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04-21-2020 - AGENDA ITEM 06 Consideration of San Gabriel Valley Regional Housing Trust Joint Exercise of Powers AgreementAGENDA ITEM NO.6 Xft AGENDA STAFF REPORT City of West Covina I Office of the City Manager DATE: April 21, 2020 TO: Mayor and City Council FROM: David Carmany City Manager SUBJECT: Consideration of San Gabriel Valley Regional Housing Trust Joint Exercise of Powers Agreement RECOMMENDATION: It is recommended that the City Council: Authorize the City Manager to negotiate and execute the San Gabriel Valley Regional Housing Trust Joint Exercise of Powers Agreement and any other documents necessary to join the San Gabriel Valley Regional Housing Trust Fund. It is recommended that the Community Development Commission: Authorize the payment of the administrative fee required by the San Gabriel Valley Regional Housing Trust Joint Exercise of Powers Agreement. BACKGROUND: In October 2019, Governor Gavin Newsom signed SB 751 (Rubio), which allows the County of Los Angeles and cities in the San Gabriel Valley to form the San Gabriel Valley Regional Housing Trust (SGVRHT) joint powers authority (JPA). The SGVRHT is intended to provide a stronger opportunity for San Gabriel Valley cities to attract and secure funding for supportive housing and affordable housing projects. In order to join the SGVRHT, the City needs to execute the joint powers agreement, which sets forth the powers of the SGVRHT that the member parties would share. Any city within the San Gabriel Valley is eligible — though not required — to join by executing the agreement. Joining the SGVRHT would provide additional potential funding resources for the planning and construction of affordable housing and homeless housing projects in the City. DISCUSSION: The SGVRHT is being created to increase the availability of funding for the planning and construction of housing projects for the homeless and extremely low, very low, and low-income populations within the San Gabriel Valley. It will be able to receive public and private financing and will also be able to authorize and issue bonds. The SGVRHT will be governed by a Board of Directors consisting of elected officials from the San Gabriel Valley and experts in homeless or housing policy, so they will be able to direct funding to those projects and programs that are most important to the region. As indicated above, the SGVRHT is a joint powers authority (JPA) that any city within the San Gabriel Valley and the County of Los Angeles can join by executing the Joint Powers Agreement (Agreement). The Agreement was developed by a working group of city staff from approximately seventeen cities in the San Gabriel Valley. Staff from every city was invited to bi-weekly meetings. Before finalization, the Agreement was also circulated to city managers and city attorneys for additional comment and review. The Agreement sets forth the powers authorized to the SGVRHT in support of its purpose of funding and financing the planning and construction of affordable housing and housing for the homeless. The Agreement also establishes the limitations on the powers of the SGVRHT. Specifically, the SGVRHT cannot do the following: • Regulate land use within the jurisdiction of any of the parties; • Levy, advocate for, incentivize the levying of an impact fee, charge, or other land use exaction as a condition of approval for the funding for a development project; • Require inclusionary zoning requirements; • Fund or otherwise approve an agreement for a housing project that is not supported by the party; or • Require the parties to the Agreement to accept or provide any specific number of housing units as a prerequisite to joining or remaining a party to the Agreement. The SGVRHT will be responsible for preparing an annual audit and annual financial report to describe the funds received by the SGVRHT, the use of said funds, and how they have furthered the purpose of the SGVRHT. The City could decide to leave the SGVRHT at the end of any fiscal year, with at least six months notice to the SGVRHT Board of Directors. If the City decided to leave the SGVRHT and a project was currently being funded in its jurisdiction, it would be responsible for an exit fee associated with the cost of the SGVRHT's completion of the project. If the City were to leave and return to the SGVRHT, it would be responsible for additional administrative fees upon its re-entry into the SGVRHT. SGVRHT Board of Directors The Agreement establishes that the SGVRHT shall be governed by a Board of Directors of nine Directors composed of the following members: • Seven members from jurisdictions that are parties to the Agreement (i.e. any city or the County of Los Angeles); and • Two members that are experts in housing or homeless policy. The SGVRHT Board of Directors will be named by the Governing Board of the San Gabriel Valley Council of Governments (SGVCOG) for two-year terms. The criteria for the SGVRHT Board of Directors were established in the authorizing legislation. The SGVCOG Governing Board will use a district -based approach to appoint the seven jurisdictional members. The following districts will be used: • Northeast District: Azusa, Claremont, Glendora, La Verne, San Dimas • Southeast District: Covina, Diamond Bar, Industry, La Puente, Pomona, Walnut • Central