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Council Reports for 10-19-09 Part 1qOW N OF !ps ° GA;~p9 Mike Wasserman, Mayor Diane McNutt, Vice Mayor NOTICE OF SPECIAL MEETING Joe Pirzynski, Council Member Steve Rice, Council Member Barbara Spector, Council Member TOWN OF LOS GATOS TOWN COUNCIL REGULAR COUNCIL MEETING WILL BE TELEVISED BEGINNING AT 7:00 P.M. NOTICE IS HEREBY GIVEN that Mike Wasserman, Mayor of the Town of Los Gatos, called a Special Meeting of the Town Council for October 19, 2009 at 5:30 p.m. to conduct a North 40 Conceptual Plan Study Session in the Council Chambers. Regular Town Council Meeting will begin at 7:00 p.m. in the Council Chambers. acki Rose, Clerk Administrator Dated: October 15, 2009 cc: Los Gatos Weekly Times Los Gatos Observer Council Members Posted !ps °.G°p ~pS Mike Wasserman, Mayor Diane McNutt, Vice Mayor Joe Pirzynski, Council Member Steve Rice, Council Member Barbara Spector, Council Member MEETING CALLED TO ORDER ROLL CALL TOWN OF LOS GATOS TOWN COUNCIL STUDY SESSION AGENDA 110 EAST MAIN STREET COUNCIL CHAMBERS (DOWNSTAIRS) OCTOBER 19, 2009 - 5:30 P.M. MEETING WILL BE TELEVISED VERBAL COMMUNICATIONS (Three-minute time limit) Update and Discussion on the General Plan Update Environmental Review Scope, including the North 40 Specific Plan Negative Declaration ND-99-08 Assessor Parcel Numbers: 424-07-009, 010, 024 thru 027, 031 thru 037, 051 thru 054, 057, 060, 063 thru 065, 070, 081 thru 095, and 424-06-047, 087, 115, 116, 120. Applicant: Town of Los Gatos Presenter: David Early of DC&E and staff ADJOURNMENT IN COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT, IF YOU NEED SPECIAL ASSISTANCE TO PARTICIPATE IN THIS MEETING, PLEASE CONTACT THE CLERK DEPARTMENT AT (408) 354-6834. NOTIFICATION 48 HOURS BEFORE THE MEETING WILL ENABLE THE TOWN TO MAKE REASONABLE ARRANGEMENTS TO ENSURE ACCESSIBILITY TO THIS MEETING (228 CFR 35.102-35.1041 ~pW N 0 Mike Wasserman, Mayor Diane McNutt, Vice Mayor Joe Pirzynski, Council Member Steve Rice, Council Member Barbara Spector, Council Member PARTICIPATION IN THE PUBLIC PROCESS The Town of Los Gatos strongly encourages your active participation in the public process, which is the cornerstone of democracy. If you wish to speak to an item on the agenda, please complete a "speaker's card" located on the back of the chamber benches and return it to the Clerk Administrator. If you wish to speak to an item NOT on the agenda, you may do so during the "verbal communications" period. The time allocated to speakers may change to better facilitate the Town Council meeting The purpose of the Town Council meeting is to conduct the business of the community in an effective and efficient manner. This is done by following meeting guidelines set forth in State law and in the Town Code. Conduct which is considered disruptive during Town Council meetings include, but is not limited to: • Addressing the Town Council without first being recognized; • Interrupting speakers, Town Council, and Town staff; • Continuing to speak after the allotted time has expired; • Failing to relinquish the podium when directed to do so; and • Repetitiously addressing the same subject For the benefit of the community, the Town of Los Gatos asks that you follow the Town's meeting guidelines while attending Town Council meetings and treat everyone with respect and dignity. Town Council Meetings Broadcast Live on KCAT, Channel 15 1st and 3rd Mondays at 7:00 p.m. Rebroadcast of Town Council Meetings Following Saturday at 12:00 Noon Live & Archived Council Meetings can be viewed by going to: w .los atosca. ov/Councilvideos TOWN OF LOS GATOS JOINT TOWN COUNCIL/PARKING AUTHORITY/ REDEVELOPMENT AGENCY OCTOBER 19, 2009 .110 East Main Street Council Chambers (Downstairs) Los Gatos, CA IN COMPLIANCE WITH THEAMERICANS WITH DISABILITIES ACT, IF YOU NEED SPECIAL ASSISTANCE TO PARTICIPATE IN THIS MEETING, PLEASE CONTACT THE CLERK DEPARTMENT AT (408) 354-6834. NOTIFICATION 48.HOURS BEFORE THE MEETING WILL ENABLE THE TOWN TO MAKE REASONABLE ARRANGEMENTS TO ENSURE ACCESSIBILITY TO THIS MEETING [28 CFR §35.102-35.104] - 1 - TOWN OF LOS GATOS JOINT TOWN COUNCIL/PARKING AUTHORITY/ REDEVELOPMENT AGENCY OCTOBER 19, 2009 7:00 P.M. MEETING CALLED TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE Commendation Los Gatos History Club PRESENTATIONS Commendation George Sampson Proclamation End Polio Day (Los Gatos Morning Rotary) CLOSED SESSION REPORT TOWN COUNCIL COUNCIL/TOWN MANAGER REPORTS ➢ Council Matters ➢ Manager Matters Writings related to an item on the Town Council meeting agenda distributed to members of the Council within 72 hours of the meeting are available for public inspection at the front desk of the Los Gatos Town Library, located at 110 E. Main Street, and are also available for review on the official Town of Los Gatos website. Copies of desk items distributed to members of the Council at the meeting are available for review in the Town Council Chambers Note: The Town of Los Gatos has adopted the provisions of Code of Civil Procedure §1094.6; litigation challenging a decision of the Town Council/Redevelopment Agency must be brought within 90 days after the decision is announced unless a shorter time is required by State or Federal law. -2- CONSENT ITEMS (TO BE ACTED UPON BY A SINGLE MOTION) (Before the Town Council/Redevelopment Agency acts on the consent agenda, any member of the public or Town Council/Agency may request that any item be removed from the consent agenda. Consent items will be considered at the discretion of Mayor/Chair) 1. Adopt resolution approving the form and authorizing the execution and delivery of a purchase and sale agreement and related documents with respect to the sale of the seller's Proposition 1A receivable from the State; and directing and authorizing certain other actions in connection therewith 2. Accept Investment Reports for First Fiscal Quarter 09/10 (July through September 2009) 3. Adopt resolution appointing Erik Wilhelmsen, Transportation and Parking Commissioner, as representative to the Santa Clara Valley Transportation Authority County Wide Bicycle and Pedestrian Advisory Committee (BPAC) 4. Adopt an ordinance for a zone change from CM to CM:PD for a three-story self storage building. No significant environmental impacts have been identified as a result of this project and a Mitigated Negative Declaration is recommended. APN 424- 31-065. Planned Development Application PD-08-001 - Negative Declaration ND-08- 05 Property Location: 930 University Avenue Property Owner: Extra Space of Los Gatos, LLC Applicant: Extra Space Storage 5. Adopt resolution granting an appeal of a Planning Commission decision denying an application for construction of a new single family residence zoned R-120. APN 529- 37-042 and remanding application to the Planning Commission: Architecture and Site Application S-04-64. Negative Declaration ND-07-147. Property location: 26 Alpine Avenue Property owner/applicant/appellant: Holiday Drive, LLC 6. Adopt ordinance amending Town Code Chapter 29, Division 6, Sections 29.10.3000 through 29.10.3040 regarding the Housing Assistance Program TOWN COUNCIL/REDEVELOPMENT AGENCY 7. Approve Council/Agency minutes of October 5, 2009 VERBAL COMMUNICATIONS (Up to three minutes maybe allotted to each speaker to address matters that are not on tonight's agenda.) TOWN COUNCIL PUBLIC HEARINGS (Applicants/Appellants and their representatives may be allotted up to a total of ten minutes maximum for opening statements. Members of the public may be allotted up to three minutes to comment on any public hearing item. Applicants/Appellants and their representatives may be allotted up to a total of five minutes maximum for closing statements. Items requested/recommended for continuance are subject to Council's consent at the meeting.) 8. Establishment of Commercial Alarm Permit Fee a. Introduce ordinance revising Town Code Section 14.50.010 regarding Police alarms and introduction of commercial alarm permit fees b. Adopt resolution authorizing the Town Manager to negotiate and execute a contract with PMAM Corporation for professional alarm management consultant services -3- PUBLIC HEARINGS (continued) 9. Consider a request of approval to operate a retail wine establishment with food, beer, and wine service on property zoned C-1. APN 529-07-047. Conditional Use Permit U- 09-007. Property Location: 414-416 N. Santa Cruz Avenue. Property Owner: Jim Zanardi Applicant: Michael Guerra/Joseph Cannistraci 10. Tow Contract Services a. Introduce ordinance rescinding Town Code Section 28.30.030 and 28.30.035 to eliminate Police rotation tows b. Adopt resolution authorizing Town Manager to negotiate and execute a contract with South Bay Towing to provide towing services for Police initiated tows TOWN COUNCIL/REDEVELOPMENT AGENCY OTHER BUSINESS (Up to three minutes may be allotted to each speaker on any of the following items.) 11. Fiscal Year 2009/10 First Quarter Budaet Performance and Status Report for the Period July 1, 2009-September 30, 2009 a. Accept 2009/10 First Quarter Budget Performance Status Report b. Authorize budget adjustments as recommended in the attached First Quarter Budget Performance Report ADJOURNMENT (Council/Redevelopment Agency policy is to adjourn no later than midnight unless a majority of Council/Redevelopment Agency votes for an extension of time) -4- ~O4N 0 'n- 4R !pS ~~A;~pS DATE: TO: FROM: SUBJECT: COUNCIL AGENDA REPORT OCTOBER 15,2009 MAYOR AND TOWN COUNCIL GREG LARSON, TOWN MANAGER MEETING DATE: STUDY SESSION pv-~ 10/19/2009 UPDATE AND DISCUSSION ON THE GENERAL PLAN UPDATE ENVIRONMENTAL REVIEW SCOPE, INCLUDING THE NORTH 40 SPECIFIC PLAN RECOMMENDATION Discuss and provide comments on the proposed General Plan Environmental Review as it pertains to the North 40. BACKGROUND Council has previously directed a limited focus update to the Town's General Plan as well as completion of the North 40 Specific Plan. In addition, the Town is completing its State-mandated update to the Housing Element. Each of these efforts requires varying degrees of environmental review prior to final Council action. Council previously approved a contract and subsequent contract amendments with Design Community & Environment (DC&E) to prepare a consolidated Environmental Impact Report (EIR) addressing the General Plan and Housing Element. Consolidation was recommended for efficiency and to avoid project piecemealing or segmentation, which are prohibited under the California Environmental Quality Act (CEQA). By law, the General Plan EIR must assess potential development in all parts of the Town, including the North 40. Since a Specific Plan will be prepared for the North 40, it is important that the General Plan EIR consider the maximum development on the North 40 that may ultimately be allowed under the Specific Plan. PREPARED BY: GREG LARSON Town Manager GL:pg NAMGR\AdminWorkFiles\2009 Council Reports\10-19-09 North 40 Study Session.doc Reviewed by: Assistant Town Manager Town Attorney Clerk Administrator Finance Community Development PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: UPDATE AND DISCUSSION ON THE GENERAL PLAN UPDATE ENVIRONMENTAL REVIEW SCOPE, INCLUDING THE NORTH 40 SPECIFIC PLAN OCTOBER 15, 2009 Alternative Development Mixes - Maintain estimated traffic levels of the Basic Development Parameters and/or the Reduced Development Alternative, but reduce the number of residential units and increase the commercial square footage to include broader community acid/or regional retail opportunities. Attachments 1. Memo to General Plan Committee on North 40 Conceptual Plan Review 2. Summary Minutes of September 23 General Plan Committee Meeting 3. North 40 Specific Plan Guiding Principles SOWN pp MEMORANDUM •.un COMMUNITY DEVELOPMENT DEPARTMENT To: General Plan Committee JI- From: Bud Lortz, Deputy Town Manager Subject: North 40 Conceptual Plan Review Date: September 17, 2009 BACKGROUND: On August 25, 2008, the Council held a Study Session to provide direction on how to proceed with finalizing the North 40 Specific Plan (N40SP) in light of prospective development proposals in the North 40 area. Specifically, the question was what process to follow: ® Complete the N40SP; and/or Consider specific development proposals in advance of completion of the N40SP. The Town Council voted 5-0 directing staff to finalize the N40SP. The Council indicated the Draft N40SP should be used as the foundation for an updated Plan. The Council also specified that the areas of focus for the update would be the following: ® How to fund and maintain infrastructure. ® Review the design standards in the Draft N40SP to address concerns that the design guidelines and images contained in the draft do not clearly reflect the character of Los Gatos. ® Determine an appropriate land use mix that does not compete with the Downtown, including limited residential development and a possible recreation component. The evaluation of residential uses should include an analysis of potential impacts to schools. ® Review the draft development standards, which currently include a 500,000 square foot cap on commercial mixed-use development, limit the size of any single use to a maximum of 70,000 square feet, state the average size of retail uses and structures should not exceed 30,000 square feet, and establish a maximum building height of 35 feet (exceptions can granted through the Planned Development process to permit buildings up to 45 feet). DISCUSSION: On June 15, 2009, the Town Council approved the agreement with Design, Community and Environment (DC&E) to include revisions to the N40SP and provide for consistency with the General Plan. The Council directed staff to work directly with the General Plan Committee and the Town Council on this important planning effort. ATTACBMENT I Q DRAFT TOWN OF LOS GATOS 1.10 East Main Street, Los Gatos, CA 95030 (408) 354-6872 SUMMARY MINUTES OF A REGULAR MEETING OF THE GENERAL PLAN COMMITTEE OF THE TOWN OF LOS GATOS ON SEPTEMBER 23, 2009, HELD AT THE NEIGHBORHOOD CENTER, LARGE HALL, 110 EAST MAIN STREET, LOS GATOS, CALIFORNIA. - The meeting was called to order at 5:20 pm by Jane Ogle. ATTENDANCE Members present: John Bourgeois, Barbara Cardillo, Tom O'Donnell, Jane Ogle, Joe Pirzynski, Chuck Sloan, Barbara Spector Members absent: Marcia Jensen Staff present: Greg Larson, Town Manager; Bud Lortz, Deputy Town Manager; Wendie Rooney, Director of Community' Development; Suzanne Davis, Associate Planner; Joel Paulson, Associate Planner; Jennifer Savage, Assistant Planner; Jessica von Borck, Economic Vitality Manager Consultants present: David Early, Design Community & Environment (DC&E); Peter Calthorpe, Architect Public attendees: Mike Amidi, Lynlee Bischoff, Pete Brutsche, Ray Davis, Kerry Laubach, Milt Mintz, Tom Spilsbury VERBAL COMMUNICATIONS: Ray Davis commented on Monday's Town Council meeting. The Council voted to acquire two acres below the dain for soccer fields. He disagrees with Bud Lortz's recommendation to install two small fields and parking for 60 cars. He also commented that the money from the sale of Town property in Vasona is not being used for its intended purpose, and he feels it is a fraud. Lastly, he commented on the dust cloud being spread by the cement plant in Cupertino. He encouraged people to protest as the permit is up for renewal, ITEM 1 REVIEW OF NORTH 40 SPECIFIC PLAN Greg Larson opened the meeting noting that tonight's meeting is the result of Council direction from a meeting held August 2009. At that meeting the Council directed staff to complete the North 40 Specific Plan. The plan was originally developed through a community process and was tabled pending the General Plan update in 2000. There will be an on-going series of discussions over the next six months. The North 40 is the largest ATTACHMENT 2 General Plan Committee September 23, 2009 Page 2 of S undeveloped area in the Town. Council directed staff to review design standards, to determine an appropriate land use mix that may include residential and will not compete with the Downtown, and to look at the development standards. The primary property owner, the Yuki family, has a representative who will present their thoughts on the development of the North 40. There will be a Town Council study session on October 19, 2009. John Bourgeois clarified that the Committee should be providing a recommendation to the Town Council on the consultant's presentation. David Early, DC&E, noted that the requested action is to include the North 40 program as a component of the General Plan EIR. The goals for the project are to indentify an appropriate mix of uses and the parameters for design and development. There is an existing draft plan that currently supports destination retail and mixed use commercial. The plan no longer matches the Town's vision included in the current General Plan. The goal is to find a project that is smart growth, sustainable, and that reflect today's market. Guiding principles include residential uses to the south, retail mixed use to the north and a variety of types of residential. The Yuki family is working with a developer, Grosvenor, and an architect, Peter Calthorpe, who will be preparing a development proposal in parallel with the General Plan Update. Many of the ideas overlap. Grosvenor controls about 30 acres of the 42 acre site. Barbara Cardillo clarified that the portion of the North 40 that is not being discussed is the parcels that are already developed. David Early noted that for the Specific Plan, the entire area is being included. The development proposal from Grosvenor does not include already developed parcels, a few residences and land not owned by the Yuki family. Peter Calthorpe, Architect, presented four principles that make a good place that is sustainable and smart growth as follows: ® Diversity and balance: inclusive of a civic realm, residential, commercial and neighborhood. ® Human and pedestrian scale: building shape, size, not centered around the automobile. There are different types of human scale, but they all have the same components including walkability and vitality. • Conservation and sustainability: no place is an island, sustainability and conservation is more than placing solar panels on the roof and driving a Prius. Single family is sprawl. Green sprawl is when people conserve energy and drive an energy efficient vehicle. Compact housing includes more efficient building envelopes as opposed to large lot single-family development. Compact green is higher density residential (compact) with sustainable design. There is a need for a range of housing types. Housing that fits into the compact green category is a 4:1 savings on carbon emissions. There is currently a regional housing shortage. General Plan Committee September 23, 2009 Page 3 of S ® Connection and interdependence: proximity to jobs and housing. One of the good things about the location of the North 40 site is its proximity to regional transit. Once the light rail is extended to Los Gatos, a shuttle link between there, the Downtown and the North 40 will interconnect the areas and allow people to travel around town without using their cars. Desirable plan elements: The scale of the site needs to be attended to ® A pedestrian oriented edge along Los Gatos Blvd. is needed ® Minimal parking along the'street and in front of buildings ® More of a pedestrian edge along buildings ® Create a more unified landscape for sense of unity and consistent theme ® Need to connect through and use as many access points as possible so the site becomes interconnected and traffic is dispersed a Streets have to designed for pedestrians ® Traffic calming ® Break the scale of the blocks down ® Two characteristics: civic anchors including a park surrounded by residential and a center plaza surrounded by mixed use ® Create boulevard treatment along the edge (Los Gatos Blvd.) to provide continuity and comiectiveness A true compact interconnected community can be achieved without impacting views of the hills and overwhelming its surroundings. 'The predominant residential type would be three-story townhouses. David Early discussed the overall development goal that will be expressed in the General Plan, which is to develop the North 40 with a mix of uses that complements and does not compete with the Downtown and the rest of the community, and to plan for a smart community that is sustainable. Guiding Principles to be included in the General Plan: Mixed use: ® High quality architecture ® Residential uses to south Retail mixed use to north Variety of types of residential Connected street network: ® Connections to existing intersections along Lark & LGV ® Pedestrian orientation General Plan Committee September 23, 2009 Page 4 of 5 Open Space: • Park at center of residential • Plaza at center of mixed use area • Continuation of treatment along LOB • Vegetative screeningibuffer along Highway 17 and Route 85 • Pedestrian scale buildings along LOB with minimal parking • Split level buildings • Tuck under parking • Building heights that protect Town character and views: a. 2-story maximum along LOB b. 4-story maximum further back on the site c. possible 5-story hotel Development potential of up to 585,000 square feet of retail and office space and up to 750 residential units to be evaluated in EIR. Tone O'Donnell asked about the numbers and what acreage would be assigned to those uses. He is having difficulty envisioning the density. David Early noted that Grosvenor controls about 31 acres. The entire site is about 42 acres and the average for residential is about 18 units per acre. Bud Lortz noted that the proposed development potential is about 30% less dense than the Sobrato development. Torn O'Donnell expressed concern that the height limitations will provide enough control. Peter Calthorpe noted that the objective is to shape something that provides a good envelope for development. David Early stated that the development parameters are intended for the entire site and that the density could not be made more compact and proposed for only a portion of the site. Barbara Spector commented that she is concerned about the proposed building heights and potential visibility, how the development may or may not be phased, infrastructure, road intersection congestion. Barbara Cardillo connnented on the.goal of complementing and not competing with the Downtown. While it sounds good, it presents the possibility of a Santana Row-like project. David Early noted that the anticipated businesses would be those that would not fit in the Downtown and would provide good that are not available there. Peter Calthorpe noted that it will be important to specify the type of retail that is needed and desired. What types of products are people leaving town to obtain. John Bourgeois commented that he is concerned about view preservation and visual impact. He asked for, clarification on the split between mixed use commercial and residential and how it was determined. Peter Calthorpe explained that the mixed use area will need its own access and should not be hidden behind the existing commercial area just north of Lark Avenue. General Plan Committee September 23, 2009 Page 5 of 5 John Bourgeois clarified that the proposed numbers are for purposes of study and environmental evaluation. He commented that the parcel is one of the last areas of agricultural use, and if the concept of retaining a portion of the orchard has been considered. Peter Calthorpe noted that project specific details are not being shown at this point. Bud Lortz noted that the history of the Yulci family should be included with preservation of a component of the existing agricultural use of the site. ' Joe Pirzynski commented that he agrees with 'everything that has been said. An important consideration is traffic generation. The entrance and egress will be very important because of the existing traffic impact that is there now. The impact on schools will need to be considered. He is not sure there is a nexus with the residential area to the south of Lark Avenue. This has gone a long way to competing the North 40 Plan, and he is very interested to see how the principles are received. He supports the proposal. This is an extremely important piece of the community, It is a chance to do things right. Jane Ogle commented that this is a very important project and she feels uncomfortable malting a decision after an hour and a half discussion. Tom O'Donnell and Barbara Spector agreed, David Early said the principles can be revised based on comments that were made tonight. For example, the need for a cultural component and preservation of views of the hills. The matter will be returned to the Committee for further discussion. NEW BUSINESS None ADJOURNMENT Meeting was adjourned at 6:45 PM. The next meeting of the General Plan Committee is scheduled for October 14, 2009. Prepared by: Suzanne Davis, Associate Planner N t\DEV\GPC\2009minutes\GPC-092309.doc North 40 Specific Plan Guiding Principles Revised for discussion October 19, 2009 Complement and do not compete with Los Gatos' Downtown and the rest of the community. Sustainable and "smart" development. Mixed use: e Residential uses to the south. ® Retail mixed use to the north. ® Variety of types of residential units. Plaza at center of mixed use area. Park at center of residential area. Connected street network. ® Pedestrian orientation. ♦ Connections to existing intersections along Los Gatos. Boulevard and Lark Avenue. Architecture and design that reflects the rural and agricultural history of the site. Gateway or landmark features at Los Gatos Boulevard/Lark Avenue and Los Gatos Boulevard/ Highway 85 off ramp. High-quality architecture. Continuation of "Boulevard Treatment" along Los Gatos Boulevard, with interconnections from one parcel's drive aisle to the next. Pedestrian-oriented buildings along the Los Gatos Boulevard frontage, with minimal parking oriented to the street. Vegetative buffer and screening along Highways 17 and 85. Take advantage