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HomeMy Public PortalAbout7J 5800 Temple City BlvdCity Cou neil October 16, 2012 Page 2 3. In April 2012, the City Manager reached out to the property owner (i.e., Benton Lee) to inquire about the availability of this property. 4. On May 1, 2012, City Council had a Closed Session meeting to discuss the potential purchase of the property. 5. On June 5, 2012, the City Council approved Ordinance 12-953 (Attachment "C"), a General Fund Reserve Ordinance which among other things established an Economic Development Fund. 6 . On June 5, 2012, the City Council approved Ordinance 12-955 (Attachment "D), an Economic Development Ordinance which allows the City to purchase, lease, obtain option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the City. 7. On June 5, 2012, the City Council had another Closed Session meeting to discuss the potential purchase of this property . 8. On August 14, 2012, City Council held a joint session with the Public Safety Commission to review the Draft Comprehensive Downtown Parking Study Strategic Plan. RBF specifically identified 5800 Temple City Boulevard in their presentation as a potential site for additional off-street parking in the downtown area (Attachment "E"). 8 . On September 25, 2012, the City Council once more discussed in Closed Session the potential purchase of 5800 Temple City Boulevard property. 9 . Between July and September, 2012, the City Manager, City Attorney and the property owner's agent worked on terms and conditions for the purchase and sale of the property given the condition of the property and the seller's position regarding the manner in which the sale should take place (i.e., Purchase and Sale Agreement instead of the traditional Exclusive Negotiation Agreement). ANALYSIS: During the past couple of years, the property owner of 5800 T em pie City Boulevard has placed the former mortuary property on the market with the goal of consummating a sale. This property, however, did not sell and thus created an opportunity for the City to acquire it to partially alleviate the off-street parking shortage in the downtown area . In fact, RBF's study revealed that the City's shortage of off-street parking in the downtown area is most evident in and around the corner of Las Tunas Drive and Temple City Boulevard. Hence, the City is in the process of examining all possibilities to alleviate the parking shortage in the traditional downtown area, from reconsideration of the Downtown Specific Plan to amending the parking plans to add more on-street parking in order to supplement off- City Council October 16, 2012 Page 3 street parking. Purchase of this property would, at the very least, help to resolve some of the City's current downtown parking shortage by potentially adding 51 parking stalls. Purchasing the property using resources from the Economic Development Fund Reserve would have the added benefit of allowing the resale of the property for economic development purposes in the future. While this is not a current plan of the City and adding additional parking is the City's paramount goal, purchase of this property will give the City the flexibility to develop the property at some point in the future (i.e., should parking conditions change) is an additional benefit to the City. In early October 2012, City Manager, City Attorney and the agent for the seller reached an agreement on the key terms of the proposed purchase. Presented below for Council consideration are a list of terms which are contained in the attached Purchase and Sale Agreement: • Price -$1,000,000, pending an appraisal that substantiates the price and potentially reduced by/offset by the appraisal of the damage recently done to the building on the Property; • Time for appraisal -45 days; • Environmental review -45 days, with an additional 45 days possible based on the results of the initial review; • Deposit-$50,000; and • Return of the deposit and cancellation of the agreement if the appraisal of the property does not justify the price in the agreement or if the environmental studies performed on the property reveal potential liabilities to which the City is unwilling to become a party to. City Council approval of the Purchase and Sale Agreement, which is in a general commercial form with addenda to meet the specific details of this transaction, will allow escrow to be opened and begin the transaction. During the escrow period, the appraisal and environmental studies will be performed simultaneously, and if they are satisfactory then the City will complete the purchase and be able to utilize the property. If the City does purchase this property and depending on the terms of the negotiation, there is a possibility that the City would have to appropriate funds for the demolition of the existing building and other improvements. City Counc il October 16, 2012 Page4 CONCLUSION: The purchase of 5800 Temple City Boulevard Property would ass ist the City in alleviating parking shortages in the downtown area in the immediate term. The City Council may determine in the future to make other use of this site. Prior to the City actually purchasing the property, an appraisal and environmental review of the property will be performed to ensure that the City is receiving appropriate value for its investment. In addition , due to the recent traffic accident that caused damage (Attachment "F ") to the structure on the property, the se ll er has agreed to negotiation on the price of the property . FISCAL IMPACT: As part of the Fiscal Year (FY) 2012-13 City Budget, the City Council approved the use of $8,000 ,000 for Economic Development activities in a manner consistent with the City's Economic Development Ordinance which authorizes the City to act for the purpose of promoting the general health and welfare , the economic welfare, the public convenience and general prosperity of the residents and businesses of the City. Two budget appropriations (i.e., $1,000,000 for property purchase and $50,000 for approval property appraisal and Environmental rev iew) from the Economic Development Fund Reserve in the FY 2012-13 City Budget totaling $1,050,000 are necessary to proceed with the due diligence and purchase of the 5800 Temple City Boulevard property. A TT ACHMENT(S): A. Purchase and Sale Agreement for 5800 Temple City Boulevard Including Aerial Map of Property B. Photo documenting the deteriorated condition of 5800 Temple City Boulevard C . Staff Report Adopting Ordinance No . 12-953, General Fund Reserve Ord inance D. Staff Report Adopting Ordinance No . 12-955, Economic Development Ordinance E. RBF Power Point Presentation Slide identifying 5800 Temple City Boulevard as a potential site for additional off-street parking in the downtown area F. Photo of Damage to the Structure on 5800 Temple City Boulevard 5800 Tempie Ci ty BI. Property Address: Tempie City, Date: October 4, 2012 6. SECURITY DEPOSITS: Security deposits, if any, to the extent they have not been applied by Seller in accordance with any rental agreement and current law, shall be transferred to Buyer on Close Of Escrow. Seller shall notify each tenant, in compliance with the Civil Code. 7. SELLER DISCLOSURES: A. NATURAL AND ENVIRONMENTAL DISCLOSURES: Seller shall, within the time specified in paragraph 17, If required by Law: (I) Deliver to Buyer earthquake guides (and questionnaire) and environmental hazards booklet; (II) even if exempt from the obligation to provide an NHD, disclose if the Property is located In a Special Flood Hazard Area; Potential Flooding (Inundation) Area; Very High Fire Hazard Zone; State Fire Responsibility Area; Earthquake Fault Zone; Seismic Hazard Zone; and (Ill) disclose any other zone as required by law and provide any other information required for those zones. B. ADDITIONAL DISCLOSURES: Within the time specified in paragraph 17, Seller shall Deliver to Buyer, in writing, the following disclosures, documentation and information: (1) RENTAL SERVICE AGREEMENTS: (I) All current leases, rental agreements, service contracts, and other agreements pertaining to the operation of the Property: and (II) a rental statement including names of tenants, rental rates, period of rental, date of last rent increase, security deposits, rental concessions, rebates, or other benefits, if any, and a list of delinquent rents and their duration. Seller represents that no tenant is entitled to any concession, rebate, or other benefit, except as set forth in these documents. (2) INCOME AND EXPENSE STATEMENTS: The books and records, including a