District: Baldwin Park, El Monte, Rosemead, South El Monte, Irwindale, West Covina • Northwest District: Arcadia, Bradbury, Duarte, La Canada Flintridge, Monrovia, San Marino, Sierra Madre • Southwest District: Alhambra, Montebello, Monterey Park, San Gabriel, South Pasadena, Temple City • Two at -large members from any city that is a Party to the Agreement, or the County if it is a Party to the Agreement. If only one city from a district were to join the SGVRHT, that jurisdictional seat will also become an at -large election amongst any jurisdiction that is a party to the Agreement (including any city and the County of Los Angeles). This ensures that there is regional representation amongst the parties, while also ensuring that there is adequate opportunity for every city to have representation on the Board, regardless of their district. At its February meeting, the SGVCOG Governing Board approved an application and election process by which to appoint members of the SGVRHT Board of Directors. Following that meeting, the application to serve as a member of the SGVRHT was distributed to all city managers and SGVCOG Governing Board delegates and alternates. The application period closed on March 20, 2020. Only one city had joined the Southwest District by the close of the application period, so that District seat became an at -large seat. The applications were reviewed by the SGVCOG's Executive Committee, and, upon review, the Committee recommended the following slate of candidates: • Jurisdictional Representatives: • Northeast District: Gary Boyer, City of Glendora • Southeast District: Patricia Cortez, City of Covina • Central District: No Applicants • Northwest District: Becky Shevlin, City of Monrovia • At -large (3): Adele Andrade -Stadler, City of Monrovia; Margaret Finley, City of Duarte; One vacancy • Housing/Homeless Experts: • Jed Leano, Councilmember, City of Claremont (Delegate); Carol Averell, City of Baldwin Park Housing Manager (Alternate) • Benita DeFrank, City of Pomona Neighborhood Services Director (Delegate); Alma Martinez, City of El Monte City Manager (Alternate) This slate of candidates was scheduled to be considered for appointment by the SGVCOG Governing Board at its April 16, 2020 meeting. The SGVCOG Governing Board will also consider re -opening the application period to fill the remaining jurisdictional seats. The SGVCOG Board's decision was not available as of the date of this report. Annual Administrative Fees The Agreement establishes an annual administrative fee for Parties to the Agreement. This fee is based on population size. Population Administrative Fee Up to 30,000 $10,000 30,001 — 60,000 $15,000 60,001 — 100,000 $20,000 100,001 — 175,000 $25,000 County (per district) $25,000 As the City of West Covina's population is approximately 106,311 (based on the United States Census), the City's administrative fee would be $25,000. The SGVRHT will actively pursue public and other grant funding and private donations. However, there are some activities that the SGVRHT will likely undertake — i.e. fundraising, advocacy efforts — that may not eligible for these funding sources. The annual administrative fees will provide the SGVRHT with a funding source for these important activities and will also allow for consistent operations even during periods when the SGVRHT receives less outside funding. SGVRHT Staffing The SGVRHT will not have its own staff but will instead contract with another public entity for its core staff. The SGVRHT will also procure and hire consultants to provide additional technical support and expertise for more specialized topics. At this time, the participating cities have indicated that they intend to contract with the SGVCOG for core staffing support. The contract between the SGVRHT and the SGVCOG for core staffing would be considered and executed by the SGVRHT Board of Directors upon its seating. Next Steps At this time, twenty-one cities in the San Gabriel Valley have indicated intent to consider joining the SGVRHT. The following cities have joined the SGVRHT: • Alhambra • Arcadia • Baldwin Park • Claremont • Covina • Diamond Bar • Duarte • Glendora • La Verne • Monrovia • Pomona • South El Monte The cities of Azusa, Irwindale, El Monte (currently agendized for 4/21), La Canada Flintridge, Montebello, San Gabriel (currently agendized for 4/21), South Pasadena (currently agendized for 4/15), and Temple City have also indicated that they plan to join the SGVHRT. Currently, $1.35 million in funding has been allocated to the SGVRHT. This seed money will be awarded to projects for the region's extremely low, very low, and low-income residents and homeless residents in cities that join the SGVRHT. In addition, it is anticipated that the SGVRHT will apply for funding from the State's Local Housing Trust Fund Grant Program. The SGVRHT would be eligible to apply for between $500,000 - $5,000,000 in funding through this Program. The State has indicated that the notice of funding availability (NOFA) for this program is anticipated to be released in spring 2020. Following appointment by the SGVCOG Governing Board, the SGVRHT Board of Directors is anticipated to have its first meeting in May 2020. The SGVRHT Board of Directors will immediately implement a staffing approach, develop and adopt a first -year workplan and budget, and consider a