of the grade change across the site. ® Split-level buildings allowing two floors of retail. ® "Tuck under" parking. Building heights to preseive Town character and views: ® Preserve views of the hills from Highways 17 and 85. ® Two stories maximum along Los Gatos Boulevard. ® Four stories maximum on most of the site. ® Possible five story hotel. ATTACHMENT 3 SOW N OF t cos GA o5 COUNCIL AGENDA REPORT DATE: OCTOBER 14, 2009 MEETING DATE: 10/19/2009 ITEM NO: , TO: MAYOR AND TOWN COUNCIL FROM: GREG LARSON, TOWN MANAGER SUBJECT: ADOPT RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE SELLER'S PROPOSITION 1 A RECEIVABLE FROM THE STATE; AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH RECOMMENDATION: It is recommended that the Council adopt the attached resolution (Attachment No. 1) approving the form of and authorizing the execution and delivery of a purchase and sale agreement and related documents (Attachment No. 2) with respect to the sale of the seller's Proposition 1 A Receivable from the State; and directing and authorizing certain other actions in connection therewith. BACKGROUND: Proposition IA was passed by California voters in 2004 to ensure local property tax and sales tax revenues remain with local government thereby safeguarding funding for public safety, health, libraries, parks, and other local services. Provisions can only be suspended if the Governor declares a fiscal necessity and two-thirds of the Legislature concur. On July 28, 2009, as part of the FY 2009/10 State Budget, an emergency suspension of Proposition IA was passed by the Legislature and signed by the Governor as ABX4 1.4 and ABX4 15. Under the emergency provision, the State will borrow 8% of the amount of property tax revenue apportioned to cities, counties and special districts. The state will be required to repay those obligations plus interest by June 30, 2013. It is anticipated that the State will borrow $800,000 - $1,000,000 in property tax revenue from the Town. ABX4 14 and ABX4 15 authorizes Proposition IA Securitization Program, which was instituted by California Communities, a joint powers authority sponsored by the California State Association of Counties and the League of California Cities. This program enables local agencies to sell their respective Proposition IA Receivables to California Communities, who will then simultaneously purchase the Proposition IA Receivables, issue bonds ("Prop IA Bonds") and provide local agencies with the cash proceeds in two equal installments, on January 15, 2010 and May 3, 2010 (to coincide with the dates that the State will be shifting prop p • tax from to al agencies). The purchase price paid to the local agencies PREPARED BY: JE 0 YA A SISTANT FINANCE/BUDGET DIRECTOR NAFINANCE\Prop IA Securitization D- uments\Prop IA Securi ion.doc Reviewed by:~5 Assistant Town Manager Clerk Administrator -AO/Finance Town Attorney nmunity Development PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: ADOPT RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE SELLER'S PROPOSITION lA RECEIVABLE FROM THE STATE; AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH October 14, 2009 will equal 100% of the amount of the property tax reduction. All transaction costs of issuance and interest will be paid by the State of California. Participating local agencies will have no obligation on the bonds and no credit exposure to the State. If the Town sells its Proposition IA Receivable under the Proposition IA Securitization Program, California Communities will pledge the Town's Proposition IA Receivable to secure the repayment of a corresponding amount of the Prop IA Bonds. The Town's sale of its Proposition IA Receivable will be irrevocable. Bondholders will have no recourse to the Town if the State does not make the Proposition lA Repayment. Specific aspects of the Proposition 1 A Securitization Program have been clarified as a result of the recent passage of SB 67, a clean up bill to ABX4 14 and ABX4 15. Key changes to the enacted legislation include, but are not limited to: enabling the financing to occur in November; requiring a county auditor certification of the amount of the Proposition IA Receivable; creating a tax-exempt structure; making California Communities the only issuer; creating more flexibility regarding the bond structure (interest payments, state payment date and redemption features); and revising the hardship mechanism. Cities, counties, and special districts who choose to participate in the program must adopt the attached Proposition IA Securitization Resolution and Purchase and Sale Agreement by November 6, 2009. DISCUSSION: Based on discussions with local agencies and literature from the League of California Cities, staff has determined that it is in the best interest or Los Gatos to participate in the Proposition 1 A Securitization Program. At a recent Santa Clara County/Cities Fiscal Officers meeting, all attending agencies confirmed their intent to participate in the Securitization Program. Benefits to participation include: ■ Immediate Cash Relief - The sale of the Town's Proposition IA Receivable will provide the Town with 100% of its Proposition lA Receivable in two equal installments, on January 15, 2010 and May 3, 2010. ■ Mitigates Impact of the 8% Property Tax Withholding in January and Mai- Per ABX4 14 and ABX4 15 and the recently adopted clean-up legislation SB 67, the State will withhold 8% of property tax receivables due to cities, counties, and special districts under Proposition IA. The financing outlines bond proceeds to be distributed to coincide with the dates that the State will be shifting property tax from local agencies. ■ All Costs of Financing will be Borne by the State of California - The Town will not have to pay any interest cost or costs of issuance in connection with it participation. ■ No obligation on Bonds The Town has no obligation with respect to the payment of the bonds, nor any reporting, disclosure or other compliance obligations associated with the bonds. PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: ADOPT RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE SELLER'S PROPOSITION 1A RECEIVABLE FROM THE STATE; AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH October 14, 2009 Should the Council choose to participate in the Proposition IA Securitization Program, it must adopt the attached Resolution and Purchase and Sale Agreement and related exhibits as summarized below: Proposed Proposition IA Receivables Sale Resolution ■ Authorizes the sale of the Town's Proposition IA Receivable to California Communities for 100% of its receivable; ■ Approves the form, and directs the execution and delivery of the Purchase and Sale Agreement with California Communities and related documents; ■ Authorizes and directs any Authorized Officer to send, or to cause to be sent, an irrevocable written instruction required by statute to the State Controller notifying the State of the sale of the Proposition IA Receivable and instructing the disbursement of the Proposition IA Receivable to the Proposition IA Bond Trustee; ■ Appoints certain Town officers and officials as Authorized Officers for purposes of signing documents; and ■ Authorizes miscellaneous related actions and makes certain ratifications, findings and determinations required by law. Proposed Purchase and Sale Agreement ■ Provides for the sale of the Proposition I A Receivable to California Communities; ■ Contains representations and warranties of the Town to assure California Communities that the Proposition IA Receivable has not been previously sold, is not encumbered, that no litigation or other actions is pending or threatened to disrupt the transaction and the this is an arm's length "true sale" of the Proposition IA Receivable; and ■ Provides mechanics for payment of the Purchase Price. Proposed Purchase and Sale Agreement Exhibits ■ (B1): Opinion of Counsel: This is an opinion of the counsel to the local agency (which may be an in-house counsel or an outside counsel) covering basic approval of the documents, litigation, and enforceability of the document against the Seller. It will be dated as of the Pricing date of the bonds (currently expected to be November 10, 2009). (B2): Bringdown Opinion: This simply "brings down" the opinions to the closing date (currently expected to be November 19, 2009). PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: ADOPT RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE SELLER'S PROPOSITION IA RECEIVABLE FROM THE STATE; AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH October 14, 2009 ■ (C 1): Certificate of the Clerk of the Local Agency: A certificate of the Clerk confirming that the resolution was duly adopted and is in full force and effect. ■ (C2): Seller Certificate: A certification of the Seller dated as of the Pricing Date confirming that the representations and warranties of the Seller are true as of the Pricing Date, confirming authority to sign, confirming due approval of the resolution and providing payment instructions. ■ (0): Bill of Sale and Bringdown Certificate: Certificate that brings the certifications of C2 down to the Closing Date and confirms the sale of the Proposition IA Receivable as of the Closing Date. ■ Irrevocable Instructions to the Controller: Required in order to let the State Controller know that the Proposition IA Receivable has been sold and directing the State to make payment of the receivable to the Trustee on behalf of the Purchaser. ■ Escrow Instruction Letter: Instructs Transaction Counsel (Orrick) to hold all documents in escrow until closing, and if closing does not occur by December 31, 2009 for any reason, to destroy all documents. CONCLUSION: It is recommended that the Council agree to participate in the Proposition IA Securitization Program and adopt the attached resolution and Purchase and Sale Agreement. FISCAL IMPACT: If the Council chooses to participate in the Proposition I A Securitization Program, the sale of the Town's Proposition IA Receivable will provide the Town with 100% of its Proposition IA Receivable in two equal installments, on January 15, 2010 and May 3, 2010. The Town will not have to pay any interest cost or costs of issuance in connection with it participation, nor will it have any obligation with respect to the payment of the bonds, reporting, disclosure or other compliance obligations associated with the bonds. Attachments: Attachment No. 1: Resolution Approving the Form of and Authorizing the Execution and Delivery of a Purchase and Sale Agreement and Related Documents with Respect to the Sale of the Seller's Proposition IA Receivable from the State; and Directing and Authorizing Certain Other Actions in Connection Therewith Attachment No. 2: Purchase and Sale Agreement and Related Documents Distribution: Orrick, Herrington & Sutcliffe LLP, 405 Howard Street, San Francisco, CA 94105 RESOLUTION NO. TOWN,COUNCIL OF THE' TOWN OFLOS GAT05 A RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE SELLER'S PROPOSITION I A RECEIVABLE FROM THE STATE; AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, pursuant to Section 25.5 of Article XIII of the California Constitution and Chapter 14XXXX of the California Statutes of 2009 (Assembly Bill No. 15), as amended (the "Act"), certain local agencies within the State of California (the "State") are entitled to receive certain payments to be made by the State on or before June 30, 2013, as reimbursement for reductions in the percentage of the total amount of ad valorem property tax revenues allocated to such local agencies during the State's 2009-10 fiscal year (the "Reimbursement Payments"), which reductions have been authorized pursuant to Sections 100.05 and 100.06 of the California Revenue and Taxation Code; WHEREAS, the Town of Los_ Galo,~, a local agency within the meaning of Section 6585(0 of the California Government Code (the "Seller"), is entitled to and has determined to sell all right, title and interest of the Seller in and to its "Proposition IA receivable", as defined in Section 6585(g) of the California Government Code (the "Proposition IA Receivable"), namely, the right to payment of moneys due or to become due to the Seller pursuant to Section 25.5(a)(1)(B)(iii) of Article XIII of the California Constitution and Section 100.06 of the California Revenue and Taxation Code, in order to obtain money to fund public capital improvements or working capital; WHEREAS, the Seller is authorized to sell or otherwise dispose of its property as the interests of its residents require; WHEREAS, the California Statewide Communities Development Authority, a joint exercise of powers authority organized and existing under the laws of the State (the "Purchaser"), has been authorized pursuant to Section 6588(x) of the California Government Code to purchase the Proposition IA Receivable; WHEREAS, the Purchaser desires to purchase the Proposition IA Receivable and the Seller desires to sell the Proposition 1A Receivable pursuant to a purchase and sale agreement by and between the Seller and the Purchaser in the form presented to this Town Council (the "Sale Agreement") for the purposes set forth herein; WHEREAS, in order to finance the purchase price of the Proposition IA Receivable from the Seller and the purchase price of other Proposition lA Receivables from other local agencies, the Purchaser will issue its bonds (the "Bonds") pursuant to Section 6590 of the California Government Code and an Indenture (the "Indenture"), by and between the Purchaser and Wells Fargo Bank, National Association, as trustee (the "Trustee"), which Bonds will be payable solely ATTACHMENT 1 from the proceeds of the Seller's Proposition IA Receivable and other Proposition IA Receivables sold to the Purchaser by local agencies in connection with the issuance of the Bonds; WHEREAS, the Seller acknowledges that (i) any transfer of its Proposition IA Receivable to the Purchaser pursuant to the Sale Agreement shall be treated as an absolute sale and transfer of the property so transferred and not as a pledge or grant of a security interest by ;Logy%n oi' Los G ~tcj to secure a borrowing, (ii) any such sale of its Proposition IA Receivable to the Purchaser shall automatically be perfected without the need for physical delivery, recordation, filing or further act, (iii) the provisions of Division 9 (commencing with Section 9101) of the California Commercial Code and Sections 954.5 to 955.1 of the California Civil Code, inclusive, shall not apply to the sale of its Proposition IA Receivable, and (iv) after such transfer, the Seller shall have no right, title, or interest in or to the Proposition IA Receivable sold to the Purchaser and the Proposition IA Receivable will thereafter be owned, received, held and disbursed only by the Purchaser or a trustee or agent appointed by the Purchaser; WHEREAS, the Seller acknowledges that the Purchaser will grant a security interest in the Proposition ]A Receivable to the Trustee and any credit enhancer to secure payment of the Bonds; WHEREAS, a portion of the proceeds of the Bonds will be used by the Purchaser to, among other things, pay the purchase price of the Proposition IA Receivable; WHEREAS, the Seller will use the proceeds received from the sale of the Proposition IA Receivable for any lawful purpose as permitted under the applicable laws of the State; NOW THEREFORE, the Town ('ouncil of the Town of Los Gatos hereby resolves as follows: Section 1. All of the recitals set forth above are true and correct, and this [f m%lii ,bwm64 hereby so finds and determines. Section 2. The Seller hereby authorizes the sale of the Proposition 1 A Receivable to the Purchaser for a price equal to the amount certified as the Initial Amount (as defined in the Sale Agreement) by the County auditor pursuant to the Act. The form of Sale Agreement presented to the T «n Council is hereby approved. An Authorized Officer (as set forth in Appendix A of this Resolution, attached hereto and by this reference incorporated herein) is hereby authorized and directed to execute and deliver the Sale Agreement on behalf of the Seller, which shall be in the form presented at this meeting. Section 3. Any Authorized Officer is hereby authorized and directed to send, or to cause to be sent, an irrevocable written instruction to the State Controller (the "Irrevocable Written Instruction") notifying the State of the sale of the Proposition IA Receivable and instructing the disbursement pursuant to Section 6588.6(c) of California Government Code of the Proposition IA Receivable to the Trustee, on behalf of the Purchaser, which Irrevocable Written Instruction shall be in the form presented at this meeting. 2 Section 4. The Authorized Officers and such other Seller officers, as appropriate, are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents, including but not limited to, if required, appropriate escrow instructions relating to the delivery into escrow of executed documents prior to the closing of the Bonds, and such other documents mentioned in the Sale Agreement or the Indenture, which any of them may deem necessary or desirable in order to implement the Sale Agreement and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution; and all such actions heretofore taken by such officers are hereby ratified, confirmed and approved. Section 5. All consents, approvals, notices, orders, requests and other actions permitted or required by any of the documents authorized by this Resolution, whether before or after the sale of the Proposition IA Receivable or the issuance of the Bonds, including without limitation any of the foregoing that may be necessary or desirable in connection with any default under or amendment of such documents, may be given or taken by an Authorized Officer without further authorization by this Town Council; and each Authorized Officer is hereby authorized and directed to give any such consent, approval, notice, order or request, to execute any necessary or appropriate documents or amendments, and to take any such action that such Authorized Officer may deem necessary or desirable to further the purposes of this Resolution. Section 6. The Town Council acknowledges that, upon execution and delivery of the Sale Agreement, the Seller is contractually obligated to sell the Proposition IA Receivable to the Purchaser pursuant to the Sale Agreement and the Seller shall not have any option to revoke its approval of the Sale Agreement or to determine not to perform its obligations thereunder. 3 approval. Section 7. This Resolution shall take effect from and after its adoption and PASSED AND ADOPTED by the Town GMI11CA of the Town of Los Gatos; State of California, this day of , 2009, by the following vote: AYES: NOES: ABSENT: ~J% lnyo Attest: C Jerk Administrator Approved as to form : SELLER'S COUNSEL By Dated: 4 APPENDIX A TOWN OF LOS GATOR Authorized Officers: -Steohcn Conway, Finance Directo , Jenny `l laruyama. ; s~istalil Finance Directuc Pamela Jacobs, Assistant Town Managers any designee of any of them, as appointed in a written certificate of such Authorized Officer delivered to the Trustee. TOWN. OF LOS GATOS; CALIFORNIA, as Seller and CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY, as Purchaser PURCHASE AND SALE AGREEMENT Dated as of November 1, 2009 ATTACHMENT 2 TABLE OF CONTENTS Page 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. DEFINITIONS AND INTERPRETATION 2 AGREEMENT TO SELL AND PURCHASE; CONDITIONS PRECEDENT 2 PURCHASE PRICE, CONVEYANCE OF PROPOSITION IA RECEIVABLE AND PAYMENT OF PURCHASE PRICE 3 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER 5 COVENANTS OF THE SELLER 7 THE PURCHASER'S ACKNOWLEDGMENT 9 NOTICES OF BREACH 9 LIABILITY OF SELLER; INDEMNIFICATION ............................................................9 LIMITATION ON LIABILITY ......................................................................................10 THE SELLER'S ACKNOWLEDGMENT ......................................................................10 NOTICES AMENDMENTS SUCCESSORS AND ASSIGNS THIRD PARTY RIGHTS PARTIAL INVALIDITY .................................................................10 .................................................................10 .................................................................10 .................................................................11 COUNTERPARTS ..........................................................................................................11 ENTIRE AGREEMENT I 1 19. GOVERNING LAW ........................................................................................................12 EXHIBIT A - DEFINITIONS A-1 EXHIBIT B 1 - OPINION OF SELLER'S COUNSEL 131-1 EXHIBIT B2 - BRINGDOWN OPINION OF SELLER'S COUNSEL 132-1 EXHIBIT C 1 - CLERK'S CERTIFICATE C 1-1 EXHIBIT C2 - SELLER CERTIFICATE C2-1 EXHIBIT C3 - BILL OF SALE AND BRINGDOWN CERTIFICATE C3-1 EXHIBIT D - IRREVOCABLE INSTRUCTIONS TO CONTROLLER D-1 EXHIBIT E - ESCROW INSTRUCTION LETTER E-1 i PURCHASE AND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT, dated as of November 1, 2009 (this "Agreement"), is entered into by and between: (1) TOWN OF'LOS GATOS, a local agency of the State of California within the meaning of Section 6585(f) of the California Government Code (the "Seller"); and (2) CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the State of California (the "Purchaser"). RECITALS A. Pursuant to Section 25.5 of Article XIII of the California Constitution and Section 100.06 of the California Revenue and Taxation Code, local agencies within the meaning of Section 6585(f) of the California Government Code are entitled to receive certain payments to be made by the State of California (the "State") on or before June 30, 2013, as reimbursement for reductions in the percentage of the total amount of ad valorem property tax revenues allocated to such local agencies during the State's 2009-10 fiscal year, which reductions have been authorized pursuant to Sections 100.05 and 100.06 of the California Revenue and Taxation Code. B. The Seller is the owner of the Proposition IA Receivable (as defined below) and is entitled to and has determined to sell all right, title and interest in and to the Proposition IA receivable, namely, the right to payment of moneys due or to become due to the Seller pursuant to Section 25.5(a)(1)(B)(iii) of Article XIII of the California Constitution and Section 100.06 of the California Revenue and Taxation Code, in order to obtain money to fund any lawful purpose as permitted under the applicable laws of the State. C. The Seller is authorized to sell or otherwise dispose of its property as the interests of its residents require. D. The Purchaser, a joint exercise of powers authority organized and existing under the laws of the State, has been authorized pursuant to Section 6588(x) of the California Government Code to purchase the Proposition 1A Receivable. E. The Seller is willing to sell, and the Purchaser is willing to purchase, the Proposition 1A Receivable upon the terms specified in this Agreement. F. Pursuant to its Proposition IA Receivable Financing Program (the "Program"), the Purchaser will issue its bonds (the "Bonds") pursuant to an Indenture (the "Indenture"), between the Purchaser and Wells Fargo Bank, National Association, as trustee (the "Trustee"), and will use a portion of the proceeds thereof to purchase the Proposition IA Receivable from the Seller. G. The Purchaser will grant a security interest in such Proposition IA Receivable to the Trustee and each Credit Enhancer to secure the Bonds. AGREEMENT NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants herein contained, the parties hereto hereby agree as follows: 1. Definitions and Interpretation. (a) For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in Exhibit A attached hereto and which is incorporated by reference herein. (b) The words "hereof," "herein," "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; section and exhibits references contained in this Agreement are references to sections and exhibits in or to this Agreement unless otherwise specified; and the term "including" shall mean "including without limitation." (c) Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time may be amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments and exhibits thereto and instruments incorporated therein; and any references to a Person are also to its permitted successors and assigns. 