statement of Income and expense for the 12 months preceding Acceptance. Seller represents that the books and records are those maintained in the ordinary and normal course of business, and used by Seller in the computation of federal and state income tax returns. (3) 0 TENANT ESTOPPEL CERTIFICATES: (If checked) Tenant estoppel certificates (C.A.R. Form TEC) completed by Seller or Seller's agent, and signed by tenants, acknowledging: (i) that tenants' rental or lease agreements are unmodified and in full force and effect (or if modified, stating all such modifications); (II) that no lessor defaults exist; and (Ill) stating the amount of any prepaid rent or security deposit. (4) SURVEYS, PLANS AND ENGINEERING DOCUMENTS: Copies of surveys, plans, specifications and engineering documents, if any, in Seller's possession or control. (5) PERMITS: If in Seller's possession, Copies of all permits and approvals concerning the Property, obtained from any governmental entity, including, but not limited to, certificates of occupancy, conditional use permits, development plans, and licenses and permits pertaining to the operation of the Property. (6) STRUCTURAL MODIFICATIONS: Any known structural additions or alterations to, or the installation, alteration, repair or replacement of, significant components of the structure(s) upon the Property. (7} GOVERNMENTAL COMPLIANCE: Any improvements, additions, alterations or repairs made by Seller, or known to Seller to have been made, without required governmental permits, final inspections, and approvals. (8) VIOLATION NOTICES: Any notice of violations of any Law filed or issued against the Property and actually known to Seller. (9) MISCELLANEOUS ITEMS: Any of the following, if actually known to Seller: (I) any current pending lawsuit(s), investigation(s), lnquiry(ies), action(s), or other proceeding(s) affecting the Property, or the right to use and occupy it; {ii) any unsatisfied mechanic's or materialman's lien(s) affecting the Property; and (iii) that any tenant of the Property is the subject of a bankruptcy. C. WITHHOLDING TAXES: Wrthin the time specified in paragraph 17A, to avoid required withholding Seller shall Deliver to Buyer or qualified substitute, an affidavit sufficient to comply w ith federal {FIRPTA) and California withholding Law, (C.A.R. Form AS or QS). 8. tx1 ENVIRONMENTAL SURVEY (If checked): Within 45 Days After Acceptance, Buyer shall be provided a phase one environmental survey report paid for and obtained by Ill Buyer 0 Seller. Buyer shall then, as specified in paragraph 17, remove this contingency or cancel this Agreemenl 9. SUBSEQUENT DISCLOSURES: in the event Seller, prior to Close Of Escrow, becomes aware of adverse conditions materially affecting the Property, or any material inaccuracy in disclosures, information or representations previously provided to Buyer of which Buyer is otherwise unaware, Seller shall promptly Deliver a subsequent or amended disclosure or notice in writing, covering those items. However, a subsequent or amended disclosure shall not be required for conditions and matertal Inaccuracies disclosed In reports ordered and paid for by Buyer. 10. CHANGES DURING ESCROW: A. Prior to Close Of Escrow, Seller may only engage in the following acts, ("Proposed Changesw), subject to Buyer's rights in paragraph 17: (i) rent or lease any vacant unit or other part of the premises; (ii) alter, modify, or extend any existing rental or lease agreement; (IIi) enter into, alter, modify or extend any service contract(s); or (lv) change the status of the condition of the Property. B. At least 7 (or 0 ) Days prior to any Proposed Changes, Seller shall Deliver written notice to Buyer of any Proposed Changes. 11. CONDOMINIUM/PLANNED UNIT DEVELOPMENT DISCLOSURES: A. SELLER HAS: 7 (or 0 ) Days After Acceptance to disclose to Buyer whether the Property is a condomimium, or located in a planned unit development or other common interest subdivision. B. If Property is a condominium, or located in a planned unit development or other common interest subdivision, Seller has 3 (or 0 ) Days After Acceptance to request from the OA (C.A.R. Form HOA): (i) Copies of any documents required by Law; (II) disclosure of any pending or anticipated claim or litigation by or against the OA; (Iii) a statement containing the location and number of designated parking and storage spaces; (iv) Copies of the most recent 12 months of OA minutes for regular and special meetings; and (v) the names and contact information of all OA's governing the Property. (Collectively, "CI Disclosures.·) Seller shall itemize and deliver to Buyer all Cl Disclosures received from the OA and any Cl Disclosures in Seller's possession. Buyer's approval of Cl Disclosures is a contingency of this Agreement as specified in paragraph 17. Buyer's Initials { ----) ( ----Seller's Initials ( Copyright C11991·2010, CALIFORNIA ASSOCIATION OF REAL TORS®, INC. CPA REVISED 4110 (PAGE 3 OF 10) I Reviewed by Date COMMERCIAL PROPERTY PURCHASE AGREEMENT (CPA PAGE 3 OF 10) )( __ _ G:r [IIW. HOU'SI NC OPPORTtllolll'V 5800 Temple City 5800 Temp~e City Bl . Property Address: TrriJlle City, Date: October 4, 2012 16. TITLE AND VES G: A . Within the time specified in paragraph 17, Buyer shall be provided a current preliminary title rep ort. which shall include a search of the General Index. Seller shall within 7 Days After Accep tance, give Escrow Holder a complete d Statement of Information. The preliminary report i s o nly an offer by the title insurer to issue a policy or title insurance and may not contain every item affecting ti tl e . Buyer's review of the preliminary report and any other matters which may affect title are a contingency of thi s Agreement as specified in paragraph 17B. B. T itle is taken in its present condition subject to all encumbrances, easements, covenants, conditions, restrictions, rights and other matters . whether of record or not, as o f the date of Accepta nce except: (I) monetary liens of record unless Buyer is assumi ng those obli gati on s or taking the property subject to those obliga tion s; and (II) those matters which Seller has agreed to remove in writing . C. Within the time specified in paragraph 17, Seller has a duty to disclose to Buyer all matters known to Seller affecting title, whether of record or not. D. At Close Of Escrow, Buyer shall receive a g ra nt deed co n veying title (or, for stock coo p erative or long-term l ea se , an assignment of stock certificate or of Seller's leasehold interest), in cluding oil , mineral and water rights if currently owned by Seller. Title shall vest as designate d In Buyer's supplemental escrow instru ctions. THE MANNER OF TAKING TITLE MAY HAV E SIGNIFICANT LEGAL AND TAX CONSEQUENCES. CONSULT AN APPROPRIATE PROFESSIONAL. E. Buyer shall receive a standard coverage owner's CLTA policy of title Insurance. An ALTA policy or the addition of endorsements may provide greater coverage for Buyer. A title company. at Buyer's request, can provi de i nformatio n about the availability, desirability, covera g e, survey re q uirements. and cost of va rious title in surance coverages and endorsements. If B uyer desires t it le cove ra g e other than that requ ire d by th is paragraph , B uye r shall instruct Escrow Holder in w riting and pay any increase in cost. 17. TIME PERIODS; REMOVAL OF CONTINGENCIES; CANCELLATION RIGHTS: The followi ng time periods may only be extended, altered, modified or changed by mutual written agreement. Any removal of conti ngenci es or cancellation under this paragraph by either Buyer or Seller must be exercised In good faith and In writing (C.A .R. Form CR or CC). A . SELLER HAS: 7 (or 0 ) Days After Acceptance to deliver to Buyer all reports, disclosures and information for which Seller is responsib le under paragraphs 4 , 7A, Band C , 11A, 12B(3) and (4), 13B, 15A and Band 16. Buyer may give Seller a Notice to Selle r to Perform (CAR. Form NSP) if Seller has not Delivered the ite m s within the time specified. B. BUYER HAS: 17 (or ll(l 45 ) Days After Acceptance, unless otherwise agreed in w riti ng , to: (1) (I) complete all Buyer lnvest1 g at1ons; approve all disclos ures, reports and other applicable informa ti on, which B uye r receives from Seller; and approve all othe r matters affecting the Property (including lead-based paint and lead-based paint hazards as well as other information specified in paragrap h 7 and insu ra bil ity of Buyer and the Property). (2) Within the time speci fied in 17B(1 ), Buyer may request that Sell er make repairs or take any other