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HomeMy WebLinkAbout2001 BAKERSFIELD MEMORANDUM CITY MANAGER'S OFFICE August 28, 2001 TO: BUDGET AND FINANCE COMMITTEE Councilmember Mike Maggard, Chair ~ Councilmember Harold Hanson Councilmember Mark Salvaggio .~ FROM: ALAN TANDY, CITY MANAGER SUBJECT: REQUEST FROM THE BAKERSFIELD SENIOR CENTER TO PULL BUDGET AND FINANCE COMMI'I-FEE AGENDA ITEM 4. B. UNDER DEFERRED BUSINESS REGARDING THEIR REQUEST FOR FINANCIAL ASSISTANCE Today we received a request by phone from Mr. Lynn Edwards on behalf of the Director of the Bakersfield Senior Center to continue Deferred Business Item 4.B., the Senior Center's request for financial assistance, to another meeting as they are unable to complete the financial information they planned to present to the Committee. Per City Attorney Bart Thiltgen, under the Brown Act it is too late to send out an amended agenda; however, the Committee Chair with a quorum vote may continue the item to the next Committee meeting. AT:jp cc: Honorable Mayor and City Councilmembers Finance Director News Media S:\Damell~2001BFCom m ittee~n emoreagenda.wpd ADMINISTRATIVE REPORT MEETING DATE: August 22, 2001 I AGENDAiTEM: SECTION: Consent, Calendar TO: Honorable Mayor and City Council AP___PROVED FROM: John W. Stinson, Assistant City Manager DEPARTMENT HEAD_. DATE: August 8, 2001 CITY A'I-I'ORNEY CITY MANAGER SUBJECT: Resolution establishing Council policy for cable broadcast of public meetings. RECOMMENDATION: The Budget and Finance Committee recommends adoption 'of the resolution. BACKGROUND: Councilmember David Couch asked staff to develop a policy regarding the broadcast of public meetings in the City Council Chambers. Staff prepared a.draft policy which was reviewed by the Budget and Finance Committee at its August 2nd meeting. The policy included the following recommendations: 1. Requests to'schedule a meeting for broadcast should be submitted at least one week prior to broadcast date. 2. Parties requesting use of video or computer equipment must provide that material to the City at least three days prior to the meeting. 3. Because of limited broadcast slots available on KGOV for"special" meetings, City-sponsored meetings would have priority over those requested by other governmental agencies or organizations. 4. Because of limited broadcast slots available on KGOV, there would be no guarantee of live broadcast. Re-broadcast of "special" meetings would be scheduled in order of request. 5. Because there are considerable costs associated with televised meetings, a cost recovery charge would be created and assessed to agencies or groups other than the City of Bakersfield. Costs include staff time for Telecommunications, Clerk, Management Information Systems, and Police Department, including overtime. 6. Regular and special meetings of the City Council, Planning Commission, Board of Zoning Adjustment, and Redevelopment Agency would take priority over other "special" meetings requested to be broadcast in the Council Chambers. The Committee discussed the proposed policy and recommends that a resolution implementing the policy be adopted by the City Council. August 9, 2001, 8:39am S:~JOHN~admin-cable-policy.wpd RESOLUTION NO. A RESOLUTION ESTABLISHING COUNCIL POLICY FOR CABLE BROADCAST OF PUBUC MEETINGS. WHEREAS, the City Council requested that the Budget and FinanCe Committee of the Council review a policy for the broadcast of public meetings on cable television; and WHEREAS, the ,Budget and Finance Committee has reviewed the proposed policy and-is recommending its adoption; and WHEREAS, a resolution of the City Council is necessary to adopt Council policy for the broadcast of public meetings; NOW, THEREFORE, BE IT RESOLVED as follows: 1. All the foregoing recitals are true and oorrect. 2. Requests to schedule a meeting for.broadcast should be submitted at least one week prior to broadcast date. 3. Parties requesting use of video or computer equipment must provide that material to the City at least 3 days prior to the meeting. 4. Because of'limited broadcast slots available on KGOV for "special" meetings, City-sponsored meetings would have priority over those requested by other governmental agencies or organizations. 5. Because of limited broadcast slots available on KGOV, there would be no guarantee of live broadcast. Re,broadcast of "special" meetings would be scheduled in order of request. 6. Because there are considerable costs associated with televised meetings, a cost recovery charge would be created and assessed to agencies or groups other than the City of Bakersfield. Costs include staff time for Telecommunications, Clerk, Management Information Systems, and Police Department, including overtime. 7. Regular and special meetings of the City Council, Planning Commission, Board of Zoning Adjustment, and Redevelopment Agency would take priority over other "special" meetings requested to be broadcast in the Council Chambers. I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the Council of the City of Bakersfield at a 'regular meeting thereof held on , by the following vote: Ayes: Council Member Benham, Carson, Couch, Hanson, Maggard, Salvaggio, Sullivan Noes: Council Member Abstain: Council.Member Absent: Council Member CITY CLERK AND EX OFFICIO of the Council of the City of Bakersfield APPROVED By. HARVEY L. HALL Mayor APPROVED AS TO FORM: BART J. THILTGEN City Attorney By __ngcrier Account;m~.~' Cor'~mtion August 15, 2001 SMG, Inc. Bakersfield Centennial Garden & Convention Center 1001 Truxtun Avenue Bakersfield, CA 93301 We have audited .the financial statements of Bakersfield Centennial Garden & Convention Center, ("the Facility") for the year ended June 30, 2001, and have issued our report thereon dated August 15, 2001. Professional standards require that we provide you with the following information related to our audit. Our responsibility under Generally Accepted Auditin~ Standards As stated in our engagement letter dated January 22, 2001, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the financial.statements are free of material misstatement. Because an audit is designed to provide reasonable, but not absolute assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, fraud, or other illegal acts may exist and not be detected by us. As part of our audit, we considered the intemal control of SMG, Inc., ("SMG"). Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we assessed the risk of SMG's compliance with certain provisions of laws, regulations, contracts, and grants. We concluded that the risk of such material misstatement was sufficiently low and that it was not necessary to perform tests of SMG's compliance with such provisions of laws, regulations, contracts, and grants. 5(X)lE. CommercenterDrive. Suite350 o P.O.I~)xlIlTI · B;~evsfield. Califomkt93389 * Fax (661) 631-0244 · (661) 631-I171 1319 Mttnh Street · Stul I.uis Obispo, C:fliforni:t 93401 · Fttx (~5) 5414024 ,, (805) 541-2500 I010 ~mth Broadway, Suite I Strata M:tria. Ctdifomkt 9~54 Fax (805) 349-7702 (805) 349-7705 August 15', 2001 SMG, Inc. Page tWo Significant Accounting Policies Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the terms of our engagementietter, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the Facility and SMG are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended june 30, 2001. We noted no transactions entered into by the Facility during 'the year that were both significant and unusual, and of which, under professional standards, we are required to inform, you, or transactions for which there is a lack of authority guidance or consensus. Accounting Estimates Accounting estimates are an integral part of the financial statements preparedby management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are ' particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. There are no significant accounting estimates affecting the financial statements. Significant Audit Adjustments For purposes of this letter, professional standards define a significant audit adjustment as a proposed correction of the financial statements that, in our judgement, may not have been detected except through our auditing procedures..These adjustments may include those proposed by us but not recorded by the Facility that could potentially cause future financial statements to be materially misstated, even though we have concluded that such adjustments are not material to the current financial statements. We proposed no audit adjustments that could, in our judgement, either individually or in the aggregate, have a significant effect on the Facility's financial reporting process. Disa~eements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting or auditing matter that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. August 15,2001 SMG, Inc. Page three Consultations with Other Independent Accountants. In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. Ifa consultation involves application of an accounting principle to the Facility' financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Issues Discussed Prior to Retention of Independent Auditors We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Facility' auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing our audit. This information is intended solely for the use of the management of SMG, Inc. and the City of Bakersfield and is not intended .to be and should not be used by anyone other than thes s;cified_ J_ _~_ parties. BAR~IC,~ONGCRI~jR HOOPER & KING · ' G:~clients~347~s fasltr I I I I I I I I I I I I ! ! I Bakersfield Centennial Garden & Convention Center Financial Statements Year Ended June 30, 2001 I I I I CONTENTS Page(s) I Independent Auditors' Report On The Financial Statements 1 Financial Statements I Balance sheet 2 Statement of revenue and expenses 3 i Statement of changes in retained deficit 4 Statement of cash flows 5 I Notes to Financial Statements 6 - 14 Independent Auditors' Report on the I Supplementary Information 15 Supplementary Information I Schedule of operating expenses 16 I Independent Auditors' Report On Compliance And On Internal Control Over Financial Reporting Based On i An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards 17 I Barbich I Independent Auditors' Report SMG, Inc. Bakersfield Centennial Garden & Convention Center Bakersfield, California We have audited the balance sheet of Bakersfield Centennial Garden & Convention Center as of June 30, 2001, and the related statements of revenue and expenses, changes in retained deficit and cash flows for the year then ended. These financial statements are the responsibility of the City's facility management company, SMG, Inc. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bakersfield Centennial Garden & Convention Center as of June 30, 2001, and the results of its operations and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles. I 5001 E. Coimnercenter Drive, Suite 350 · l~O. Box 11171 · Bakersfield, California 93389 ° Fax (661) 631-0244 · (661) 631-1171 1319 Marsh Street · San Luis Obispo, Califom a 93401 · F=Lx (805) 541-4024 · (805) 541-2500 1010 South Broadway, Suite I · Sm~ta Maria, California 93554 · Fmx (805) 349-7702 ° (805) 349-7705 I 1 In accordance with Government Auditing Standards, we have also issued a report dated August 15, 2001 on our consideration of SMG, Inc.'s internal control over financial reporting and our assessment of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. BAR~/( ~ONGCRIElt ]I-IOOPER & KING Acco~~~; ~ ~cy Corp ti By: G~ "y~King~ttEl: ~~ California~,, Bakersfield, August 15,2001 I I ! Bakersfield Centennial Garden & Convention Center Balance Sheet June 30, 2001 ASSETS Current Assets Cash $ 1,448,578 Accounts receivable, trade 350,712 Accounts receivable, other 130,364 Prepaid expenses 130,844 2,060,498 Property and Equipment, at cost 39,584 Less accumulated depreciation 16,237 23,347 $ 2,083,845 LIABILITIES AND RETAINED DEFICIT Current Liabilities Accounts payable, trade $ 236,709 Accounts payable, other 242,462 Accrued expenses 92,159 Deferred revenue 1,352,635 Advance from City of Bakersfield 1,445,815 3,369,780 Commitments Retained Deficit Unappropriated (1,285,935) $ 2,083,845 See Notes to Financial Statements. ! I Bakersfield Centennial Garden & Convention Center Statement of Revenue and Expenses For the Year Ended June 30, 2001 Net revenues: Facilities rent $ 1,405,741 Event expense reimbursements 795,378 Suite and premium seats 651,648 Concession commission 451,847 Signage and advertising 446,779 Parking 126,650 Ticketing fees 130,528 Merchandise 63,035 4,071,606 Direct event expenses: Event labor 1,002,111 Other direct event expenses 309,023 ing 222,371 Event advertis 1,533,505 Gross profit 2,538,101 Operating expenses 3,025,046 Operating loss (486,945) Nonoperating