2. Agreement to Sell and Purchase; Conditions Precedent. (a) The Seller agrees to sell, and the Purchaser agrees to purchase, on the Closing Date, for an amount equal to the Purchase Price, all right, title and interest of the Seller in and to the "Proposition IA receivable" as defined in Section 6585(g) of the California Government Code (the "Proposition IA Receivable"), namely, the right to payment of moneys due or to become due to the Seller pursuant to Section 25.5(a)(1)(B)(iii) of Article XIII of the California Constitution and Section 100.06 of the California Revenue and Taxation Code. The Purchase Price shall be paid by the Purchaser to the Seller in two equal cash installment payments, without interest (each, an "Installment Payment" and, collectively, the "Installment Payments"), on January 15, 2010, and May 3, 2010 (each a "Payment Date" and, collectively, the "Payment Dates"). The Purchaser shall pay the Purchase Price by wire transfer pursuant to wire instructions provided by the Seller to the Trustee by e-mail to john.deleray@wellsfargo.com or by facsimile to 213-614-3355, Attention: John Deleray. If wire instructions are not provided to the Trustee (or if such wire instructions are invalid) payment will be made by check mailed to the Seller's Principal Place of Business. (b) The performance by the Purchaser of its obligations hereunder shall be conditioned upon: (i) Transaction Counsel receiving on or before the date the Bonds are sold (the "Pricing Date"), to be held in escrow until the Closing Date and then delivered to the Purchaser on the Closing Date, the following documents 2 duly executed by the Seller or its counsel, as applicable: (1) an opinion of counsel to the Seller dated the Pricing Date in substantially the form attached hereto as Exhibit BI, (2) certificates dated the Pricing Date in substantially the forms attached hereto as Exhibit CI and Exhibit C2, (3) irrevocable instructions to the Controller dated as of the Closing Date in substantially the form attached hereto as Exhibit D, (4) this Agreement, (5) a certified copy of the resolution of the Seller's To yn Co~inci I approving this Agreement, the transactions contemplated hereby and the documents attached hereto as exhibits, and (6) an escrow instruction letter in substantially the form attached hereto as Exhibit E; (ii) Transaction Counsel receiving on or before the Pricing Date, (1) a bringdown opinion of counsel to the Seller dated as of the Closing Date in substantially the form attached hereto as Exhibit B2, and (2) a bill of sale and bringdown certificate of the Seller (the "Bill of Sale") in substantially the form attached hereto as Exhibit C3; provided that the Purchaser may waive, in its sole discretion, the requirements of Section 2(b)(ii)(1); (iii) the Purchaser issuing Bonds in an amount which will be sufficient to pay the Purchase Price; and (iv) the receipt by the Purchaser of a certification of the County Auditor confirming the Initial Amount of the Proposition IA Receivable pursuant to the Act. (c) The performance by the Seller of its obligations hereunder shall be conditioned solely upon the Purchaser's issuance of the Bonds its execution and delivery of this Agreement, pursuant to which it is legally obligated to pay the Installment Payments to the Seller on the Payment Dates as set forth in this Agreement, and no other act or omission on the part of the Purchaser or any other party shall excuse the Seller from performing its obligations hereunder. Seller specifically disclaims any right to rescind this Agreement, or to assert that title to the Proposition lA Receivable has not passed to the Purchaser, should Purchaser fail to make Installment Payments in the requisite amounts on the Payment Dates. 3. Purchase Price Conveyance of Proposition lA Receivable and Payment of Purchase Price. (a) Upon pricing of the Bonds by the Purchaser, the Purchaser will inform the Seller that it will pay the Purchase Price in Installment Payments on the Payment Dates. (b) In consideration of the Purchaser's agreement to pay and deliver to the Seller the Installment Payments on the Payment Dates, the Seller agrees to (i) transfer, grant, bargain, sell, assign, convey, set over and deliver to the Purchaser, absolutely and not as collateral security, without recourse except as expressly provided herein, and the Purchaser agrees to purchase, accept and receive, the Proposition 1 A Receivable, and (ii) assign to the Purchaser, to the extent permitted by law, all present or future rights, if any, of the Seller to enforce or cause the enforcement of payment of the Proposition 1 A Receivable pursuant to the Act and other 3 applicable law. Such transfer, grant, bargain, sale, assignment, conveyance, set over and delivery is hereby expressly stated to be a sale and, pursuant to Section 6588.6(b) of the California Government Code, shall be treated as an absolute sale and transfer of the Proposition IA Receivable, and not as a grant of a security interest by the Seller to secure a borrowing. This is the statement referred to in Sections 6588.6(b) and (c) of the California Government Code. 4. Representations and Warranties of the Purchaser. The Purchaser represents and warrants to the Seller, as of the date hereof, as follows: (a) The Purchaser is duly organized, validly existing and in good standing under the laws of the State of California. (b) The Purchaser has full power and authority to enter into this Agreement and to perform its obligations hereunder and has duly authorized such purchase and assignment of the Proposition IA Receivable by the Purchaser by all necessary action. (c) Neither the execution and delivery by the Purchaser of this Agreement, nor the performance by the Purchaser of its obligations hereunder, shall conflict with or result in a breach or default under any of its organizational documents, any law, rule, regulation, judgment, order or decree to which it is subject or any agreement or instrument to which it is a party. (d) To the best of the knowledge of the Purchaser, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, is pending or threatened in any way against the Purchaser affecting the existence of the Purchaser or the titles of its commissioners or officers, or seeking to restrain or to enjoin the purchase of the Proposition IA Receivable or to direct the application of the proceeds of the purchase thereof, or in any way contesting or affecting the validity or enforceability of any of the Transaction Documents or any other applicable agreements or any action of the Purchaser contemplated by any of said documents, or in any way contesting the powers of the Purchaser or its authority with respect to the Transaction Documents to which it is a party or any other applicable agreement, or any action on the part of the Purchaser contemplated by the Transaction Documents, or in any way seeking to enjoin or restrain the Purchaser from purchasing the Proposition IA Receivable or which if determined adversely to the Purchaser would have an adverse effect upon the Purchaser's ability to purchase the Proposition IA Receivable, nor to the knowledge of the Purchaser is there any basis therefor. (e) This Agreement, and its execution, delivery and performance hereof have been duly authorized by it, and this Agreement has been duly executed and delivered by it and constitutes its valid and binding obligation enforceable against it in accordance with the terms hereof, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to or affecting creditors' rights generally or the application of equitable principles in any proceeding, whether at law or in equity. (f) The Purchaser is a separate legal entity, acting solely through its authorized representatives, from the Seller, maintaining separate records, books of account, assets, bank accounts and funds, which are not and have not been commingled with those of the Seller. 4 (g) All approvals, consents, authorizations, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would adversely affect, the purchase by the Purchaser of the Proposition lA Receivable or the performance by the Purchaser of its obligations under the Transaction Documents to which it is a party and any other applicable agreements, have been obtained and are in full force and effect. (h) Insofar as it would materially adversely affect the Purchaser's ability to enter into, carry out and perform its obligations under any or all of the Transaction Documents to which it is a party, or consummate the transactions contemplated by the same, the Purchaser is not in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which it is a party or to which it or any of its property or assets is otherwise subject, and, to the best of the knowledge of the Purchaser, no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument, and the execution and delivery by the Purchaser of the Transaction Documents to which it is a party, and compliance by the Purchaser with the provisions thereof, under the circumstances contemplated thereby, do not and will not conflict with or constitute on the part of the Purchaser a breach of or default under any agreement or other instrument to which the Purchaser is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Purchaser is subject. 5. Representations and Warranties of the Seller. The Seller hereby represents and warrants to the Purchaser, as of the date hereof, as follows: (a) The Seller is a local agency within the meaning of Section 6585(f) of the California Government Code, with full power and authority to execute and deliver this Agreement and to carry out its terms. (b) The Seller has full power, authority and legal right to sell and assign the Proposition 1A Receivable to the Purchaser and has duly authorized such sale and assignment to the Purchaser by all necessary action; and the execution, delivery and performance by the Seller of this Agreement has been duly authorized by the Seller by all necessary action. (c) This Agreement has been, and as of the Closing Date the Bill of Sale will have been, duly executed and delivered by the Seller and, assuming the due authorization, execution and delivery of this Agreement by the Purchaser, each of this Agreement and the Bill of Sale constitutes a legal, valid and binding obligation of the Seller enforceable in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to or affecting creditors' rights generally or the application of equitable principles in any proceeding, whether at law or in equity. (d) All approvals, consents, authorizations, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would adversely affect, the sale by the Seller of the Proposition lA Receivable or the performance by the Seller of its 5 obligations under the Resolution and the Transaction Documents to which it is a party and any other applicable agreements, have been obtained and are in full force and effect. (e) Insofar as it would materially adversely affect the Seller's ability to enter into, carry out and perform its obligations under any or all of the Transaction Documents to which it is a party, or consummate the transactions contemplated by the same, the Seller is not in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which it is a party or to which it or any of its property or assets is otherwise subject, and, to the best of the knowledge of the Seller, no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument, and the adoption of the Resolution and the execution and delivery by the Seller of the Transaction Documents to which it is a party, and compliance by the Seller with the provisions thereof, under the circumstances contemplated thereby, do not and will not conflict with or constitute on the part of the Seller a breach of or default under any agreement or other instrument to which the Seller is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Seller is subject. (f) To the best of the knowledge of the Seller, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, is pending or threatened in any way against the Seller affecting the existence of the Seller or the titles of its Town,Gouncil members or officers to their respective offices, or seeking to restrain or to enjoin the sale of the Proposition IA Receivable or to direct the application of the proceeds of the sale thereof, or in any way contesting or affecting the validity or enforceability of any of the Transaction Documents or any other applicable agreements or any action of the Seller contemplated by any of said documents, or in any way contesting the powers of the Seller or its authority with respect to the Resolution or the Transaction Documents to which it is a party or any other applicable agreement, or any action on the part of the Seller contemplated by the Transaction Documents, or in any way seeking to enjoin or restrain the Seller from selling the Proposition IA Receivable or which if determined adversely to the Seller would have an adverse effect upon the Seller's ability to sell the Proposition I A Receivable, nor to the knowledge of the Seller is there any basis therefor. (g) Prior to the sale of the Proposition I A Receivable to the Purchaser, the Seller was the sole owner of the Proposition 1A Receivable, and has such right, title and interest to the Proposition lA Receivable as provided in the Act. From and after the conveyance of the Proposition IA Receivable by the Seller to Purchaser on the Closing Date, the Seller shall have no right, title or interest in or to the Proposition IA Receivable. Except as provided in this Agreement, the Seller has not sold, transferred, assigned, set over or otherwise conveyed any right, title or interest of any kind whatsoever in all or any portion of the Proposition 1A Receivable, nor has the Seller created, or to the best knowledge of the Seller permitted the creation of, any lien, pledge, security interest or any other encumbrance (a "Lien") thereon. Prior to the sale of the Proposition IA Receivable to the Purchaser, the Seller held title to the Proposition 1A Receivable free and clear of any Liens. As of the Closing Date, this Agreement, together with the Bill of Sale, constitutes a valid and absolute sale to the Buyer of all of the Seller's right, title and interest in and to the Proposition 1A Receivable. 6 (h) The Seller acts solely through its authorized officers or agents. (i) The Seller maintains records and books of account separate from those of the Purchaser. 0) The Seller maintains its respective assets separately from the assets of the Purchaser (including through the maintenance of separate bank accounts); the Seller's funds and assets, and records relating thereto, have not been and are not commingled with those of the Purchaser. (k) The Seller's principal place of business and chief executive office is located at l 10 L. Main Street,, Los Uatos„ ('aiitotnia95030,. (1) The aggregate amount of the Installment Payments is reasonably equivalent value for the Proposition 1A Receivable. The Seller acknowledges that the amount payable to or on behalf of the Purchaser by the State with respect to the Proposition IA Receivable will be in excess of the Purchase Price and the Initial Amount of the Proposition 1A Receivable and confirms that it has no claim to any such excess amount whatsoever. (m) The Seller does not act as an agent of the Purchaser in any capacity, but instead presents itself to the public as an entity separate from the Purchaser. (n) The Seller has not guaranteed and shall not guarantee the obligations of the Purchaser, nor shall it hold itself out or permit itself to be held out as having agreed to pay or as being liable for the debts of the Purchaser; and the Seller has not received nor shall the Seller accept any credit or financing from any Person who is relying upon the availability of the assets of the Purchaser in extending such credit or financing. The Seller has not purchased and shall not purchase any of the Bonds or any interest therein. (o) All transactions between or among the Seller, on the one hand, and the Purchaser on the other hand (including, without limitation, transactions governed by contracts for services and facilities, such as payroll, purchasing, accounting, legal and personnel services and office space), whether existing on the date hereof or entered into after the date hereof, shall be on terms and conditions (including, without limitation, terms relating to amounts to be paid thereunder) which are believed by each such party thereto to be both fair and reasonable and comparable to those available on an arms-length basis from Persons who are not affiliates. (p) The Seller has not, under the provisions of Section 100.06(b) of the California Revenue and Taxation Code, received a reduction for hardship or otherwise, nor has it requested, made arrangements for, or completed a reallocation or exchange with any other local agency, of the total amount of the ad valorem property tax revenue reduction allocated to the Seller pursuant to Section 100.06(a) of the California Revenue and Taxation Code. 6. Covenants of the Seller. (a) The Seller shall not take any action or omit to take any action which adversely affects the interests of the Purchaser in the Proposition IA Receivable and in the proceeds thereof. The Seller shall not take any action or omit to take any action that shall adversely affect 7 the ability of the Purchaser, and any assignee of the Purchaser, to receive payments of the Proposition IA Receivable. (b) The Seller shall not take any action or omit to take any action that would impair the validity or effectiveness of the Act, nor, without the prior written consent of the Purchaser or its assignees, agree to any amendment, modification, termination, waiver or surrender of, the terms of the Act, or waive timely performance or observance under the Act. Nothing in this agreement shall impose a duty on the Seller to seek to enforce the Act or to seek enforcement thereof by others, or to prevent others from modifying, terminating, discharging or impairing the validity or effectiveness of the Act. (c) Upon request of the Purchaser or its assignee, (i) the Seller shall execute and deliver such further instruments and do such further acts (including being named as a plaintiff in an appropriate proceeding) as may be reasonably necessary or proper to carry out more effectively the purposes and intent of this Agreement and the Act, and (ii) the Seller shall take all actions necessary to preserve, maintain and protect the title of the Purchaser to the Proposition IA Receivable. (d) On or before the Closing Date, the Seller shall send (or cause to be sent) an irrevocable instruction to the Controller pursuant to Section 6588.6(c) of California Government Code to cause the Controller to disburse all payments of the Proposition IA Receivable to the Trustee, together with notice of the sale of the Proposition IA Receivable to the Purchaser and the assignment of all or a portion of such assets by the Purchaser to the Trustee. Such notice and instructions shall be in the form of Exhibit D hereto. The Seller shall not take any action to revoke or which would have the effect of revoking, in whole or in part, such instructions to the Controller. Upon sending such irrevocable instruction, the Seller shall have relinquished and waived any control over the Proposition I A Receivable, any authority to collect the Proposition lA Receivable, and any power to revoke or amend the instructions to the Controller contemplated by this paragraph. Except as provided in Section 2(c) of this Agreement, the Seller shall not rescind, amend or modify the instruction described in the first sentence of this paragraph. The Seller shall cooperate with the Purchaser or its assignee in giving instructions to the Controller if the Purchaser or its assignee transfers the Proposition ]A Receivable. In the event that the Seller receives any proceeds of the Proposition IA Receivable, the Seller shall hold the same in trust for the benefit of the Purchaser and the Trustee and each Credit Enhancer, as assignees of the Purchaser, and shall promptly remit the same to the Trustee. (e) The Seller hereby covenants and agrees that it will not at any time institute against the Purchaser, or join in instituting against the Purchaser, any bankruptcy, reorganization, arrangement, insolvency, liquidation, or similar proceeding under any United States or state bankruptcy or similar law. (f) The financial statements and books and records of the Seller prepared after the Closing Date shall reflect the separate existence of the Purchaser and the sale to the Purchaser of the Proposition IA Receivable. (g) The Seller shall treat the sale of the Proposition IA Receivable as a sale for regulatory and accounting purposes. (h) From and after the date of this Agreement, the Seller shall not sell, transfer, assign, set over or otherwise convey any right, title or interest of any kind whatsoever in all or any portion of the Proposition JA Receivable, nor shall the Seller create, or to the knowledge of the Seller permit the creation of, any Lien thereon. 7. The Purchaser's Acknowled ment. The Purchaser acknowledges that the Proposition IA Receivable is not a debt or liability of the Seller, and that the Proposition IA Receivable is payable solely by the State from the funds of the State provided therefor. Consequently, neither the taxing power of the Seller, nor the full faith and credit thereof is pledged to the payment of the Proposition IA Receivable. No representation is made by the Seller concerning the obligation or ability of the State to make any payment of the Proposition 1A Receivable pursuant to Section 100.06 of the Revenue and Taxation Code and Section 25.5 of Article XIII of the California Constitution, nor is any representation made with respect to the ability of the State to enact any change in the law applicable to the Transaction Documents (including without limitation Section 100.06 of the Revenue and Taxation Code or Section 6588.6 of the Government Code). The Purchaser acknowledges that the Seller has no obligation with respect to any offering document or disclosure related to the Bonds. 8. Notices of Breach. (a) Upon discovery by the Seller or the Purchaser that the Seller or Purchaser has breached any of its covenants or that any of the representations or warranties of the Seller or the Purchaser are materially false or misleading, in a manner that materially and adversely affects the value of the Proposition IA Receivable or the Purchase Price thereof, the discovering party shall give prompt written notice thereof to the other party and to the Trustee, as assignee of the Purchaser, who shall, pursuant to the Indenture, promptly thereafter notify each Credit Enhancer and the Rating Agencies. (b) The Seller shall not be liable to the Purchaser, the Trustee, the holders of the Bonds, or any Credit Enhancer for any loss, cost or expense resulting from the failure of the Trustee, any Credit Enhancer or the Purchaser to promptly notify the Seller upon the discovery by an authorized officer of the Trustee, any Credit Enhancer or the Purchaser of a breach of any covenant or any materially false or misleading representation or warranty contained herein. 9. Liability of Seller; Indemnification. The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Agreement. The Seller shall indemnify, defend and hold harmless the Purchaser, the Trustee and each Credit Enhancer, as assignees of the Purchaser, and their respective officers, directors, employees and agents from and against any and all costs, expenses, losses, claims, damages and liabilities to the extent that such cost, expense, loss, claim, damage or liability arose out of, or was imposed upon any such Person by the Seller's breach of any of its covenants contained herein or any materially false or misleading representation or warranty of the Seller contained herein. Notwithstanding anything to the contrary herein, the Seller shall have no liability for the payment of the principal of or interest on the Bonds issued by the Purchaser. 10. Limitation on Liability. (a) The Seller and any officer or employee or agent of the Seller may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder. The Seller shall not be under any obligation to appear in, prosecute or defend any legal action regarding the Act that is unrelated to its specific obligations under this Agreement. (b) No officer or employee of the Seller shall have any liability for the representations, warranties, covenants, agreements or other obligations of the Seller hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Seller. 11. The Seller's Acknowledgment. The Seller hereby agrees and acknowledges that the Purchaser intends to assign and grant a security interest in all or a portion of (a) its rights hereunder and (b) the Proposition IA Receivable, to the Trustee and each Credit Enhancer pursuant to the Indenture. The Seller further agrees and acknowledges that the Trustee, the holders of the Bonds, and each Credit Enhancer have relied and shall continue to rely upon each of the foregoing representations, warranties and covenants, and further agrees that such Persons are entitled so to rely thereon. Each of the above representations, warranties and covenants shall survive any assignment and grant of a security interest in all or a portion of this Agreement or the Proposition 1 A Receivable to the Trustee and each Credit Enhancer and shall continue in full force and effect, notwithstanding any subsequent termination of this Agreement and the other Transaction Documents. The above representations, warranties and covenants shall inure to the benefit of the Trustee and each Credit Enhancer. 12. Notices. All demands upon or, notices and communications to, the Seller, the Purchaser, the Trustee or the Rating Agencies under this Agreement shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to such party at the appropriate notice address, and shall be deemed to have been duly given upon receipt. 13. Amendments. This Agreement may be amended by the Seller and the Purchaser, with (a) the consent of the Trustee, (b) the consent of each Credit Enhancer, and (c) a Rating Agency Confirmation, but without the consent of any of the holders of the Bonds, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement. Promptly after the execution of any such amendment, the Purchaser shall furnish written notification of the substance of such amendment to the Trustee and to the Rating Agencies. 14. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Seller, the Purchaser and their respective successors and permitted assigns. The Seller may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Purchaser. Except as specified herein, the Purchaser may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Seller. 10 15. Third Party Rights. The Trustee and each Credit Enhancer are express and intended third party beneficiaries under this Agreement. Nothing expressed in or to be implied from this Agreement is intended to give, or shall be construed to give, any Person, other than the parties hereto, the Trustee, and each Credit Enhancer, and their permitted successors and assigns hereunder, any benefit or legal or equitable right, remedy or claim under or by virtue of this Agreement or under or by virtue of any provision herein. 16. Partial Invalidity. If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Agreement nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby. 17. Counterparts. This Agreement may be executed in any number of identical counterparts, any set of which signed by all the parties hereto shall be deemed to constitute a complete, executed original for all purposes. 