action regarding the Property (CAR. Form RR). Seller has no o bli g atio n to agree to or respond to Buyer's requests. (3) Within the time specified in 148(1) (or as otherwise speci fied in this Agreement), Buyer shall Deliver to Seller either (i) a removal of the a pplicable contingency (CAR. Form C R ), or (ii) a cancellation (CAR. Form CC) of this Agreement based upon a remaining contingency or Seller's fa ilure to Deliver the s pec ified items. However, if any repo rt , disclosure or information for which Seller is responsible is not Delivered within the time specified in 17A, then Buye r has 5 (or D ) Days After Delivery of any such items, or the time specified In 14B(1), whichever Is later, to Delive r to Se ller a re m oval of t he applicable contingency or cancellation of this Agreement. (4) Continuation of Contingency: Even after the end or the time specified in 17B(1} and before Selle r cancels this Agreement. if at all , pursuant to 17C, B uyer retains the right to either (i) in w riti ng remove remai ning contingencies, or (ii ) cancel this Agree ment based upon a re m ai ning contingency or Seller's failu re to Deliver the specified items. Once Buyer's w ri tte n removal of all contingen cies is Delivered to Seller, Seller may not cancel this Agreement pursuant to 17C(1}. C . SELLER RIGHT TO CANCEL: (1) Seller right to Cancel; Buyer Contingencies: If, within the time specified i n this A gre em e nt, Buyer does not , in writi ng , Deliver to Seller a removal o f the applica ble contingency or cancellation of this A gre ement then Seller, after first Delivering to B uyer a Notice to Buyer to Perform (C.A.R. Form NBP) may cancel this Agreement. In such event, S eller shall authorize return of Buyer's deposit. (2) Seller right to Cancel; Buyer Contract Obligations: Seller, after first Deliv e ri ng to Buyer a NBP may cancel thi s Agreement for any or the following reasons: (i) if Buyer fail s to deposit funds as required by 3A or 3 B ; (II) if the funds de posited pursuant to 3A or 3B are not good when d e posited; (iii) if Buyer faits to provide a letter as required by 3H; (iv) if Buyer faits to provide verification as required by 3G or 3J ; or (v) if Sell er reasonably disapproves of the verification provid ed by 3G or 3J. In such event, Seller s hall authorize return of Buyer's deposit. {3) NoUce To Buyer To Perform: The NBP shall: (I) be in writing; (ii) be signed by Seller; and {ill ) give Buyer at least 2 (or lXI 3 ) Days After Delivery (or until the time specified in the applicable paragraph, whichever occurs last) to take the applicable action. A NBP may not be Delivered any earlier than 2 Days Prior to the expirati o n of the applicable time for Buyer to remove a contingency or cancel this Agre eme nt o r meet an obligation specified in 17C(2). D. EFFECT OF BUYER'S REMOVAL OF CONTINGENCIES : If Buyer removes, in writing , any co ntingen cy or cancellation rights, unless otherwise specified In a separate written agreem ent between Buyer and Seller, Bu yer shall wi th regard to that contingency or cancellation rig ht conclusively be deemed to have : (I) completed all Buyer Investiga tio ns, and review of reports and other applicable information and d isclosure s pertaining; (II) e le cted to pro ceed with the tran saction; and (Ill) assumed all liability, respon sibility and expense for Repairs or corrections, or for inability to obtain financing . E . CLOSE OF ESCROW: Before Seller or Buye r m ay cancel this Agreement for failure of the other party to close escrow pursuant to this Ag reem e nt, Seller or Buyer must first Deliv er to the other a demand to close escrow (C.A .R. Form DCE}. F. EFFECT OF CANCELLATION ON DEPOSITS: If Buyer or Seller gives written notice of cancellation pursuant to rig hts duly exercised under the terms of this A greement. Buye r and Seller agree to Sign mutual instructions to cancel the sale and escrow and release deposits, if any, to the party entitled to the funds, less fees and costs incurred by that party. Fees and costs may be payable to servica providers and vend ors for services and products provided duri ng escrow. Release of funds will require mutual Signed release Instructions from Buyer and Seller, judicial decision or arbitration award. A Buyer or Seller may be subject to a civil penalty of up to $1,000 for refusal to sign such Instructions If no good faith dispute exists as to who Is entitled to the deposited funds (Civil Code §1057.3). Buyer's lnilials ( ) ( ) Seller's Initials ( ) ( Copyright !I:) 1991-2010, CALIFORNIA ASSOCIATION OF REALTORS®, INC. I CPA REVISED 4/10 (PAGE 5 OF 10) Reviewed by Dale COMMERCIAL PROPERTY PURCHASE AGREEMENT (CPA PAGE 5 OF 10) G) lti&M.HOUSIHC OPPOFITUNITY 51100 Temple City 5800 Temple City Bl. Property Address: Temple City, Date: october 4, 2012 37. TIME OF ESSENCE; ENTIRE CONTRACT; CHANGES: Time is of the essence. All understandings belween the parties are incorporated in this Agreement. Its terms are intended by the parties as a final, complete and exclusive expression of thelr Agreement with respect to its subject matter, and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement. If any provision of this Agreement is held to be ineffective or invalid, the remaining provisions will nevertheless be given full force and effect. Neither this Agreement nor any provision In It may be extended, amended, modified, altered or changed, except In writing Signed by Buyer and Seller. 38. AUTHORITY: Any person or persons signing this Agreement represent(s) that such person has full power and authority to bind that person's pnncipal, and that the designated Buyer and Seller has full authority to enter into and perform this Agreement. Entering into this Agreement, and the completion of the obligations pursuant to this contract, does not violate any Articles of Incorporation, Articles of Organization, By Laws, Operating Agreement, Partnership Agreement or other document governing the activity of either Buyer or Seller. 39. EXPIRATION OF OFFER: This offer shall be deemed revoked and the deposit shall be returned, unless the offer is Signed by Seller, and a Copy of the Signed offer Is personally received by Buyer, or by , who is authorized to receive it by 5:00 PM on the third Day after this offer is signed by Buyer (OR, it checked 0 by =--.....----..,..-__,.---,.-...,.....,----(date), at DAM 0 PM}. Buyer has read and acknowledges receipt of a Copy of the offer and agrees to the above confirmation of agency relationships. Buyer City o£ Temple City By Date Print name ----------- Address City State Zip------- Telephone Fax E-mail----------------------- Buyer By ----------------------------------------------------------~D~a~te--------------------- Printname _______________________ ~----------------------~~~------~----------- Address City State Zip-------- Telephone Fax E-mail Notice Address, If Different --------------------------------- 0 Additional Signature Addendum attached (C.A.R. Form ASA). 40. ACCEPTANCE OF OFFER: Seller warrants that Seller is the owner of the Property, or has the authority to execute this Agreement. Seller accepts the above offer, agrees to sell the Property on the above terms and conditions, and agrees to the above confirmation of agency relationships. Seller has read and acknowledges receipt of a Copy of this Agreement, and authorizes Broker lo deliver a Signed Copy to Buyer. 0 (If checked) SUBJECT TO ATIACHED COUNTER OFFER, DATED------------------------ Seller Ben ton Lee ~ ~~ Print name ----------------- Address City State Zip ______ _ Telephone Fax E-mail _______________________ _ Seller -----------------------------------=-:----------------By Da~ Print name ----------- Address City State Zip Telephone Fax E-mail ------- Notice Address. If Different ........,,...,.........,..--.,.,---,----,,....,..,,.........=-=--....,....,,....,...,..---------------------------------0 Additional Signature Addendum attached (C.A.R. Form ASA). ____ f ) Confirmation of Acceptance: A Copy of Signed Acceptance was personally received by Buyer or Buyer's (Initials) authorized agent on (date) at 0 AM 0 PM. A binding Agreement Is created when a Copy of Signed Acceptance is personally received by Buyer or Buyer's authorized agent whether or not confirmed In this document. Completion of this confirmation Is not legally required In order to create a binding Agreement; It Is solely intended to evidence the date that Confirmation of Acceptance has occurred. Buyer's lnllials ( ) ( Sellar's Initials ( ) ( Copyright C> 1991-2010, CALIFORNIA ASSOCIATION OF REALTORS«<, INC. 1 Dale CPA REVISED 4110 (PAGE 9 OF 10) LR:,::s:,:viswed:::::::....:::b!....y ====~~====:...J G) l11W.HOUS1'NC OPfi'Ofl.TlJ~ItV COMMERCIAL PROPERTY PURCHASE AGREEMENT (CPA PAGE 9 OF 10) 5800 Temple City 4-~ C A L I F 0 R N I A ·~~ASSOCIATION ~ OF REALTORS.