process for awarding the $1.35 million in funding available to the SGVRHT. Over the first year of its operation, the SGVRHT will also undertake a number of foundational efforts, including development of a housing pipeline, development of priorities and a strategic plan, and development of a long-term funding strategy. LEGAL REVIEW: The City Attorney's Office has reviewed and approved the proposed agreement as to form. OPTIONS: The Community Development Commission has the following options: 1. Approve staffs recommendation; or 2. Provide alternative direction. Prepared by: Paulina Morales, Economic Development and Housing Manager Fiscal Impact FISCAL IMPACT: The City of West Covina will utilize low/mod housing funds for the $25,000 administrative fee. If approved, a budget amendment will be processed for the $25,000 administrative fee. Attachments Attachment No. 1 - SGVRHTF Joint Powers Agreement CITY COUNCIL GOALS & OBJECTIVES: Respond to the Global COVID-19 Pandemic ATTACHMENT NO. 1 THE SAN GABRIEL VALLEY REGIONAL HOUSING TRUST JOINT EXERCISE OF POWERS AGREEMENT THIS JOINT EXERCISE OF POWERS AGREEMENT (the "Agreement') is made this_ day of 2020 (the "Effective Date"), by and between the public agencies listed in the attached Exhibit "A" (hereafter, individually, a "Party" and collectively, the "Parties"). RECITALS A. The Parties are authorized to take such actions that promote the public health, safety and welfare of residents. B. The Parties acknowledge that a shortage of affordable housing exists as a result of various causes. C. The Parties are committed to providing additional housing opportunities and reducing homelessness in a coordinated and comprehensive manner. D. The Parties acknowledge that an adequate supply of housing will provide social and economic benefits to residents and taxpayers of each Party. E. Each Party has the individual power to fund the planning and construction of affordable housing projects within its jurisdictional boundaries and to carry out all of the purposes of this Agreement. F. The Parties find it in their mutual interest to enter into this Agreement to provide a coordinated response to addressing shortages in workforce housing, affordable housing, and supportive housing in the San Gabriel Valley. G. California Government Code sections 6500 et seq. ("Joint Exercise of Powers Act' or "Act') permits two or more public agencies to create a joint powers authority for the purposes cited herein, and permits such agencies to exercise jointly any power that the public agencies could exercise separately. 1471730.1 H. California Government Code section 6539.6 authorizes the County of Los Angeles and any of the cities within the jurisdiction of the San Gabriel Valley Council of Governments to create a joint powers agency known as the San Gabriel Valley Regional Housing Trust ("SGVRHT"), which may do any of the following: 1. fund the planning and construction of housing of all types and tenures for the homeless population and persons and families of extremely low, very low, and low income, as defined in Section 50093 of the Health and Safety Code, including, but not limited to, permanent supportive housing; 2. receive public and private financing and funds; and 3. authorize and issue bonds, certificates of participation, or any other debt instrument repayable from funds and financing received and pledged by SGVRHT. I. The Parties are establishing the SGVRHT to promote public -private partnerships, nonprofit collaborations, and community building to maximize sources of public and private funds, when available, to efficiently accelerate housing for homeless, low, very low and extremely low-income individuals and families. J. This Agreement shall not in any way be interpreted to limit any Party's authority over land -use decisions within their respective jurisdictions, including, but not limited to, whether any project or program supported by SGVRHT is to be implemented within such Party's jurisdiction. NOW, THEREFORE, in consideration of the mutual promises set forth below, the parties agree as follows: Section 1. Creation and Purpose. a) Creation of SGVRHT. Pursuant to the Joint Exercise of Powers Act, including Section 6539.6 of the Government Code, there is hereby created a public entity to be known as the "San Gabriel Valley Regional Housing Trust." SGVRHT shall be a public entity separate and apart from the Parties, and shall administer this Agreement. 1471730.1 b) Purpose. This Agreement is made pursuant to the Joint Exercise of Powers Act for the purpose of creating SGVRHT as a public entity separate from the Parties to: (i) exercise common powers with respect to providing funding for the planning and construction of housing of all types and tenures for the homeless population and persons and families of extremely low, very low, and low income, as defined in Section 50093 of the Health and Safety Code, including, but not limited to, permanent supportive housing; and (ii) receive public and private financing and funds. The purpose of this Agreement shall be accomplished and common powers exercised in the manner set forth in the Agreement. Nothing contained in this Agreement shall preclude any Party from establishing, maintaining or providing social programs or services to its respective residents as it deems proper and necessary. Section 2. Term and