18. Entire Agreement. This Agreement sets forth the entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes any and all oral or written agreements or understandings between the parties as to the subject matter hereof. 11 19. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Seller and the Purchaser have caused this Agreement to be duly executed as of the date first written above. GOWN OF LOS G:AT0S`, as Seller By: Authorized Officer CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY, as Purchaser By: Authorized Signatory 12 EXHIBIT A DEFINITIONS For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings set forth below. "Act" means Chapter 14XXXX of the California Statutes of 2009 (Assembly Bill No. 15), as amended. "Bill of Sale" has the meaning given to that term in Section 2(b)(ii) hereof. "Closing Date" means the date on which the Bonds are issued. The Closing Date is expected to be November 19, 2009, but the Purchaser may change the Closing Date by providing e-mail notification to Lconwav@losgatosca gov not later than one day prior to the Closing Date. "Controller" means the Controller of the State. "County Auditor" means the auditor or auditor-controller of the county within which the Seller is located. "Credit Enhancer" means any municipal bond insurance company, bank or other financial institution or organization which is performing in all material respects its obligations under any Credit Support Instrument for some or all of the Bonds. "Credit Support Instrument" means a policy of insurance, a letter of credit, a stand-by purchase agreement, a revolving credit agreement or other credit arrangement pursuant to which a Credit Enhancer provides credit or liquidity support with respect to the payment of interest, principal or purchase price of the Bonds. "Initial Amount" means, with respect to the Proposition IA Receivable, the amount of property tax revenue reallocated away from the Seller pursuant to the provisions of Section 100.06 of the Revenue and Taxation Code, as certified by the County Auditor pursuant to the Act. "Installment Payments" have the meaning set forth in Section 2(a). "Payment Dates" have the meaning set forth in Section 2(a). "Pricing Date" means the date on which the Bonds are sold. The Pricing Date is expected to be November 10, 2009, but the Purchaser may change the Pricing Date by providing e-mail notification to'pconway-lu5ga~gsca.gov. not later than one day prior to the Pricing Date. "Principal Place of Business" means, with respect to the Seller, the location of the Seller's principal place of business and chief executive office located at `11O:E. IVlaii~ Strec~, Los iGatos, California 95030. A-1 "Proposition 1A Receivable" has the meaning set forth in Section 2(a). "Purchase Price" means an amount equal to the Initial Amount. "Rating Agency" means any nationally recognized rating agency then providing or maintaining a rating on the Bonds at the request of the Purchaser. "Rating Agency Confirmation" means written confirmation from each Rating Agency that any proposed action will not, in and of itself, cause the Rating Agency to lower, suspend or withdraw the rating then assigned by such Rating Agency to any Bonds. "Resolution" means the resolution adopted by the 'l own council approving the sale of the Proposition IA Receivable. "State" means the State of California. "Transaction Counsel" means Orrick, Herrington & Sutcliffe LLP. "Transaction Documents" mean this Agreement, the Bill of Sale, the Indenture, the Bonds and the Irrevocable Instructions For Disbursement of Proposition IA Receivable of To%%n of Los Gatos, dated as of the Closing Date. A-2 EXHIBIT BI OPINION OF COUNSEL to TOWN'OF LOS' GATOS Dated: Pricing Date California Statewide Communities Development Authority Sacramento, California Wells Fargo Bank, National Association Los Angeles, California Re: Sale of Proposition IA Receivable Ladies & Gentlemen: [I have/This Office has] acted as counsel for the'1'o%%n of I,os G toa: (the "Seller") in connection with the adoption of that certain resolution (the "Resolution") of the l'o%.Yn COMICi I of the Seller (the "Governing Body") pursuant to which the Seller authorized the sale to the California Statewide Communities Development Authority (the "Purchaser") of the Seller's "Proposition IA Receivable", as defined in and pursuant to the Purchase and Sale Agreement dated as of November 1, 2009 (the "Sale Agreement") between the Seller and the Purchaser. In connection with these transactions, the Seller has issued certain Irrevocable Instructions For Disbursement of the Seller's Proposition IA Receivable to the Controller of the State of California (the "Disbursement Instructions") and a Bill of Sale and Bringdown Certificate of the Seller (the "Bill of Sale" and, collectively with the Sale Agreement and the Disbursement Instructions, the "Seller Documents"). Unless the context otherwise requires, capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Sale Agreement. [I/We] have examined and are familiar with the Seller Documents and with those documents relating to the existence, organization, and operation of the Seller, the adoption of the Resolution, and the execution of the Seller Documents, and have satisfied ourselves as to such other matters as [1/we] deem necessary in order to render the following opinions. As to paragraphs numbered 3 and 4 below, [1/we] have relied as to factual matters on the representations and warranties of the Seller contained in the Sale Agreement. Based upon the foregoing, and subject to the limitations and qualifications set forth herein, [1/we] are of the opinion that: B1-I 1. The Seller is a local agency, within the meaning of Section 6585(0 of the California Government Code. The Governing Body is the governing body of the Seller. 2. The Resolution was duly adopted at a meeting of the Governing Body, which was called and held pursuant to law and with all public notice required by law, and at which a quorum was present and acting throughout, and the Resolution is in full force and effect and has not been modified, amended or rescinded since the date of its adoption. 3. To the best of [my/our] knowledge, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, is pending or threatened in any way against the Seller (i) affecting the existence of the Seller or the titles of its Governing Body members or officers to their respective offices; (ii) seeking to restrain or to enjoin the sale of the Proposition IA Receivable or to direct the application of the proceeds of the sale thereof, or materially adversely affecting the sale of the Proposition IA Receivable; (iii) in any way contesting or affecting the validity or enforceability of the Resolution, Seller Documents or any other applicable agreements or any action of the Seller contemplated by any of said documents; or (iv) in any way contesting the powers of the Seller or its authority with respect to the Resolution or the Seller Documents or any other applicable agreement, or any action on the part of the Seller contemplated by any of said documents. 4. To the best of [my/our] knowledge, prior to the sale of the Proposition 1 A Receivable to the Purchaser, the Seller had not sold, transferred, assigned, set over or otherwise conveyed any right, title or interest of any kind whatsoever in all or any portion of the Seller's Proposition IA Receivable, nor had the Seller created, or permitted the creation of, any Lien thereon. 5. The Seller has duly authorized and executed the Seller Documents and, assuming the due authorization execution and delivery of the Sale Agreement by the Purchaser, each Seller Document will be legal, valid and binding against the Seller and enforceable against the Seller in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or laws relating to or affecting creditors' rights, and the application of equitable principles and the exercise of judicial discretion in appropriate areas. No opinion is expressed concerning the obligation or ability of the State of California to make any payment of the Proposition IA Receivable pursuant to Section 100.06 of the Revenue and Taxation Code and Section 25.5 of Article XIII of the California Constitution, nor is any opinion expressed with respect to the ability of the State to enact any change in the law applicable to the Seller Documents (including, without limitation, Section 100.06 of the Revenue and Taxation Code or Section 6588.6 of the Government Code). Furthermore, [1/we] express no opinion as to the value of the Proposition IA Receivable or as to any legal or equitable remedies that may be available to any person should the Proposition JA Receivable have little or no value. No opinion is expressed with respect to the sale of Bonds by the Purchaser. B1-2 The legal opinion set forth herein is intended for the information solely of the addressees hereof and for the purposes contemplated by the Sale Agreement. The addressees may not rely on it in connection with any transactions other than those described herein, and it is not to be relied upon by any other person or entity, or for any other purpose, or quoted as a whole or in part, or otherwise referred to, in any document, or to be filed with any governmental or administrative agency other than the Purchaser or with any other person or entity for any purpose without [my/our] prior written consent. In addition to the addressees hereof, each Credit Enhancer and the underwriters of the Bonds may rely upon this legal opinion as if it were addressed to them. [I/We] do not undertake to advise you of matters that may come to [my/our] attention subsequent to the date hereof that may affect the opinions expressed herein. Very truly yours, By: Seller's Counsel B 1-3 EXHIBIT B2 OPINION OF COUNSEL to TOWN OF LOS GATOS Dated: Closing Date California Statewide Communities Development Authority Sacramento, California Wells Fargo Bank, National Association Los Angeles, California Re: Sale of Proposition 1A Receivable (Bringdown Opinion) Ladies & Gentlemen: Pursuant to that certain Purchase and Sale Agreement dated as of November 1, 2009 (the "Sale Agreement") between the 1,l m\p of Lott Gatos (the "Seller") and the California Statewide Communities Development Authority (the "Purchaser"), this Office delivered an opinion (the "Opinion") dated the Pricing Date as counsel for the Seller in connection with the sale of the Seller's Proposition IA Receivable (as defined in the Sale Agreement), the execution of documents related thereto and certain other related matters. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Sale Agreement. I confirm that you may continue to rely upon the Opinion as if it were dated as of the date hereof. Each Credit Enhancer and the underwriters of the Bonds may rely upon this legal opinion as if it were addressed to them. This letter is delivered to you pursuant to Section 2(b)(ii)(1) of the Sale Agreement. Very truly yours, By: Seller's Counsel B2-1 EXHIBIT C1 CLERK'S CERTIFICATE CERTIFICATE OF THE CLERK A1)N1INISTRATOROF TOWNIOI' EOS GA"1'0S,, CALIFORNIA Dated: Pricing Date The undersigned Clerk Adm its rato v.. of the To A ti of I ,os C~ ltps (the "Seller"), a local agency of the State of California within the meaning of Section 6585(f) of the California Government Code, does hereby certify that the foregoing is a full, true and correct copy of Resolution No. duly adopted at a regular meeting of the Town Council. of said Seller duly and legally held at the regular meeting place thereof on the day of 2009, of which meeting all of the members of said Tojvn council had due notice and at which a quorum was present and acting throughout, and that at said meeting said resolution was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: I do hereby further certify that I have carefully compared the same with the original minutes of said meeting on file and of record in my office and that said resolution is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes and that said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect. I do hereby further certify that an agenda of said meeting was posted at least 72 hours before said meeting at a location in the City of 1Eos Gato, California freely accessible to members of the public, and a brief general description of said resolution appeared on said agenda. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase and Sale Agreement, dated as of November 1, 2009, between the Seller and the California Statewide Communities Development Authority. WITNESS by my hand as of the Pricing Date. By: Clerk Administrato r of the Town of Los Gatos, California CM EXHIBIT C2 SELLER CERTIFICATE SELLER CERTIFICATE Dated: Pricing Date We, the undersigned officers of the j I ovv ii of Los Gates (the "Seller"), a local agency of the State of California within the meaning of Section 6585(0 of the California Government Code, holding the respective offices herein below set opposite our signatures, do hereby certify that on the date hereof the following documents (the "Seller Transaction Documents") were officially executed and delivered by the Authorized Officer or Officers whose names appear on the executed copies thereof, to wit: Document 1. Purchase and Sale Agreement, dated as of November 1, 2009 (the "Sale Agreement"), between the Seller and the California Statewide Communities Development Authority (the "Purchaser"). 2. Irrevocable Instructions For Disbursement of Seller's Proposition IA Receivable to the Controller of the State of California, dated the Closing Date. 3. Bill of Sale, dated the Closing Date. Capitalized terms used herein and not defined herein shall have the meaning given such terms in the Sale Agreement. We further certify as follows: 1. At the time of signing the Seller Transaction Documents and the other documents and opinions related thereto, we held said offices, respectively, and we now hold the same. 2. The representations and warranties of the Seller contained in the Seller Transaction Documents are true and correct as of the date hereof in all material respects. 3. The iTown LOunell duly adopted its resolution (the "Resolution") approving the sale of the Seller's Proposition 1 A Receivable at a meeting of the Town C_ ouncil, which was duly called and held pursuant to law with all public notice required by law and at which a quorum was present and acting when the Resolution was adopted, and such Resolution is in full force and effect and has not been amended, modified, supplemented or rescinded. C2-1 Name, Official Title Signature Stephen C'onwp , Finance Director Jennv Haru;~anla,Assistant`F'inance Director 11'amela Jacobs, Assistant Town Manager: I HEREBY CERTIFY that the signatures of the officers named above are genuine. Dated: Pricing Date By: Clerk: administrator of theD-Owls of Fos Gatos. California C2-2 EXHIBIT C3 BILL OF SALE AND BRINGDOWN CERTIFICATE BILL OF SALE AND BRINGDOWN CERTIFICATE Pursuant to terms and conditions of the Purchase and Sale Agreement (the "Sale Agreement"), dated as of November 1, 2009, between the undersigned (the "Seller") and the California Statewide Communities Development Authority (the "Purchaser"), and in consideration of the obligation of the Purchaser to pay and deliver to the Seller the Purchase Price (as defined in the Sale Agreement), in two equal installment payments to be made on January 15, 2010, and May 3, 2010 (collectively, the "Payment Dates"), the Seller does hereby (a) transfer, grant, bargain, sell, assign, convey, set over and deliver to the Purchaser, absolutely and not as collateral security, without recourse except as expressly provided in the Sale Agreement, the Proposition IA Receivable as defined in the Sale Agreement (the "Proposition IA Receivable"), and (b) assign to the Purchaser, to the extent permitted by law (as to which no representation is made), all present or future rights, if any, of the Seller to enforce or cause the enforcement of payment of the Proposition IA Receivable pursuant to the Act and other applicable law. Such transfer, grant, bargain, sale, assignment, conveyance, set over and delivery is hereby expressly stated to be a sale and, pursuant to Section 6588.6(b) of the California Government Code, shall be treated as an absolute sale and transfer of the Proposition IA Receivable, and not as a grant of a security interest by the Seller to secure a borrowing. Seller specifically disclaims any right to rescind the Agreement, or to assert that title to the Proposition IA Receivable has not passed to the Purchaser, should Purchaser fail to make the installment payments in the requisite amounts on the Payment Dates. The Seller hereby certifies that the representations and warranties of the Seller set forth in the Certificate of the Clek .1.dministrator dated the Pricing Date, the Seller Certificate dated dated the Pricing Date and in the Transaction Documents to which the Seller is a party are true and correct in all material respects as of the date hereof (except for such representations and warranties made as of a specified date, which are true and correct as of such date). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Sale Agreement. Dated: Closing Date TOWN OF LOS GATOS', By: Authorized Officer C3-1 EXHIBIT D IRREVOCABLE INSTRUCTIONS TO CONTROLLER IRREVOCABLE INSTRUCTIONS FOR DISBURSEMENT OF PROPOSITION IA RECEIVABLE OF SOWN OF LOS G \'f OS Dated: Closing Date Office of the Controller State of California P.O. Box 942850 Sacramento, California 94250-5872 Re: Notice of Sale of Proposition IA Receivable by the "Lowii of Los Gatos and Wiring Instructions Information Form Dear Sir or Madam: Pursuant to Section 6588.6(c) of the California Government Code, Towil o Los; Gatos (the "Seller") hereby notifies you of the sale by Seller, effective as of the date of these instructions written above, of all right, title and interest of the Seller in and to the "Proposition IA Receivable" as defined in Section 6585(g) of the California Government Code (the "Proposition IA Receivable"), namely, the right to payment of moneys due or to become due to the Seller pursuant to Section 25.5(a)(1)(B)(iii) of Article XIII of the California Constitution and Section 100.06 of the California Revenue and Taxation Code. By resolution, the Seller's TFQwn Cuu~tic l authorized the sale of the Proposition IA Receivable to the California Statewide Communities Development Authority (the "Purchaser") pursuant to a Purchase and Sale Agreement, dated as of November 1, 2009 (the "Purchase and Sale Agreement") and a Bill of Sale, dated the Closing Date (as defined in the Purchase and Sale Agreement). The Proposition IA Receivable has been pledged and assigned by the Purchaser pursuant to an Indenture, dated as of November 1, 2009 (the "Indenture") between the Purchaser and Wells Fargo Bank, National Association, as Trustee (the "Trustee"). The Seller hereby irrevocably requests and directs that, commencing as of the date of these instructions written above, all payments of the Proposition 1 A Receivable (and documentation related thereto) be made directly to Wells Fargo Bank, National Association, as Trustee, in accordance with the wire instructions and bank routing information set forth below. Please note that the sale of the Proposition IA Receivable by the Seller is irrevocable and that: (i) the Seller has no power to revoke or amend these instructions at any time, (ii) the Purchaser shall have the power to revoke or amend these instructions only if there are no notes of the Purchaser outstanding under the Indenture and the Indenture has been discharged, and (iii) so long as the Indenture has not been discharged, these instructions cannot be revoked or amended by the Purchaser without the consent of the Trustee. Should D-1 the Purchaser, however, deliver a written notice to the Office of the Controller stating that: (a) the Seller failed to meet the requirements set forth in the Purchase and Sale Agreement, (b) the Purchaser has not waived such requirements, and (c) the Purchaser has not purchased the Proposition lA Receivable as a result of the circumstances described in (a) and (b) above, then these instructions shall be automatically rescinded and the Seller shall again be entitled to receive all payment of moneys due or to become due to the Seller pursuant to Section 25.5(a)(1)(B)(iii) of Article XIII of the California Constitution and Section 100.06 of the California Revenue and Taxation Code. Bank Name: Wells Fargo Bank, N.A. Bank ABA Routing 121000248 Bank Account 0001038377 Bank Account Name: Corporate Trust Clearing Further Credit To: CSCDA Proposition IA Bonds Bank Address: 707 Wilshire Blvd., 17th Floor MAC E2818-176 Los Angeles, CA 90017 Bank Telephone (213) 614-3353 Bank Contact Person: Robert Schneider Please do not hesitate to call the undersigned if you have any questions regarding this transaction. Thank you for your assistance in this matter. Very truly yours, TQ,WNOF LU5 GATOS' By: Authorized Officer D-2 EXHIBIT E ESCROW INSTRUCTION LETTER ESCROW INSTRUCTION LETTER 2009 California Statewide Communities Development Authority 1100 K Street Sacramento, CA 95814 Re: Proposition IA Receivable Financin Dear Sir or Madam: The Town of Los GA6s (the "Seller") hereby notifies you of its agreement to participate in the California Statewide Communities Development Authority Proposition IA Receivable Financing. By adoption of a resolution (the "Resolution") authorizing the sale of its Proposition IA Receivable, the Seller's Town GOL111cil has agreed to sell to the California Statewide Communities Development Authority (the "Purchaser"), for a purchase price that meets the conditions set forth in the Resolution, all of its right, title and interest in the Proposition IA Receivable. Enclosed herewith are the following documents which have been duly approved and executed by the Seller and which are to be held in escrow by Orrick, Herrington & Sutcliffe LLP, as transaction counsel ("Transaction Counsel"), as instructed below: 1. certified copy of the Resolution, together with a certificate of the 'Clerl "Administrator, dated the Pricing Date; 2. the Seller Certificate, dated the Pricing Date; 3. the Opinion of Seller's Counsel, dated the Pricing Date; 4. the Opinion of Seller's Counsel (bringdown opinion), dated the Closing Date; 5. the Purchase and Sale Agreement, dated as of November 1, 2009; 6. the Bill of Sale and Bringdown Certificate, dated the Closing Date; and 7. the Irrevocable Instructions to Controller, dated the Closing Date. The foregoing documents are to be held in escrow by Transaction Counsel and shall be delivered on the Closing Date (as defined in the Purchase and Sale Agreement), provided that such Closing Date occurs on or before December 31, 2009. E-1 Should (i) the Closing Date not occur on or berfore December 31, 2009, or (ii) Transaction Counsel receive prior to the Closing Date written notification from Seller or Seller's Counsel stating, respectively and in good faith, that the representations made in the Seller's Certificate are not true and accurate, or the opinions set forth in the Opinion of Seller's Counsel are not valid, in each case as of the Closing Date and provided that the Purchaser may, in its sole discretion, choose to waive receipt of such representations or opinions, then this agreement shall terminate and Transaction Counsel shall destroy all of the enclosed documents. Very truly yours, T0WNT' 01; Los GATO By: Authorized Officer Enclosures cc: Orrick, Herrington & Sutcliffe LLP E-2 MEETING DATE: 10/19/09 °w N ~'ITEM NO. COUNCIL AGENDA REPORT !ps GA;~pS DATE: October 14, 2009 TO: MAYOR AND TOWN COUNCIL FROM: GREG LARSON TOWN MANAGER SUBJECT: INVESTMENT REPORTS FOR FIRST FISCAL QUARTER 09/10 (JULY THROUGH SEPTEMBER 2009) RECOMMENDATION: Accept reports as attached. DISCUSSION: Attached for your review and acceptance are the Investment reports for the first quarter of the current fiscal year 09/10. Investment returns are being affected by the overall general interest rate environment which is experience historic low yields. During the first quarter of FY 2009/10 the Town's weighted average interest rates declined slightly. As is usual for this time of year, treasurer's funds declined due to payment of the RDA pass-through amounts and the acquisition of property approved by council. Treasurer's funds should increase again with the receipt of property taxes in the second quarter. ENVIRONMENTAL ASSESSMENT: Is not a project defined under CEQA, and no further action is required. FISCAL IMPACT: None Attachments: Investment reports for the first fiscal quarter (July through September 2009). C AY PREPARED BY: V?dministr~ e & tive Services Director/ Town Treasurer Financ Town Manager Assistant Town Manager Town Attorney Reviewed by: IM --NEW- Clerkinance Community Development Revised: 10/14/09 1:21 pm Reformatted: 5/30/02 Town of Los Gatos Investment Report for the month ended September 30, 2009 Prepared by Linda L. Speicher, Project Manager 010/14/09 A Town of Los Gatos Summary Investment Information September 30, 2009 Weighted Average Portfolio Yield: 2.11% Weighted Average Maturity (days) 371 This Month Last Month One year ago Portfolio Balance $73,931,975 $75,673,488 $70,635,879 Benchmarks/ References: Town's Average Yield 2.11% 2.14% 3.64% I,AIF Yield for month 0.70% 0.93% 2.77% 3 mo. Treasury 0.12% 0.15% 1.18% 6 mo. Treasury 0.19% 0.24% 1.57% 2 yr, Treasury 1.03% 1.11% 2.12% 0 5 yr. Treasury (most recent) 2.47% 2.49% 3.13% Prime rate 3.25% 3.25% 5.00% Most recent auctions of Freddie Mac or Fannie Mae Reference Notes: 3 yr. Freddie Mac (09/25/09) 2.10% 2 yr. Fannie Mae (04/09/09) 1.50% Compliance: The Town's investments are in compliance with the Town's investment policy dated May 1, 2008 and also in compliance with the requirements of Section 53601 of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months. Page 1 Town of Los Gatos Portfolio Allocation & Treasurer's Fund Balances September 30, 2009 Month YTD Fund Balances - Beginning of Month/Period $75,673,488.49 $85,021,578.85 Receipts 1,424,655.75 5,423,894.14 Disbursements (3,166,169.29) (16,513,498.04) Fund Balances - End of MontbMeriod $73,931,974.95 $73,931,974.95 Portfolio Allocation; Union MM $87,781,78 US Govt Agencies 44,032,732,04 Local Agency Investment Fund 28,468,836.13 Subtotal - Investments 72,589,349.95 Reconciled Demand Deposit Balances 1,342,625.00 Total Treasurer's Fluid $73,931,974.95 Portfolio Investment Allocation Union MM 0.1% !r!!!! ! fr f!! ! !r''J!J11 Local Agency Investment Fund /!J!