-: ADDENDUM (C.A.R. Fonn ADM, Revised 4112) No . ..=.1 _____ _ The following terms and conditions are hereby incorporated in and made a part of the: D Residential Purchase Agreement, 0 Manufactured Home Purchase Agreement, 0 Business Purchase Agreement, 0 Residential Lease or Month-to-Month Rental Agreement, 0 Vacant Land Purchase Agreement, 0 Residential Income Property Purchase Agreement, IX! Commercial Property Purchase Agreement, 0 Other------------------------------------ dated _.....;;.O.;:;c.;:;t.;:;o.;:;b.;:;e.;:;r;.......;4'"',--"2;;..;0;;..;1;;.;2;;...._ , on property known as ---------=5:..:8:..:0:..:0:........:7\:.:emp=;:;:~:.;e=--C=~=-· .:::;tyL-B=~-=-· -------- ~wh~h-----------~c=z~·t~y~o~£~T~~~p~l~e~C=i~t~y~,-----------~ ~refurred~as r BuyM~ena n~ and Benton Lee , is referred to as ("Seller/Landlord"). 3 . Regarding Remova~ of Environmental Inspection Continaencv ... Buver's approval of the results of the Phase 1 and anv Pbase II is an exeress contingency to the Buyer's obligations ynder the Pyrqbase Agreement (the "Environmental Contingency"). If only a Phase 1 is performed , t hen the Environmental Contingency must either be removed or the Purchase Agreement be cancelled as provided in paragraph 17 (B) (3) of the Purchase Agreement. I£ a Phase II is performed pursuant to the terms of paragraph 2 of tbis Addendu!n. the period of time within which only the Environmental Contingency must either be removed or the Purchase Agreement cancelled shall be extended until and including the date which is 45 days after the date gpecitied in paragrqpb 17(BI (3). and the Close of Escrow shall be extended as is ~r~riate to permit either the removal of the Environmental eontingency or the cancellation of this Agreement . The time within which Buver must either approve anv other contingen~ or cancel the Purchase Agreement shall not be extended if a Phase II i s ,performed pursyant to the terms of ,paragraph 2 of this Addendum 4, Byyers understand that the Subjec t prgperty maY have a pending i nsurance cla~ due to an accident ciated 9 /1 5112 and PY.k,POSe that the final sales price reflect $1.000.000,00 minys the amount Seller reci eves £rom this clajm ADPENDUM' 1, PAGE 2 of 2 The foregoing terms and conditions are hereby agreed to , and the undersigned acknowledge receipt of a copy of this document. Date ______________________________________ ___ BuyerfTenant ~C~i~t_y __ o_f~T=em __ p_l~e--C~z~-~ty ______________ __ BuyerfTenant ________________________________ ___ Date ______________________________________ __ Seller/Landlord -----,-----,.:---------------B enton Lee Seller/Landlord------------------- The copyright lawa of the United States (nUs 17 U.S. Code) forbid the unauthorized reproduction of this fo rm. or any portion thereof, by ph otocopy machine or any other lll68na. Including fa cs1mile or computerized fonnalll. CopyrighiC 1986 -20 12. CALIFORNIA ASSOCIATION OF REALTORS®. IN C. ALL RIGHTS RESERVED . THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REAL TORS4J) (C.A.R.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE , CONSULT AN APPROPRIATE PROFESSIONAL. This form ia available for use by lhe enUre real estale industry. II is not Intended to idenHfy lha user as a REAL TOR®. REAL TOR® Is a ragistered collective membership marl! which may be used only by members of the NATIONAL ASSOCIATION OF REALTORS® who subsaibelo its Code of Ethics. [] Pub lished and Distnbuted by: REAL ESTATE BUSINESS SERVICES. INC. & SIJbsilflilty of I he C8lifomia AS$0Ciallon of REAL 10R91D • 525 Scxrth Virgn Avenue. Los Angeles. Caifomia 90020 ADM REVISED 4112 (PAGE 1 OF 1) t.:l R~BVI8~· :_:wed:=_~by~==....:::Oa::t:.e.=======:..JI !il OPPORTUNITY ADDENDUM (ADM PAGE 1 OF 1) Agent: Diana He rrera Phone: (6 26)664-6943 Fax: {626)236-92 68 Prepared using zlpForm® software Broker: Coldwell B anker Dynasty T.C. 9228 Las Tunas Dr Temple City, CA 91780 4-~ C A L I f 0 R N J A -~ASSOCIATION ~ OF REALTORS'~: DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (Selling Firm to Buyer) (As re quired by the Civil Code) (C.A.R. Form AD, Revised 11/09) When you enter into a discussion with a real estate agent regarding a real estate transaction, you should from the outset unde~tand what type of agency relationship or representation you wish t o have with the agent in the transaction. SELLER'S AGENT A Seller's agent under a llsUng agreement with the Seller acts as the agent for lhe Seller only. A Seller's agent or a subagent of that agent has the following affirmative obligations: To the Seller· A Fiduciary duty of utmost care, Integrity, honesty and loyalty in dealings with the Seller. To the Buyer and the Seller: (a) Diligent exercise of reasonable skill and care in performance of the agent's dulles. (b) A duty of honest and fa ir dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the prop erty that are not known to . or within the diligent aHantion and observation of, the parties. An agent is not obligated to reveal lo aithar party any confidential information obta1n ed from the other party that does not involve the affirmative duties set forth above. BUYER'S AGENT A selling agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situations, the agent is not the Seller's agent, even if by agreement the agent may recei ve compensati on for services rendered, either in run or In part from the Seller. An agent acting only for a Buyer has the following affirmative obligations: To the Buyer: A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Buyer. To the Buyer and the Sellar. (a) Diligent exercise of reasonable skill and care in performance of the agent's dulles. (b) A duty of honest and fair dealing and good faith . (c) A duty to disclose all facts known to the agent materially alfecting the value or desirability of the property that are not known to, or within the diligent attentio n and observation of, the parties. An agent Is not obligated to reveal to either party any confidential information obtained from the other party that does not Involve the affirmativ e duties set forth above. AGENT REPRESENTING BOTH SELLER AND BUYER A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. In e dual agency situation . the agent has the following affirmative ob ligation s to both the Seller and the Buyer. (a) A fiduci ary duty o f utmost care, integrity, honesty and loya lty in the dealings with either the Seller or the Buyer. (b) Other duties to the Seller and the Buyer as stated above in the1r respective sections. In representing both Seller and Buyer, the agent may nol, without the express permission of the respeclive party, disclose to the o ther party that the Seller will accept a price lass then the lis ling price or that the Buyer will pay a price greater than the price olfered . The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect his or her own Interests. You should ca refull y read all ag reements to assure that th ey adequately ex press your unde~tanding of the transaction. A real estate agent is a penson q ualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Throughout your real property transaction yo u may receive more than one disclosure form, depending upon the number of agents assisting in the transection. The law requires each agent w1 th whom you have mora than a casual relationship to present you with thts disclosure form . You should read its contents each time it 1s presented to you, considering the relationship between you and the real estate agent in your speciflc transection. This disclosure form includes the provisions of Sections 2079.13 to 2079.24, Inclusive, of the Civil Code set forth on page 2. Read It carefully. 1/WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS DISCLOSURE AND THE PORTIONS OF THE CIVIL CODE PRINTED ON THE BACK (OR A SEPARATE PAGE). lXI Buyer 0 Seller 0 Landlord 0 Tenant Dale ----------- City of Temple City 0 Buyer 0 Seller 0 Landlord 0 Tenant Dale ---------- Agent _________ c=o=l;;;d""w=e:=;l::l-:=B=a:::;;nk;:.:.:;;e=r'-'iiDynF'-"a::s:.:t""y'----------DRE Lie.