Termination. a) Term. This Agreement shall become effective, and SGVRHT shall come into existence, on the Effective Date, which date shall be the date upon which this Agreement has been approved by four eligible members, and this Agreement shall thereafter continue in full force and effect until terminated pursuant to subdivision (b) of this section. b) Termination. This Agreement may be terminated by agreement of a majority of the Parties, but shall remain in full force and effect until all bonds or SGVRHT liabilities have been paid. Upon such liabilities being paid, the assets of SGVRHT shall be distributed to the Parties in proportion to the contributions of each Party to SGVRHT and the amounts paid by, each Party in connection with SGVRHT's activities. Section 3. Powers and Duties of SGVRHT. a) General Powers. SGVRHT shall have all the powers common to the Parties to this Agreement necessary or convenient, specified or implied, to accomplish the purpose of this Agreement as set forth in Section 1, subject to the restrictions set forth in Section 3, subdivision (c) below. Said powers shall be exercised in the manner provided in the Joint Exercise of Powers Act, including without limitation all powers set forth in Government Code section 6539.6, and, except as expressly 1471730.1 set forth herein, subject only to such restrictions upon the manner of exercising such powers as are imposed upon the City of West Covina, a general city. b) Specific Powers. Without limiting the generality of the powers conferred in subdivision (a) of this Section 3, SGVRHT is hereby authorized, in its own name, to do all of the acts necessary or convenient to the accomplishment of the purposes of this Agreement and the full exercise of the powers conferred in subdivision (a) of this Section 3, including but not limited to the following: 1. to make and enter into contracts; 2. to contract for staff assistance, including, but not limited to, contracting with other public agencies; 3. to sue and be sued in its own name; 4. to apply for, accept, receive and disburse grants, loans and other aids from any Federal, State or local program that is related to the purposes of this Agreement; 5. to invest any money in the treasury pursuant to Section 6505.5 of the Joint Exercise of Powers Act that is not required for the immediate necessities of SGVRHT, as SGVRHT determines is advisable, in the same manner and upon the same conditions as local agencies, pursuant to Section 53601 of the California Government Code; 6. to apply for letters of credit or other forms of financial guarantees in order to enter into agreements in connection therewith; 7. to incur and discharge debts, liabilities, and obligations, subject to the limitations provided in this Agreement and to the extent permitted under the law; 8. to issue and receive loans; 9. to engage the services of private consultants to render professional, financial and technical assistance and advice in carrying out the purposes of this Agreement; 10.to employ and compensate legal counsel, including bond counsel, determined appropriate by SGVRHT in the accomplishment of the purposes of this Agreement; 11.to contract for engineering, construction, architectural, accounting, 1471730.1 environmental, land use, or other services determined necessary or convenient by SGVRHT in connection with the accomplishment of the purposes of this Agreement; 12.for the purposes of enforcing affordable housing covenants or holding security interests for loans, to take title to, and transfer, sell by installment sale or otherwise, lands, structures, real or personal property, rights, rights -of -way, franchises, easements, and other interests in real or personal property which SGVRHT determines are necessary or convenient in connection with the accomplishment of the purposes of this Agreement; 13.for the purposes of renting space for SGVRHT to operate, to lease to, and to lease from, a Party or any other person or entity lands, structures, real or personal property, rights, rights -of -way, franchises, easements, and other interests in real or personal property which SGVRHT determines are necessary or convenient in connection with the accomplishment of the purposes of this Agreement; 14. to solicit charitable contributions from private sources; 15.to acquire, hold, or dispose of property, contributions, and donations of property, funds, services, and other forms of assistance from persons, firms, corporations, and government entities; 16.to partner with Parties on funding solicitations and other opportunities for the purposes set forth in this Agreement, including but not limited to jointly exercising powers with a Party pursuant to the Joint Exercise of Powers Act; 17. to the extent not herein specifically provided for, to exercise any powers in the manner and according to methods provided under the laws applicable to the SGVRHT; and 18. to carry out and enforce all the provisions of this Agreement in compliance with the Joint Exercise of Powers Act. c) Limitation on Powers. This Agreement does not authorize SGVRHT do any of the following: 1. regulate land use within the jurisdiction of any of the Parties; 1471730.1 2. levy, or advocate or incentivize the levying of, any land use exaction such as an impact fee, charge, dedication, reservation or tax assessment, as a condition of