income: Interest income 22,741 22,741 Net loss $ (464,204) See Notes to Financial statements. ! Bakersfield Centennial Garden & Convention Center Statement of Changes in Retained Deficit Year Ended June 30, 2001 Retained deficit, beginning of year $ (821,731) Net loss (464,204) Retained deficit, end of year $ (1,285,935) See Notes to Financial Statements. -4- I Bakersfield Centennial Garden & Convention Center I Statement of Cash Flows For the Year Ended June 30, 2001 1 Cash flows from operating activities: Operating loss $ (486,945) Adjustments to reconcile operating loss to net cash used in operating activities: Depreciation 10,887 Increase in accounts receivable (158,128) Decrease in prepaid expenses 16,106 Increase in accounts payable 326,123 Decrease in accrued expenses (110,673) Increase in deferred revenue 564,108 Net cash provided by operating activities 161,478 Cash flows from investing activities: Payments for purchase of property and equipment (13,843) Interest income 22,741 Net cash provided by investing activities 8,898 Cash flows from financing activities: Net increase in advances from the City of Bakersfield 494,497 Net increase in cash and cash equivalents 664,873 Cash and cash equivalents at beginning of year 783,705 Cash and cash equivalents at end of year $ 1,448,578 I See Notes to Financial statements. I I I I Bakersfield Centennial Garden & Convention Center I Notes to Financial Statements Note 1. Nature of Business and Significant Accounting Policies Nature of Business: The City of Bakersfield ("the City") owns the Bakersfield Centennial Garden and Convention Center ("the Facilities"). The Centennial Garden is an arena, built by the City, which was completed and began operations in October 1998. It is the only building of its kind in the Bakersfield area. On August 6, 1997, the City issued a request for proposals for services prior to the opening of the Centennial Garden and the operation and management of the Facilities thereafter. In an agreement dated January 28, 1998, the City contracted with Ogden Entertainment, Inc. ("the Company") for these services for an initial period of five years. The contract term was subsequently extended for an additional five-year term and the agreement is effective through June 30, 2008. The Company worked during the January 14, 1998 through June 30, 1998 pre-opening phase and assumed management responsibilities of the Facilities on July 1, 1998. The Company was hired by the City for its expertise in the management, operation and marketing of public assembly Facilities. The Company currently manages similar Facilities throughout the United States. The Company sold its entertainment business division to ARAMARK Corporation effective June 2, 2000. The operation of the Facility is still being conducted under the Company's name. All contracts and leases, with the exception of the administrative services agreement with the City, are transferable to ARAMARK Corporation. See Note 4 for terms of the administrative services agreement. The City has approved the transfer of the administrative services agreement to ARAMARK Corporation. On September 13, 2000, the Company sold and assigned all of it's rights, obligations, liabilities and indemnities as manager of the Facilities to SMG, Inc. for $10. All contracts and leases, with the exception of the administrative service agreement city, are to SMG, Note 4 for terms of the with the transferable Inc. See administrative service agreement. The city has approved the transfer of the administrative services agreements to SMG, Inc. I I Notes to Financial Statements I I The activity of the Facilities is recorded in a special revenue fund of the City's accounting records. The City owns all the assets of the Facilities and accordingly, I all amounts related to the of the Facilities to the The operation belong City. Company has a fiduciary responsibility under the management agreement to maintain and operate the Facilities in the best interests of the City and the I community. I Fund accounting: Enterprise Funds are used to account for operations (a) that are financed and I operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or I recovered primarily through user charges or, (b) where the governing body has decided that periodic determination of revenue earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management I control, accountability, or other purpose. Revenue Recognition: I Suite andpremium seat contracts I Revenues from suite and premium seat contracts are recognized over the contract period per the contract terms. Contracts are billed twice a year with the entire contract i amount payable prior to the contract period. The suite and premium seat payments are recorded as deferred revenue until earned and recognized over the contract period. I Signage and advertising contracts Revenues from Signage and advertising contracts are recognized over the contract I period per the contract terms. Contracts are billed according to the contract terms. Payments are recorded as deferred revenue until earned and recognized over the contract period. I 1 I I I I Ticket sales The Company, through its contract with Ticketmaster, sells tickets to Facility events as an agent of the event holder at the on site box office location and through telephone, internet and outlet locations. All revenues from the sale of tickets belong to the event holder. The ticket sales are recorded as deferred revenue when sold. After the event has occurred, settlement with the event holder takes place. The net of total ticket sales less event expenses such as facility rent and reimbursement of direct event expenses is then paid to or received from the event holder. The event ticket removed revenues are from the deferred revenue account at the time of settlement. The Facilities earn a ticketing fee on the sale of event tickets that take place through telephone, internet and outlet locations. Revenues are recorded as deferred revenue at the time of sale and are recognized at the time of event settlement. Event revenues Revenues from Facilities' events such as facilities rent, direct event expense reimbursements, concession commissions, parking and merchandise are recognized at the time of event settlement. Basis of accounting: The accompanying financial statements have been prepared on the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned and expenses are recognized when incurred. Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents: For purposes of reporting cash flows, cash and cash equivalents include cash on hand and amounts deposited with banks. -8- I I Categories of deposit risk: In accordance with the Governmental Accounting Standard Board Statement No. 3, the City's deposits are categorized to give an indication of the level of risk assumed by the City at June 30, 2001. The categories are described as follows: Category 1 - Insured or collateralized with securities held by the entity or by its agent in the entity's name Category 2 - Collateralized with securities held by the pledging financial institution's trust department or agent in the entity's name. Category 3 - Uncollateralized. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the entity's name). Catego~_ Carrying 1 2 3 Value Cash and cash equivalents $ 837,445 $ -0- $ 611,133 $ 1,448,578 30, 2001, carrying amount deposits was At June the of financial institution $1,448,578 and the bank balance was $1,490,162 of which only $300,000 is covered by federal depository insurance. Concentration of credit risk: Credit is extended, in the form of accounts receivable, to customers located primarily in California. Property and equipment: Property and equipment are recorded at cost. Depreciation is computed using the straight line method over estimated useful lives of 3 years. I I Maintenance and repairs of property and equipment are charged to operations and major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts and gain or loss is included in the statement of income. Note 2. Deferred Revenue Deferred revenue at June 30, 2001 consists of the following: Suite contracts $ 417,500 Advertising contracts 146,680 Ticket sales, future events 702,694 Event deposits 43,245 Event sponsorship 2,500 Ticket rebates 40,017 $ 1,352,635 Note 3. Advance From City of Bakersfield During the normal course of business, the City pays expenses that are allocated to the operation of the Facilities. These expenses include payroll and related expenses for the City employees and rent and utilities for the office space used by the Company. The amount of the advance fluctuates throughout the year depending on allocated monthly expenses and additional cash flow needs. The advance is an inter-company account that is eliminated in the consolidation for the of the financial preparation City's statements. The amount due at June 30, 2001 was $1,445,815. Note 4. Administrative Services Agreement The Company provides administrative services for the City under an original five-year agreement, which was subsequently extended for an additional five-year period. Compensation for these services is a base fee of $150,000 for the first year, paid in equal monthly installments. The base fee increases by 3% per year each year thereafter until the agreement has terminated. I I I I I In addition to the base fee, the Company receives an incentive relative to the amount of the reduction, if any, in net operating loss for each fiscal year. The incentive is I calculated based upon the net operating income or loss after the base fee. The . Company receives an incentive of 1) 10% of the first $350,000 in net operating loss reduced; 2) 20% of the next $500,000 in net operating loss reduced; 3) 30% of any net I operating surplus in one fiscal All of the incentive calculations are based any year. upon a projected annual net operating loss of $850,000. Beginning July 1, 2003, the incentive is $25,000 for every year the net operating loss is below $300,000. If the net I in fiscal reaches then the incentive fee will operating surplus $350,000, any year cease. For the year ended June 30, 2001 the Company received $266,344 in management and i incentive fees. The computation of the incentive fee is based upon the books and records of the i Facilities maintained by the Company. The accounting records for the Facilities must be maintained in accordance with generally accepted accounting principles and industry standards. The Company is required under the agreement with the City to have an i annual audit at the end of the fiscal year. Under the management agreement with the City, the Company has the right to operate I or contract with others to operate concession and catering services for the Facilities during the initial five-year term of the contract, effective through June 30, 2003. The City has not extended this portion of the management agreement. The Company has I contracted with its food and beverage division to operate these services. The food and beverage division is a related entity under common management at the Company's corporate level. Operations of this food and beverage division are not included in the I Facilities' financial statements. The Facility is entitled to receive 35% of the first $1.2 million in gross concession I receipts and 40% of receipts in excess of $1.2 million and 15% concession of gross receipts to the suites. For the year ended June 30, 2001 the Facility received $626,054 in gross concession and catering receipts from the Food and Beverage division. The Facility is entitled to receive 75% of the net novelty receipts and the Company i receives the remaining 25%. For the year ended June 30, 2001 the Facility received $62,200 and the Company received $19,284 in net novelty receipts from the Food and Beverage division. I Note 5. Commitments The Company has entered into various long-term contracts and leases. At June 30, 2001 outstanding commitments consist of the following: Ticket sales The Company has entered into a licensed user agreement with Ticketmaster to be the exclusive provider for ticket sales for event the the any presented by Company at Facilities. Under the agreement, Ticketmaster has the authority to act as an agent for the Company for ticket sales to the general public by any and all means including telephone, intemet, and outlet locations. Ticketmaster earns fees from the ticket sales such as inside ticket charges, customer convenience charges, credit card charges, handling charges and ticket sales royalties. Some fees are subject to increases throughout the contract term. Ticketmaster collects these fees as tickets are sold and the net amount is remitted to the Company weekly. The initial term of the agreement is for five years and the agreement is effective through August 31, 2003. The contract automatically renews