# 01280398 Real Estate Broker (Firm) By ------;";<".,------:::--:--:-----:--:-~-----:::-ORE Lie. # 01200922 (Salesp erson or Broker-Assoc1ale) Diana Herrera /Rosemary Vasque:<: AGENCY DISCLOSURE COMPLIANCE (Civil Code §2079.14): Dale 10/0 4/2012 • When the listing brokerage company also represents Buyer/Tenant: The LisUng Agent shall have one AD form signed by Seller/Landlord and a different AD form signed b y Buyer/Tenant. • When Seller/Landlord and Buyer/Tenant are represented by di fferent brokerage com p anies: (i) the Listing Agent shall have one AD form signed by Sellar/Landlord and (ii) the Buyar's/Tenanl's Agent shall have one AD form signed by Buyer!Ten ant and either that seme or a different AD form presented to Seller/Landlord for signature prior to presentatio n of the offer. If the same form is used. Seller may sign here: Sellar/Landlord Benton Lee Data SellerA:andlord Dale The copyright laws of the United Stales (Title 17 U.S. Code) forbid the unauthorized reproduction of this form. or any portion thereof , by photocopy mach ine or any other means, includi ng facs imile or computerized formals. Copyr ight © 1991-2009, CALIFORNIA ASSOCIATION OF REAL TORS®. INC. ALL RIGHTS RESERVED. THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REAL TORS® (C.A.R.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALID ITY OR ADEQUACY OF ANY PROVISION IN AHY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS .IF YOU DES IRE LEGAL OR TAX ADVICE, CONSUlT AN APPROPRIATE PROFESSIONAL This form is available for use by the entire real eslale industTy. It is not Intended lo identify the user as a REAL TOR®. REAL TOR® Is a reg istered collective membernhip marie which may be uaad only by membera of the NATIONAL ASSOCIATI ON OF REALTORS® who subscribe to its Code of Ethics. El. Published and Oislribuled by: ReAL ESTATE BUSINESS SERVICES. INC. a subsidiary of the C8llfomil A5socialliln of REAL TORSII!I 525 South Wgil Avenue. Los Angeles, California 90020 AD REVISED 11/09 (PAGE 1 DF 2) I Reviewed by Da te ~ f DIIAI-C OPPORTUNIT'I' DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (AD PAGE 1 OF 2) Agent: Diana Herrera Phone: (626)664·6943 Fax: (6 26)236·9268 Prepared using zlpForm® software Broker: Coldwell Banker Dynasty T.C . 9228 Las Tunas Dr Temple City, CA 91780 CIVIL CODE SECTIONS 2079.13 THROUGH 2079.24 (2079.16 APPEARS ON THE FRONT) 2079.13 As used in Sections 2079.14 to 2079.24, inclusive, the following tenns have the following meanings: (a) "Agent" means a person acting u nder provisions or title 9 (commencing with Section 2295) in a real property transaction. and includes a person who Is licensed as a real estate broker under Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of the Business and Professions Code, and under whose license a listing is executed or an offer to purchase is obtained. (b) "Associate licensee• means a person who is licensed as a real estate broker or salesperson under Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 or the Business and Professions Coda and who Is either licen sed under a broker or has entered into a written contract with a broker to act as the broker's agent in connect1on with acts r equiring a real estate license and to function under the broker's supervision In the capacity of an associate licensee. The agent in the real property transaction bears responsibility for his or her associate licensees who perform aa agents of the agent. When an assoc1ate licensee owes a duty to any prin cipal, or to any buyer or seller who is not a r,rinclpal, in a real property transaction, that duty Is equivalent to the duty owed to that party by the broker for whom the associate licensee functions . (c) Buyer" means a transferee 1n a real property transaction, and mcludes a person who executes an offer to purchase real property from a seller through an sgent, or who seeks the services of an agent in more than a casual. transitory, or preliminary manner. with the object of entering Into a real property transaction. "Buyer" includes vendee or lessee. (d) "Dual agent" means an agent acling. either directly or through an associate licensee. as agent fo r both the seller and the buyer in a real property transaction. (e) "Listing agreement" means a contract between an owner of real property and an agent. by which the agent has been authorized to sell the real property or to find or obtain a buyer. (f) "L1sting agent" means a person who has obtained a listing or real property to act as an agent for compensa!ion. (g) "Listing price" is the amount expressed in dollars specified in the listing for which the seller is vlilling to sell the real property through the listing agent. (h) "Offering price" is the amount expressed in dollars specified in an offer to purchase for which the buyer Is willing to buy the real property. (I) "Offer to purchase" means a written contract executed by a buyer acting through a selling agent which becomes the contract for the sale of the real property upon acceptance by the seller. ij) "Real property" means any estate specified by subdivision (1) or (2) of Section 761 in property which constitutes or is Improved with one to four dwelling units, any leasehold in this type of property exceeding one year's duration. and mobile homes. when offered for sale or sold through an agent pursuant to the authority contained In Section 10131 6 of the Business and Professions Code . (k) "Real property transaction" means a transaction for the sale of real property i n which an agent is employed by one or more of the principals to act in that transaction. and includes a listing or an offer to purchase. (I) "Sell," "sale," or "sold" refers to a transaction for the transfer of real property from the seller to the buyer, and includes exchanges of real property betv•een the seller and buyer, transactions for the creation of a real property sales contract w ithin the meaning of Section 2985, and transactions for the creation of a leasehold exceeding one year's duration. (m) "Seller" means the transferor In a real property transacti on . and includes an owner who lists real property with an agent. whether or not a transfer results. or who receives an offer to purchase real property of which he or she is the owner from an agent on behalf of another. "Seller" includes both a vendor and a lessor. (n) "Selling agent" means a listing agent who acts alone, or an agent who acts in cooperatiOn with a listing agent, and who sells or finds and obtains a buyer for the real property, or an agent who locates property for a buyer or who finds a buyer for a property lor which no listing exists and presents an offer to purchase to the seller. (o) "Subagent' means a person to whom an agent delegates agency powers as provided in Article 5 (com mencing with Section 2349) of Chapter 1 of Title 9 However. "subagent" does not include an associate licensee who 1s acting under the supervision of an agent in a real property transaction. 2079.14listing agents and selling agents shall provide the seller and buyer in a real property transaction with a copy of the disclosure form specified In Sect1on 2079.16. and, except as provided in subdivision (c), shall obtain a signed acknowledgement of receipt from that seller or buyer, except as provided in this section or Section 2079 15, as follows· (a) 1he listing agent. if any. shall provide the disclosure form to the seller prior to entering 1nto the listing agreement. (b) The selling agent shall provide the disclosure form to the seller as soon as practicable prior to presenting the seller with an offer to purchase. unless the selling agent previously provided the seller with a copy of the disclosure form pursuant to subdivision (a). (c) Whera the selling agent does not deal on a face-to-face basis with the seller. the disclosure form prepared by the selling agent may be furnished to the seller (and acknowledgement of receipt obtained for the selling agent from the seller) by the listing agent. or lhe selling agent may deliver the disclosure form by certified mail addressed to the seller at his or her last known address. in which case no signed acknowledgement of rece1pt is required (d) The selling agent shall provi de the disclosure form to the boyar as soon as practicable prior to execution of the buyer's offer to purchase, except that if the olfer to purchase is not prepared by the selling agent, the selling agent shall present the disclosure form to the buyer not later than lhe next business day alter the selling agent receives the offer to purchase from the buyer. 2079.15 In any circumstance In which the seller or buyer refuses to si!ln an ackn owl edgement of rec eipt pursuant to Section 2079.14, the agent. or an associate licensee acting for an agent, shall set forth, sign, and date a wntten declaration of the facts of the refusal. 