approving the funding for or approval of, a development project; 3. require inclusionary zoning requirements; 4. fund or otherwise approve an agreement for a housing project that is not supported by the Party within whose jurisdiction the project is proposed to be located; or 5. require the Parties to this Agreement to accept or provide any specific number of housing units as a prerequisite to joining or remaining a Party to this Agreement. Section 4. Members/Affiliates. a) Members. The members of SGVRHT shall be the Parties to this Agreement who have not withdrawn from SGVRHT, and such other entities that may join SGVRHT after execution of this Agreement. New members may join on the terms and conditions set forth in Section 10 hereof. Only the County of Los Angeles and cities within the jurisdiction of the San Gabriel Valley Council of Governments may become members of SGVRHT. b) Affiliates. Entities that are eligible to be a party to this Agreement may join the SGVRHT as an affiliate. Entities that join as an affiliate are not eligible to have a member of their governing board serve on the Board of Directors or receive funding for a project within their jurisdiction until such time, if ever, they become of a Party of SGVRHT. An eligible entity may become an affiliate through written notice from the executive officer of the entity, but shall not be a Party to this Agreement. Section 5. Board of Directors. a) Selection of Directors. The membership of the Board of Directors of SGVRHT shall be governed by Government Code section 6539.6 and as it may be amended. As currently provided therein, SGVRHT shall be governed by a Board of Directors selected by the San Gabriel Valley Council of 1471730.1 Governments Governing Board ("SGVCOG Board") consisting of nine Directors selected as follows: 1. Seven Directors who are members of the SGVCOG Board that either represent: (i) a County of Los Angeles board of supervisor district that is located wholly or partially within the territory of the San Gabriel Valley Council of Governments, provided the County of Los Angeles is a Party to this Agreement; or (ii) a city that is a Party to this Agreement. 2. Two Directors that are experts in homeless or housing policy. 3. Alternates for each Director position may be established by the Board of Directors under bylaws adopted by the Board of Directors; provided that such alternates meet the requirements established in Government Code section 6539.6 and as it may be amended. b) Board Powers. Subject to the limitations of this Agreement and the laws of the State of California, the powers of SGVRHT shall be vested in and exercised by and its property controlled and its affairs conducted by the Board of Directors. c) Director Terms. At its first regular meeting following the Effective Date or at such other time as it determines, the SGVCOG Board shall select the Directors for the SGVRHT Board of Directors. Each Director shall serve a term of two years. At a regular SGVCOG Board meeting preceding the end of the Directors' terms by at least 15 days, the SGVCOG Board shall select new Directors or re -select current Directors for the new terms of office. There is no limit on the number of terms a Director may serve. In the event of a vacancy on the Board of Directors, the SGVCOG Board shall appoint a replacement within 60 days of such vacancy who shall serve out the remainder of term of the Director that he or she has replaced. d) Advisory Board. The Board of Directors may appoint advisory boards that may include such persons as designated by the Board of Directors. The Board of Directors shall adopt bylaws that govern the appointment of advisory boards should it determine in its discretion to appoint such advisory boards. 1471730.1 e) Compensation. Directors shall serve without compensation but may be reimbursed for any expenses actually incurred in connection with serving as a Director; provided such expenses have been previously approved by the Board of Directors and incurred in accordance with any SGVRHT policies or procedures governing same. f) Meetings of the Board of Directors. 1. Call, Notice and Conduct of Meetings. All meetings of the Board of Directors, including without limitation, regular, adjourned regular, special meetings and adjourned special meetings, shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act, Government Code sections 54950 et seq. 2. Regular Meetings. Regular meetings of the Board of Directors shall be held at such dates and times as the Board of Directors may fix by resolution; a copy of such resolution shall be furnished to each Party hereto. If any day so fixed for a regular meeting shall fall upon a legal holiday, then such regular meeting shall be held on the next succeeding business day at the same hour, unless otherwise determined by the Board of Directors. No notice of any regular meeting of the Board of Directors need be given to the individual Directors. 3. Special Meetings. Special meetings of the Board of Directors shall be held whenever called by the Chairperson of the Board or by a majority of the Directors. Notices of all special meetings shall be provided to all Parties. 