for one two-year period unless terminated in accordance with the provisions of the contract. Concert promoter The Company has entered into a booking service agreement with Nederlander- Bakersfield, Inc. as the exclusive musical concert promoter for the Facilities. Nederlander has contracted to pay a minimum annual guarantee of $175,000 in facilities rent and reimbursement of direct event expenses through the concerts it promotes at the Facilities. Nederlander is entitled to 25-50% of amounts in excess of the minimum annual guarantee based upon various target levels. The facilities rent and annual guarantee amounts are subject to escalation each over the contract period based year upon increases in the Consumer Price Index, but not more than 4% per year. For the year ended June 30, 2001, Nederlander paid $173,543 in facilities rent less expenses an amount $-0- due for the excess reimbursement of direct with estimated of of the minimum annual guarantee. The contract year is different than the Facilities fiscal year. Therefore, the excess of the minimum annual guarantee is allocated over two of the Facilities' fiscal years. The agreement is effective through December 31, 2003 unless terminated earlier in accordance with the provisions of the agreement. - 12- I I I I Personnel services I The Company has entered into an independent contractor's agreement with Staff Pro, Inc. to provide personnel services for the Facilities, which include ushers, ticket takers and security. Under the agreement, Staff Pro, Inc. receives the actual wages for I personnel working at the Facilities plus a payroll overhead mark-up of 33.7% of the wage rate and a management fee of 10% of the actual wages plus overhead mark-up. The Company guarantees $30,000 for the minimum annual management fee for the I initial The fee is subject to negotiation on the anniversary date of year. management the agreement. The agreement is effective through August 1,2001 unless terminated earlier in accordance with the provisions of the agreement. Subsequent to year end, the I Staff Pro, Inc. agreement was extended for 60 days while the parties negotiate to a renewal of this agreement. I Maintenance staff i The Company has entered into an independent contractor's agreement with Maintenance Staff, Inc. for janitorial, set-up, breakdown and related services at the Facilities. Maintenance Staff, Inc. receives a contracted hourly rate of pay for I personnel working at the Facilities. The rates are subject to increases based upon increases in the state or federal minimum wage, FICA or Medicare rates. The agreement is effective through July 15,2001 unless terminated earlier in accordance I with the provisions of the agreement. This agreement was not renewed and the Company hired employees in-house to perform services previously performed by Maintenance Staff, Inc. I Hockey lease I The City has entered into a lease agreement, which has been assigned to Flying Puck, Inc. for exclusive use of the Facilities for West Coast Hockey League (WCHL) games. Flying Puck has agreed to pay a minimum of $160,000 per season for use of the I Facilities. The $1 consists of lease fees of 7.5% of 60,000 $5,000 per played game plus ticket sales above certain levels per year, which increase over the contract term. The lease fees are subject to increase beginning in the third year of the contract and every I two years thereafter based upon the Consumer Price Index adjustments. I I I I Flying Puck receives $5,000 for each suite leased for hockey tickets. For the year ended June 30, 2001, Flying Puck received $120,000 for the twenty-four suites leased. I The agreement is effective through June 30, 2004 or ten days following the date the last WCHL playoff game of 2004 is played, whichever occurs first unless terminated earlier in accordance with the provisions of the agreement. The contract has two options for I renewal for terms of each. Prior to the exercise of either option, the parties seven years shall negotiate new lease fees. ! Basketball lease I The Company has entered into a lease agreement with the Cal State University Bakersfield Foundation (Cal State) for exclusive use of the Facilities for Cal State i University Bakersfield men's basketball games. A lease fee of $4,000 per game plus 7.5% of ticket sales above certain levels is charged for use of the Facilities. Cal State receives $2,500 for each suite leased that includes basketball tickets. For the year I ended June 30, 2001, Cal State received $52,500 for suite ticket options. The agreement is effective through October 31,2001 unless terminated earlier in accordance with the provisions of the agreement. The contract has two options for I renewal for terms of five years each. Prior to the exercise of either option, the parties shall negotiate new lease fees. The Company is currently in negotiations with Cal State to renew the lease. 1 I 1 I ,! ! O B ch Lpngcrier Independent Auditors' Report on the Supplemental_ Information I SMG, Inc. Bakersfield Centennial Garden & Convention Center I Bakersfield, California The accompanying information shown on page 16 is presented only for purposes of additional I analysis and is not a required part of the basic financial statements. Our audit of the basic financial statements was made for the purpose of forming an opinion on I those statements taken as a whole. The accompanying information has been subjected to the procedures applied in the audit of the basic financial statements. I In our opinion, the accompanying information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. I BARB¢I~NGCRIER ~IOOPER & KING I Acco t Corporatio I By: ~o~ BSKing~ I Baker~forni~ August 15, 2001 ! 1 I 5001 E. Conm~ercenter Drive, Suite 350 · F~O. Box 11171 · Bakersfield, California 93389 · Fax (661) 631-0244 · (661) 631-1171 I 1319 Marsh Street · San Luis Obispo, California 93401 · Fmx (805) 541-4024 ° (805) 541-2500 1010 South Broadway, Suite I · Santa Maria, California 93454 · Fax (805) 349-7702 · (805) 349-7705 I Bakersfield Centennial Garden & Convention Center Schedule of Operating Expenses Year Ended June 30, 2001 Full time staff $ 1,101,387 Utilities 618,027 Management fees 211,834 Equipment rental 156,428 Security 134,286 Hockey premium 120 014 Supplies 97 095 Part time staff 73 074 Contract maintenance 56 937 Insurance 235 316 Credit card fees 40 538 Marketing 37 817 Travel 30 560 Repairs and maintenance 15 408 Telephone 22 682 Office supplies 11 743 Printing 15 548 Professional fees 12 600 Miscellaneous 8 807 Depreciation 10 887 Postage 7 124 Uniform 1 116 Dues and subscriptions 2,775 Training 785 Employment ad fees 2,258 $ 3,025,046 I Barbich ! Accounmcy Corporation I Independent Auditors' Report on Compliance and on Internal Control Over Financial Reporting I Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards I SMG, Inc. Bakersfield Centennial Garden & Convention Center I Bakersfield, California ! We have audited the financial statements of Bakersfield Centennial Garden & Convention Center as of and for the year ended June 30, 2001, and have issued our report thereon dated August 15, 2001. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. I Compliance I Compliance with laws, regulations, contracts and grants applicable to Bakersfield Centennial Garden & Convention Center is the responsibility of the City's facility management company, I SMG, Inc. As part of our audit, we assessed the risk that noncompliance with certain provisions of laws, regulations, contracts and grants could cause the financial statements to be materially misstated. We concluded that the risk of such material misstatement was sufficiently low and that it was not necessary to perform tests of SMG, Inc.'s compliance with such provisions of laws, regulations, contracts and grants. I I I 5001 E. Commercenter Drive, Suite 350 · 120. Box 11171 · Bakersfield, Ctflifomia 93389 · Fax (661) 631-0244 · (661) 631-1171 1319 Marsh Street · San Luis Obispo, California 93401 ° Fax (805) 541-4024 ° (805) 541-2500 1010 South Broadwa.~; Suite 1 · S,cmta Maria, California 93454 · Fax (805) 349-7702 · (805) 349-7705 I I I Internal Control Over Financial Reporting In planning and performing our audit, we considered SMG, Inc.'s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. This is intended for the information and of report solely use management, others within the organizati0,~/and the City of Bakersfield and is not intended to be and should not be used by anyone other than ~hese specified parties. BARBI/~ [,~NGCRIER ~IOOPER & KING By: G~B~ing, Bakersfi¢ lff~-~ifornia August 15, 2001 I BUDGET AND FINANCE COMMITTEE MEETING - MAILED NOTICES FOR AUGUST 2, 2001 MARVIN DEAN KERN MINORITY CONTRACTORS ASSOC PO BOX 2506 BAKERSFIELD CA 93302 831-5067 838-3555 cell STUART GENTRY 6305 AMBERGROVE STREET BAKERSFIELD CA 93311 665-9338 JOHN STINSON WILL CALL LYNN EDWARDS · . .... . PUBLIC STATEMENTS SPEAKER'S CARD . 'i :. Budget and Finance Committee .? .. Committee of the Bakersfield City Council · "" . ~ .. Committee Meeting Date ,/~_~G'-~ r~:)O.~ :.." ? You are invited to address the Committee under Public Statements on any subject that · .' .. is listed on the Committee Agenda. · i' 'i "."i'" ./~i'i .":~'~!i':" !:~"~ .:.';' "i~:i:" "i.. 'i~.. :'i..i~ii:/~.?'?.:': :i Public statements are limited to three (3) minutes per speaker with a maximum of fifteen (15) minutes, per side, for any one subject. The Committee may, by simple majority vote, .' ii i?i; i : ' ;: waive tho time limit. No action will be taken; this Committee gathers information and ' ':"" '"' :':' ': :' i'" ":"*: 'i~" '".'.: '/!:* ?" ::':?*ii :"":".:' reports back to the City Council. · . · · · Please fill out a Speaker's Card and. present it to the Committee Chair: :- , .. ., · · .- .. -.:- -.,- Mike-'-Macjgard Company/ Organization: ~ ~ ¢ "~"-' ~t,-,,.~,,~ Addre~q: '" Phone: Fax/e-maih PUBLIC sTATEMENTS SPEAKER'S CARD Budqet and Finance,Commiffee Committee of the Bakersfield City Council .... i'. ':!.":: !?i!i.: :..:':..v:~::. ':. :'" Committee Meeting Date .. ,~. IA. et L~.,q ~ o',g; ,-~g,_O0 J. .... ': '" ' .... :.'i ':" ":.':.::':'" ::"-:' '.,.':. ,""' -'.:-" You are invited to address the Committee under Public Statements on any subject that ?:!~ :- .............. ~:? :' -, ":., .:. ', : '::..:: ', ' :: '. is listed on the Committee Agenda. ..;i" '- .:.i.. i':' :.."..., :'".. *. '.::....'." -'"": :: "~:' i"."'" · . Public statements are limited to three (3) minutes per speaker with a maximum of fifteen . . (15) minutes, per side, for any one subject. The Committee may, by simple majority vote, ' waive the time limit. No action will be taken; this Committee gathers information and ' " reports back to. the City Council. Please fill out a Speaker's Card and present it to the Committee Chair: Mike 'Maqgard '"' ' ' Name: ~ ...."" Organization: ._~-~/ :. .. '...:-. ~.: .' Phone: /'/- ~'J..~.'~1'~'~ F ail: .. ...... .... .. ' ":' ':Li.:':' :' '. .... ' . " Subject: . _ ' . .. ........ ......,. >.,,: :,....: .:.~:~: .. ' .... '"':' '-':'~ :"'":" .'.:::~':: :~:! :i::.":.':'. ::::.':?'.::.'" '" :"~::":"": ::::::..'"..::::: :.:: -,. ~-::.:;~ :- ..