2079.16 Reproduced on Page 1 of this AD form. 2079.17 (a) As soon as practicable, the selling agent shall disclose to the buyer and seller whether the selling agent is acting In the real property transaction exclu sively as the buyer's agent. exclusively as the seller's agent. or as a dual agent representmg both the b u yer and the seller. This relationship shall be confirmed in the contract to purchase and sell real property or in a separate writing executed or acknowledged by the seller, th e buyer, and the selling agent prior to or coincident with execution of that contract by the buyer and the seller, respectively. (b) As soon as practicable. the listing agent shall disclose to the seller whether the listing agent is acting in th e real property transaction exclusively as the seller's agent, or as a dual agent representing both the buyer and seller. This relationship shall be confirmed in the contract to purchase and sell real property or in a separate writing executed or acknowledged by the seller and the listing agent prior to or coincident with lhe execution of that contract by the seller. (c) The confirmation required by subdiVisions (a) and (b) shall be in the following form. (DO NOT COMPLETE, SAMPLE ONL. Y) Is the agent of (check one): 0 the seller exclusively; or 0 both lhe buyer end seller. (Nama ot Dating Agent) (DO NOT COMPLETE, SAMPLE ONLY) Is the agent of (check one): 0 the buyer exclusively; or 0 the seller exclusively; or (NarnP. of Selling Agent If nottna aame as the Ustl~g Agent) 0 both the buyer and seller. (d) The disclosures and confirmation required by this section shall be In addition to the disclosure required by Section 2079.14. 2079.18 No ae!tlng agent in a real property transection may act as an agent for the buyer only, when the seiHng agent Is also acting as the listing agent in the transaction. 2079.19 The payment of compensation or the obligation to pay compensati on to an agent by the sellar or buyer is not necessarily detenninative of a particular agency relationsh ip between an agent and the seller or buyer. A listing agent and a selling agent may agree to share any compensation or commission pa1d , or any right to any compen sa tion or commission for which an obligation arises as the result of a real estate transaction, and the terms of any such agreement shall not necessarily be determinative of a particular relationship 2079.20 Nothing in this article prevents an agent from selecting. as a condition or the agent's employment. a specific form of agency relationship not specifically prohibited by this art1cle if the requirements of Section 2079.14 and Section 2079.17 are complied with. 2079.21 A dual agent shall not disclose to the buyer that the seller is willing to sell the property at a price less than the listing price, without the express written consent or the seller. A dual agent shall not disclose to the seller that the buyer is wilting to pay a price greater than the offering price, without the express written consent of the buyer. This section does not alter In any way the duty or responsibility of a dual agent to any principal with respect to confidential Information other than price. 2079.22 Nothing In this article precludes a listing agent from also being a selling agent, and the combination of these functions In one agent does not, of itself, make that agent a dual agent. 2079.23 A contract between the principal and aQent may be modified or altered to change lhe agency relationship at any time before the performance of lhe act w h ich is the object of the agency with the wnttan consent of the parties to the agency relalionship. 2079.24 Nothing in this article shall be construed to either diminish the duty of disclosure owed buyers and sellers by agents and their associate licensees, subagents, and employees or to relieve agents and their associate licensees. subagents, and employees from liability for their conduct in connection with acts governed by th1s article or for any breach of a fiduciary duty or a duty of drsclosure . Buyer's/Tenant's Initials ( ) ( ----G:r Copyright C 1991 ·2009. CALIFORNIA ASSOCtAnON OF REAL TORS®, tNC . Setler's/Landlord Initials ( ) ( AD REVISED 11/09 (PAGE 2 OF 2) I Reviewed by Date DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (AD PAGE 2 OF 2) ICIWI<OIJIII<G OPPOfU UNI1Y 5800 Temple City CITY OF TEMPLE CITY PUBLIC SERVICES DEPARTMENT CODE ENFORCEMENT 5800 Temple City TC Funeral Home 01/26/10 A<;:Cum ulaHon of junk, tras h and debris In the rear of parking lot junk, trash and debrJs m tn.e rear of parking lot City Council June 5, 2012 Page2 and reporting purposes of this reserve policy, it was suggested by staff, and the City Council Budget Ad Hoc Committee members concurred, that one reserve level or dollar amount be brought forward for approval by the City Council. 4. On April 17, 2012, the City Council received and filed the Comprehensive Annual Financial Report (CAFR) at June 30, 2011, and fund balances were reported and classified in accordance with GASB 54, as a formal policy had yet to be adopted by the City. 5. On May 1, 2012, the City Attorney and Administrative Services Director recommended to the City Manager, that for ease of clarity, the adoption of the GASB 54 Fund Balance Polley and the Budget Reserve Fund Balance requirements to be adopted by Ordinance (as recommended by the City Council Budget Ad Hoc Committee), should be considered separately as each proposed action has a different objective. The GASB 54 is a fund balance classification and financial reporting mandate only and is recommended to be adopted by policy only. The Budget Reserve Fund Balance requirements address how General Fund Reserves can and cannot be spent and the requirements for the Reserves should be adopted by Ordinance. Further, the proposed Budget Reserve Fund Balance Requirements is intended for the General Fund only and GASB 54 must address all funds. 6. On May 4, 2012, staff met with the City Council Budget Ad Hoc Committee (i.e., Mayor Yu and Council member Blum) to discuss the merits of separating the GASB 54 Fund Balance Polley and the Budget Reserve Fund Balance requirements. The City Council Budget Ad Hoc Committee concurred with staffs recommendation. 7. On May 15, 2012, the City Council introduced Ordinance No. 12-953. After answering a clarifying question from Councilmember Blum, staff recommended one minor wording change. That change Is red-lined on Page 3 in the attached Ordinance and this Ordinance is now presented for second reading and adoption. ANALYSIS: The City Council desires to establish various budgeted reserve fund accounts that will allow for the funding of emergencies, contingencies, liabilities and planned major capital projects. The goal is to maintain adequate financial reserves so that in times of economic downturns and annual revenue fluctuations, the City can continue to provide essential city services to meet expenditure obligations. The dollar amount of General Fund recommended reserves, the criteria for each Reserve and the GASB 54 Classification is documented in Attachment "A". It is proposed that Budget Fund Balance Reserves be established for: • Emergency/Disasters at $1,000,000; • Liquidity at $2,000,000; and City Council June 5, 2012 Page 3 • Local Economic Uncertainty at $500,000. It is recommended that these Reserves be established by Ordinance (Attachment "B") as proposed. This approach is suggested so that any changes in these Reserves will require an adoption of a new Ordinance with a first and second reading, eliminating the ability to change the reserve levels without careful consideration and a 415th affirmative vote of the City Council. The recommended reserve for Other Postemployment Benefits (OPEB) will be part of the annual budget process and it is anticipated that an amount will be earmarked in each proposed fiscal year budget to reduce the liability of the postemployment benefits estimated at $9,142,000. At the June 19, 2012, City Council meeting, staff will recommend that the City Council allocate $1 ,000,000 OPEB Trust Fund which will include a recommendation for the Public Agency Retirement Services (PARS) to administer the Trust Fund. The remaining recommended Reserves are as follows: • Fleet Management at $400,000; • Facilities Management at $4,000,000; • Technology Replacement at $200,000; • Economic Development at $8,000,000; and • Opportunities for One-Time Expenditures at $4,600,000. These reserve levels will be reviewed on an annual basis (or more often if necessary) as part of the City Budget process and recommendations for changes in these reserves will come from the City