4. Quorum. A quorum is established if at least five (5) Directors are present at a meeting, except that less than a quorum may adjourn a meeting to another time and place or constitute a "committee of the whole" for purposes of hearing reports or other matters not requiring action by the Board of Directors. Unless otherwise provided in this Agreement, actions and decisions of the Board of Directors may be taken by a majority of the quorum present at any meeting. 1471730.1 5. Minutes. The Board of Directors shall cause minutes of all regular, adjourned regular, and special meetings to be kept and present same for approval by the Board of Directors. 6. Officers. The Board of Directors shall elect a chairperson and a vice chairperson from among its Directors at the first meeting held in each calendar year. In the event that the chairperson or vice chairperson so elected ceases to be a Director, the resulting vacancy shall be filled at the next regular meeting of the Board of Directors held after such vacancy occurs or at a special meeting called for that purpose. In the absence or inability of the chairperson to act, the vice chairperson shall act as chairperson. The chairperson, or in the chairperson's absence, the vice chairperson, shall preside at and conduct all Board of Director meetings. 7. Rules and Regulations. The Board of Directors may adopt, from time to time, by resolution, such rules, regulations and bylaws for the conduct of its meetings and affairs as the Board determines is necessary or convenient. Section 6. Additional Officers and Employees a) Officers and Contract Staff. 1. SGVRHT may contract for officers and staff with a Party to this Agreement, the San Gabriel Valley Council of Governments or other independent contractors, agents, or volunteers as the Board of Directors may deem necessary to carry out any of SGVRHT's powers, upon such terms and conditions as the Board may require, including the retaining of professional and technical assistance, provided that adequate funds are available in SGVRHT's budget and are appropriated by SGVRHT therefore. 2. None of the officers, agents or staff, if any, directly contracted by SGVRHT shall be deemed, by reason of their roles or duties or contracted status, to be employed by any Party. 3. If SGVRHT contracts with a Party to this Agreement to provide SGVRHT 1471730.1 with administrative services through persons who are employees and/or officers of the Party, then any retirement liabilities associated with that Party's employees and/or officers shall not constitute a liability of SGVRHT or any other Party to this Agreement. 4. All privileges and immunities from liability, exemptions from laws, ordinances and rules, and benefits that apply to officers, agents or employees of a member Party shall apply to the same extent when performing duties for SGVRHT. b) Treasurer and Auditor/Controller. Pursuant to Government Code Sections 6505.5 and 6505.6, the Board of Directors shall appoint an officer or employee of SGVRHT, the treasurer of a Party to this Agreement or a certified public accountant to hold the offices of treasurer and auditor for SGVRHT. Such person or persons shall possess the powers of and shall perform the treasurer and auditor functions for SGVRHT required by Sections 6505, 6505.5 and 6505.6 of the Government Code, including any amendments thereto. Pursuant to Government Code Section 6505.1, the auditor and treasurer shall have charge of certain property of SGVRHT. The treasurer and auditor shall ensure that there shall be strict accountability of all funds and reporting of all receipts and disbursements of SGVRHT. The treasurer and auditor of SGVRHT shall be required to file an official bond as required by Government Code section 6505.1 with the Board of Directors in an amount, which shall be established by the Board. 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 herein. The premiums on any such bonds attributable to the coverage required herein shall be an appropriate expense of SGVRHT. c) Attorney. The Board of Directors shall have the power to appoint one or more legal advisors to SGVRHT who shall perform such duties as may be prescribed by the Board. Section 7. Financial Provisions a) Fiscal Year. The Fiscal Year of SGVRHT shall, unless and until changed by the 1471730.1 Board of Directors, commence on the 1 st day of July of each year and shall end on the 30th day of June of the next succeeding year except that the initial Fiscal Year of SGVRHT shall commence on the effective date of this Agreement and end on the immediately following 30th day of June. b) Budget. 1. General Budget. Within one hundred and twenty days (120) after the first meeting of the Board of Directors, a general budget for the first fiscal year shall be adopted by the vote of a majority of the membership of the Board of Directors. 2. Expenditures for the Approved Budget. The payment of all SGVRHT obligations is limited to the amount of appropriations allowed in SGVRHT's approved budget, except as it may be revised with the approval of a majority of all of the Directors of the Board of Directors. c) Contributions by the Parties. 