*:. -..:..,.: .... I BAKERSFIELD Alan Tandy · City Manager June 26, 2001 Sandra V. Serrano, President Bakersfield College 1801 Panorama' Drive Bakersfield, CA 93305 Dear Ms. Serrano: Over the past several months Bakersfield C°llege has been-working with the Bakersfield City Parks and Recreation Department learning about the aquatic needs of the Bakersfield community; specifically, the water needs of the Bakersfield City area located east of Highway 99. In your letter dated May 24, 2001, you requested financial support from the City Council for the Bakersfield College Aquatic Center project to further develop a partnership. The Budget and Finance Committee reviewed the request at its June 5, 2001 meeting and directed staff to forward the request to the full Council for consideration at the next City Council meeting. The City Council at its June 13, 2001 meeting after reviewing several requests for funding, did not recommend any funding for your project; however, they directed City staff to explore with Bakersfield College how the proposed Aquatic Center facilities might fit into the City's recreational needs and if they would enhance the ability of the City to deliver recreation services to the community. Staff from the Recreation and Park Department are available to meet with you to further discuss any City involvement in your project. Your Aquatic Center project at Bakersfield College sounds very exciting. On behalf of the City Council, myself and staff, we wish you every.success with your project and look forward to working with you. Sincerely, ugity Manag(~r ./ AT:jp cc: Linda Quinones-Vaughn, Director of External Relations S:~Damelh2.001 BFCom mittee~etterBakersfieldCollege,wpd City of BakerSfield · City Manager's Office · 1501 Truxtun Avenue Bakersfield ° California ° 93301 (661) 326-3751 · Fax (661) 852-2050 BAKERSFIELD Alan Tandy · City Manager dune 26, 2001 Milo E. Hall, Kern County Museum Authority Board 3801 Chester Avenue Bakersfield, CA 93301 Dear Mr. Hall: The Budget and Finance Committee had been working with Museum representatives on your initial request for the City to become a participating partner and contribute towards on-going museum operations. In working with the Committee and to make the request fit with the Council's policy of funding one-time capital improvements, the request was changed and resubmitted for a City contribution of $105,000 to assist the Museum in fulfilling its Americans with Disabilities Act (ADA) requirements in the construction of a new state-of-the art'interactive Oil and Gas Exhibit. The City Council at its June 13~ meeting after reviewing several requests' for funding, decided instead of funding ADA requirements, to accept staff's recommendations of utilizing Community Development Block Grant (CDBG) ~funds for improvements to the Kern County Museum area median enhancements and on-going street lighting. Under existing Council policy, the City is converting all asphalt street medians to a new minimum standard and also has an ongoing street lighting Program. North Chesterneeds both and is in an eligible CDBG census tract. The Council directed staff to work out a two-year program for funding those capital improvements. Your expansion projects at the Museum are very exciting and worthwhile. On behalf of the City Council, myself and staff, we wish you every success with your expansion projects and staff looks forward to working with you on the median and street lighting enhancements. Sincerely, City Manager / / AT:jp ~ ./ cc: Don Murfin, Kern County Museum Board of Trustees S:~Damel~001 BFCom rnittee~KernCountyMuseum .wpd City of'Bakersfield · City Manager's Office · 1501 Truxtun Ave.nue ~ Bakersfield · California · 93301 (661) 326-3751 · Fax (6~:1') 852-2050 "'~'~..~ "~ ':~ ~ " ~ MEMORANDUM June 5, 2001. TO: COUNCIL MEMBER MIKE MAGGARD FROM: BART J. THILTGEN, CITY ATTORNEY ALAN D. DANIEL, DEPUTY CITY ATTORNEY Subject: CHOOSING BONDING COMPANIES UNDER THE CALIFORNIA CODE OF CIVIL PROCEDURE COUNCIL REFERRAL NO. WF0018869/001 Council Member Maggard requested that Bart Thiltgen, City Attorney, review the California Code of Civil Procedure Sections 995-660 and 995-630 to see if they benefit the City and to put on the next agenda for consideration of a Citywide endorsement. Copy of correspondence is available at the City Clerk's Office front counter. The California Code of Civil Procedure Sections 995.010 through 995.510 deal with bonds and undertakings. Sections 995.610 through 995.675 deal with admitted surety insurers. Section 995.660(b) states: If the admitted surety insurer complies with subdivision (a), and if it appears that the bond was duly executed, that the insurer is authorized to transact surety insurance in the State, and that its assets exceeded its liability in an amount.equal to or in excess of the amount of the bond, the insurer is sufficient and shall be accepted or approved as surety on the bond, subject to Section 12090 of the Insurance Code. Please see City Council referral WF0018854 (attached) for further information. S:\COUNCIL\Referrals\BondingCompaniesMMO.wpd COUNCIL MEMBER MIKE MAGGARD June 5, 2001 Page 2 ~ We read Section 995.660(b) as requiring a city to accept a bond company if that company is an admitted surety insurer and meets the qualifications set forth in the section. Thus, the City may be forced to accept insurance companies with a very Iow Best rating because they are an admitted surety insurer and meet the qualifications of paragraph 995.660(b). .. Recently, I have met with Mr. Stuart C. Gentry concerning the above Code section and possible legislation on this issue, as the City could be hurt by being forced to accept weak bonding companies. Mr. Gentry has been meeting with other entities in order to better ascertain if legislation is possible. Mr. Gentry was to supply our office with proposed language and a list of groups that would support this legislative change. My meeting with Mr. Gentry took place on June 1, and I have not received any information since that time. As the City could be hurt by being forced to accept weak bonding companies, I would recommend the City endorse a concept that 'if public funds are expended on a project, the bonding companY must be rated B or better by Best Rating Service. In this fashion, the City would be assured that the bonding company would have the financial strength to pay in the event of a default.' BJT/ADD:cy Attachment cc: Honorable Mayor and Council Members Alan Tandy, City Manager S:~COUNCIL\Referrals\BondingCompaniesMMO.wpd MEMORANDUM May 22, 2001 TO: COUNCIL MEMBER DAVID R. COUCH FROM: BART J. THILTGEN, CITY ATTORNEY ALAN D. DANIEL, DEPUTY CITY ATTORNEY Subject: SELECTION OF CONTRACTORS/BONDING COMPANIES COUNCIL REFERRAL NO. WF0018854 Council Member Couch referred to the City Attorney information regarding the policy the City uses to select contractors, bonding companies. In bids on Public Works contracts, the City of Bakersfield requires performance and labor and materials bonds in the amount of 100 perCent of the contract price. The contractors, when they submit the bid, must agree to supply the bonds in accordance with the bid documents. The bid documents contain forms which the bonding company should adhere to when they submit the bonds to the City of Bakersfield, should their contractor be selected to construct the project. According to State law, if a contractor is an admitted surety in the State of Califomia, we must accept that bond and cannot force a bonding company to comply with a certain rating, such as a rating by Best. Section 995.660(b) states: .*. 'If the admitted surety insurer complies with Subdivision (a), and if it appears that the bond was duly executed, that the insurer is authorized to transact surety insurance in the State, and that its assets exceeded its liability in an amount equal to or in excess of the amount of the bond, the insurer is sufficient and S:\COUNCIL\Referrals~SelectionOfContractorsMMO.wpd COUNCIL MEMBER DAVID cOUCH May 22, 2001 Page 2 shall be accepted or approved as surety on the bond, subject to Section 12090 of the Insurance Code. Section 12090 of the California Insurance Code states: (a) An admitted surety insurer shall not become surety on any one undertaking, or accept reinsurance on such undertaking, when its liability thereon, in excess of the amount reinsured by it in an admitted insurer, amounts to more than 10 percent of its capital and surpluses as shown on its last statement on file in the Office of the Commissioner. (b) In determining its liability on an undertaking for purposes of ' subdivision (a), an admitted insurer may reduce its liability by either or both of the following: (1) Deposits with the surety insurer, in a manner acceptable to the Commissioner, or by Conveyance to' it in' trust for its protection, of assets that would qua!.ify'as admitted assets. (2) A clean and irrevocable letter of credit acceptable to the Commissioner. ... · Thus, if an admitted surety insurer complies With provisions 995.660 and its assets exceed its liabilities in an amount equal to or in excess of the amount of the bond, then the. insurer is sufficient and we must accept them as surety on the 'bond. "Note that Section 12090 sets forth a methodology upon which an admitted insurer may reduce its liability. One can see by reading Section 12090 that the calculation of an insurer's liability is a matter for the accounting department. An admitted surety insurer not only has its own liability, and assets, but it can take into account any amount of reinsurance, deposits with the surety insurer, conveyances to it in trust of assets that would qualify as admitted assets, 'and irrevocable letters of credit. In order to determine whether or not an admitted surety insurer has assets that exceed its liabilities in an amount equal to or in excess of the amount of the bond, the City would have to receive audited financial statements and have our accounting department review them to determine if, in fact, the bond issuance exceeded the aforesaid rules. S:\CO U NCIL\Referrals\SelectionOfContractorsMMO.wpd · ~-"~ ~" COUNCIL MEMBER DAVID cOUCH May 22, 2001 Page 3 In addition, should the 'City of Bakersfield choose to audit the financial statements to determine whether or not a company was qualified under Code Section 995.660, the City may be assuming additional liability in that it will be a guarantor that the bonding company is, in fact, able to perform under the terms of the bond. Currently, once the bonding company submits its bond, the Risk Management Department checks to ensure that it is an admitted surety insurer and thereafter the bond is accepted. No audit is performed by the City's financial department. (Walt Rankin & Associates vs. City of Mudeta (2000) 84 CA 4tI' 605.) BJT/ADD:cy ~ cc: Honorable Mayor and Council Members Alan Tandy, City Manager Risk Management S:\COU NCIL\Re[errals\SelectionOfContractorsMMO.wpd "~'~~ L" ' ~FIDENTIAL - PROTECTED /~! E M O R A N D U M II S', ,:~ORNEYICLIENT AND II ATTORNEY WORK PRODUCT II PRIVILEGES July 2, 2001 TO: COUNCIL MEMBER MIKE MAGGARD FROM: BART D. DANIEL, DEPUTY CITY ATTORNE~._~ ALAN J' THILTGEN, CITY ATTORNEY ~/~ ,~ ~ SUBJECT: BONDING COMPANIES COUNCIL REFERRAL NO. WF0018909 Council Member Maggard requested that Bart Thiltgen, City Attorney, explore the alternatives to current criteria regarding bonding and ratings on public projects. Report back to Council. THIS IS AN AMENDED MEMORANDUM. PLEASE DISREGARD MEMO DATED JUNE 28, 2001, Please see City Council Referrals for June 5, 2001 and May 22, 2001 (attached) concerning bonding companies. As stated therein, the California Code of Civil Procedure sections 995.660(b), et seq., state an admitted surety insurer shall be accepted or approved on the bond. The best way to correct the bonding situation is to seek legislation amending the California Code of Civil Procedure and allowing local agencies to choose bonding companies rated by Best Rating Service as B or better. The City Attorney's Office is in contact with members of the State Legislature, and the League of California Cities, and is attempting to formulate language that would be acceptable to the legislature in correcting this problem. A second alternative would be to require all bidders submitting bids use bonding companies rated as B or better. Some other local agencies are doing just this. Arguably, however, if the State has occupied the field of legislation, a local entity is normally not allowed to pass any of its own legislation which would be in conflict with the State law. However, if the State has not occupied the field and if it is a matter of purely local concern, a Charter City may pass ordinances which are in conflict.with State law and these ordinances will survive scrUtiny by the Courts. Thus, it may be possible for the City of Bakersfield to demand a specific minimum rating for sureties in its Public Works contracts. If a challenge was raised to the City's demanding such a rated surety, that challenge would COUNCILMAN MIKE M, ' '",ARD July 2, 2001 ~ CONFiDENTiAl ~1 Page 2 - .