Manager to the City Council. CONCLUSION: In order to meet the City Council's objective of developing and implementing comprehensive budgeted reserves for fund balances, it is recommended the City Council adopt the attached Ordinance, stipulating minimum amounts for Emergency/Disasters, Liquidity and Local Economic Uncertainty. The adoption of an Ordinance is a best practice to ensure budgeted reserve levels cannot be changed without a thoughtful process and 4/5 vote by the City Council. Further, in order to enable long~term planning for replacement of the fleet, facilities, technology, economic development and one-time expenditures, recommended reserve levels shall be an on-going part of the annual budget process. FISCAL IMPACT: This action does not have an impact on the FY 2011-12 City Budget. City Cou neil June 5, 2012 Page 4 ATTACHMENTS: A. General Fund Recommended Reserves-FY 2012-13 B. Ordinance No. 12-953, An Ordinance of the City Council of the City of Temple City, California, Addrng a New Chapter 10 "Budget Reserve Fund Balance Requirementsu to Title 2 "Administration" of the Temple City Municipal Code Attachment "8" ORDINANCE N0.12-953 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMPLE CITY, CALIFORNIA, ADDING A NEW CHAPTER 10 "BUDGET RESERVE FUND BALANCE REQUIREMENTS" TO TITLE 2 "ADMINISTRATION" OF THE TEMPLE CITY MUNICIPAL CODE. WHEREAS, to ensure adequate fiscal resources and stable delivery of City services during emergencies, fiscal emergencies , annual revenue fluctuation, liquidity shortages, or severe economic downturns, the City desires to establish a General Fund reserve requirements, and; WHEREAS, to ensure fiscal prudence and responsibility the City desires to also establish criteria for use of General Fund reserves; and WHEREAS, the City desires to adopt these requirements and criteria by Ordinance and codify its provisions in the City of Temple City Municipal Code. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TEMPLE CITY HEREBY ORDAINS AS FOLLOWS: SECTION 1. Addition of Chapter 10 to Title 2 of the Temple City Municipal Code. The City Council hereby adds a new Chapter 10 " Budget Reserve Fund Balance Requirements) to Title 2 "Administration" of the Temple City Municipal Code, which shall read as follows: Chapter 10 BUDGET RESERVE FUND BALANCE REQUIREMENTS 2550: PURPOSE 2560: DEFINITIONS 2570: BUDGET RESERVE FUND BALANCE TARGETS 2550: PURPOSE The primary purpose of this Chapter is to ensure adequate fiscal resources and stable delivery of City services during emergencies, fiscal emergencies, annual revenue fluctuations, liquidity shortages, or severe economic downturns so that in the event of 1 these occurrences the City is able to continue providing essential city services and satisfying expenditure obligation. The secondary purpose of this Chapter is to enable realistic long-term planning, assist in development of annual budgets, require the prudent use of resources, and to implement of sound fiscal management practices. To achieve these purposes, this Chapter requires the City to: 1. Establish adequate reserves. 2. Establish sound fiscal reserve requirements. 3. Ensure the City satisfies its short-term and long-term financial obligations. 4. Establish a periodic review of the City's fund balances and reserves. 5 . Enhance the City's credit rating. To achieve the purposes of this Chapter it is contemplated that the City will establish various Budget Reserve Fund Balance accounts facilitating funding of emergencies, contingencies, liabilities and planned major capital projects. 2560: DEFINITIONS For the purposes of this Chapter 10, the following terms shall have the following meanings: (a) "Emergencyh shall mean, in accordance with Section 2701, the actual or threatened existence of conditions of disaster or of extreme peril to the safety of persons and pr ope rty within the city caused by such conditions as air pollution, fire, flood, storm, ep idemic. riot or earthquake, or other conditions, including conditions resulting from a labor controversy, which conditions are or are likely to be beyond the control of the services, personnel, equipment and facilities of the city, requiring the combined forces of other political subdivisions to combat. (b) "Fiscal Emergency" shall mean the occurrence of any one or more of the following: (1) the existence of a default on a debt obligation for more than thirty days, or the reasonable probability that the City will default on a debt obl ig ation, or that the City will not be able to cure a default on a debt obligation within thirty days; (2) the existence of a failure for lack of funds to make payment of all payroll to officials. officers, or employees of the municipal corporation for more than one payment cycled ; (3) the existence of a condition in which accounts due and payable at the end of the preceding fiscal year, less the year-end balance, exceeded one-twelfth of the available revenues during the preceding fiscal year; (4) the existence of a condition In which the aggregate of deficit amounts 2 of all deficit funds at the end of the p receding fiscal year, less the year-end balance, exceeded one-twelfth of t he total of the general fund budget for that year and the receipts to those deficit funds other than from transfers from the general fund; (5) the existence of a condition in which, at the end of the preceding fiscal year, moneys and marketable investments in or held for the unsegregated treasury of the municipal corporation, minus outstanding checks and warrants, were less than the ag gre gate of the positive balances of the general fund and those special fu n ds whose purposes the unsegregated treasury meets, and such deficiency exceeded one-twelfth of the total amount received into the unsegregated treasury during the preceding fiscal year. (c) "Economic Stabilization Reserve" shall mean, as provided in GASB 54 (Governmental Accounting Standards Board), an identified fund for which the specified purpose is stabilizing the d e l ive ry of city services during periods of operational deficits resulting from deferral o f federal, state , or county remittance and which may also be used as a short-term bridge from unexpected and drastic downturns in th e economy. Pursuant to GASB 54 stabilization is regar d ed as a specified pL:r pose only If the circumstances or conditions that signal the need for stabilization (a) are identified in sufficient detail and (b) are not expected to occur routinely. 2570 : MINIMUM BUDGET RESERVE FUND BALANCE The City will maintain combined General Fund reserves as follows: (a) Emergency/Disaster Reserve-$1,000,000. ( 1) Use of these funds is allowable only when the following conditions have been met: (I) The City Council has declared the existence of either an "Emergency" or "Fi sca i Eme rgencyu; and (ii) The use of the reserve has been approved by 4 /5tt· vote of the membership of the City Council. (2) Within 6 months after the Council's determination in paragraph (1) above the City Manager shall present . a plan to the City Council to replenish this fund O'fer a lWO year-pefieQ. (3) If all or a portion of the Reserve is utilized, the Reserve will be restored to the original level as adopted within the next five years or whenever reasonab ly possible. (b) Liquidity Reserve-$2,000,000. (1) Funds are to be set-aside to provide cash flow for timing of revenues and expenditures. For example, while payroll costs are bi·weekly and 3 fairly predictable, state and county tax payments can vary. The City may also from time to time have major projects that are grant funded on a reimbursement basis that requ ire large cash outlays. A "Liquidity Reserve" is established to provide the cash-on -hand needed in between large revenue payments and grant reimbursements and will alleviate the need for short-term borrowing. (2} If all or a portion of the Reserve is utilized, the Reserve will be restored to the original level as adopted within the next five years or whenever reasonably possible. (c) Local Economic Uncertainty Reserve· $500,000 (1} Funds are to be set aside for the purpose of stabilizing the delivery of City services during periods of operational budget deficits resu lti ng from the conditions as described in the definition above "Economic Stabilization Reserve. (2) Use of the funds are allowable only when the C ity Council, upon the 4/5th vote of its membership, has approved the use of the fund. (3) If all or a portion of the Reserve is utilized, the Reserve will be restored to the origi nal level as adopted within the next five years or