/////!//!!y!}}}, 39.2% /f{fff{{{{i J!{J{JJ!J!/Jr' rf/}}~{{}jj{f%1%illflf {{{!!j{jib!! Treasury, Agencies, & Corp. Notes 57.8% page 2 Town of Los Gatos Non-Treasury Restricted Fund Balances September 30, 2009 Previous Ending Balance Deposits Interest Withdrawals Balance Non-Treasury Funds: Downtown Parking District 12/20/02 $275,855.97 $380.07 $276,236.04 Note 1 Certificates of Participation Reserve Fund (Lot 4) 254,136.26 0.00 254,136.26 Note 2 Cert, of Participation Lease Payment Fund (Lot 4) 21,534.06 20,618.19 0.00 42,152.25 Note 3 Cert. of Participation 2002 Series A Const. Fund 144,937.57 0.00 144,937.57 Note 4 Cert. of Participation 2002 Series A Reserve Fund 686,251.00 5.85 5.85 686,251.00 Note 4 Cert. Of Participation 2002 Series A Interest Fund 0.00 0.26 0.26 0.00 Note 4 Cert. Of Participation 2002 Series A COI Fund 0.00 0.00 0.00 0.00 Note 4 Total Restricted Funds: $1,382,714.86 $20,618.19 $386.18 $6.11 $1,403,713.12 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities. Note 1: This account include redemption accounts set up for the repayment of interest and principal on outstanding bond coupons for Parking Assessment District'3', as well as Reserve Funds set up as required by the original Bond resolution. Note 2: The reserve fund was a requirement of the original certificates of participation agreement when Lot 4 was built. It helps to guarantee payment of the lease payments should the Town not make payment. Note 3: The lease payment fund receives the lease payments from the Town monthly for the lease of Lot 4. It holds the funds until payments on the certificates of participation are due semi-annually. Note 4: The three funds for the Certificates of Participation 2002 Series A consist of construction funds which will be expended over the next few years, reserve funds which will guarantee the payment of lease payments, and a third fund for the disbursement of lease payments and initial delivery costs. Page 3 Town of Los Gatos Statement of Interest Earned September 30, 2009 Current Fiscal Montle Year to Date Interest received from Investments Add: Interest accrued at end of period (see page 5) Less: Interest accrued at beginning of period Interest earned on investments July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 March 2010 April 2010 May 2010 June 2010 $83,405.65 $518,212.93 357,344.90 357,344.90 (314,967.46) (474,569.94) $125,783.09 $400,987.89 137;073,40 138,131.40 125,783.09 Page 4 Town of Los Gatos Inac tive Deposits by Institution Market to Cost Position Report September 30, 2009 Deposit Amortized Maturity Days Days to Days Yield to hiterest Interest Interest Institution Securi Date Cost Date Elapse d Maturi hivested Maturi Earned Received Accrued USTreasury Note 11/17/06 748,066.41 11/15/09 1048 46 1094 4,734% 101,680.30 86,527.11 15,153.19 USTreasary Note 06/02/08 1,514,941.41 12/31/09 485 92 577 2.602% 52,378.37 52,500.00 (121.63) FHLMC Coupon Note 06114105 299,331.00 01/25/10 1569 117 1686 4.431% 57,014.26 53,994.79 3,019.47 ML Corp Corporate Note 04/10/07 976,150.00 02/08/10 904 131 1035 5.165% 124,871.25 98,930.56 25,940.69 USTreasary Note 06/24/08 739,921.88 02/28/10 463 151 614 2.819% 26,458.73 17,771.74 8,686.99 USTreasury Note 10/19/06 976,406.25 04115110 1077 197 1274 4.744% 136,677.83 99,560.44 37,117.39 FHLB Coupon Note 08/22/06 1,507,665.00 06111110 1135 254 1389 4.957% 232,394.99 214,500.00 17,894.99 FHLB Coupon Note 01/12/07 1,487,205,00 08/10/10 992 314 1306 4.960% 200,480.12 181,733,33 18,746.79 FHLB Coupon Note 03/23/09 1,049,400.00 08/16/10 191 320 511 1.284% 7,050.93 19,229,17 (12,178.24) USTreasury Note 05/31/07 737,226.56 10115110 853 380 1233 4.801% 82,715.87 59,743,85 22,972.02 FFCB Coupon Note 12/07/07 2,032,140.00 11/08/10 663 404 1067 3.715% 137,130.20 122,072.22 15,057.98 FHLB Coupon Note 03/23/09 1,040,160.00 12/10/10 191 436 627 1.485% 8,082.90 8,180.56 (97.66) FFCB Coupon Note 01/18/07 756,922,50 01/18/11 986 475 1461 3.175% 64,920.10 39,375.00 25,545,10 FFCB Coupon Note 11/28/07 2,062,000.00 02/18/11 672 506 1178 3.840% 145,779.45 167,916.67 (22,137.22) USTreasury Note 06/12/09 1,987,187.50 03/31/11 110 547 657 0,875% 5,240.19 5,259.56 (19.37) FNMA Coupon Note 09/29/06 1,516,485.00 04/15/11 1097 562 1659 4.874% 222,145.44 195,604.17 26,541.27 FHLB Coupon Note 06/08/09 1,988,018,60 06/03/11 114 611 725 1.432% 8,891.51 8,891,51 FHLMC(1) Coupon Note 07/22/09 1,501,171.88 07/22/11 70 660 730 1.585% 4,563.15 4,563.15 USTreasury Note 08/05/09 1,992,187.50 07/31/11 56 669 725 1.196% 3,655.58 3,655.58 Treasury Note 09/21/09 2,000,000.00 08/31/11 9 700 709 1.032% 50893 508.93 FHLB Coupon Note 09/08/09 2,000,000.00 09/08/11 22 708 730 1.743% 2,101.15 2,101.15 USTreasury Note 10119106 990,078.13 09/30/11 1077 730 1807 4.721% 137,919.70 132,651.10 5,268.60 FFCB Coupon Note 12/12/07 2,025,080.00 11/21/11 658 782 1440 4.000% 146,027.69 125,183.33 20,844.36 FFCB Coupon Note 05/28/09 998,500.00 11/28/11 125 789 914 1.590% 5,437.04 5,437.04 FFCB Coupon Note 02/22/07 986,080.00 12/08/11 951 799 1750 4.959% 127,407.18 106,118,06 21,289.12 FHLMC(4) Coupon Note 06/24/09 998,500.00 01/23/12 98 845 943 2.031% 5,444.92 1,586.94 3,857.98 FNMA(5) Coupon Note 05/21/09 1,004,500.00 02/03/12 132 856 988 1.951% 7,087.42 4,250.00 2,837.42 FHLB Coupon Note 05/09/07 1,509,255.00 03/09/12 875 891 1766 4.743% 171,605.39 175,000.00 (3,394.61) FFCB (6) Coupon Note 09/04/09 1,005,500.00 04/20/12 26 933 959 1.806% 1,293.54 1,293.54 FFCB Coupon Note 07/21/09 1,012,800.00 07/17/12 71 1021 1092 1.472% 2,899.99 2,89999 FHLB Coupon Note 11/29/07 2,038,360.00 08/15/12 671 1050 1721 4.170% 156,259.56 158,277.78 (2,018,22) FHLMC Coupon Note 09/25/09 999,850.00 09/25/12 5 1091 1096 2.005% 274.62 274.62 GE Corporate Note 01/16/08 1,542,165.00 10/19/12 623 1115 1738 4.587% 120,741.00 99,093.75 21,647.25 Subtotal 44,023,254.62 Union mm 87,781.78 30 30 0.15% 10.82 10.82 Purchased hnterest 9,477.42 LAIF N/A 06/30/09 28,468,836,13 09/30/09 92 0 92 0.70% 75,254.88 75,254.88 $72,589,349.95 371 2.11% $2,582,405.03 $2,225,060.13 $357,344.90 Maturity Profile Amount Percent 0-1 year $37,865,182.28 52.16% 1-2 years $20,603,577.67 28.38% 2-3 years $12,578,425.00 17,33% 3-5 years $1.542,165.00 2.12% $72,589,349.95 100.00% Market to Cost Position Report Amortized Market Unrealized * Source: Treasury and Agency Obligations - Union Bank of California hrstihntion Cost Value* Gain Loss LA)F balances per Local Agency Investment Fund monthly statement. Union Bank Assets $44,023,254.62 $45,094,764.50 1,071,509.88 Union TOM 87,781.78 87,781.78 0.00 Purchased Interest 9,477.42 9,477.42 0.00 LAIF 28,468,836.13 28,468,836.13 0.00 Totals: $72,589,349.95 $73,660,859.83 $1,071,509.88 (1) Callable quarterly starting 10/22/09 (5) Callable once on 02/03/10 (6) Callable once on 04/20/10 page 5 Town of Los Gatos Investment Report for the month ended August 31, 2009 Prepared by Linda L. Speicher, Project Manager 10/14/09 Town of Los Gatos Summary Investment Information Angust 31, 2009 Weighted Average Portfolio Yield: 2,14% Weighted Average Maturity (days) 333 This Month Last Month One year afro. Portfolio Balance `,575,673,488 $80,887,202 $74,560,416 13enchmarks/ References Town's Average Yield 2.14'%o 2,16% 3.56°/ I_,AIF Yield for month 0.93% 1.04% 2.78% 3 mo. Treasury 0.15% 0,19% 1.74% 6 mo. Treasury 0.24% 0.28% 1.97% 2yr, Treasury 1.12% 1.08% 2.38°/, 5 yr, Treasury (most recent) 2.49% 2.69% 3.13%o Prime rate 3.25% 3.25% 5.00% Most recent auctions of Freddie Mac or Fannie Mae Reference Notes: 3 yr. Fannie Mae (08/28/09) 1.82% 2 yr. Freddie Mae (04/22/09) 1.62% Compliance: The'rown's investments are in compliance with the "town's investment. policy dated May 1, 2008 and also in compliance with the requirements or Section 53601 of the California State Code. Based on the information available, the Town has sufficient hinds to meet the cash demands for the next. six months. Page 1 Town of Los Gatos Portfolio Allocation & I'm sm-er's Fund Balances August 31, 2009 Month YTD Fund Balances - Beginning of Month/Period $80,887,202.47 $8,021,578.85 Receipts 2,043,944.08 3,999,238.39 Disbursements (7,257,658.06) (13,347,328.75) Fund Balances - End of Month/Period $75,673,488.49 $75,673,488.49 Portfolio Allocation; Union MM $3,490,986.25 US Govt Agencies 40,546,255.87 Local Agency Investment Fund 30,468,836.13 Subtotal - Investments 74,506,078.25 Reconciled Demand Deposit Balances 1,167,110.24 Total Treasurer's Fund $75,673,488.49 page 2 Town of Los Gatos Non-Treasury Restricted Pond Balances August 31, 2009 Previous Ending Balance DA)osits II11CI'C51 Wllh(II'il\\'e I5 Balance Non=rreasury Funds: Downtown Parking District 12/20/02 $275,476.42 $379.55 $275,855.97 Nm, I Cer(ilicatesol'ParlicipationReserve Fund(Lot 4) 255,037.10 0.00 900.54 254,136.26 No(e2 Cert. of Participation Lease Payment Fund (Lot 4) 227,265.03 21,519.03 0.00 227,250.00 21,534.06 Nm, 3 Cell, of Participation 2002 Series A ConsL Fund 144,937.57 144,937.57 Nola 4 CerL oF' Participation 2002 Series A Reserve Fund 656,251.00 5.55 5.55 656,251.00 core 4 Cert. OF' Participation 2002 Series A Interest Fund 465,081.25 0.00 465;051.25 0.00 Note 4 CerL OF'Parlicipalion 2002 Series A COI Fund 0.00 0.00 0.00 0.00 No le4 Total Restricted Funds: $2,057,048.37 $21,519.03 $385.40 $696,237.94 $1,382,714.86 These accollllls are not part of the Treasurer's Imid balances repor(ed elsewhere ill Ihls report. as they are for separille and distinct entitles. Note 1: This account include redemption accounts set up for the repayment of interest and principal on ouutanding bond coupons Im Parking Assessment District 'Y, as well as Reserve Funds set up as required by the original Bond resolution. Note 2: The reserve fund was a requirement of' tile original certificates of'parlicipation agreement when Lot 4 was fill ill. It helps to guarantee payment of (Ile lease payments should the Town not make paymem. Note 3: The lease payment find receives (he lease payments front the Town monthly for the lease of Lot 4. It holds the funds until payments on the certilicates ofparticipalion are due Senli-annually. Note 4: The three Funds fill. the Certificates of Participation 2002 Series A consist ol'construction funds which will be expended over the next few years, reserve funds which will guarantee the payment oF' lease payments, and a third land for the disbursement o1' lease payments and initial delivery costs. Page 3 Town of Los Gatos Statement of Interest Earned August 31, 2009 Current Fiscal Month Year to Date Interest received from Investments Add: Interest accrued at end of period (see page 5) Less: Interest accrued at beginning of period Interest earned on investments $ 199,074.33 $434,807.28 314,967.46 314,967.46 (375,910.39) (474,569.94) $138,131.40 $275,204.80 Interest by Month July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 20t0 March 2010 April 2010 Nlay 2010 June 2010 137,073.40 138,131.40 Page 4 Town of Los Gatos Inact ive Deposits by Institution Market to Cost Position Repoil August 31, 2009 Deposit Amortized Matotily Days Days to Days Yield to Interest Interest Interest Institution Secutil Dkte Cost Dale ILipsed Matmity Invested Matuity Famed Received Acumed USTreasuty Note 08/05/09 1,992,187.50 07/31, I 1 26 699 725 1.196% 1.697.23 1,697.23 USTreasuty Note 03/25/08 1,024{162.50 09/15/09 524 15 539 1.709% 25,125.05 32,832.88 (7,707.83) USTreasoty Note 11/17/06 748,066.41 11115109 1018 76 1094 4.734%0 98,769.61 86,527.11 12,242.50 USTreasnty Note 06/02/08 1,514,941.41 12/31/09 45S 122 577 2.602% 49,138.47 52,500.00 (3,361.53) FHLMC Coupon Note 06/14/(15 299,331.00 01/25/10 1539 147 1686 4.431% 55,924.13 53,994.79 1,929.34 MLCotp CotpomteNote 04/10/07 976,150.00 02/08/10 874 161 1035 5.165% 120,727.29 98,930,56 21,796.73 USTreasmy Note 06/24/08 739,921.88 02/28/10 433 181 614 2.819% 24,744.35 17,771.74 6,972.61 USTrcasuty Note 10/19/06 976,406.25 04/15/10 1047 227 1274 4.744% 132,870.65 99,560.44 33,310.21 FHLB Coupon Note 08/22/06 1,507,665.00 06/11/10 1105 284 1389 4.957% 226,252.40 214,500.00 11,752.40 FHLB Coopon Note 01/12/07 1,487,205.00 08/10/10 962 344 1306 4.960% 194,417.22 181,733.33 12,683.89 FHLB Coupon Note 03/23/09 1,049,400.00 08/16/10 161 350 511 1,284% 5,943.46 19,229.17 (13,285,71) FFCB(2) Coupon Note 09/15/08 1,500,(1(1(1.00 09/15/10 350 380 730 3.300% 47,465.75 24,750.00 22,715.75 USTreasury Note 05/31/07 737,226.56 10115110 823 410 1233 4.801°/ 79,806.75 59,743.85 20062.90 FFCB Coupon Note 12/07/07 2,032,140.00 11/08/19 633 434 1067 3.715% 130,925.21 122,072.22 8,852.99 FHLB Coupon Note 03/23/09 1,040,160.00 12/10/1(1 161 466 627 1.485% 6,813.33 8,180.56 (1367.23) FFC13 Coupon Note (11/18/(17 756,922.50 01/18/11 956 505 1461 3.175% 62,944.85 39,375.00 23,569.X5 FFC13 Coupon Note 11/28/07 2,062,000.00 02/18/11 642 536 1178 3.840% 139,271.43 167916.67 (28.645.24) USTreasnty_ Note 06/12/09 1987,187.50 03/31/11 80 577 657 0.875% 3,811.04 3.811.04 FNMA Coupon Note 09/29/06 1,516,485.00 04/15/11 1067 592 1659 4.874% 216,070.36 195,604.17 20,466.19 FIILB Coupon Note 06/08/09 1,988,0 18.60 06/03/11 84 641 725 1.432% 6,551.64 6,551.64 FHLMC(I) Coupon Note 07/22/09 1,50 1,17 1.88 07/22/11 40 690 730 1.585% 2,607.51 2,607.51 USTreasuty_ Note 1{1/79/(16 990,078.13 09/30/11 1047 760 1807 4.721% 134,077.93 110,151,10 23,926.83 FFCB Coupon Note 12/12/07 2,025,080.00 11/21/11 628 812 1440 4.000% 139,369.89 125,183,33 14,186.56 FFCB Coupon Note 05/28/09 998,5O(),()() 11/28/11 95 819 914 1.590% 4,132.15 4,132.15 FFCB Coupon Note 02/22/07 986,080.00 12/08/11 921 829 1750 4.959% 123,388,03 106,118.06 17,269.97 FHLMC(4) Coupon Note 06/24/09 998,5()().()0 01/23/12 68 875 943 2.031% 3,778.11 1,586.94 2.191.17 FNMA(5) Coupon Note 05/21/09 1,004,500.00 02/03/12 102 886 988 1.951% 5,476:64 4,250.00 1,226.64 FH1.113 Coupon Note 05/09/07 1,509,255.00 03/09/12 845 921 1766 4.743% 165,721.78 137500.00 28,221.78 FFC13 Coupon Note 07/21/09 1,012,800.00 (17/17/12 41 1051 1092 1.472% 1,674.64 1,674.64 FHLB CouponNote I1/29/07 2,038,360.00 08/15/12 641 1080 1721 4.170% 149,273.29 158.277.78 (9,00449) CIE CotpontteNote 01/16/08 1,542,165.00 10/19/12 593 1145 1738 4.587'% 114,926.83 99093.75 15,833.08 Subtotal 40,541,967.12 Union MM 3,490,986.25 30 30 0.15% 430.40 430.40 Pntchosed bit caesl 4,288.75 L.AIF N/A 06/3(1/(19 30,468,836,13 09/30/09 62 30 92 0.93% 58,223.50 58,223.50 $74,506,078.25 333 2.14% $2,532,350.91 $2,217,383,45 $314,967.46 Maturity Profile Amount Dement 0-1 veal .$44,287,260.58 59.44% 1-2 Year, $17,113,499.54 22.97% 2-3 years $11,563,153.13 15.52% 3-5 Years $1,542,165.00 2.07% $74,506,078.25 1()0.0()% nllarket to Cost Position Repotl Amortized Market Umull Iized Source: "Ilcasnty and Agency Obligations- Union Bonk ofCalitbntia Institution Cost Value* Gain (Loss) LAW balances per Local Agency Investment Fund monthly slatctnent, Union Bank Assets $40,541,967.12 $41,587,114.00 1,045,146.88 Union MM 3,490,986.25 3,490,986.25 0,00 Purchased Lttetcst 4,288.75 4,288.75 0.00 LAW 30,468,836.13 30,468,836.13 0.00 Totals: $74,5(16,(178.25 $75,551,225.13 $1,045,146.88 (1) Callable gnatlerly stalling 10/22/09 (2) Callable once on 9/1S/09 (5) Callable once oil 02/03/10 page 5 Town of Los Gatos Investment Report for the month ended July 31, 2009 Prepared by Linda L. Speicher, Project Manager 26-Sep-09 Town of Los Gatos Summary Investment Information July 31, 2009 Weighted Average Portfolio Yield: 2,16% Weighted Average Maturity (days) This Month Last Month One year ag Portfolio Balance $80,887,202 $85,021,579 $76,014,723 Benchmarks/ References: Frown's Average Yield 2.16% 2.50°/o 3.60% LAI Yield for month 1.04% 1,38% 2.79% 3 mo. Treasury 0.19% 0.20% 1.73% 6 mo. Treasury 0.28% 0.36% 1.92% 2 yr. Treasury 1.08% 1.08% 2.82% 5 yr. Treasury (most recent) 2.69% 2.69% 3.44%0 Prime rate 3.25%0 3,25% 5.00% Most recent auctions of Freddie Mac or Fannie Mae Reference Notes: 3 yr. Freddie Mac (07/16/09) 1.75% 2 yr. Fannie Mae (04/09/09) 1.50% 330 Compliance: The Town's investments are in compliance with the Town's investment policy dated May 1, 2008 and also in compliance with the requirements of Section 53601 ofthe California State Code. Based on the inibrmation available, the Town has sufficient Cunds to meet the cash demands for the next. six months. Page 1 Town of Los Gatos Portfolio Allocation & Treasurer's Fund Balances July 31, 2009 Month YT Fund Balances- Begiimingof Montli/Period $85,021,578.85 $85,021,578.85 Receipts 1,955,294.31 1,955,294.31 Disbursements (6,089,670.69) (6,089,670.69) Fund Balances - End of Montll/Perlod $80,887,202.47 $80,887,202.47 Portfolio Allocation: Union MM $3,262,355.36 US Govt Agencies 40,576,083.11 Local Agency Investment Fund 34,468,836.13 Subtotal - Investments 78,307,274,60 Reconciled Demand Deposit Balances 2,579,927.87 Total Treasurer's Fund $80,887,202,47 Treasurer's Fund Balances page 2 Town or Los Gatos Non-T reasury Restricted Fund Ba lances July 31, 2009 Previous Ending Balance Deposits Interest Withdrawals Balance Non-Treasury Funds: Downtown Parking District 12/20/02 $275,109.61 $366.81 $275,476.42 Nate I Certificates oR Participation Reserve Fund (Lot 4) 255,037,10 0.00 255,037.10 NW 2 Cert, or Participation Lease Payment Fund (Lot 4) 206,517.47 20,747.56 0.00 227,265.03 Note 3 Cerl, of Participation 2002 Series A Const. Fund 149,937.57 5,000.00 144,937.57 Not, 4 Cert. or Participation 2002 Series A Reserve Fund 686,251.00 5.66 5.66 686,251.00 Note 4 Cert. OlParticipalion 2002 Series A Interest Fund 0.00 468,081.25 0.00 468,051.25 Note4 Cert. Or Participation 2002 Series A COI Fund 0,00 0.00 0.00 0.00 Note 4 'total Restricted Funds: $1,572,852.75 5488,828.81 $372.47 $5,005.66 $2;057,048,37 These accounts are not part ollhc Treasurer's fund balances reported elsewhere in This report, as they are for separate and distinct entities. Note 1: This account inClide redemption accounts SCI up Rn'the repayment OR interest and principal on outstanding bond coupons fur Parking Assessment District'3', as well as Reserve Funds set up as required by the original Bond rCSOlution. Note 2: The reserve Rind was a requirement of' the original certificates of participation agreement when Lot 4 was built. It helps to guarantee payment of the lease payments should the Town not make payment. Note 3: The lease payment Rind receives the lease payments From the Town monthly for the lease of Lot 4. It holds the funds until payments on the certificates orparlicipadon are due semi-annually. Note 4: The three funds Ior the Certificates of Participation 2002 Series A consist oPconstruction funds which will be expended over the next I'm years, reserve finds which will guarantee the payment of' lease payments, and a third fund for the disbursement of lease payments and initial delivery costs. Page 3 Town of Los Gatos Statement of Interest Earned July 31, 2009 Current Fiscal Month Year to Date Interest received from Investments $235,732.95 $235,732.95 Add: Interest accrued at end of period (see page 5) 375,910.39 375,910.39 Less: Interest accrued at beginning of period (474,569.94) (474,569.94) Interest earned on investments $137,073.40 $137,073.40 Interest by Month July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 March 20tO April 2010 May 2010 June 2010 137,073.40 137,073.40 Page 4 Town of Los Gatos Inac tive Deposits by Institution Market to Cost Position Repot July 31, 2009 Deposit Amortized Maturity Days Days to Days Yield to Merest Interest Interest Institution Secant Dote Cost Dote Elapsed Malmity Invested Matuil Eamed Received Acemed FFCB Coupon Note 04/02/08 2,010,820.00 08/04/09 485 4 489 2.286% 61,079,90 45,300,00 15,77990 USTreasmy Note 03/25/08 1,024,062.50 09/15/09 493 46 539 1.709% 23,638.65 32;832.88 (9,194.23) USTronsuty Note 11/17/06 748,066,41 11/15/09 987 107 1094 4.734% 95,761.89 86,527.11 9,234.78 USTreasor v _ Note 06/02/08 1,514,941.41 12/31/09 424 153 577 2.602% 45,790.58 52,5(1(1.(1(1 (6,709.42) FHLIVIC Coupon Note 06/14/05 299,331.00 01/25/10 1508 178 1686 4.431% 54,797.65 53,994.79 802.86 ML Cotp Corpornle Note 04/10/07 976,150.00 02/08/10 843 192 1035 5.165% 116,445.20 77;680.56 38,764.64 USTreasury Note 06/24/08 739,921.88 (12/28/1(1 402 212 614 2.819% 22,972.81 10,271,74 12,701.07 USTreasmy_ Note 10/19/06 976,406.25 04/15/10 1016 258 1274 4.744% 128,936.56 99,560.44 29,376.12 FHLB Coupon Note 08/22/06 1,507,665.00 06/11/10 1074 315 1389 4.957% 219,905.04 214,500.00 5,4(15.(14 FHLB Coupon Note 01/12/07 1,487,205.00 08/10/10 931 375 1306 4.960% 188,152.21 146,483.33 41,668.88 FHLB Coupon Note (13/23/09 1,049,400.00 08/16/10 130 381 511 1.284% 4,799.06 4,799.06 FFCB(2) Coupon Note (19/15/(18 1,500,000,00 09/15/10 319 411 730 3.300% 43,261.64 24,750.00 18,511.64 USTreasmy Note 05/31/07 737,226.56 10/15/10 792 441 1233 4.801% 76,800.67 59,743.85 17,056.82 FFCB Coupon Note 12/07/07 2,032,140.00 11/(18/1(1 602 465 1067 3.715% 124,513.39 122,072.22 2,441.17 FHLB Coupon Note 03/23/09 1,040,160.00 12/10/10 130 497 627 1.485% 5,501.45 8,180,56 (2,679.11) FFCB Coupon Note 01/18/(17 756,922.50 01/18/11 925 536 1461 3.175% 60,903.75 39,375.00 21,528.75 FFCB Coupon Note 11/28/07 2,062,000.00 02/18/11 611 567 1178 3.840% 132,546.49 119,166.67 13,379.82 USTicasuty Note 06/12/09 1,987,187.50 03/31/11 49 608 657 0.875% 2,334.26 2,334.26 FNMA Coupon Note 09/29/06 1,516,485.00 04/15/11 1036 623 1659 4.874"/ 209,792.78 195,604.17 14,188.61 FHL13 Coupon Note 06/08/09 1,988,018.60 06/03/11 53 672 725 1.432% 4,133.77 4,133.77 FHLMC(1) Coupon Note 07/22/09 1,501,171.88 07/22/11 9 721 730 1,585% 586.69 586.69 USTrensttrv _ Note 10119106 990,078,13 09/30/11 1016 791 1807 4.721% 130,108.09 11(),151.1() 19,956.99 FFCB Coupon Note 12/12/07 2,025,080.00 11/21/11 597 843 1440 4.000% 132,490.17 125,183,33 7,306.84 FFCB CoupouNole 05/28/09 998,500.00 11/28/11 64 850 914 1,590% 2,783.76 2,783.76 FFCB Coupon Note (12/22/(1"/ 986,080.00 12/08/11 890 860 1750 4.959% 119,234.90 106,118,06 13,116,84 FHLMC(4) Coupon Note 06/24/09 998,500.00 01/23/12 37 906 943 2.031% 2,055.73 1,586.94 468.79 FNIVIA(5) Coupon Note 05/21/09 1,004,500.00 02/03/12 71 917 988 1.951% 3,812.17 3,812.17 F1ILB Coupon Note 05/09/07 1,509,255.00 03/09/12 814 952 1766 4.743% 159,642.05 137,500.00 22,142.05 FFCB Coupon Note 07/21/09 1,012,800.00 07/17/12 10 1082 1092 1.472% 408.45 408.45 FHLB Coupon Note 11/29/07 2,038,360.00 08/15/12 610 1111 1721 4.170% 142,054.15 112,027.78 30,026.37 613 Cotpor.nteNote 01/16/08 1,542,165.00 10/19/12 562 1176 1738 4.597% 108,918.85 99,093.75 9,825,10 Subtotal 40,560,599.62 Union MM 3,262,355.36 30 30 0,15% 402.21 402.21 Fnrehascd Int eest 15,483.49 LAIF N/A 06130109 34,468,836.13 ()9/3()/()9 31 61 92 1.04% 31,549.69 31,549.69 578.307.274.60 330 2.16% $2,456,114.67 $2,080,204.28 $375,910,39 Maturity Profile Amount Percent 0-1 year $47,544,039.43 60.71% 1-2 years $17,657,917.04 22.55% 2-3 years $9,524,793.13 12.16% 3-5 years $3,580,525.00 4.57% $78,3 07,274.60 1(1(1.00% Market to Cost Position Report Amortized Market Untvalizcd ° Soul-cc: 'I'roasury and Agency Obligationg - Union Bank ol'Colilbmia hislihrtion Cost Valne* Gain Loss LAIF balances per Local Agency hmslment Fund monthly statement. Union Bank Assets $40,560,599;62 $41,584,295.00 1,023,695.38 Union MM 3,262,355.36 3,262,355.36 0,00 Purchawd lotemst 15,483.49 15,483.49 0.00 LAW 34,468,836.13 34,468,836.13 0.00 Totals: $78,307,274.60 $79,330,969.98 $1,023,695,38 (l) Callable gnmterly starting 10/22/09 (2) Callable once oil 9/15/09 (5) Callable once on 02/03/10 page 5 ~pW N 0 gtos GA~ps COUNCIL AGENDA REPORT DATE: OCTOBER 8, 2009 MEETING DATE: 10/19/09 ITEM NO: 3 TO: MAYOR AND TOWN COUNCIL FROM: GREG LARSON, TOWN MANAGER U SUBJECT: ADOPT RESOLUTION APPOINTING ERIK WILHELMSEN, TRANSPORTATION AND PARKING COMMISSIONER, AS REPRESENTATIVE TO THE SANTA CLARA VALLEY TRANSPORTATION AUTHORITY COUNTY-WIDE BICYCLE AND PEDESTRIAN ADVISORY COMMITTEE (BPAC) RECOMMENDATIO Adopt resolution appointing Erik Wilhelmsen, Transportation and Parking Commissioner, as representative to the Santa Clara Valley Transportation Authority County-Wide Bicycle and Pedestrian Advisory Committee (BPAC). BACKGROUND: The Santa Clara Valley Transportation Authority is requesting the Town of Los Gatos appoint a representative to serve on the BPAC. The term of Los Gatos' current BPAC representative, Bruce Entin, has expired. Bruce Entin informed the Town's Transportation and Parking Commission that he will not be able to reapply to serve as the representative to the BPAC. DISCUSSION: The Town of Los Gatos held its regular Transportation and Parking Commission meeting on October 8, 2009 and voted for the appointment of Erik Wilhehmen as the representative to the Santa Clara Valley Transportation Authority County-Wide BPAC. Erik Wilhelmsen has been a member of the Town Transportation and Parking Commission in good standing and is actively involved in a wide range of Bicycle and Pedestrian related improvement projects. PREPARED BY: TODD CAPURSO Director of Parks and Public Works Reviewed 'by.MAssistant Town Manager *inance Town At torney Clerk Administrator Community Development N:\PPW\MANAGEMENT\COUNCIL\COUNCIL REPORTS\2009 reports\October 19\scvta.bpac.appoint. erik.wiIhelmsen.doe PAGE 2 OCTOBER 9, 2009 MAYOR AND TOWN COUNCIL SUBJECT: ADOPT RESOLUTION APPOINTING ERIK WILHELMSEN, TRANSPORTATION AND PARKING COMMISSIONER, AS REPRESENTATIVE TO THE SANTA CLARA VALLEY TRANSPORTATION AUTHORITY COUNTY WIDE BICYCLE AND PEDESTRIAN ADVISORY COMMITTEE (BPAC) CONCLUSION: Staff is recommending the Town Council appoint Erik Wilhelmsen, Transportation and Parking Commissioner, as representative to the Santa Clara Valley Transportation Authority County- Wide Bicycle and Pedestrian Advisory Committee (BPAC). Attachments: Resolution appointing Erik Wilhelmsen to the Santa Clara Transportation Authority County- Wide Bicycle and Pedestrian Advisory Committee. Distribution: Kurt Evans, Government Affairs Manager, Santa Clara Valley Transportation Agency, 3331 North First Street, San Jose, CA 95134-1906 Erik Wilhelmsen, 112 Elmwood Court, Los Gatos, CA 95032 Attachment 1 RESOLUTION RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS APPOINTING ERIK WILHELMSEN TO THE SANTA CLARA VALLEY TRANSPORTATION AUTHORITY COUNTY-WIDE BICYCLE AND PEDESTRIAN ADVISORY COMMITTEE (BPAC) WHEREAS, the Santa Clara Valley Transportation Authority is in need of a Town representative to serve on the Santa Clara Transportation Authority County Wide Bicycle and Pedestrian Advisory Committee (BPAC); and WHEREAS, the term of Bruce Entin has expired on the Santa Clara Transportation Authority's County Wide Bicycle and Pedestrian Advisory Committee (BPAC); WHEREAS, Erik Wilhelmsen is a member in good standing of the Transportation and Parking Commission and involved in Bicycle and Pedestrian related projects. NOW, THEREFORE BE IT RESOLVED, that Erik Wilhelmsen, Transportation and Parking Commissioner, be appointed to serve as the representative to the Santa Clara Transportation Authority County Wide Bicycle and Pedestrian Advisory Committee (BPAC). PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 19t" day of October, 2009, by the following vote: COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: ATTEST: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA qOW N 0 c cos °GASOS COUNCIL AGENDA REPORT DATE: October 14, 2009 TO: MAYOR AND TOWN COUNCIL FROM: ORRY P. KORB, TOWN ATTORNEYW MEETING DATE: 10-19-2009 AGENDA ITEM: SUBJECT: ADOPT AN ORDINANCE FOR A ZONE CHANGE FROM CM TO CM:PD FOR A THREE STORY SELF STORAGE BUILDING. NO SIGNIFICANT ENVIRONMENTAL IMPACTS HAVE BEEN IDENTIFIED AS A RESULT OF THIS PROJECT AND A MITIGATED NEGATIVE DECLARATION IS RECOMMENDED. APN: 424-31-065. PROPERTY LOCATION 930 UNIVERSITY AVENUE. PROPERTY OWNER: EXTRA SPACE OF LOS GATOS, LLC. APPLICANT: EXTRA STORAGE SPACE FILE. RECOMMENDATION: Adopt an ordinance to amend a zone change from CM to CM:PD for a three story self storage building. DISCUSSION: On October 5, 2009, Council considered the Planning Commission's recommendation to approve a plarmed development application for an existing 1.31 acre site located at 930 University Avenue. This parcel was created in October of 2006, when a two parcel subdivision was approved for property previously own by Verizon. The applicant seeks approval of a zone change to allow development of a 86,345 square foot commercial self storage building with and on-site caretaker residence located within the proposed building and a reduced front yard setback. Council acted to introduce the ordinance. Adoption of the attached ordinance finalizes that decision. The ordinance would become effective 30 days thereafter. Attachment: Ordinance. introduced October 5, 2009. Pl\_l_iPARE BY: ORRY P. KORB, TOWN ATTCCL7 iN1PJsJs\tikurb\AppDnli\Loual\7'emi\C\NVicwer\Report930Uni-rsilyZ.