- normally come from an apparent Iow bidder who had been denied the contract becauSe of an inability to supply bonds from a bonding company which would meet or exceed the City standards. Legally, the City can argue under Pile Drivers v. Santa Monica (1984) 151 CaI.App.3d 509 that using local money for a local construction project is a matter of purely local concern and, therefore, the City can pass its own ordinances which are in conflict with State law (as long as such ordinances do not invade a field totally occupied by the State). Operationally, the filing of such a case could cause the project to be significantly delayed due to the litigation. Thus, while our office.recommends we continue to pursue a change in the California Code of Civil Procedure governing bonding of government projects, the City Council could make a decision to require bonding companies be rated by Best Rating Service at an acceptable level with the recognition that we would potentially have to defend whatever lawsuit may be brought against us for requiring such a rating. BJT/ADD:cy/alj Attachments cc: Honorable Mayor and Council Members Alan Tandy, City Manager S:\COUNClL\Referrals~BondingCompaniesMMO_2.wpd MEMORANDUM June 5,2001 TO: COUNCIL MEMBER MIKE MAGGARD FROM: BA'RT J. THILTGEN, CITY ATTORNEY ALAN D. DANIEL, DEPUTY CITY ATTORNEY Subject: CHOOSING BONDING COMPANIES UNDER THE CALIFORNIA CODE OF CIVIL PROCEDURE COUNCIL REFERRAL NO. WF00188691001 Council Member Maggard requested that Bart Thiltgen, City Attorney, review the California Code of Civil Procedure Sections 995-660 and 995-630 to see if they benefit the City and to put on the next agenda for consideration of a Citywide endorsement. Copy of correspondence is available at the City Clerk's Office front counter. The California Code of Civil Procedure sections 995.010 through 995.510 deal with bonds and undertakings. Sections 995.610 through 995.675 deal with admitted surety insurers. Section 995..660(b) states: If the admitted surety insurer complies with 'subdivision (a), and if it appears that the bond was duly executed, that the insurer is authorized to transact surety insurance in the State, and that its assets exceeded its liability in an amount .equal to or in excess of the amount of the bond, the insurer is sufficient and shall be accepted or approved as surety on the bond, subject to Section 12090 of the Insurance Code. Please see City Council referral WF0018854 (attached) for further information. S:\COUNCIL\Referrals\RondingCompaniesMMO.wpd COUNCIL MEMBER MIKE MAGGARD June 5, 2001 Page 2 We read Section 995.660(b) as requiring a city to accept a bond company if that company is an admitted surety insurer and meets the qual fications set forth in the section. Thus, the City may be forced to accept insurance companies with a very Iow Best rating because they are an admitted surety insurer and meet the qualifications of paragraph 995.660(b). Recently, I have met with Mr. Stuart C. Gentry concerning the above Code secti°n and possible legislation on this issue, as the City could be hurt by being forced to accept weak bonding companies. Mr. Gentry has been meeting with other entities in order to better ascertain if legislation is possible. Mr. Gentry was to supply our office with proposed language and a list of groups that would support this legislative change. My meeting with Mr. Gentry took place on June 1, and t have not received any information since that time. As the City could be hurt by being forced to accept weak bonding companies, I would recommend the City endorse a concept that if public funds are expended on a project, the bonding company' must be rated B or better, by Best Rating Service. In this fashion, the City would be assured that the bonding company would have the financial strength to pay in the event of a default. BJT/ADD:cy Attachment cc: Honorable Mayor and Council Members Alan Tandy, City.Manager S:\COUNClL\Referrals~BondingCompaniesMMO.wpd MEMORANDUM May 22, 2001 TO: COUNCIL MEMBER DAVID R. COUCH FROM: BART J. THILTGEN, CITY ATTORNEY ALAN D. DANIEL, DEPUTY CITY ATTORNEY Subject: SELECTION OF CONTRACTORS/BONDING COMPANIES COUNCIL REFERRAL NO. WF0018854 Council Member Couch referred to the City Attorney information regarding the policy the City uses to select contractors, bonding companies. In bids on Public Works contracts, the City of Bakersfield requires performance and labor and materials bonds in the amount of 100 percent of the contract price. The contractors, when they submit the bid, must agree to supply the bonds in accordance with the bid documents. The bid documents contain forms which the bonding company should adhere to when they submit the bonds .to the City of Bakersfield, should their contractor be selected to construct the project. According to State law, if a contractor is an admitted surety'in the State of Califomia, we must accept that bond and cannot force a bonding company to comply with a certain rating, such as a rating by Best. Section 995.660(b) states: .' If the admitted surety insurer complies with subdivision (a), and if it appears that the bond was duly executed, that the insurer is authorized to transact surety insurance in the State, and that its assets exceeded its liability in an amount equal to or in excess of the amount of the bond, the insurer is sufficient and S:\COUNClL\Referrals~SelectionOfContractorsMMO.wpd COUNCIL MEMBER DAVID cOUCH May 22, 2001 Page 2 shall be accepted or approved as surety on the bond, subject to Section 12090 of the Insurance Code. Section 12090 of the California Insurance Code states: (a) An admitted surety insurer shall not become surety on any one undertaking, or accept reinsurance on such undertaking, when its liability thereon, in excess of the amount reinsured by it in an admitted insurer, amounts to more than 10 percent of its capital and surpluses as shown on its last statement on file in the Office of the Commissioner. (b) In determining its liability on an undertaking for purposes of · subdivision (a), an admitted insurer may reduce its liability by either or both of the following: (1) Deposits with the surety insurer, in a manner acceptable to the Commissioner, or by conveyance to it in trust for its protection, of assets that would qua!ify'as admitted assets. (2) A clean and irrevocable letter of credit acceptable to the Commissioner· .,. . . · Thus, if an admitted surety insurer complies with provisions 995.660 and its assets exceed its liabilities in an amount equal to or in excess of the amount of the bond, then the insurer is sufficient and we must accept them as surety on the bond. "Note that Section 12090 sets forth a methodology upon which an admitted insurer may reduce its liability. One can see by reading Section 12090 that the calculation of an insurer's liability is a matter for the accounting department. An admitted surety insurer not only has its own liability, and assets,' but it can take into account any amount of reinsurance, deposits with the surety insurer, conveyances to it in trust of assets that would qualify as admitted assets, and irrevocable letters of credit. In order to determine whether or not an admitted surety insurer has assets that exceed its liabilities in an amount equal to or in excess of the amount of the bond, the City would have to receive audited financial statements and have our accounting department review them to determine if, in fact, the bond !ssuance exceeded the aforesaid rules· $;\COUNCIL\Referrals\$electionOfContractorsMMO.wpd COUNCIL MEMBER DAVID COUCH May 22, 2001 Page 3 In addition, should the 'City of Bakersfield choose to audit the financial statements to determine whether or not a company was qualified under Code Section 995.660, the City may be assuming additional liability in that it will be a guarantor that the bonding company is, in fact, able to perform under the terms of the bond. Currently, once the bonding company submits its bond, the Risk Management Department checks to ensure that it is an admitted surety insurer and thereafter the bond is accepted. No audit is performed by the City's financial department. (Walt Rankin & Associates vs. City of Murieta (2000) 84 CA 4th 605.) BJT/ADD:cy ~ cc: Honorable Mayor and Council Members Alan Tandy, City Manager Risk Management S:\COUNClL\Referrals\$electionOfContractorsMMO.wpd t_. '"FIDENTIAL - PROTECTED e'. ,TORNEY/CLIENT AND ATTORNEY WORK PRODUCT' PRIVILEGES July 2, 2001 TO: COUNCIL MEMBER MIKE MAGGARD J. THILTGEN, CITY ATTORNEY F R O M: ALANBART D.D ANIE L, DEPUTY CITY ATT O P, NEY ~. -~ SUBJECT: BONDING COMPANIES COUNCIL REFERRAL NO. WF0018909 Council Member Maggard requested that Bart Thiltgen, City Attorney, explore the alternatives to current criteria regarding bonding and ratings on public projects. Report back to Council. THIS IS AN AMENDED MEMORANDUM. PLEASE DISREGARD-MEMO DATED JUNE 28, 200'1. Please see City Council Referrals for June 5, 2001 and May 22, 2001 (attached) concerning bonding companies. As stated therein, the California Code of Civil Procedure sections 995.660(b), et seq., state an admitted surety insurer shall be accepted or approved on the bond. The best way .to correct the bonding situation is to seek legislation amending the California Code of Civil Procedure and allowing local agencies to choose bonding companies rated by Best Rating Service as B or better. The City Attorney's Office is in contact with ~members of the State Legislature, and the League of California Cities, and is attempting to formulate languagethat would be acceptable to the legislature in correcting this problem. A second alternative would be to require all bidders submitting bids use bonding companies rated as B or better. Some other local agencies are doing just this. Arguably, however, if the State has occupied the field of legislation, a local entity is normally not allowed to pass any of its own legislation which would be in conflict with the State law. However, if the State has not occupied the field and if it is a .matter of purely local concern, a Charter City may pass ordinances which are in conflict with State law and these ordinances will survive scrutiny by the Courts. Thus, it may be possible for the City of Bakersfield to demand a specific minimum rating for sureties in its Public Works contracts. If a challenge was raised-to the City's demanding such a-rated surety, that challenge would COUNCILMAN MIKE M, ",ARD July 2, 2001 II CONFIDENTIAl Page 2 normally come from an apparent Iow bidder who had been denied the contract becauSe of an inability to supply bonds from a bonding company which would meet or exceed the City standards. Legally, the City can argue under Pile Drivers v. Santa Monica (1984) 151 CaI.App.3d 509 that using local money for a local construction prOjeCt is a matter of purely local concern and, therefore, the City can pass its own ordinances which are in conflict with State law (as long as such ordinances do not invade a field totally occupied by the State). Operationally, the filing of such a case could cause the project to be significantly delayed due to the litigation. Thus, while our.office recommends we continue to pursue a change in the California Code of Civil Procedure governing bonding of government projects, the City Council could make a decision to require bonding companies be rated by Best Rating Service at an acceptable level with -the recognition that we would potentially have to defend whatever .lawsuit may be brought against us for requiring such a rating. BJT/ADD:cy/alj Attachments cc: Honorable Mayor and Council Members Alan Tandy, City Manager S:\COUNClL\Referrals~BondingCompaniesMMO_2.wpd PU~- Council Meeting Date'~ ~ You are invited to address the Council under Public Statements on any matter rela~ed to City Business, except matters set for a hearing this evening. Comments regarding hearing matters will be heard at that time and no Public Statements Speaker's Card is necessary. Public statements are limited to three (3) minutes per speaker with a maximum of fifteen (15) minutes, per side, for anyone subject. Council may, by simple majority vote, waive the time limit. No action will be taken other than referring the issue to a Committee or Staff. Any person who has not notified the Clerk or filled out a Speaker's Card shall not be allowed to address the Council during Public Statements, unless approved upon motion by the City Council after · ~.