1. Administrative Cost Contributions. The Parties agree that they shall make annual contributions ("Administrative Fee") towards the budgeted administrative costs of SGVRHT in accordance with a cost allocation formula as outlined below: Population Annual Administrative Fee Up to 30,000 $10,000 30,001 — 60,000 $15,000 60,001 — 100,000 $20,000 100,001 — 175,000 $25,000 County (per district) $25,000 Affiliate Membership Population Annual Administrative Fee Up to 30,000 $2,000 30,001 — 60,000 $3,000 60,001 — 100,000 $4,000 1471730.1 100,001 — 175,000 $5,000 The Administrative Fee and Affiliate Fee (collectively, "Fees") shall be assessed annually. After the first fiscal year, the Fees shall increase annually in an amount equal to the U.S. Bureau of Labor Statistics consumer price index for the Los Angeles -Long Beach -Anaheim area for the 12-month period preceding the year the Fees are assessed. Payment of the Fees shall be due within 30 days of receipt of an invoice from the SGVRHT. The invoice shall indicate how the Fees were calculated. A Party's contribution to SGVRHT's administrative costs shall be in the form of money, unless the Board of Directors approves another form of contribution such as services, personal property or use of real or personal property, or other in- kind contributions. The acceptance and valuation of any such non -monetary contributions may be used to offset in whole or part a Party's contribution as determined in the sole and absolute discretion of the Board of Directors. If a Party has received funding through the County Measure H Program and allocates that funding to support the start-up and operations of the SGVRHT, the funding will be credited towards the Party's first year Administrative Fee only. Notwithstanding the above, after the first fiscal year the Board of Directors may establish Fees in an amount the Board of Directors deems financially prudent; provided it shall roughly be proportional as to each Party in the amounts reflected in the table above. 2. Program Cost Contributions. In addition to a Party's annual Administrative Fee set forth above, the level of, and mechanism for involvement by SGVRHT or a Party to any particular programs and program budget, funded, sponsored or operated by SGVRHT, shall be determined and approved by the Board of Directors. d) Accounts and Reports. 1. Books and Records. There shall be strict accountability of all SGVRHT funds and accounts and report of all SGVRHT receipts and disbursements. 1471730.1 Without limiting the generality of the foregoing, SGVRHT shall establish and maintain such funds and accounts as may be required by good government accounting practice. The books and records of SGVRHT shall be open to inspection at all reasonable times by each Party and its duly authorized representatives. 2. Annual Audit. The person appointed by the Board of Directors to perform the auditor function for SGVRHT shall cause an annual independent audit of the accounts and records of SGVRHT and records to be made by a certified public accountant or firm of certified public accountants in accordance with Government Code section 6505. Such audits shall be delivered to each Party and shall be made available to the public. 3. Annual Financial Report. Pursuant to section 6539.6 of the Government Code, SGVRHT shall publish an Annual Financial Report that shall describe the funds received by SGVRHT and the use of such funds by SGVRHT. The Annual Financial Report shall describe how the funds received by SGVRHT have furthered the purpose of SGVRHT. e) Funds. Subject to the applicable provisions of any instrument or agreement which SGVRHT may enter into, which may provide for a trustee or other fiscal agent to receive, have custody of and disburse SGVRHT funds, the person appointed by the Board of Directors to perform the treasurer function for SGVRHT shall receive, have the custody of and disburse SGVRHT funds in accordance with generally accepted accounting practices, shall make the disbursements required by this Agreement or to carry out any of the provisions or purposes of this Agreement. Section 8. Amendments. Unless otherwise specifically provided herein, this Agreement may not be amended or modified except by writing and with approval of two-thirds of the governing bodies of all the Parties and no other amendment or modification shall be of any force and effect unless approved in accordance with this Agreement. Section 9. Non -Liability for Obligations of SGVRHT. IC►11M! The debts, liabilities and obligations of SGVRHT shall not be considered the debts, liabilities or obligations of any Party or its respective officers, agents, employees, representatives or volunteers. a) Indemnification. The SGVRHT shall defend, indemnify and hold harmless each Party, its officers, agents, employees, representatives and volunteers (the "Indemnitees") from and against any loss, injury, claim, lawsuit, liability, expense, or damages of any kind or nature (collectively, "Claims") brought by a third party which arises out of or in connection with SGVRHT's administration of this Agreement, including such third party claims arising out of or in connection with any Indemnitees acting within their authorized capacity as an officer, agent, employee, representative or volunteer of SGVRHT. The SGVRHT's duty to defend and indemnify under this Section shall not extend to Claims otherwise arising out of the Indemnitees' own active negligence, omissions or willful misconduct, whether in whole or part. The SGVRHT shall finance its obligation pursuant to this Subsection by establishing a liability reserve fund, and/or by purchasing commercial insurance, and/or by joining a joint powers insurance authority (JPIA) as determined by the Board. In