-Ch6.wi>cj 41 Reviewed by: _ wown Manager Assistant Town Manager Clerk Finance _ Connntunity Development Rev: I0/14/09 5:29 pm Reformatted: 7/19/99 Hell 301-05 ORDINANCE OF THE TOWN OF LOS GATOS AMENDING THE TOWN CODE EFFECTING A ZONE CHANGE FROM CM TO CM:PD FOR PROPERTY AT 930 UNIVERSITY AVENUE (APN 424-31-065) THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS: SECTION I The Town Code of the Town of Los Gatos is hereby amended to change the zoning on property at 930 University Avenue (Santa Clara County Assessor Parcel Number 424-31-065) as shown on the map attached hereto as Exhibit A, and is part of this Ordinance, from CM (Controlled Manufacturing) to CM:PD (Controlled Manufacturing, Planned Development). SECTION II The PD (Planned Development Overlay) zone established by this Ordinance authorizes the following: 1. Construction of an 86,345 square foot (three stories above grade and one story below grade) self storage facility with an on-site caretaker residence. 2. Landscaping, parking, and other site improvements shown and required on the Official Development Plan. 3. Uses permitted are those specified in the underlying CM (Controlled Manufacturing) zone by Sections 29.70.220 (Permitted Uses) and 29.20.185 (Conditional Uses) of the Zoning Ordinance, as those sections exist at the time of the adoption of this Ordinance, or as they may be amended in the future, subject to any restrictions or other requirements specified elsewhere in this ordinance including, but not limited to, the Official Development Plan. However, no use listed in Section 29,20.185 is allowed unless specifically authorized by this Ordinance, or by Conditional Use Permit. SECTION III COMPLIANCE WITH OTHER DEVELOPMENT STANDARDS All provisions of the Town Code apply, except when the Official Development Plan specifically shows otherwise. SECTION IV Architecture and Site approval is required before construction and site improvement construction work is performed, whether or not a permit is required for the work and before any permit for construction is issued. Construction permits shall only be in a manner complying with Section 29.80.130 of the Town Code. Page 1 of 13 SECTION V The attached Exhibit A(Map), and Exhibit B (Official Development Plans), are part of the Official Development Plan. The following conditions must be complied with before issuance of any grading, or construction permits: TO THE SATISFACTION OF THE DIRECTOR OF COMMUNITY DEVELOPMENT: Planning Division 1. APPROVAL: This application shall be completed in accordance with all of the conditions of approval listed below and in substantial compliance with the plans approved and noted as Exhibit 18 of the report to the Planning Commission for the June 24, 2009 meeting. Any changes or modifications made to the approved plans shall be approved by the Director of Community Development, Development Review Committee, Planning Commission or the Town Council, depending on the scope of the change(s). 2. TOWN INDEMNITY: Applicants are notified that Town Code Section 1.10.115 requires that any applicant who receives a permit or entitlement from the Town shall defend, indemnify, and hold harmless the Town and its officials in any action brought by a third party to overturn, set aside, or void the permit or entitlement. This requirement is a condition of approval of all such permits and entitlements whether or not expressly set forth in the approval, and may be secured to the satisfaction of the Town Attorney. 3. ARCHITECTURE AND SITE REQUIRED: An Architecture and Site application and approval i:s required forthe proposed building, parking lot improvements, and other site improvements. The Development Review Committee shall be the deciding body for the Architecture and Site application. 4. ON-SITE CARETAKER RESIDENCE: An on-site caretaker residence is permitted. 5. FRONT SETBACK: The front setback shall not be less than twelve feet three inches. 6. COMMUNITY BENEFIT: The applicant has offered the following Community Benefit to offset traffic impacts created by the proposed project: replacing existing incandescent light bulb tree lights with LED tree lights for E. Main Street east of the Highway 17 bridge (approximately 26 trees). Alternately, at the discretion of the Town, the applicant will provide $40,000 for on-site or off-site access or other improvements for the proposed adjacent public recreation facility as determined by the Town. The community benefit must be satisfied prior to the final occupancy. 7. FINAL LANDSCAPE PLAN. A final landscape plan shall be reviewed by the Town's Consulting Arborist and approved as part of the Architecture and Site process. Minimum tree size at time of planting shall be 24-inch box. 8. TREE PRESERVATION. All recommendations of the Town's Consulting Arborist shall be Page 2 of 13 followed throughout all phases of construction. Refer to the report prepared by Arbor Resources dated August 14, 2008 and June 3, 2009 for details. Tree protection specifications shall be printed on the construction plans. 9. *BIOLOGICAL RESOURCES MITIGATION MEASURE #1: All recommendations made by Arbor Resources (August 14, 2008) will be implemented to eliminate or minimize the construction-related impacts on the trees to be retained. These include recommendations under the Design Guidelines section addressing tree location mapping, protective fencing, building setback, trenching, drainage facilities, and installation of new trees (including installation of three new trees of 24-inch box size). The report also provides recommendations for Protection Measures before and during construction, encompassing fencing, removal of hardscape, demolition, work within tree canopies, etc. The report's recommendations are included as Attachment 1 of the Initial Study. 10. *CULTURAL RESOURCES MITIGATION MEASURE #l: Construction personnel shall be alerted to the potential for archaeological materials, especially during trenching operations. Archaeological indicators include, but not be limited to the following: darker than surrounding soils of a friable nature, concentrations of stone, bone or fresh water shellfish, artifacts of these materials, and evidence of fire (ash, charcoal, fire alerted earth or rock) and of course human burials. 11. *CULTURAL RESOURCES MITIGATION MEASURE #2: In the event that archaeological traces are encountered, all construction within a 20-foot radius of the find shall be halted, the Community Development Director shall be notified, and an archaeologist shall be retained to examine the find and make appropriate recommendations. 12. * CULTURAL RESOURCES MITIGATION MEASURE #3: In the event that it appears further earthmoving will affect a resource eligible for the California Register of Historic Resources (CRHR), a plan for evaluation of the resource through limited hand excavation should be submitted to the Town's Community Development Department for approval. If evaluative testing demonstrates that the project will affect a CRHR eligible resource, a plan for the mitigation of impacts to the resource should be submitted to the Community Development Director for approval before construction is allowed inside the zone designated as archaeologically sensitive. 13. *CULTURAL RESOURCES MITIGATION MEASURE #4: If testing determines that an archaeological site is eligible for listing, a plan shall be submitted to the Community Development Director for consideration and approval, which outlines the process of mitigating impacts on the resource. Assuming that the project could not be redesigned to prevent further damage, mitigation can take the form of additional hand excavation to retrieve additional data and materials from the deposit, combined with continued archaeological monitoring inside the archaeologically sensitive zone to ensure that significant data and materials are retrieved for analysis and final report preparation. Page 3 of 13 14. *HAZARDS AND HAZARDOUS MATERIALS MITIGATION MEASURE #1: The project applicant and/or Town shall prepare a management plan to identify all suspected hazardous materials and specify applicable regulations that would determine appropriate handling and disposal of these materials. For suspected hazardous materials (contaminated soil and groundwater) that may be encountered during construction, the management plan shall include contingency plans for site safety, worker protection, sampling and investigation, and disposal and remediation; these shall be based on soil and groundwater sampling and testing that have been completed to date. The management plan shall be filed with the Town of Los Gatos and all other jurisdictional agencies prior to issuance of the demolition and grading permits. 15. *HAZARDS AND HAZARDOUS MATERIALS MITIGATION MEASURE 42: If groundwater is encountered during project construction and dewatering is required, the project applicant shall undertake sampling and testing of the encountered groundwater in accordance with the contingency sampling and investigation plan. If groundwater is found to contain contaminants that exceed regulatory action levels, it may not be discharged into the existing storm drainage system. Removal and handling of the contaminated groundwater shall be done in a manner acceptable to the RWQCB, the Town, and other jurisdictional agencies. 16. *NOISE MITIGATION MEASURE #1: Noise attenuation measures shall be included in the proposed caretaker's unit to ensure that noise levels on the proposed balcony do not exceed 65 dBA (Ldn) and the unit's interior noise levels do not exceed 45 dBA (Ldn). Provision of mechanical ventilation may be adequate to achieve this interior level, but a qualified acoustical consultant shall provide appropriate design recommendations to ensure these interior and exterior noise levels are met. 17. COMPLIANCE MEMORANDUM: A memorandum shall be prepared and submitted with the building permit and/or final subdivision map detailing how the Conditions of Approval will be addressed. Building Division 18. PERMITS REQUIRED: A building permit shall be required for the new commercial building. Separate permits are required for electrical, mechanical, and plumbing work as necessary. 19. CONDITIONS OF APPROVAL: The Conditions of Approval must be blue-lined in full on the cover sheet of the construction plans. A Compliance Memorandum shall be ;prepared and submitted with the building permit application detailing how the Conditions of Approval will be addressed. 20. SIZE OF PLANS: For sets of construction plans, maximum size 24" x 36." 21. STREET NAMES, HOUSE & SUITE NUMBERS: Submit requests for new street names and/or house numbers/suite numbers to the Building Division prior to submitting for the building permit Page 4 of 13 application process. 22. SOILS REPORT: A soils report, prepared to the satisfaction of the Building Official, containing foundation and retaining wall design recommendations, shall be submitted with the building permit application. This report shall be prepared by a licensed civil engineer specializing in soils mechanics. California Building Chapter 18. 23. SHORING: Shoring plans and calculations will be required for all excavations which exceed four (4) feet in depth or which remove lateral support from any existing building, adjacent property or the public right-of-way. Shoring plans and calculations'shall be prepared by a California licensed engineer and shall conform to Cal/OSHA regulations. 24. BACKWATER VALVE: The scope of this project may require the installation of a sanitary sewer backwater valve per Town Ordinance 6.50.025. Please provide inforination on the plans if a backwater valve is required and the location of the installation. The Town of Los Gatos Ordinance and West Valley Sanitation District (WVSD) requires backwater valves on drainage piping serving fixtures that have flood level rims less than 12-inches above the elevation of the next upstream manhole. 25. TOWN FIREPLACE STANDARDS: New wood burning fireplaces shall be an EPA Phase II approved appliance as per Town Ordinance 1905. Tree limbs shall be cut within 10-feet of chimneys. 26. SPECIAL INSPECTIONS: When a special inspection is required by CBC Section 1701, the architect or engineer of record shall prepare an inspection program that shall be submitted to the Building Official for approval prior to issuance of the building permit. The Town Special Inspection form must be completely filled-out, signed by all requested parties, and be blue-lined on the construction plans. Special Inspection forms are available from the Building Division Service Counter or online at www.los atg osea.gov/building. 27. NONPOINT SOURCE POLLUTION STANDARDS SHEET: The Town standard Santa Clara County Valley Nonpoint Source Pollution Control Program Sheet (or Clean Bay Sheet 24x36) shall be part of the plan submittal as the second page. The specification sheet is available at the Building Division Service Counter for a fee of $2 or at San Jose Blue Print for a fee. 28. PLANS: The construction plans shall be prepared under the direct supervision of a licensed architect or engineer. (Business and Professionals Code Section 5538) 29. APPROVALS REQUIRED: The project requires the following departments and agencies approval before issuing a building permit: a. Community Development- Planning Division: Joel Paulson at (408) 354-6879 b. Engineering/Parks & Public Works Department: Fletcher Parsons at 395-3460 c. Santa Clara County Fire Department: (408) 378-4010 Page 5 of 13 d. West Valley Sanitation District: (408) 378-2407 e. Local School District: The Town will forward the paperwork to the appropriate school district(s) for processing. A copy of the paid receipt is required prior to permit issuance, 30.- TITLE 24 - COMMERCIAL: The building shall comply with the latest California Title 24 Accessibility Standards. 31. FOUNDATION INSPECTIONS: A pad certificate prepared by a licensed civil engineer or land surveyor shall be submitted to the project building inspector at foundation inspection. `This certificate shall certify compliance with the recommendations as specified in the soils report; and, the building pad elevation, on-site retaining wall locations and elevations are prepared according to approved plans. Horizontal and vertical controls shall be set and certified by a licensed surveyor or registered civil engineer for the following items: a. Building pad elevation b. Finish floor elevation c. Foundation corner locations d. Retaining Walls TO THE SATISFACTION OF THE DIRECTOR OF PARKS AND PUBLIC WORKS: Engineering Division 32. *GEOLOGY AND SOILS MITIGATION MEASURE #1: The recommendations of the PSI geotechnical investigation (August 2, 2007 and February 22, 2009) shall be incorporated in the final construction plans for the proposed project (Attachment 2 of the Initial Study). These recommendations address site preparation, earthwork operations, drainage, and foundations. 33. *HYDROLOGY AND WATER QUALITY MITIGATION MEASURE #1: Prior to the issuance of a building permit, the project applicant shall incorporate landscape-based stormwater treatment systems (e.g., bio-swales, bio-retention, etc.) into the project design. In the event that such treatment facilities are determined to be infeasible, the applicant will demonstrate to the Tower's satisfaction that such measures would preclude the project implementation. 34. *TRANSPORTATION AND TRAFFIC MITIGATION MEASURE #1: The applicant shall contribute to the Town's future capital improvement project of installing a signal at the Lark Avenue/University Avenue intersection for its incremental share of impact as determined by the Town Engineer. 35. GENERAL. All public improvements shall be made according to the latest adopted Town Standard Drawings and the Town Standard Specifications. All work shall conform to the applicable Town ordinances. The adjacent public right-of-way shall be kept clear of all job related dirt and debris at the end of the day. Dirt and debris shall not be washed into storm drainage facilities. The storing of goods and materials on the sidewalk and/or the street will not Page 6 of 13 be allowed unless a special permit is issued. The developer's representative in charge shall be at the job site during all working hours. Failure to maintain the public right-of-way according to this condition may result in the Town performing the required maintenance at the developer's expense. 36. ENCROACHMENT PERMIT, All work in the public right-of-way will require a Construction Encroachment Permit. All work over $5,000 will require construction security. 37. GRADING PERMIT. A grading permit is required for site grading and drainage. The grading permit application (with grading plans) shall be made to the Engineering Division of the Parks & Public Works Department located at 41 Miles Avenue. The grading plans shall include filial grading, drainage, retaining wall location, driveway, utilities and interim erosion control. Grading plans shall list earthwork quantities and a table of existing and proposed impervious areas. Unless specifically allowed by the Director of Parks and Public Works, the grading permit will be issued concurrently with the building permit. The grading permit is for work outside the building footprint(s). A separate building permit, issued by the Building Department on E. Main Street is needed for grading within the building footprint. 3 8. PAD CERTIFICATION. A letter from a licensed land surveyor shall be provided stating that the building foundation was constructed in accordance with the approved plans shall be provided subsequent to foundation construction and prior to construction on the structure. The pad certification shall address both vertical and horizontal foundation placement. 39. PRECONSTRUCTION MEETING. Prior to issuance of any permit or the commencement of any site work, the general contractor shall: a. Along with the project applicant, attend a pre-construction meeting with the Town Engineer to discuss the project conditions of approval, working hours, site maintenance and other construction matters; b. Acknowledge in writing that they have read and understand the project conditions of approval, and will make certain that all project sub-contractors have read and understand them prior to commencing work and that a copy of the project conditions of approval will be posted on site at all times during construction. 40. RETAINING WALLS, A building permit, issued by the Building Department at 110 E. Main Street, may be required for site retaining walls. Walls are not reviewed or approved by the Engineering Division of Parks and Public Works during the grading permit plan review process. 41. SOILS REPORT. One copy of the soils and geologic report shall be submitted with the grading permit application. A geotechnical review to determine the potential for fault ground rupture is required. Geotechnical Engineer must review and submit a report on the mapped faults in the area of the project and evaluate the potential for fault ground rupture and seismically induced liquefaction. The soils report shall include specific criteria and standards governing site grading, drainage, pavement design, retaining wall design and erosion control. The reports shall be Page 7 of 13 signed and "wet stamped" by the engineer or geologist, in conformance with Section 6735 of the California Business and Professions Code. 42. SOILS REVIEW. Prior to issuance of any permit, the applicant's soils engineer shall review the final grading and drainage plans to ensure that designs for foundations, retaining walls, site grading, and site drainage are in accordance with their recommendations and the peer review comments. The applicant's soils engineer's approval shall then be conveyed to the Town either by letter or by signing the plans. 43. DESIGN CHANGES. The Applicant's registered Engineer shall notify the Town Engineer, in writing, at least 72 hours in advance of all differences between the proposed work and the design indicated on the plans. Any proposed changes shall be subject to the approval of the Town before altered work is started. Any approved changes shall be incorporated into the final "as- built" drawings. 44. TRAFFIC IMPACT MITIGATION FEE (COMMERCIAL). The developer shall pay a fee proportional to the project's share of transportation improvement needed to serve cumulative development within the Town of Los Gatos. The fee amount will be based upon the Town Council resolution in effect at the time the building permit applications are made. The fee shall be paid beforesthe building permit is issued. The traffic.impact mitigation fee for this project, using the current fee schedule and the preliminary plans is $18,352. The final fee shall be calculated from the final plans using the rate schedule in effect at the time of the building permit application, using a trip generation rate based on Mini Warehouse use. 45. EASEMENT: Ingress/Egress/Utility easement will be required. Recorded Document will need to be provided to the Town Engineering Department prior to releasing Certificate of Occupancy. 46. PUBLIC WORKS INSPECTIONS. The developer or his representative shall notify the Engineering Inspector at least twenty-four (24) hours before starting any work pertaining to on- site drainage facilities, grading or paving, and all work in the Town's right-of-way. Failure to do so will result in rejection of work that went on without inspection. 47. EROSION CONTROL. Interim and final erosion control plans shall be prepared and submitted to the Engineering Division of the Parks & Public Works Department. A Notice of Intent (NOI) and Storm Water Pollution Prevention Plan (SWPPP) shall be submitted to the San Francisco Bay Regional Water Quality Control Board for projects disturbing more than one acre. A maximum of two weeks is allowed between clearing of an area and stabilizing/building on an area if grading is allowed during the rainy season.. Interim erosion control measures, to be carried out during construction and before installation of the final landscaping shall be included. Interim erosion control method shall include, but are not limited to: silt fences, fiber rolls (with locations and details), erosion control blankets, Town standard seeding specification, filter berms, check dams, retention basins, etc. Provide erosion control measures as needed to protect downstream water quality during winter months. The grading, drainage, erosion control plans and SWPPP Page 8 of 13 shall be in compliance with applicable measures contained in the amended provisions C.3 and C.14 of Order No. R2-2005-0035 of the amended Santa Clara County NPDES Permit. 