~i'~ being notified of the name of the person and the subject matter addressed. Please complete the Speaker's Card and present it to the City Clerk before the Meeting. Name: Telephone: ~, .) ~'~. ~:~' Subject orltemNo. ~ '~J~ MC. 2.04.110, G.C. Section 54954.3 (a) & (b) City of Bakersfield WORK REQUEST *REPRINT* PAGE 1 ~EQ/JOB: WF0018932 / 001 PROJECT: REQUEST DATE: 7~18Z01 CREW: PRINT DATE: 7/25/01 PRINT TIME: 11:25:07 SCHEDULE DATES LOCATION: START DATE: 7~18~01 GEN. LOC: LOC ID: COMP DATE: 7/26/01 REF NBR: REQ DEPT: CITY COUNCIL REFERRAL PRIORITY: HIG~ REQUESTOR: CITY COUNCIL ORIGIN: CITY COUNCIL REFERRAL USER ID: RGAFFORD AUTH: RGAFFORD WORK TYPE: REFERRAL DESCRIPTION: PRE-QUALIFICATION OF BIDDERS ORDINANCE REQUEST COMMENTS ***REFERRAL TO BUDGET AND FINANCE COMMITTEE*** COUNCIL REFERRED TO BUDGET AND FINANCE COMMITTEE AN ORDINANCE ADDING SECTION 3.20.066 TO THE BAKERSFIELD MUNICIPAL CODE RELATING TO PRE- QUALIFICATION OF BIDDERS FOR REVIEW AND RECOMMENDATIONS. Job_Order Description: Pre-crualification of bidders Ordinance ~a~or~ co~e . : BUDGET & FINANCE COM. RB&F Task co~e: · · : RESPONSE TO REFERRAL RESP Facility ID . . : 'Assigned Department: BUDGET & FINANCE COM 'City of Bakersfield *REPRINT* ~ WORK REQUEST PAGE REQ/JOB: WF0018933 / 001 PROJECT: REQUEST DATE: 7~18~01 PRINT DATE: 7/25/01 CREW: PRINT TIME: 11:24:59 SCHEDULE DATES ~LOCATION: START DATE: 7~18~01 COMP DATE: 7/26/01 GEN. LOC: LOC ID: REF NBR: REQ DEPT: CITY COUNCIL REFERRAL PRIORITY: HIGH REQUESTOR: CITY COUNCIL ORIGIN: CITY COUNCIL REFERRAL USER ID: RGAFFORD AUTH: RGAFFORD WORK TYPE: REFERRAL DESCRIPTION: MINIMUM RATING FOR SURETIES REQUEST COMMENTS. ***REFERRAL TO BUDGET AND FINANCE COMMITTEE*** COUNICL REFERRED THE MINIMUM RATING FOR SURETIES ISSUING PERFORMANCE AND LABOR AND MATERIALS BONDS FOR CITY CONSTRUCTION PROJECTS TO BUDGET AND FINANCE COMMITTEE FOR REVIEW AND RECOMMENDATIONS. NOTIFY STUART GENTRY AND MARVIN DEAN OF DATE OF B&F MEETING SCHEDULED TO CONSIDER THIS ISSUE. Job Order Description: MINIMUM RATING FOR SURETIES Category code . : BUDGET & FINANCE COM. RB&F Task code: . . : RESPONSE TO REFERRAL RESP A Faci%ity ID.. ._: ssigned Department: BUDGET & FINANCE COM City of Bakersfield *REPRINT* WORK REQUEST PAGE 1 REQ/JOB: WF0018905 / 001 PROJECT: REQUEST DATE: 6Z27Z01 PRINT DATE: 7/25/01 CREW: PRINT TIME: 11:25:15 SCHEDULE DATES ~LOCATION: START DATE: 6~27~01 COMP DATE: 7/05/01 GEN. LOC: LOC ID: REF NBR: · REQ DEPT: CITY COUNCIL REFERRAL PRIORITY: HIGH REQUESTOR: CITY COUNCIL ORIGIN: CITY COUNCIL REFERRAL USER ID: DSULLIVAN AUTH: DSULLIVAN WORK TYPE: REFERRAL DESCRIPTION: INVESTMENT POLICY REQUEST COMMENTS ***REFERRAL TO BUDGET AND FINANCE COMMITTEE*** COUNCIL REFERRED TO BUDGET AND FINANCE COMMITTEE THE INVESTMENT POLICY FOR REVIEW & RECOMMENDATION. Job Order Description: INVESTMENT POLICY Category code . : BUDGET & FINANCE COM. RB&F Task code: . . : RESPONSE TO REFERRAL RESP A Faci%ity ID . . : ssigned Department: BUDGET & FINANCE COM MEMORANDUM June 5, 2001 TO: COUNCIL MEMBER MIKE MAGGARD FROM: BART J. THILTGEN, CITY ATTORNEY ALAN D. DANIEL, DEPUTY CITY ATTORNEY Subject: CHOOSING BONDING COMPANIES UNDER THE CALIFORNIA CODE OF CIVIL PROCEDURE COUNCIL REFERRAL NO. WF0018869/001 Council Member Maggard requested that Bart Thiltgen, City Attorney, review the California Code of Civil Procedure Sections 995-660 and 995-630 to see if they benefit the City and to put on the next agenda for consideration of a Citywide endorsement. Copy of correspondence is available at the City Clerk's Office front counter. The California Code of Civil Procedure Sections 995.010 through 995.510 deal with bonds and undertakings. Sections 995.610 through 995.675 deal with admitted surety insurers. Section 995.660(b) states: If the admitted surety insurer complies with 'subdivision (a), and if it appears that the bond was duly executed, that the insurer is authorized to transact surety insurance in the State, and that its assets exceeded its liability in an amount.equal to or in excess of the amount of the bond, the insurer is sufficient and shall be accepted or approved as surety on the bond, subject to Section 12090 of the Insurance Code. Please see City Council referral WF0018854 (attached) for further information. S:~COUNClL~Ret'errals~8ondingCom paniesMMO.wpd COUNCIL MEMBER MIKE MAGGARD June 5, 2001 Page 2 We read Section 995.660(b) as requiring a city to accept a bond company if that company is an admitted surety insurer and meets the qualifications set forth in the section. Thus, the City may be forced to accept insurance companies with a very Iow Best rating because they are an admitted surety insurer and meet the qualifications of paragraph 995.660(b). Recently, I have met with Mr. Stuart C. Gentry concerning the above Code section and ~possible legislation on this issue, as the City could be hurt by being forced to accept weak bonding companies. Mr. Gentry has been meeting with other entities in order to better ascertain if legislation is possible. Mr. Gentry was to supply our office with proposed language and a list of groups that would support this legislative change. My meeting with Mr. Gentry took place on June 1, and '1 have not received any information since that time. As the City could be hurt by being forced to accept weak bonding companies, I would recommend the City endorse a concept that if public funds are expended on a project, the bonding company must be rated B or better byBest Rating Service. In this fashion, the City would be assured that the bonding company would have the financial strength to pay in the event of a default. BJT/ADD:cy Attachment cc: Hor~orable Mayor and Council Members Alan Tandy, City Manager S:\COUNClL\Referrals\BondingCompaniesMMO.wpd MEMORANDUM May 22, 2001 TO: COUNCIL MEMBER DAVID R. COUCH FROM: BART J. THILTGEN, CITY ATTORNEY ALAN D. DANIEL, DEPU*TY CITY ATTORNEY Subject: SELECTION OF CONTRACTORS/BONDING COMPANIES COUNCIL REFERRAL NO. WF0018854 Council Member Couch referred to the City Attorney information regarding the policy the City uses to select contractors, bonding companies. In bids on Public Works contracts, the City of Bakersfield requires performance and labor and materials bonds in the amount of 100 percent of the contract pdce. The contractors, when they submit the bid, must agree to supply the bonds in accordance with the bid documents. The bid documents contain forms which the bonding company should adhere to when they submit.the bonds to the City of Bakersfield, should their contractor be selected to construct the project. According to State law, if a contractor is an admitted surety in the State of California, we must accept that bond and cannot force a bonding company to comply with a certain rating, such as a rating by Best. Section 995.660(b) states: .' If the admitted surety insurer complies with subdivision (a), and if it appears that the bond was duly executed, that the insurer is authorized to transact surety insurance in the State, and that its assets exceeded its liability in an amount equal to or in excess of the amount of the bond, the insurer is sufficient and S:~COUNClL~Referral$~$electionOfContractorsMMO.wpd COUNCIL MEMBER DAVID coUcH May 22, 2001 Page 2 shall be accepted or approved as surety on the bond, subject to Section 12090 of the Insurance Code. Section 12090 of the California Insurance Code states: (a) An admitted surety insurer shall not become'surety on any one undertaking, or accept reinsurance on such undertaking, when its liability thereon, in excessof the amount reinsured by it in an admitted insurer, amounts to more than 10 percent of its capital and surpluses as shown on its last statement on file in the Office of the Commissioner. (b) In determining its liability on an undertaking for purposes of · subdivision (a), an admitted insurer may reduce its liability by either or both of the following: (1) Deposits with the surety insurer, in a manner acceptable to the Commissioner, or by conveyance to it in trust for its protection, of assets that would qualify'as admitted assets. .. (2) A clean and irrevocable letter of credit acceptable to the Commissioner. · Thus, if an admitted surety insurer complies with provisions 995.660 and its assets exceed its liabilities in an amount equal to or in excess of the amount of the bond, then the insurer is sufficient and we must accept them as surety on the bond. "Note that Section 12090 sets forth a methodology upon which an admitted insurer may reduce its liability. One can see by reading Section 12090 that the calculation of an insurer's liability is a matter for the accounting department. An admitted surety insurer not only has its own liability, and assets, but it can take into account any amount of reinsurance, deposits with the surety insurer, conveyances to it in trust of assets that would qualify as admitted assets, and irrevocable letters of credit. In order to determine whether or not an admitted surety insurer has assets that exceed its liabilities in an amount equal to or in excess of the amount of the bond, the City would have to receive audited financial statements and have our accounting department review them to determine if, in fact, the bond !ssuance exceeded the aforesaid rules. $:~.COUNCIL~Referrals~SetectionOfContractorsMMO.wpd COUNCIL MEMBER DAVID COUCH May 22, 2001 Page 3 In addition, should the 'City of Bakersfield choose to audit the financial Statements to determine whether or not a company was qualified under Code Section 995.660, the City may be assuming additional liabil'ity in that it will be a guarantor that the bonding company is, in fact, able to perform under the terms of the bond. Currently, once the bonding company submits its bond, the Risk Management Department checks to ensure that it is an admitted surety insurer and thereafter the bond is accepted. No audit is performed by the City's financial department. (Walt Rankin & Associates vs. City of Murieta (2000) 84 CA 4t~' 605.) BJT/ADD:cy ~ cc: Honorable Mayor and Council Members Alan Tandy, City Manager Risk Management S:tCOUNClL~,Referrals~SelectionOfContractorsMMO.wpd ~_~' ~FIDENTIAL- PROTECTED~'~I II B'. ,~NTAND /I II ^TTOeNEY WORK PRODUCT' /I [[PRIVILEGES ~ July 2, 2001 TO: COUNCIL MEMBER MIKE MAGGARD THILTGEN, CITY ATTORNEY FR OM: BART J' DANIEL, DEPUTY CITY ATTORNE~~ ALAN D. SUBJECT: BONDING COMPANIES COUNCIL REFERRAL NO. WF0018909 Council Member Maggard requested that Bart Thiltgen, City Attorney, explore the alternatives to current criteria regarding bonding and ratings on public projects. Report back to Council. THIS IS AN AMENDED MEMORANDUM. PLEASE DISREGARD MEMO DATED JUNE 28, 2001. Please see City Council Referrals for June 5, 2001 and May 22, 2001 (attached) concerning bonding companies. As stated therein, the California Code of Civil Procedure sections 995.660(b), et seq., state an admitted surety insurer shall be accepted or approved on the bond. The best way to correct the bonding situation is to seek legislation amending the California Code of CMl Procedure and allowing local agencies to choose bonding companies rated by Best Rating Service as B or better. The City Attorney's Office is in contact with members of the State Legislature, and the League of California Cities, and is attempting to formulate language that would be acceptable to the legislature in correcting this problem. A second alternative would be to require all bidders submitting bids use bonding companies rated as B or'better. Some other local agencies are doing just this. Arguably, however, if the State has occupied the field of legislation, a local entity is normally not allowed to pass any of its own legislation which would be in conflict with the State law. However, if the State has not occupied the field and if it is a matter of purely local concern, a Charter City may pass ordinances which are in conflict with State law and these ordinances will survive scrutiny by the Courts. Thus, it may be possible for the City of Bakersfield to demand a specific minimum rating for sureties in its Public Works contracts. if a challenge was raised.to the City's demanding such a rated surety, that challenge would COUNCILMAN MIKE M, qARD July 2, 2001 ~ CONFIDENTIAI.~ Page 2 - normally come from an apparent Iow bidder who had been denied the contract becauSe of an inability to supply bonds from a bonding company which would meet or exceed the City standards. Legally, the City can argue under Pile Drivers v. Santa Monica (1984) 151 CaI.App.3d 509 that using local money for a local construction project is a matter of purely local concern and, therefore, the City can pass its own ordinances which are in conflict with State law (as long as such ordinances do not invade a field totally occupied by the State). Operationally, the filing of such a case could cause the project to be significantly delayed due to the litigation. Thus, while our office recommends we Continue to pursue a change in the California Code of Civil Procedure governing bonding of government projects, the City Council could make a decision to require bonding companies be. rated by Best Rating Service at an acceptable level with .the recognition that we would potentially have to defend whatever lawsuit may be brought against us for requiring such a rating. BJT/ADD:cy/alj Attachments cc: Honorable Mayor and Council Members Alan Tandy, City Manager S:\COU NClL~,eferrals~BondingCompaniesMMO.2,wpd  ~ONFIDENTIAL. PROTECTED M E M O R A N D U M BY ATTORNEYICLIE~NTAND ATTORNEY WORK PRODUCT PRIVILEGES JOHN W. sTiNSON .... :" .... ASSISTANT CITY MANAGER ,June 1 ,. 