the event the SGVRHT's financial obligations to indemnify, defend and hold harmless, pursuant to this Subsection, exceed the liability reserve fund and/or the proceeds from any applicable insurance and/or JPIA coverage maintained by the SGVRHT (hereinafter "Unfunded Liability"), a Party or Parties may meet and confer with SGVHRT in good faith to negotiate alternative means or mechanisms by which SGVHRT may fund such Unfunded Liability; however, in no event shall the event of an Unfunded Liability relieve, limit or waive SGVHRT's obligations of indemnity or defense to each Party as first set forth above in this Section. Nothing herein shall obligate any Party to indemnify or hold harmless SGVRHT for any Unfunded Liability. b) Assignment. Each Party shall assign to the SGVRHT its rights, title, and interest to recover damages from any third party for Claims arising out of this Agreement, to the extent that the SGVRHT has met its obligations to defend and indemnify such Party pursuant to this Section. 1471730.1 c) Survival. SGVRHT's duty to defend, indemnify and hold harmless shall survive and continue in full force and effect after withdrawal of any Party from this Agreement, including as to the withdrawing Party, or termination of this Agreement for any reason with respect to any Claims that occurred before the date of such withdrawal or termination. Section 10. Admission and Withdrawal of Parties. a) Admission of New Parties. It is recognized that additional eligible entities other than the Parties, may wish to join SGVRHT after the Effective Date. Such eligible entities may become a Party to this Agreement upon such terms and conditions as are established by this Agreement and the Board of Directors. As a condition precedent to becoming a Party more than six months after the Effective Date, an eligible entity may thereafter become a Party to this Agreement; provided that (1) this Agreement is adopted by its governing body and (2) the eligible entity pays, a late joining fee. The late joining fee shall be calculated by totaling the annual affiliate fee the eligible entity would have paid under this Agreement had it been an affiliate in all years prior to becoming a Party, minus any affiliate fees it actually paid during those years. Notwithstanding the foregoing, an eligible entity's late joining fee shall not exceed two times the amount of the applicable annual administrative fee existing at the time it becomes a Party. Payment shall be due within 30 days of receipt of an invoice from SGVRHT. b) Withdrawal from SGVRHT. A Party may withdraw from SGVRHT upon its governing board's adoption of a resolution stating its intent withdraw from SGVRHT. The withdrawal of any Party, unless otherwise provided by the Board of Directors, shall be conditioned as follows: 1. The withdrawal shall be effective at the end of the SGVRHT fiscal year which is at least six months after the receipt by SGVRHT of a written notice of the Party's intent to withdraw, accompanied by a copy of the governing board resolution stating its intent to withdraw; and 2. Unless otherwise provided by a unanimous vote of the Board of Directors, withdrawal shall result in the forfeiture of the withdrawing Party's rights and 1471730.1 claims relating to distribution of property and funds upon termination of SGVRHT as set forth in Section 2 above. Withdrawn members shall not be entitled to any reimbursement of Administrative Fees. Section 11. Notices. Notices required or permitted hereunder shall be sufficiently given if made in writing and delivered either personally or by registered or certified mail, postage prepaid, to the persons and entities listed at the addresses set forth in the attached Exhibit "A", or to such other address as may be designated to SGVRHT for formal notice. Section 12. Miscellaneous. a) Section Headings. The section headings herein are for convenience only and are not to be construed as modifying or governing or in any manner affecting the scope, meaning or intent of the provisions or language of this Agreement. b) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Agreement. c) Laws Governing. This Agreement is made in the State of California under the Constitution and laws of such State and shall be construed and enforced in accordance with the laws of California. d) Severability. Should any part, term, portion or provision of this Agreement, or the application thereof to any person or circumstance, be held to be illegal or in conflict with any law of the State of California, or otherwise be rendered unenforceable or ineffectual, it shall be deemed severable, and the remainder of this Agreement or the application thereof to other persons or circumstances shall continue to constitute the agreement the Parties intended to enter into in the first instance. e) Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors of the respective Parties hereto. No party may assign any right or obligation hereunder without the written consent of a majority of the other Parties. IN WITNESS THEREOF, the Parties hereto have caused this Agreement to be executed and attested by their duly authorized officers, as follows: 1471730.1 Party: By: Supervisor/Mayor Attest: Clerk 1471730.1 EXHIBIT A Parties to This Agreement and Their Addresses for Notice Pursuant to Section 11 of This Agreement Are as Follows: 1471730.1