48. STORM WATER MANAGEMENT PLAN. A storm water management shall be included with the grading permit application for all Group 1 and Group 2 projects as defined in the amended provisions C.3.d. of Order No. R2-2005-0035 of the amended Santa Clara County NPDES Permit No. CAS029718. The plan shall delineate source control measures and BMP's together with the sizing calculations. The plan shall be certified by a professional pre-qualified by the Town. In the event that storm water measures proposed on the Planning approval differ significantly from those certified on the Building/Grading Permit, the Town may require a modification of the Planning approval prior to release of the Building Permit. The applicant may elect to have the Planning submittal certified to avoid this possibility. 49. AGREEMENT FOR STORMWATER BEST MANAGEMENT PRACTICES INSPECTION AND MAINTENANCE OBLIGATIONS. The property owner shall enter into an agreement with the Town for maintenance of the stormwater filtration devices. required to be installed on this project by Town's Stormwater Discharge Permit No. CAS029718 and modified by Order No. R2-2005-0035. The agreement will specify that certain routine maintenance shall be performed by the property owner and will specify device maintenance reporting requirements. The agreement will also specify routine inspection requirements, permits and payment of fees. The agreement shall be recorded prior to release of any occupancy permits. 50. DUST CONTROL. Blowing dust shall be reduced by timing construction activities so that paving and building construction begin as soon as possible after completion of grading, and by landscaping disturbed soils as soon as possible. Further, water trucks shall be present and in use at the construction site. All portions of the site subject to blowing dust shall be watered as often as deemed necessary by the Town, or a minimum of three times daily, or apply (non-toxic) soil stabilizers on all unpaved access roads, parking areas, and staging areas at construction sites in order to insure proper control of blowing dust for the duration of the project. Watering on public streets shall not occur. Streets will be cleaned by street sweepers or by hand as often as deemed necessary by the Town Engineer, or at least once a day. Watering associated with on-site construction activity shall take place between the hours of 8 a.m. and 5 p,m, and shall include at least one late-afternoon watering to minimize the effects of blowing dust. All public streets soiled or littered due to this construction activity shall be cleaned and swept on a daily basis during the workweek to the satisfaction of the Town. Demolition or earthwork activities shall be halted when wind speeds (instantaneous gusts) exceed 25 MPH. All trucks hauling soil, sand, or other loose debris shall be covered. 51. CONSTRUCTION STREET PARKING. No vehicle having a manufacturer's rated gross vehicle weight exceeding ten thousand (10,000) pounds shall be allowed to park on the portion of a street which abuts property in a residential zone without prior approval from the Town Engineer 15.40.070). 52. SITE DRAINAGE. Rainwater leaders shall be discharged to splash blocks. No through curb Page 9 of 13 drains will be allowed. 53. NPDES. On-site drainage systems shall include a filtration device such as a bio-swale or permeable pavement. 54. SILT AND MUD IN PUBLIC RIGHT-OF-WAY. It is the responsibility of contractor and home owner to make sure that all dirt tracked into the public right-of-way is cleaned up on a daily basis. Mud, silt, concrete and other construction debris SHALL NOT be washed into the Town's storm drains. 55. RESTORATION OF PUBLIC IMPROVEMENTS. The developer shall repair or replace all existing improvements not designated for removal that are damaged or removed because of developer's operations. Improvements such as, but not limited to: curbs, gutters, sidewalks, driveways, signs, pavements, raised pavement markers, thermoplastic pavement markings, etc. shall be repaired and replaced to a condition equal to or better than the original condition. Existing improvement to be repaired or replaced shall be at the direction of the Engineering Construction Inspector, and shall comply with all Title 24 Disabled Access provisions. Developer shall request a walk-through with the Engineering Construction Inspector before the start of construction to verify existing conditions. 56. SIDEWALKICURB IN-LIEU FEE. A curb and sidewalk in-lieu fee of $4,464 shall be paid prior to issuance of a building permit. This fee is based on a 0 LF of curb at $57/LF and 279-square feet of 4.5-foot wide sidewalk at $16/SF in accordance with Town policy. 57. CURB AND GUTTER. The developer shall repair and replace to existing Town standards any curb and gutter damaged now or during construction of this project. New curb and gutter shall be constructed per Town Standard Details. The limits of curb and gutter repair will be determined by the Engineering Construction Inspector during the construction phase of the project. 58. DRIVEWAY APPROACH. The developer shall install one (1) Town standard commercial driveway approach. The new driveway approach shall be constructed per Town Standard Details. 59. DEBRIS CLEANUP. The developer shall remove all debris and regrade the existing area at the base of the slope and the existing fence along University Avenue. The limits of cleanup will be determined by the Engineering Construction Inspector during the construction phase of the prod ect. 60. AS-BUILT PLANS. An AutoCAD disk of the approved "as-built" plans shall be provided to the Town prior to issuance of a Certificate of Occupancy. The AutoCAD file shall include only the following information and shall conform to the layer naming convention: a) Building Outline, Layer: BLDG-OUTLINE; b) Driveway, Layer: DRIVEWAY; c) Retaining Wall, Layer: Page 10 of 13 RETAINING WALL; d) Swimming Pool, Layer: SWIMMING-POOL; e) Tennis Court, Layer: TENNIS-COURT; f) Property Line, Layer: PROPERTY-LINE; g) Contours, Layer: NEWCONTOUR. All as-built digital files must be on the same coordinate basis as the Town's survey control network and shall be submitted in AutoCAD version 2000 or higher. 61. SANITARY SEWER LATERAL. Sanitary sewer laterals are televised by West Valley Sanitation District and approved by the Town of Los Gatos before they are used or reused. Install a sanitary sewer lateral clean-out at the property line. 62. CONSTRUCTION NOISE. Between the hours of 8:00 a.m. to 8:00 p.m., weekdays and 9:00 a.m. to 7:00 p.m. weekends and holidays, construction, alteration or repair activities shall be allowed. No individual piece of equipment shall produce a noise level exceeding eighty-five (85) dBA at twenty-five (25) feet. If the device is located within a structure on the property, the measurement shall be made at distances as close to twenty-five (25) feet from the device as possible. The noise level at any point outside of the property plane shall not exceed eighty-five (85) dBA. 63. HAULING OF SOIL. Hauling of soil on or off-site shall not occur during the morning or evening peak periods (between 7:00 a.m. and 9:00 a.m. and between 4:00 p.m. and 6:00 p.m.). Prior to the issuance of a building permit, the developer shall work with the Town Building and Engineering Department Engineering Inspectors to devise a traffic control plan to ensure safe and efficient traffic flow under periods when soil is hauled on or off the project site. This may include, but is not limited to provisions for the developer/owner to place construction notification signs noting the dates and time of construction and hauling activities, or providing additional traffic control. Cover all trucks hauling soil, sand, and other loose debris or require all trucks to maintain at least two feet of freeboard. 64. MAINTENANCE ACCESS. The applicant shall propose maintenance access improvements for the Town Engineer to review, comment on, and approve. The Engineering Division shall approve the surface materials over each public easement. 65. PERMIT ISSUANCE: Permits for each phase; reclamation, landscape, and grading, shall be issued simultaneously. 66. COVERED TRUCKS: All trucks transporting materials to and from the site shall be covered. Parks Division 67. WATER EFFICIENCY. This project is subject to the Town's Water Efficient Landscape Ordinance, Chapter 26, Article IV of the Town Code. Required fees shall be paid when the landscape, irrigation plans and water calculations are submitted for review. 68. NEW TREES. All newly planted trees are required to be double staked to Town standards. 69. GENERAL. All newly planted trees shown on the plan are specific subjects of approval of this Page 11 of 13 plan and must remain on the site. 70. IRRIGATION. All newly planted landscaping shall be irrigated by an in-ground irrigation system. Special care shall be taken to avoid irrigation which will endanger existing native trees and shrubs. TO THE SATISFACTION OF THE SANTA CLARA COUNTY FIRE DEPARTMENT: 71. REQUIRED FIRE FLOW: The fire flow for this project is 6,250 gpm at 20 psi residual pressure. As an automatic fire sprinkler system will be installed, the fire flow has been reduced by 75% establishing an adjusted fire flow of 1,500 gpm at 20 psi residual pressure. The adjusted fire flow is available from area water mains and fire hydrant(s) which are spaced at the required spacing. 72. AUTOMATIC FIRE SPRINKLER SYSTEM REQUIRED: All new and existing modified buildings when gross floor area exceeds 3,600 square feet shall be protected throughout by an approved automatic fire sprinkler system, hydraulically designed per National Fire Protection Association (NFPA) Standard #13. A State of California licensed (C-16) Fire Protection Contractor shall submit plans, calculations, a completed permit application and appropriate fees to this department for review and approval prior to beginning their work. 73. NEW COMMERCIAL BUILDINGS: All new commercial buildings shall comply with standard specification SI-7 for construction site fire safety. 74. FIRE DEPARTMENT KEY BOX REQUIRED: The building shall be equipped with a permanently installed emergency access key lock box (Knox) conforming to Fire Department Standard Details and Specification sheet K-1. At time of final inspection keys shall be provided to the fire department. 75. FIRE APPARATUS (ENGINE) ACCESS ROADS REQUIRED: Provide access roadways with a paved all-weather surface with a minimum unobstructed width of 20 feet, vertical clearance of 13 feet 6 inches, minimum circulating turning radius of 36 feet outside and 23 feet inside, and a maximum slope of 15%. Installations shall conform with Fire Department Standard Details and Specifications sheet A-1. 76. FIRE DEPARTMENT (ENGINE) ROADWAY TURN-AROUND REQUIRED: Provide an approved fire department engine roadway turn around with a minimum radius of 36 feet outside and 23 feet inside. Installations shall conform with Fire Department Standard Details and Specification sheet A-1. Cut-de-sac diameters shall be no less than 72 feet. All fire department access/turnaround areas must be properly marked and dedicated solely to such use. SECTION VI Page 12 of 13 This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on October 5, 2009, and adopted by the following vote as an ordinance of the Town of Los Gatos at a meeting of the Town Council of the Town of Los Gatos on October 19, 2009 and becomes effective 30 days after it is adopted. COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: ATTEST: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA NADMORDSWOUN I VGRSITYDOC Page 13 of 13 v3 \V4 N 0 COUNCIL AGENDA REPORT S G AS DATE: October 12, 2009 TO: MAYOR AND TOWN COUNCIL FROM: ORRY P. KORB, TOWN ATTORNEYO~ MEETING DATE: 10-19-2009 AGENDA ITEM: SUBJECT: ADOPT RESOLUTION GRANTING AN APPEAL OF A DECISION OF THE PLANNING COMMISSION DENYING AN APPLICATION FOR CONSTRUCTION OF A NEW SINGLE FAMILY RESIDENCE ZONED R-120. APN: 529-37-042 AND REMANDING APPLICATION TO THE PLANNING COMMISSION: ARCHITECTURE APPLICATION: S-04-64. NEGATIVE DECLARATION: ND-07-147. PROPERTY LOCATION: 26 ALPINE AVENUE. PROPERTY OWNER/APPLICANT/APPELLANT: HOLIDAY DRIVE LLC. RECOMMENDATION: Adopt resolution granting an appeal of a decision of the Planning Commission denying an application for a new single family residence on property zoned R-120 and remanding the application to the Planning Commission. DISCUSSION: On October 5, 2009, Council decided to grant an appeal of a decision of the Planning Commission denying an application for a new single family residence on property zoned R-120. Council and remanding the application to the Planning Commission. The attached resolution finalizes that decision. Attachment: Proposed Resolution PREPARED BY: ORRY P. KORB TOWN ATTORNEY OPK:pg N:\MGR\Town Attorney\Council Reports\10-19-09 26 Alpine.wpd Reviewed by: wn Manager Assistant Town Manager Clerk Finance 6 Community Development Rev: 10/14/09 3:14 pm Reformatted: 7/19/99 File# 301-05 RESOLUTION RESOLUTION GRANTING AN APPEAL OF A DECISION OF THE PLANNING COMMISSION DECISION DENYING AN APPLICATION FOR CONSTRUCTION OF A NEW SINGLE FAMILY RESIDENCE ZONED R-120 AND REMANDING APPLICATION TO THE PLANNING COMMISSION APN: 529-37-042 ARCHITECTURE APPLICATION: S-04-64 NEGATIVE DECLARATION: ND-07-147 PROPERTY LOCATION: 26 ALPINE AVENUE PROPERTY OWNER/APPLICANT/APPELLANT: HOLIDAY DRIVE, LLC WHEREAS: A. This matter came before the Town Council for public hearing on October 5, 2009, and was regularly noticed in conformance with state and Town law. B. Council received testimony and documentary evidence from the applicant/appellant and all interested persons who wished to testify or submit documents. Council considered all testimony and materials submitted, including the record of the Planning Commission proceedings and the packet of material contained in the Council Agenda Report dated September 23, 2009, along with any and all subsequent reports and materials prepared concerning this application. C. The appeal concerns a decision of the Planning Commission denying an application to build a new single family residence. The subject is the remaining undeveloped lot of a three-lot subdivision approved by the Planning Commission in 1991. The project site is located at 26 Alpine Avenue on the west side of the street, southeast of East Main Street. The subject lot also has frontage on Jackson Avenue. D. The application was considered by the Planning Commission on May 27, 2009. The Commission continued the matter to the meeting of July 8, 2009, with the direction that the applicant consider staff's suggestions or other alternatives to reduce the mass of the structure and the height of the auto court. At the July 8, 2009 meeting, the Planning Commission continued the matter at the applicant's request, with no discussion, to the meeting of August 12, 2009. The applicant modified the auto court area, which reduced the mass of the retaining wall. No changes were made to reduce the mass of the house. On August 12, 2009, the Commission denied the application since the mass of the house was not reduced and the applicant did not provide justification for ignoring the Commission's concerns in that regard. E. The Planning Commission's decision was appealed on August 24, 2009. The basis for the appeal was that the Commission erred or abused it discretion because of undue influence and false information allegedly received by them and the Planning Department, from a property that adjoining the north property line of the appellant/applicant. The neighbor is a member of the Town Council. N:\MGR\Town Attorneffouncil Reports\10-19-09 26 Alpine Resolution.wpd F. The appellant/applicant provided no evidence of undue influence by the neighbor. The staff report demonstrates that the Community Development Department was concerned about the mass of the right elevation of the proposed stricture when the application was first reviewed in 2007, that this same concern was reiterated to the applicant numerous time during the application process, and that the concern was communicated to the Planning Commission by Town staff. G. Pursuant to Town Code section 29.20.300, Council finds that new inforination was presented that was not readily or reasonably available for submission to the Planning Commission at the time the applicant/appellant's application was denied.; to wit, that the appellant/applicant desires a remand in order to work with staff to address the issues of concern in order to obtain approval by the Planning Commission. Specifically, the appellant/applicant will work with staff to reduce the mass and scale of the right elevation and to ensure that the project is compatible and will blend with the scale and rhythm of the neighborhood and the natural features in the area. RESOLVED: That the appeal of the decision of the Planning Commission denying architecture and site application 5- 04-64 is granted and the application is remanded to the Planning Commission for further review consistent with this resolution. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California on the day of October, 2009, by the following vote. COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK ADMINISTRATOR TOWN OF LOS GATOS, CALIFORNIA N:\MGR\Town AttoineyTouncil Reports\10-19-09 26 Alpine Resolutionmpd ApW N OF 5Y r °~Og °GA~Og COUNCIL AGENDA REPORT DATE: October 13, 2009 TO: MAYOR AND TOWN COUNCIL FROM: ORRY P. KORB, TOWN ATTORNEYVJ'" MEETING DATE: 10-19-2009 AGENDA ITEM: SUBJECT: ADOPT AN ORDINANCE AMENDING THE TOWN CODE CHAPTER 29, DIVISION 6, SECTIONS 29.10.3000 THROUGH 29.10.3040 REGARDING THE HOUSING ASSISTANCE PROGRAM RECOMMENDATION: Adopt an ordinance to amend the Town Code Chapter 29, Division 6, Sections 29. through 29.10.3040. DISCUSSION: On October 5, 2009, Council voted to introduce an ordinance amending Town Code Chapter 29, Division 6 Sections 29.10.3000 through 29.10.3040 regarding the Housing Assistance Program and adopted a resolution approving revised Below Market Price (BMP) Program Guidelines. Adoption of the attached ordinance finalizes the decision to amend the Town Code provisions regarding the Housing Assistance Program. Attachment: Ordinance introduced October 5, 2009. PREPARED BY: ORRY P. KORB, TOWN ATTORNEY omACi✓wr [NWrykii-&Or&Rq-tsvBMPOM10-U-09,vpol Reviewed by: mown Manager Assistant Town Manager Clerk Finance NCommunity Develo}~ment Rev: 10/14/09 5:13 pm Reformatted: 7/19/99 riie# 301-05 ORDINANCE AN ORDINANCE OF THE TOWN OF LOS GATOS AMENDING TOWN CODE CHAPTER 29, DIVISON 6, SECTIONS 29.10.3000 THROUGH 29.10.3040 HOUSING ASSISTANCE PROGRAM THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS: SECTION I Town Code Chapter 29, Division 6 (Sections 29.10.3000 through 29.10.3040, Housing Assistance Program) is deleted in its entirety. SECTION 11 Town Code Chapter 29, is hereby amended to read as follows: ZONING REGULATIONS Article L In General DIVISION 6. HOUSING ASSISTANCE PROGRAM Sec, 29.10.3000. Intent. Sec. 29.10.3005. Below market price program - Established. Sec, 29.10.3010. Same - Intent. Sec. 29.10.3015. Application, Sec. 29.10.3020. Definitions. Sec. 29.10.3025 Scope. Sec. 29.10.3030. Price. Sec, 29.10.3035. Project denial. Sec. 29.10.3040. Administration. Page 1 of 5 SECTION III Town Code Chapter 29, Division 6 is replaced as follows: DIVISION 6. HOUSING ASSISTANCE PROGRAM Sec. 29.10.3000. Intent. This division is adopted to meet housing needs shown in the housing element of the general plan. (Ord. No. 1316, § 3.90.010, 6-7-76; Ord. No. 1430, 6-4-79) Sec. 29.10.3005. Below market price program--Established. This division establishes the below market price program (BMP). (Ord. No. 1316, § 3.90.100, 6-7-76; Ord. No. 1430, 6-4-79) Sec. 29.10.3010. Same--Intent. The below market price (BMP) program requires the provision of dwellings that persons and families of moderate income can afford to buy or rent, and assures to the extent possible that the resale prices of those dwellings, and rents if they are rented, will be within the means of persons and families of moderate income. (Ord. No. 1316, § 3.90.105, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 1685, 6-2-86) Sec. 29.1.0.3015. Application. This division shall apply to all multiple-family dwelling projects, residential condominium projects, condominium conversions, and to all residential planned development projects (division 2 of article VIII of this chapter) either approved after July 4, 1979, or whose approval includes a condition requiring the provision of BMP dwellings. Projects in the R-1 and HR zones are excepted from BMP participation. The exception does not apply if the project is built under the rules of an overlay zone unless the rules of the overlay zone provide otherwise. (Ord. No. 1316, § 3.90.110, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 1685, 6-2-86) Sec. 29.10.3020. Definitions. For the purposes of this division the following definitions shall apply: BMP dwelling means any residential dwelling unit designated for very low, low, and moderate income under the rules of this section. Person of moderate income means one whose income falls within the range specified by the Town Council in the resolution authorized by section 29.10.3040. (Ord. No. 1316, § 3.90.115, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 1685, 6-2-86; Ord. No. 2115, § Il, 9-15-03) Page 2 of 5 Sec. 29.10.3025. Scope. The Below Market Price Program requirements shall apply to all residential development projects that include five (5) or more residential units or parcels which involve: 1. New construction of ownership or rental housing units, including mixed use developments and addition of units to existing projects, or 2. Subdivision of property for single family or duplex housing development, or 3. Conversion of rental apartments to condominiums or other common interest ownership, or 4. Conversion of non-residential use to residential use. The residential developments consisting of five or more units are required to provide the following number of BMP units: (1) Projects containing five (5) or more but less than twenty (20) market rate units must provide a number of BMP units equal to ten (10) percent of the number of market rate units. (2) Projects with from twenty (20) to one hundred (100) market rate units must provide BMP units as determined by the following formula: Number of BMP units = .225 (total # of market rate units) - 2.5 (3) All projects in excess of one hundred (100) market rate units must provide a number of BMP units equal to twenty (20) percent of the market rate units. (4) Whenever the calculations of BMP units result in a fraction of one-half or more, the number of units to be reserved is increased to the next whole number. (5) The Town, at its sole discretion, may consider an in-lieu payment alternative to the required BMP unit in the case of Planned Unit development with an underlying zone of IIR or a residential developments with five (5) to nine (9) units. Prior to approving the in-lieu fee alternative, the applicant must demonstrate to the satisfaction of the Town why a BMP unit cannot be (1) developed on the same site as the market rate units, and if it camiot be provided on the same site then, (2) develop at an appropriate off-site location within the Town limits. If the developer provides sufficient justification that both of these alternatives are not viable, then a fee in-lieu option may be considered. The required in-lieu fee is as established by a separate resolution and is to be paid to the Town prior to issuance of the certificate of occupancy for the market rate residential unit that triggered the BMP requirement. The provision for a BMP unit applies if the project is built under the rules of an overlay zone unless the rules of the overlay zone provide otherwise. BMP units shall be constructed and Certificate of Occupancies secured concurrently with or prior to the construction of the market-rate units. The BMP requirement will be calculated on the basis of the whole development. The Town Council may grant an exception to the phasing requirements during the project approval process. Page 3 of 5 (Ord. No. 1316, § 3.90.120, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 1685, 6-2-86; Ord. No. 1687, 8-4-86; Ord. No. 1838, § I, I1-5-90) Sec. 29.10.3030. Price. The price of BMP units is controlled for the first buyer and for future buyers by the BMP Guidelines as adopted and amended from time to time by Council resolution and as follows: (1) The initial price is limited to direct construction cost and a proportionate share of the costs of preparing working drawings and specifications and providing on-site and off site improvements, determined according to rules set by the Council. (2) The initial price does not include the cost of land, profit, or marketing costs. (3) Each BMP unit will be subjected to recorded title restrictions concerning manner of future sales, occupancy and leasing. (4) Each buyer of a BMP unit must agree to sell the unit to a moderate income buyer designated by the Town. The Town will designate moderate income persons according to rules adopted by the Council in effect at the time the seller purchased the unit. (5) The resale price cannot exceed the original selling price plus the value at the time of sale of improvements added by the owner, and plus an amount equal to the increase in cost of living or housing during the owner's tenure. The index or method to be used in calculating the increase is established by the Council. (6) If a BMP unit to be resold has not been properly maintained or for any other reason is in poor condition and in need of cleaning or repair, the Town may elect to do the work or have it done and recover the cost from the sale price limited as provided in subsection (5). (7) The regulations will specify the period for controlled resales. The time period will be in perpetuity or for as long as is practical. (Ord. No. 1316, § 3.90.125, 6-7-76; Ord. No. 1430, 6-4-79) Sec. 29.10.3035. Project denial. If an applicant for zoning approval declines to provide BMP units required by ordinance, the zoning approval shall be