whenever reasonably possible (d) Other Reserve Designations. The City Council may at any time designate specific fund balance levels for future development of projects which it has determined to be in the best long-term interests of the City. (e) The City Manager must include a recommendation for the amounts to be appointed to these reserves during the annual budget process. SECTION 2. Severability. The City Council hereby declares that, should any provision, section, subsection, paragraph, sentence, clause , phrase, or word of this Ordinance or any part thereof, be rendered or declared invalid or unconstitutional by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, such decision or action shall not affect the validity of the remaining section or portions of the Ordinance or part thereof. The City Council hereby declares that it would have independently adopted the remaining provisions, sections, subsections, paragraphs, sentences, clauses, phrases, or words of this Ordinance irrespective of the fact that any one or more provisions, sections, subsections, paragraphs, sentences, clauses, phrases, or words may be declared invalid or unconstitutional. SECTION 3. Publication. The City Clerk shall certify to the passage and adoption of this Ordinance and to its approval by the Mayor and shall cause the same to be published according to law. PASSED, APPROVED, AND ADOPTED this 15th day of May 2012 . MAYOR ATIEST: APPROVED AS TO FORM: City Clerk City Attorney I, Mary Flandrick, City Clerk of the City of Temple City, hereby certify that the foregoing Ordinance No. 12-953 was introduced at the regular meeting of the City Council of the City of Temple City held on the_ day of __ 2012, and was duly passed, approved and adopted by said Council at the regular meeting held on , 2012 by the following vote: AYES: NOES: ABSENT: City Clerk City Council May 15,2012 Page2 after making voluntary payments. The Court's ruling was a tremendous blow to local economic advancement as it eliminated over 400 redevelopment agencies statewide effective February 1, 2012. 4. At a March 8, 2012 study session, the City Council ("Council~) reviewed a draft ordinance, which if enacted, would allow for expenditure of City funds for economic development purposes. The proposed language gives the City authority to acquire land, provide financial assistance to developers, rehabilitate properties and undertake other activities -most of which were previously under purview of the former Agency. ANALYSIS: The City's Charter allows the Council to legislate over any municipal affair to the full extent permitted by the California Constitution. Specifically, Section 400 of the Charter reads In relevant part that the City : "shall have the power to make and enforce all ordinances and regulations in respect to municipal affairs, subject only to such restrictions and limitations as may be provided in this charter, and in the constitution of the state of California." Economic development is a municipal affair, as demonstrated by the clear benefit to the Temple City community arising out of the increased revenues attributable to increased property taxes and increased sales taxes associated with successful economic development. The decision to utilize City resources and funds to further those efforts is also a municipal affair, and within scope of the Council's legislative authority. Council adoption of Ordinance No. 12-955 ("Ordinance") would add Chapter 1 0 [Economic Development] to Title 9 of the Temple City Municipal Code (Attachment "Aj . The language of the Ordinance sets forth powers and obligations authorizing the City to engage in and continue those economic development activities that were previously under the purview of the fanner Agency. The City's powers under the Ordinance differ in significant ways from the economic development powers of the fanner Agency. First, the City's powers currently lack a designated funding source (i.e ., tax increment). Second, there is no separate and legally distinct government agency carry ing out the economic development activities, but rather the City itself. But what the Ordinance does provide is a legal framework as to how the Council can allocate current City resources to economic development, and what City staff may be directed to do with those resources in undertaking economic development activities . The Ordinance identifies a number of authorized economic development activities, including but not limited to: City Council May 15,2012 Page3 • Acquiring and disposing of property (including eminent domain when necessary); • Conducting site preparation work (i.e., demolition, clearing and remediation); • Using City property for economic development purposes; • Making improvements on private property; • Pursuing public and private financial assistance; • Providing financial assistance on commercial and housing projects; and • Issuing debt for key initiatives. If approved by the Council after a second reading based on tonight's first reading, staff anticipates that the Ordinance would take effect July 6, 2012. This action is timely as it would provide the momentum to establish an economic development program in line with the City's FY 2012-13 budget adoption process. Further, as the redevelopment wind-down process continues, it is likely that the State Legislature will eventually create funding mechanisms for local economic development. The City would be poised to immediately take advantage of those mechanisms by having an economic development ordinance already in place. CONCLUSION: Adoption of the Ordinance would set forth a framework to stimulate economic growth, invigorate the city's business sector, revitalize neighborhoods and generate new tax revenues. FISCAL IMPACT: There is no direct financial impact associated with adopting the Ordinance. Funding requests for specific economic development initiatives will be presented for Council consideration on a case-by~case basis or as part of the City's annual budget process. AnACHMENT: A. Ordinance No. 12-955 Attachment A ORDINANCE NO. 12-955 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMPLE CITY, CALIFORNIA, ADDING CHAPTER 10 [ECONOMIC DEVELOPMENT] TO TITLE 9 OF THE TEMPLE CITY MUNICIPAL CODE AUTHORIZING THE EXPENDITURE OF CITY FUNDS FOR ECONOMIC DEVELOPMENT PURPOSES THE CITY COUNCIL OF THE CITY OF TEMPLE CITY HEREBY ORDAINS AS FOLLOWS: SECnON 1: Findings. The City Council hereby makes the following findings: A. The City of Temple City is a charter city, and the City Council is vested with the power to make and enforce ordinances and regulations with respect to all municipal affairs by Article XI, § 5 of the California Constitution and the City Charter. 8. Fiscal policies and decisions on the expenditure of City funds are municipal affairs, and the City may adopt ordinances and regulations pertaining to how City funds may be expended provided that such ordinance or regulation is consistent with the CitYs charter. C. Article XI, § 7 of the California Constitution also vests In the City the power to make and enforce within its limits ordinances and regulations that promote the public health and welfare that are not in conflict with general laws. D. The California Supreme Court has interpreted Article XI, § 7 to authorize local ordinances and regulations that "promote the economic wetfare, public convenience, and general prosperity of the community," (Miller v. Bd. of Pub. Works (1925) 195 Cal. 477). E. The City Council desires to clarify that economic growth and development within the City aids in the promotion of the health and welfare of the inhabitants of the City and is a general benefit to them by and through the provision of improved housing options, improved retaU and commercial options, Improved dining options, and an improved tax base that aids the City in providing municipal services to the residents. F. The City Council desires to further clarify that the use of City funds for economic development activities is a proper use of City funds because economic development is a municipal affair with a clear benefit to the inhabitants of the City. G. The City Council wishes to authorize City staff to carry out economic development activity for the benefit of the City and its inhabitants. SECTION 2: Addition of Chapter 10 to Title 9. Chapter 10 [Economic Development] is hereby added to Title 9 of the Temple City Municipal Code to read as follows: "Chapter 10 Economic Development 2950: PURPOSE The City of Temple City shall undertake economic development activities, including but not LA #4825~3171~3294v1