denied. (Ord. No. 1316, § 3.90.130, 6-7-76; Ord. No. 1430, 6-4-79) Sec. 29.10.3040. Administration. The Council shall adopt by resolution regulations concerning all aspects of the BMP program, including the elements of location of the units, price, buyer eligibility standards, rent, the length of the period during which a unit will be subject to BMP restrictions, the form of recorded instruments and any other matter consistent with the provisions of this section. (Ord. No. 1316, § 3.90.135, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 1685, 6-2-86) Page 4 of 5 SECTION IV If any of the provisions of this ordinance or the application thereof to any person or property is held invalid, such invalidity shall not affect the other provisions of this ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are declared to be severable. SECTION V Any judicial review of this ordinance shall be by writ of mandate, under Code of Civil Procedure 1085. Any action or proceedings seeking to attack, review, set aside, void or annul this ordinance shall be commenced within 90 days after adoption of this ordinance. This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on October 5, 2009, and adopted by the following vote as an ordinance of the Town of Los Gatos at a meeting of the Town Council of the Town of Los Gatos on , 2009. This ordinance takes effect 30 days after it is adopted. COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA Page 5 of 5 DRAFT Council/Agency Meeting Item # 1-7 MINUTES OF THE TOWN COUNCIL/PARKING AUTHORITY/REDEVELOPMENT AGENCY OCTOBER 5, 2009 The Town Council of the Town of Los Gatos conducted a Regular Meeting on Monday, October 5, 2009 at 7:00 P.M. CLOSED SESSION BEGAN AT 5:30 P.M. TOWN COUNCIL/PARKING AUTHORITY/REDEVELOPMENT AGENCY ROLL CALL Present: Mayor Mike Wasserman, Vice Mayor Diane McNutt, Council Member Joe Pirzynski, Council Member Steve Rice, Council Member Barbara Spector Absent: None. PLEDGE OF ALLEGIANCE Youth Park "Citizens of the Year" Jakob Jolley, Ubah Dimbil, Molley Macierz, Grace Peterson, and LaurenJean Rice, Youth Citizens of the Year led the Pledge of Allegiance. The audience was invited to participate. Mayor Mike Wasserman introduced Boy Scout Troop 539. The Troop was attending the meeting for a Scout project. PRESENTATIONS Commendations Harley Crock, Los Gatos-Saratoga Community Education & Recreation • Mayor Mike Wasserman presented Harley Crock with a commendation for his service to Los Gatos-Saratoga Recreation and to the community. • Mr. Crock thanked the Town and the community for all their support. Nick Johnson, Eagle Scout • Mayor Mike Wasserman presented a commendation to Nick Johnson for his service to the Town and to the Boy Scouts of America. Mr. Johnson completed a project which he designed and built 12 emergency backboards for the CERT program for the Town of Los Gatos to earn his Eagle Scout award. • Mr. Johnson thanked the Town Council and community for their support. Proclamation - Los Gatos Prepared • Mayor Mike Wasserman presented a proclamation to Sergeant Kerry Harris proclaiming the month of October as Los Gatos Prepared Month. • Commented that the Town of Los Gatos is preparing for the 20 year anniversary of the Loma Prieta Earthquake and urged all residents to be prepared. CLOSED SESSION REPORT CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section 54956.8) Property: 123 and 208 E. Main Street Negotiating Parties: Town of Los Gatos (Negotiator: Regina Falkner, Community Services Director) Los Gatos-Saratoga Community Education & Recreation District (Negotiator: Steve Rauwolf, Director) Under Negotiation: Price and terms of payment Mr. Korb stated that direction was given and no final action was taken. Property: 17 Fiesta Way Negotiating Parties: Town of Los Gatos (Negotiator: Pamela Jacobs, Assistant Town Manager) currently unknown potential purchasers Under Negotiation: Price and terms of payment Mr. Korb stated that direction was given and no final action was taken. TOWN COUNCIL COUNCIL/TOWN MANAGER REPORTS Council Matters There were no Council matters for this meeting. 2 Council/Manager Reports - Continued Manager Matters Mr. Larson • Commented that the Town is recruiting applicants to fill seats on the Town's Boards and Commissions. The deadline to submit applications is October 16, 2009. • Commended Town staff, Los Gatos Recreation Department, Fisher Middle School, and Billy Jones Railroad for the success of the Town's annual Screen on the Green event. • Commented that there were 120 homes participating in the Town's annual garage sale. Second Chance Week starts this week and on Saturday, October 10, 2009, residents are encouraged to drop off goods to be used by families which are in need over the winter months. Items will be donated to seven non-profits and they are requesting warm outerwear for men, women, and children, blankets and towels, ladies professional attire, eye glasses, sun glasses, and new toiletries to provide to those in need in the broader Los Gatos community. • Thanked the sponsors, residents, and visitors who participated in the Town wide garage sale. • Commented that the slurry seal project was delayed due to weather and to finish the project, the Town scheduled work over the weekend which did cause some traffic delays. • Thanked the community for being patient and commended the Police Department for providing extra traffic control during the project. • Commented that the Town will not have to do another slurry seal project for two years. • Commented that Bud Lortz, Deputy Town Manager, has announced his retirement from the Town of Los Gatos. Mr. Lortz has contributed over 20 years to the Town of Los Gatos, the Community Development Department, and the Redevelopment Agency. CONSENT ITEMS (TO BE ACTED UPON BY A SINGLE MOTION) 1. Adopt ordinance revising Town Code Section 14.110.015 regarding the passage of Senate Bill 731 which regulates massage therapy practitioners and therapists. ORDINANCE 2177 2. Accept Fiscal Year 2008-09 Annual Report. TOWN COUNCIL/REDEVELOPMENT AGENCY 3. PPW Job No. 07-16 - Parking Lot 6 Reconstruction Adopt resolution approving plans and specifications for the Parking Lot 6 reconstruction project and authorize staff to advertise the project for bid. RESOLUTION 2009-107 4. Approval of Special Gift Opportunities List to be used by the Friends of the Los Gatos Library in the Capital Campaign for the new Los Gatos Library. 5. Approve Council/Agency minutes of September 21, 2009. Mr. Davis pulled Consent Item #5. Mayor Mike Wasserman requested that Mr. Davis speak on the pulled consent Item prior to Council's motion to approve the Consent Item Calendar. Mr. Davis Commented that his public comments for Item #6 of the October 5, 2009 Town Council meeting did not reflect his correct statement. Commented that he said that he took objection to Mr. Larson's comment about the fact that the kids of Los Gatos would have continued use of the 13 acres of Vasona property. He felt that there were approximately 8 out of the 13 acres that were buildable for sports use for the Town to utilize and that once the County purchased the land the passive use policy would restrict sports use on the property. MOTION: Motion by Council Member Joe Pirzynski to approve Consent Items # 1-5. Seconded by Council Member Barbara Spector. VOTE: Motion passed unanimously. 4 VERBAL COMMUNICATIONS Mr. Davis Commented that the naming of the mountain in Los Gatos should reflect the natural beauty of the Town and suggested calling the Mountain "Monte del Sol" to reflect that natural beauty of the sun rising over the mountain. Expressed concerns that Mayor Mike Wasserman cuts speakers off from the podium. Expressed concerns about the proposed North 40 Plan and that he does not like the policies set by the Town. Mr. Reichwein Commended the Town for purchasing land to build a sports use facility and requested that the Town build a skate park at the proposed site. Suggested that the Town hold classes at the sports facility to teach kids to build ramps and skate parks and that he is willing to build a skate park at the facility. Dr. Ronen • Stated that he has applied for a business license and has experienced difficult challenges with the classification of his business and parking for that classification. Ms. Rooney, Director of Community Development • Commented that staff did meet with Dr. Ronen and had explained to him that the space that he has rented has insufficient parking for a chiropractic business. • Commented that six spaces are required by Town policy for the amount of space rented by Dr. Ronen. Closed Verbal Communications 5 OTHER BUSINESS - TOWN COUNCIL 6. Adopt an Interim Ordinance of the Town of Los Gatos imposing as an urgency measure a moratorium on the approval, commencement, establishment, or operation of medical marijuana dispensaries. Staff report made by Greg Larson, Town Manager. Open/Closed Public Comments MOTION: Motion by Council Member Joe Pirzynski to adopt an Interim Ordinance of the Town of Los Gatos imposing as an urgency measure a moratorium on the approval, commencement, establishment, or operation of medical marijuana dispensaries. Seconded by Council Member Steve Rice. Council Discussions • Requested information as to what the League of California Cities and other jurisdictions might be doing to address the issue. • Commented that the League of California Cities may have input that would be applicable to all jurisdictions. • Commented on seeking the views from the League of California Cities as well as reflecting the values of the community. • Suggested that the 480 cities in California are very diverse and that the Town should drive the issue primarily by local community interest. VOTE: Motion passed unanimously. PUBLIC HEARINGS - TOWN COUNCIL/REDEVELOPMENT AGENCY 7. Introduction of an ordinance amending Town Code Chapter 29, Division 6, Sections 29.10.3000 through 29.10.3040 Housing Assistance Program and adoption of the resolution repealing resolution 2008-121 and approving the revised BMP Guidelines (continued from 9/21/09) RESOLUTION 2009-108 Staff report made by Wendie Rooney, Director of Community Development. 6 Public Hearing Item #7 - Continued Council Comments • Requested clarification on the Planning Commission's recommendation to change the in-lieu fee. • Questioned the qualifications for a first time buyer and if Santa Cruz County is one of the nine bay area counties. • Questioned the reality to incorporate BMP housing within a hillside development. • Questioned whythe Community Services Commission thought two years would be fair as the BMP requirement. Ms. Rooney • Commented that the Planning Commission felt that you could integrate a BMP unit into a hillside development, but their major concern was that hillside developments tend to have larger lots and larger homes which may make it economically infeasible to develop a BMP unit into that type of hillside development. • Clarified that Santa Cruz County is one of the bay area counties in the BMP Guidelines. • Clarified that there should be some type of concession for people affected by condo conversions and the Community Services Commission thought that the two year time frame would be sufficient. Open/Closed Public Hearing Council Discussions ® Questioned how an applicant would demonstrate that a site is infeasible for BMP units. • Questioned if the same solution was discussed regarding small residential projects with 5 to 9 units. • Commented that the General Plan Committee had expressed that they would like to have BMP units scattered throughout the Town rather than funding the in-lieu fee account. • Commented that it was General Plan's recommendation to eliminate the in-lieu fee for the smaller projects with 5 to 9 units and that staff has researched why the Town might need an in-lieu fee fund. • Commented on supporting building a BMP unit verses the in-lieu fee. • Commented that it would be to the Town's benefit to produce BMP units and that the in-lieu fee would be a last option. • Requested clarification on the consistency of the General Plan Committee and the Planning Commission's recommendation for BMP units. • Commented that the goal is to create BMP units throughout the community. 7 Public Hearing Item #7 - Continued Ms. Rooney • Commented that the Planning Commission was looking at a tiered process for hillside residential, because in hillside residential the overall intent is to keep the density lower and that an applicant should be able to demonstrate why a BMP should not be constructed on site. Mayor Mike Wasserman directed Jackie Rose, Clerk Administrator to read the title of the ordinance. MOTION: Motion by Council Member Steve Rice to waive the reading of the ordinance. Seconded by Council Member Joe Pirzynski. VOTE: Motion passed unanimously. MOTION: Motion by Mayor Mike Wasserman to introduce an ordinance amending Town Code Chapter 29, Division 6, Sections 29.10.3000 through 29.10.3040 Housing Assistance Program with the change to apply the current rule proposed for hillside residential to small residential projects with 5 to 9 units. Seconded by Council Member Steve Rice. Council Discussions • Expressed concerns that there is an inconsistency in fairness across the board if the motion was only relating to smaller projects with 5 to 9 units. • Commented that the rules have not changed for larger developments and that the change would only mean that the smaller projects would have to follow the same guidelines. • Expressed concerns that the goal, as part of the General Plan, was to scatter BMP units across Town and feels that the motion does not reflect that recommendation. • Suggested maintaining the Planning Commission's recommendation and to move forward with the language that accommodates the elimination of the in-lieu fee for the 5 to 9 units. • Commented that the motion leaves room for BMP units to be proposed at another site if the current development is not reasonable. • Commented that the statement relating to the phrase "if the on-site option is infeasible" is a pretty clear direction to future Planning Commissioners. • Commented that it would be the responsibility of the applicant to prove that the BMP unit would not be feasible on site. Public Hearing Item #7 - Continued Mr. Korb • Clarified that the challenge may arise when trying to phase projects in a manner that ensures development of an off-site BMP unit and regulates that the BMP unit gets built. VOTE: Motion passed 3/2. Vice Mayor Diane McNutt and Council Member Barbara Spector voted no. Mayor Mike Wasserman directed Jackie Rose, Clerk Administrator to publish the ordinance. MOTION: Motion by Council Member Joe Pirzynski to approve the resolution repealing Resolution 2008-121 and approving the revised BMP Program Guidelines in staff report as Attachment 1. Seconded by Council Member Steve Rice. VOTE: Motion passed 3/2. Vice Mayor Diane McNutt and Council Member Barbara Spector voted no. PUBLIC HEARINGS - TOWN COUNCIL 8. Consider a request for a zone change from CM to CM:PD for a three- story self storage building. No significant environmental impacts have been identified as a result of this project and a Mitigated Negative Declaration is recommended. APN 424-31-031. Planned Development Application PD-08-001 - Negative Declaration ND-08-05 Property Location: 930 University Avenue Property Owner: Extra Space of Los Gatos, LLC Applicant: Extra Space Storage. Staff report made by Joel Paulson, Associate Planner. Council Comments • Questioned if there is a document showing which trees are being removed along the University Avenue side of the site. • Questioned if any thought was given to a community benefit for traffic mitigation along University Avenue or the intersection of University Avenue and Lark Avenue. • Questioned if the Oaks that are on the site would be removed. • Questioned the community benefit for LED lights and requested clarification on the traffic impact fee and the traffic and transportation mitigation under performance standard #32. 9 Public Hearing Item #8 - Continued Mr. Paulson Clarified that there are five trees slated to be removed and that the Town arborist had indicated that the Eucalyptus trees were a hazard. • Commented that the Walnut tree is not on the endangered tree list. • Clarified that the Oaks will not be removed from the site. • Clarified that staff did not persue any community benefit for traffic issues. • Clarified that the Town consultant has recommended that the developer pay a percentage of the traffic signal fees for a signal at Lark Avenue and University Avenue. Mr. Korb • Clarified that the applicant is already paying traffic mitigation fees per the requirements by Town policies and the applicant is offering the LED lighting as a community benefit. Open Public Hearing Mr. Wyckoff, Applicant • Commented that the proposed building has 360 degree architecture. • Commented that the buffer from the trees shields most of the unit and property. • Requested the zone change from controlled manufacturing to controlled manufacturing, Planned Development. • Clarified the purpose for the caretaker's quarters. • Commented that the current public right-of-way is 65 feet and requested a reduction from that setback which would be comparable to the existing neighbors. • Commented that the trees slated for removal have health issues and are a hazard, but they are willing to leave any trees that Council recommends. • Commented that the Pine trees would need to be removed or pruned to avoid a hazard. • Commented that a community benefit comparable to the cost for LED lighting at the site could be used for any other benefit that the Council would suggest. • Commented on the low vehicle trip rate for the proposed project. • Commented that the size of the facility is economically suitable for the use and the height is lower than the surrounding buildings. • Commented that the site is buffered from the community trail and fits in well with the neighbors. 10 Public Hearing Item #8 - Continued Council Comments • Questioned if all of the staging and construction for the proposed building would be done on site. • Questioned if the applicant would be willing to offer the community benefit to assist the Town with needs for the sport facility site. • Questioned when Council would need to determine what the community benefit would be used for at the proposed sports facility site. Mr. Wyckoff • Clarified that they will be doing all construction and staging on site. • Clarified that they are willing to donate the community benefit to use for the sports facility site. • Commented that the community benefit could be donated and used at the discretion of the Town. Mr. Larson Recommended that Condition #6 be expanded to reflect the offering of the applicant, but to provide an alternative at the Town's discretion for the receipt of the equivalent value to be applied to a traffic site or other improvement for the sports facility adjacent to the applicant's property. Mr. Davis • Commented that the idea for neighborhood compatibility and community benefit is a great idea. • Questioned if the setback is sufficient enough on the side adjacent to the sports facility. • Commented that the traffic studies were discussed during the first Planning Commission meeting, but never discussed again. • Commented that there are 200 car trips a day listed in the current traffic study done on the proposed project. • Expressed concerns that the study was not in the Council's staff report. Mr. Larson Clarified that the Planning Commission at its first hearing did not send back to staff any further consideration of the traffic analysis. They viewed that the work had been completed at the first Planning Commission hearing. All that was returned to the Planning Commission for the second hearing were the issues that had been continued. Commented that Council has the staff reports from the first and second Planning Commission meeting including the full traffic analysis. 11 Public Hearing Item #8 - Continued Mr. Wyckoff • Commented that if they utilize the front setback it would allow further setbacks on the creek side and sports facility side. • Commented on the parking uses for the proposed property and the neighboring sites. • Commented that they are required to have 14 spaces, but usually only four or five cars are at the facility at any given time. Closed Public Hearing Council Discussions • Questioned the reason for the large Floor Area Ratio (FAR) for the proposed site. • Questioned if there was any discussion during Planning Commission relating to the Floor Area Ratio (FAR) issue. • Questioned the limitations on the property given the Planned Development if the owners were to sell the property at a later time. • Questioned if the applicant understands the requirements associated with the Planned Development for the property. Mr. Wyckoff • Clarified that the proposed project does have a higher Floor Area Ratio (FAR) and the primary reason for that is because of the parking requirements. Also the proposed project has less intensive use, less vehicle trips, and low impacts to the neighbors. • Commented that the facility is a local facility and that they have other locations within a three mile radius. • Commented that the modeling for the proposed project was designed using the current zoning policies of the Town, Mr. Paulson Clarified that the Floor Area Ratio (FAR) issues were discussed with staff and that staff had provided information to the Planning Commission regarding why they felt that for this project the height, mass, and scale were appropriate given the site's characteristics. Clarified that there are health issues with the Ash and Walnut trees located on the property. 12 Public Hearing Item #8 - Continued Mr. Korb Clarified that when you place a Planned Development on a property it creates an alternative land use zone. The limitations are the uses allowed by the Planned Development. Commented that the Planned Development use for the proposed site is extremely limited and allows a storage use with a caretaker unit. Commented that any subsequent user would need to seek an amendment to the Planned Development application in order to change the use. MOTION: Motion by Council Member Joe Pirzynski to make the Mitigated Negative Declaration as stated in Attachment 1. Seconded by Vice Mayor Diane McNutt. VOTE: Motion passed unanimously. MOTION: Motion by Council Member Joe Pirzynski to approve Mitigated Monitoring Plan as indicated in Exhibit 15 of Attachment 2. Seconded by Vice Mayor Diane McNutt. VOTE: Motion passed unanimously. MOTION: Motion by Council Member Joe Pirzynski to waive the reading of the ordinance. Seconded by Vice Mayor Diane McNutt. VOTE: Motion passed unanimously. Mayor Mike Wasserman directed Jackie Rose, Clerk Administrator to read the title of the ordinance. MOTION: Motion by Council Member Joe Pirzynski to make the required findings for the zone change (Exhibit 2 of Attachment 2) and approve the application subject to the conditions included in the Planned Development Ordinance (Exhibit 18 of Attachment 2) with Condition #6 amended to read: Alternately, at the discretion of the Town, the applicant will provide $40,000 for on-site or off-site access or other improvements for the proposed adjacent public recreation facility as determined by the Town. Seconded by Vice Mayor Diane McNutt. VOTE: Motion passed unanimously. 13 Public Hearing Item #8 - Continued MOTION: Motion by Council Member Joe Pirzynski to introduce a zone change from CM to CM:PD for a three-story self storage building. No significant environmental impacts have been identified as a result of this project and a Mitigated Negative Declaration is recommended. APN 424-31-031. Planned Development Application PD-08-001 - Negative Declaration ND-08-05 Property Location: 930 University Avenue Property Owner: Extra Space of Los Gatos, LLC Applicant: Extra Space Storage. Seconded by Vice Mayor Diane McNutt. VOTE: Motion passed unanimously. Mayor Mike Wasserman to direct Jackie Rose, Clerk Administrator to publish ordinance. 9. Consider an appeal of a Planning Commission decision denying Architecture and Site Application S-04-64 and the Mitigated Negative Declaration ND-07-147 on property zoned R-1:20. APN 529-37-042 Property location: 26 Alpine Avenue Property owner/applicant/appellant: Holiday Drive, LLC. Vice Mayor Diane McNutt and Council Member Steve Rice recused themselves from Item #9 due to the location of their residence. Staff report made by Sandy Baily, Interim Assistant Planning Director. Council Comments • Requested clarification on the process to remand the application back to the Planning Commission. Mr. Korb • Clarified that it would be appropriate given the appeal, that the applicant would like the opportunity to revise the project in an effort to obtain Planning Commission approval which would be new information and that would be a basis to reverse the decision and remand it back to the Planning Commission. 14 Public Hearing Item #9 - Continued Open Public Hearing Mr. Barnes, Applicant Requested that the issue be remanded back to the Planning Commission. • Commented that he would like to work with staff and the Planning Commission to obtain Planning Commission approval. Closed Public Hearing MOTION: Motion by Council Member Barbara Spector to move that the Planning Commission decision be modified relative to the appeal and return the item back to the Planning Commission because of new information received by Council. The new information as stated below and in Attachment 13 which was provided as a Desk Item as well as the applicant's testimony. New Information: 1. The project can be modified as the Planning Commission requested to reduce the mass of the right elevation; and 2. Applicant would like the opportunity to work with staff and the Planning Commission to obtain Planning Commission approval. Seconded by Council Member Joe Pirzynski. VOTE: Motion passed unanimously. ADJOURNMENT Attest: Jackie D. Rose, Clerk Administrator 15