2001 L*.t it; 2 3 2001 ' TO: JOHN W. STINSON, ASSISTANT CITY MANAGER FROM: MICHAEL G. ALLFORD, DEPUTY CITY ATTORNEY SUBJECT: BAKERSFIELD'MUNICIPAL CODE CHAPTER 5.02; BUSINESS LICENSE TAX APPLICATION TO LEASING/RENTAL OF COMMERCIAL/RESIDENTIAL PROPERTY The Treasury Division and the City Attorney's Office have been working on an issue pertaining to the business license tax which may require policy guidance by the City Council. Bakersfield Municipal Code section 5.02.010(A) defines "business" to include "professions, trades, and occupations and all and every kind of calling whether or not carried' on for profit" which occur within City limits. The ordinance does. not define every conceivable manner of "doing business," nor does the law require such an attempt in recognition of the numerous and ever-expanding areas and means by which ;business" is conducted. Recently, my office has had contact with individuals.operating the "Truxtun Business Plaza" (Anthony Leggio, Esq.) and the"OId 19"' Street Properties" (Curtis Darling, Esq.) as to Chapter 5.02's application to their activities. In both instances, a Corporate or other business entity has been established for the purpose of leasing commercial property within the City of Bakersfield. Specifically, Mr. Darling operates two commercial structures where the premises are leased to approximately seven commercial tenants. Truxtun Business Plaza operates the commercial center at the southeast comer of Truxtun Avenue Extension and Office Park Drive with approximately twelve commercial tenan[s. Pending clarification as to the applicability of Chapter 5.02 to this type of businesS, both have obtained a business tax certificate. Attached for your review is a copy of my September 13,.2000 correspondence to Anthony L. Leggio, Esq. (a partner of Truxtun Business Plaza) discussing B.M.C. Chapter 5.02's applicability to the rental/leasing of commercial and residential property. It has been recently reaffirmed by the California Court of Appeal that a business license tax on residential (and commercial) landlords is not a tax "on property" requiring voter approval pursuant to Proposition 218. (Howard Jarvis Taxpayers Association v. City of Los Angeles (2000) 79 CaI.App.4th 242.) Furthermore, the City's enforcement 'of its Mr. John W. Stinson June 1, 2001 CONFIDENTIAl Page No. 2 business license tax ordinance on these operations would not constitute the imposition of a new or revised tax as the tax rate has been previously established in Chapter 5.02. The City is merely seeking to enforce the tax certificate requirement in an equitable manner on all businesses within the City that are not otherWise exempt under the ordinance. Also .attached to this memorandum is a May 24, 2001 memorandum with exhibits by City Treasurer William Descary discussing the issue from the finance perspective. Our investigation has revealed that the City of Fresno is increasing its enforcement to 15ursue this tYpe ~)f buSiness activitY as a source of revenue. As yOu can see more clearly from the exhibits attached to Mr. Descary's memorandum, the vast majority of the cities contacted do impose their business license tax upon'th.is type of commercial activity. Significantly, the City of San Bernadino raises approXimately 12.30 percent of. its business license revenue through the licensing of residential/commercial leasing activityl Accordingly, were the City not to enforce Chapter 5.02 as to this type of business activity, it may forego a significant source of revenue for the general fund. .Recommendation: For purposes of Chapter 5.02, the leasing/rental of residential/commercial facilities within the City constitutes a "business." These "businesses" utilize fire, police, road services, etc. to a degree similar to all other businesses. Some cities have determined a minimum number of units they apply the business license tax to (e.g., Oxnard and Ontario - 3 or more residential units require a business license; Fresno - 4 or more; no exceptions for commercial units) and the City may wish to consider a similar allowance for de minimis leasing activities. Once You have had the opportunity to review this memorandum and its attachments, kindly advise as to your thoughts on the need for additional City Council guidance on this matter. MGA:Isc Attachments cc (w/att): Bart J. Thiltgen, .City Attorney Gregory J. Klimko, Finance Director William Descary, Treasurer Allen M. Shaw, Deputy City Attorney S:\Finance\MEMOS~JWS.BusLicTax.wpd C~TY l~rt J. T~ailt~a A.S~I.STA,N'F CF'F'Y AT'TOP,.N~y Ro~a M. Shcr6y DEPfu'F'~ CF"J'~ AT'T'O R.',iEy A:.~ D. D~cl A:lca .%1. W.~l~r FI. Pa~. Jr. .%lic.~xa~l G. c~,, .~,~.~: m CtTY OF BA.I'CERSFIELD l~tUc: ~nia C,c.',.n~-~ O~C~: OF ~ CFTC' ATTOI~.NF..y · .k,ad~, w C:. September 13, 2000 VIA ~AN~ Ant. hony L. Leggio, Esq. CLIFFORD & BROWN 1430 Truxtun Avenue, Suite 900 Bakersfield, California 93301 RE: Business License for Trux-tun Business Plaza Bakersfield Municipal Code Chapter 5.02 Your File Mo. 40520-1 Dear Mr. Leggio: I am in receipt of your September 6, 2000, correspondence relative to the above matter. Thank you for the requested factual clarifications and additional informationl Unfortunately, for purposes of the Business Tax Certificate (license) analysis, the corrected and additional information does not relieve Truxtun Business Plaza from the business license requirement. Your correspondence of September 6, 2000, confirms, albeit indirectly, that Truxtun Business Plaza is not a non-profit organization, if it was, it would be entitled to an exception from the cost of procurement, of the Business Tax Certificate. In other words, although non-profit organizations are still required to obtain a Business Tax Certificate, they are not subject to payment of the required business tax. Chapter 5.02 of the Bakersfield Municipal Code discusses the exempt categories and further provides the mechanism for obtaining an exemption. (BMC 5,02.060.) The citations in my correspondence to you of September 1,2000, were provided to support the fact that the term "business," for purposes of a business license tax, is to be interpreted in the broadest possible terms. The citations support this fact and it is not relevant that in the two cases you identify the courts ultimately determined that a business license ,,vas not necessary. (Newport Bldg. Corp. vs. City of Santa Ana (~962) 210 Cal.App.2d 771 -- a specific statutory preemption under the SubdiviSion blap Act; Long vs. Ana,beim (1967) 255 CaI.App.2d 191 -- pertains to a non-profit newspaper engaged in constitutionally protected political speech with no thought of commercial gain.) As I Anthony L. Leggio, Esq. CLIFFORD & BROWN September 13, 2000 Page 2 indicated in my earlier correspondence, t~ese are fact intensN, e inquiries, frequently determined on a case-by-case basis. · Perhaps there is some confusion on your par't as to the Business Tax Certificate requirement. As I earlier' ' , md~ca,.ed, the City is not asse~ing that the shareholders (based upon your September 6, 2000, letter this may now be modified to "partners") of Trux'tun Business Plaza must obtain a Business Tax Certificate. However, it is clear from the facts presented that "Truxtun Business Plaza" (be it a corporation, partnership, or other legally cognizable entity) provides a commercial service to actual and prospective commercial tenants within the City of Bakersfield. Applying the definition of "business" to its activities reveals that Truxtun Business Plaza (the entity)is in the business of providing commercial pr°pertyl°catedwithinthejurisdictionalboundariesoftheCity f ,~ o Ba:.~rsfield to prospectN, e tenants in e:~change for a lease fee. Accordingly, it is TrUxtun Business Plaza itself, and not its partners, which is conducting business for purposes of the Business Tax Certificate requirement. Your correspondence of September 6, 2000, does not address or dispute the assertion that Truxtun Business Plaza is the recipient of numerous municipal se, vices pro,~'ided to all commercial enterprises within the City (e.g., fire and police protection, mitigation of adverse traffic impacts, sewer services - the list of benefits is virtually endless).. Likewise, your response does not dispute our assertion that"Truxtun Business Plaza, or an intermediary thereof, enters into commercial lease arrangements with numerous tenants and appears to actively pursue replacement tenants when vacancies arise." Furthermore, you do not dispute that Truxtun Business Plaza "receives references from a realtor(s) for prospective commercial tenants when vacancies occur .... It appears Truxtun Business Plaza may have entered into a contractual relationship with ASU & Associates relative to leasing and/or management of the subject property." Your correspondence of September 6, 2000, assumes that there is an arbitrary application of the business license tax requirement in the City of Bakersfield as pertains to the leasing/rental of commercial and residential space. Staff of the City of'Bakersfield's Treasury Division who are charged with the enforcement of Bakersfield Municipal 'Code Chapter 5.02, work diligently to identify any person or entity doing business within the City of Bakersfield. When such a person or entity comes to their attention, as was recently the case with the Truxtun Business Plaza, the appropriate contact person is promptly identified and notified of the Business Tax Certificate requirement. It is an unfortunate truism however that despite their diligent work, commercial activity does occur in the City which the City is not aware of or which.is not other,vise brought to. staff', s attention. However, I can assure you that due diligence is applied to identify all such persons or entities to assure paymenl of all taxes so that all businesses which benefit from the multitude of services provided by the City of Bakersfield bear an equal and fair share of their cost. Anthony L. Leggio, Esq. CLIFFORD & BROWN September 13, 2000 Page 3 If the City did not enforce the Business Tax Certificate ordinance against a commercial enterprise such as Tru~un Business Plaza, now that its activities have been broughl to staff's at-tent on a-creditable argument could be entities of discriminatory enforcemenl of the ordinance, ma,..~ by other COmmercial The Internal Revenue Code citations provided i~ your res.ccnse have no bearing on the question as to the conduct of"business', for Ioca! municipal revenue purposes. There is nothing in the Internal Revenue Code which prohibits local cha~er cities from imposing a business license tax in thi§ instance. If Truxtun Business Plaza was exempt from payment of business license taxes, a business license must still be obtained (although no taxes would be paid/collected) so that its exempt status can be annually reviewed by City staff. "Business license taxes" and "income taxes" are not synonymous for purposes of our municipal revenue concerns. Truxtun Business Plaza carries on operations with a vie,,,,, towards creating a profit - you have described this operation as an "investment." Whether that goal is ultimately realized is not relevant for purposes of the local Business Tax Certificate requirement. Undoubtedly, certain tax advantages would accrue to the partnership in the event Truxtun Business Plaza were to operate at a loss (e.g., depreciation). Based upon the foregoing, the City must insist that"Truxtun Business Plaza" obtain a Business Tax Certificate immediately. Failure to do so may result in a additional enforcement action taken against this commercial enterprise. Relative to the application and business license, kindly contact bls. Cheryl Simpson, Financial Investigator at the City of Bakersfield's Treasury Division at 1715 Chester Avenue, telephone (661) 326-3928. Very truly yours, ' ICHAEL G. ALLFoRD~ MGA:dlr Deputy City Attorney cc: Bill Descary, City Treasurer Cheryl Simpson, Financial Investigator S :\Tr e a su ri' 0¢ r," L ecj~!o-T.-bx..~c 8u s;n e sspl~.aLt~i.,v=d MEMORANDUM TO: MICHAEL ALLFOtLD, DEPUTY CITY ATTORaNEY FROM: WILLIAM C. DESCARY, cITY TREASURER ~' DATE: MAY 24, 2001 SUBJECT: tLENTA-L PROPERTIES The Financ. ial Investigator is spending more time in the field canvassing for business license tax compliance, commonly called business license, Bakersfield Municipal Code (BMC) chapter 5.02.- Canvassing includes obtaining business names from directories at office buildings and from signs outside commercial locations. A search of the business license file is then done for these names and addresses. When they are not found in the file the businesses are contacted via mail with a brief letter of explanation and a business license application. Recently, several of these unlicenced businesses, which are lessors of commercial property, have challenged the applicability of business license tax to their type of business. The Treasury.Division has taken the position that it does'apply to property rental/leasing based on a broad definition of what constitutes doing business in BMC Section 5.02.090, Evidence of doing business. In order-to see how other cities apply business license tax to rental/lease businesses, the Financial Investigator surveyed the ten cities Bakersfield normally uses for comparison purposes. In order to do a cost comparison, we assumed $100,000 gross receipts (GR) from rents/leases and computed the tax in each city. In the case of Oxnard and Pasadena, we used the tax for a three unit minimum. Survey results are attached as Exl, iibit A. As background information, business license revenue in Bakersfield last fiscal year ending June 3~), 2000 was $1,943,000. Only $8,729 of this amount is currently composed of revenue raised from Commercial/residential leasing activity. Business license is General Fund revenue. Over 50 percent of General Fund monies are budgeted for safety services (Police and Fire). We are unable tO estimate revenue from rents/leases that the City of Bakersfield may not be 'receiving. However, survey cities were contacted and three responded with the information shown in Exhibit B attached. For comparison,.current fiscal year information for Bakersfield is shown at the bottom of Exhibit B. I agree with your suggestion that we seek guidance from the City Council as to how we should proceed in this matter. Attachments cc: Gregory $. Klimko', Finance Director Cheryl Perkins, Treasury Supervisor Cheryl Simpson, Financial Investigator S:~,,imG~Bill~Merno - MAll['ordRentalProp.wpd Business License Tax Survey - Rental Properties GR = Gr0.ss_~e_geip.t$ ...................................... City -- ~-ommercial Residential .............................. ANNUAL RA~E .................. TAX FOR . .................... . ............................................ GR_$!O0,O00 FREMONT : YES YES ........................... )ver 4 units $1 30j:)er_$.l,..O00_G_R ........................ - ........................ $!.30_.00 FRESNO YES YES Commercial: ..... Over4 unils $10 Processing_F_ff.9_+__$O.93 per_$_!_,000._G _R ............. $103.00 R.e.s.i.d.e_n_t{a_ I_: ........................................................ ~o minimum,_$10 Pro.c_e_~_s!._nfl_F_-e_e__+_$[}:50. Per_.u_n]!_P_ER..QUARTER ..... GLENDALE NO NO MODESTO NO NO .... ~.u_r_rg-n-llY-g.n-d-9-r-r-e-v.-i-e--w' - .......................................... OXNARD NO YES Base_[e_e_$_14_8_f_q.r_.3_u_n!l.s + $_l_2_jg.r_eacti~Jd.'i.!JqOal_.u.~i .............................. $148.00 PASADENA 'YES YES $73.76 for 3 units + $8.04 each additional unil $73.76 .RIVERSIDE "--Y_-~F_-S YES Base fee $40 + $0_._5. 2..p~!'_$_1~ .0_0 .Q.GR_. .............. .................. $92_._0.0 SAN BEt-- YES YES Minimum $60 for O_R__Up_!.o_$.2.~L0.0.0._+_$.1i~)i-e-~l:ii-~'~(i-~.~-~0-~'_r.']$'25,000 ..... $_2._1_0:00 STOCKTON YES YES _R. egis_t.r_.ati_9_n__$2_4_+._$.Q:9O_p~_$.!_,_O00 GR ............................ $114.00 BAKERSFIELD YES YES GR 0 to 1,.0._O_0.,.0_O0=..$_O.__30_p__.e_r_$_l.000 $30.00 'GR--'~,000,001 to 10,000,000 = $0.15 ?r $1,000 ............. I ........................ Exhibit A ESTIMATED RENTAL/LEASING REVENUE FISCAL YEAR 2000.2001 FRESNO NUMBER OF LICENSES TA_X. COLLECTED Commercial 2,431 $69,000 Residential (4 or more units) 1,820 $54,000 O.xL.x,'ARD Residential (3 or more units) 585 '$100,000 S.__&N BERNARDINO Residential 5,800 $355,000 Commercial 1,000 $ 100,000 BAKERSFIELD Residential 31 $2,648 Commercial 21 $6,081 Exhibit B PUBLIC STATEMENTS SPEAKER'S CARD BUDGET AND FINANCE COMMITTEE Committee of the City Council Committee Meeting Date You are invited to address the Committee under Public Statements on any subject that is listed on the Committee Agenda. Public statements are limited to three (3) minutes per speaker with a maximum of fifteen (15) minutes, per side, for any one subject. The Committee may, by simple majority vote, waive the time limit. No action will be taken; this Committee gathers information and reports back to the City Council. Please fill out a Speaker's Card and present it to the Committee Chair: Mike Maggard Company/ Organization: .<:~--~ \~,.-.~ Address: "~."~4> I~ ~'~. Phone: '~(-.-~-- ~:~,~ Fax/e-mail: ~[~. t~_~__-~./~, Subject: (' ~[,~t~ ~'O~.l,t- ~,=~ ~--~----~-~Y-, Mid-year Budcjet Amendment Fire Station Construction-- Station #15 $ 550,000 ($650,000 currently budgeted) . · Traffic Signal Preemption 250,000 Fire Vehicle MDC/AVL's - Phase I 65,000 Police Strategic Plan 250,000 MIS Wide Ama Network Upgrade 105,000 Downtown Charette 30,000 Southeast Chamtte 40,000 street Maintenance (AB2928 match) 450,000 · Northeast Hills Preservation (Specific Plan) 200,000 Median Islands 445,000 Trees / Beautification 400,000 Total $ 2, 785,000 Southwest 30 Acre Park: 700,000 Castle & Cooke Park Improvement Fund Balance $ 700.000 Total $1,400,000 ,BAKERSFIELD CITY ~L~NAGER~S OFFICE ~EMORANDU~ ' March 8, 2001 TO: Alan Tandy, City Manager FROM: John W. Stinso~sistant City Manager SUBJECT: Requests for Funds from Non-Profit 'Groups The city annually receives a variety of requests for city funds from non-profit groups. Most are requesting use of Community Development Block Grant Funds but there are some which request General Funds as well. In order to fairly evaluate these requests the City Council has had a policy that these requests meet a certain criteria. The Council in the past has considered the following criteria when reviewing requests: · One-time expenditures rather than ongoing costs; · Capital expenditures rather than general operating expenditures; ' One-time activities which are tied to specific high priority City Council goals; · Use of city facilities by the non-profit group. The Council in the past has carefully considered how these requests are considered since there are limited funds available to meet such requests due to the financial demands of normal city operations and needs including police and fare protection, public works and other city services. The Council has also looked to non-profits making requests to provide matching funds so the city the does bear' the entire cost of the proposed project or activity. The matching fund requirement is a demonstration of community support for the proposal. S:~Ol'~on-i~oflt R~lu~m.v~d EMERGENCY VEHICLE TRAFFIC SIGNAL PREEMPTION DEVICES · CURRENTLY THERE ARE 255 TRAFFIC SIGNALS OPERATED BY THE CITY OF BAKERSFIELD. · · THERE ARE ABOUT 110 TRAFFIC SIGNALS FITTED WITH THE EMERGENCY VEHICLE PREEMPTION DEVICES AND 145 SIGNALS WITHOUT THE DEVICES. · THE DEVICES ARE TRIGGERED BY STROBE LIGHT EMITTERS ON FIRE TRUCKS AND ON AMBULANCES. · THE AVERAGE COST, FOR THE HARDWARE CONNECTED TO THE TRAFFIC SIGNALS, IS ABOUT $5000 PER INTERSECTION. · THE AVERAGE COST TO INSTALL THE DEVICES IS ABOUT $2400 PER INTERSECTION, DEPENDING ON THE COMPLEXITY. · ABOUT 46 REMAINING INTERSECTIONS HAVE BEEN DETERMINED BY THE FIRE DEPARTMENT AS "HIGH PRIORITY" TO RECEIVE THE PREEMPTION DEVICES. · $60,000 IS BUDGETED IN THE CURRENT CIP AND WILL ALLOW INSTALLATION AT ABOUT 10 TO 12 INTERSECTIONS, DEPENDING ON COMPLEXITY. City of Bakersfield General Fund Contributions From FY 97-98 - FY 2000-01 Description Amount First Night Bakersfield First Night Celebration $30,000 Centennial Celebration Foundation Centennial Plaza $15,788 Bakersfield Senior Center Recreation Programs $25,000 Bakersfield Symphony Annual Rent $46,000 Arts Council Of Kern Entry Point Maquette $16,500 Bakersfield Museum Of Art Sculpture Garden $30,000 Bakersfield Museum Of Art Land $295,000 * Vision 2020 Communitywide Vision Plan $25,000 Kern County Museum Metro Recreation Master Plan $35,000 * Estimated value BUDGET AND FINANCE COMMITTEE MEETING February 5, 2001 Item 4F. Committee review and recommendation on financial and audit reports: (4.) 1999-00 Transportation Development Act Funds Financial Statements This is not verbatim as it was a conversation and speakers did not wait to be recognized by the chair. Not sure if it was Georgina speaking or someone else, Jack LaRochelle: Article 3 is non-motorized, pedestrian bike path stuff. Article 8, we used to get quite a lot of Article 8 money awhile back. The majority of the money now goes to operate Golden Empire Transit. We did get a little bit of it back with the construction of the Amtrak Station to fund operating expenses such as: janitorial, maintenance for landscaping, lights, and things like that. Mike Maggard: The revenue is up significantly - the operations in 2000 over 1999 quite a bit? The balance sheet is significantly less. There's a couple hundred thousand assets in 1999 and only $63,000 in 2000 - tell us why that has changed. Georgina? Different types of projects. These two funds are capital improvement oriented, so it could be the recognition of expenditures. I know we had a larger CIP project in that year than we had in 1998-99. Mike Maggard: That would explain the operations being a lot higher revenue. Did 'we just have less assets on hand because we are at the end of the cycle. Georgina? Right. Mike Maggard: Eventually it becomes -0-? Georgina? Right. Darnell Haynes: Will the Article 8 money eventually disappear? Jack LaRochelle: The Article 8 money will be increasing, because that's the money we are using at the Amtrak Station. Gregory Klimko: We went several years without any Article 8 money and it just started trickling back in. Mike Maggard: Can any of this tyPe of money be used for the bike path, walking path extension from Calm to the Water Treatment Plant? Jack LaRochelle: Article 3 money can, certainly. Mike Maggard: Are we doing that? Jack LaRochelle: Every year there is an application process that we go through with Kern COG and we are always looking for candidate projects. Page 1 of 2 Alan Tandy: Was some used for Panorama? Mike Maggard: I think the County used that to extend the walking path up on the bluffs. Jack LaRochelle: I am not sure if they used Article 3 money. They did use TEA Federal money for some of that, or it might have been a combination. The.bike path project we currently have now around Paladino and Morning Drive is a combination of Article 3 money and Federal money. Mike Maggard: So we are using some of this money. Page 2 of 2 BUDGET & FINANCE COI~fITTEE cc: HONORABLE I~xYOR AND CITY ~ COUNCIL ClT~ }~I~GER ,-~ CITY ATTORNE~ SENIOR HO USING CENTER BAKERSFIELD, CALIFORNIA PROPOSED PROJECT SITE 530 4TM ST PREPARED BY: VERNON D. STRONG VALARIE STRONG SENIOR HOUSING CENTER January 17, 20001 /1' TABLE OF CONTENTS I INTRODUCTION: TAB '~i Title Page Letter to City Manager Table of Contents Plat Map of Project Area i. FINANCIAL SECTION: i Survey and Window Estimate Bid to Demolish or Remove Property I PROPERTY PROFILES: 2 604 5~h St. 612 5~h S{. 618 5th St. 500 "R" St. Street Scenes ~a OTHER REPORTS AND MAPS: 3 MAP OF GAS LINE MAP OF WATER LINE I LETTER OF APPROVAL/SEC 202 FUNDS January 17, 2001 Mr. Alan Tandy, City Manager City of Bakersfield 1501 Truxtun Avenue Bakersfield, California 93301 RE:, Senior Housing Center 530 4~h Street Bakersfield, CA Dear Mr. Tandy: The Bakersfield Senior Center in conjunction with The Bakersfield Senior Center Housing Project respectfully request financial assistance from the City of Bakersfield inorder to acquire the additional land necessary to develop 80 low income units of housing for the elderly. More specifically, the complex will consist of 79 bedroom units one and I two bedroom unit to accommodate the on site manager. Other improvements of the complex include a recreation area, laundry facility, special visiting rooms and a secure green garden area, as well as, off street parking to accommodate residents, visitors and employees. The award notification to the Retirement Housing Foundation (Long Beach), co- applicants of this approved project, stated that $6,770, 500 has been reserved for this project along with a Project Rental Assistance Contract and budget authority of $272,900 and $1,364,500 respectively. Formal acceptance of the notification constitutes a certification and agreement by the Sponsor that: 1. The grant cannot be assigned, sold, conveyed or otherwise transferred. 2. The fund reservation will be cancelled if the project does not proceed according to a precise schedule. 3. The funds are subject to cancellation if(HUD) becomes aware of pre-existing conflict of interest. 4. Site control must be evident at every contmcttnfl stage of this agreement, although some exceptions may otc ,ur during the initial stages. 5. The Section 202 capital advance and project rental assistance funds reserved for the project identified herein may not be used for any other purpose and in connection with any other project except as stated in the contract. The proposed site is located on "R" Street, 4.h and 5th Street, in Bakersfield. The amount of property, which is the subject of this acquisition proposal - including the vacated portion of 5th Street - is approximately 1.40 acres. When this 1.40 acres is added to the existing site of 1.79 acres, the total property available for development will be 3.19 acres. if the portion of the property, which now comprises the recreation building and adjoining parking lot, remains and continues to be used for the same purpose, the available land left for development will be approximately 2.69 acres. The Iolal amounl of funds necessary lo accomplish lhis acquisition is $560,18:2.00. Each cost that comprises this amount has been indentified on the accompanying matrix. Also., Ihe accompanying booklet serves as reference and further explains the individual cost that has been identified. On behalf of the Bakersfield Senior Center's Board of Directors, I respectfully hope that the City ~tafffinds it in lheir discretion to recommend approval of this request as soon as possible, as time is of the essence. Respeclfully Submitted, Lynn Edwards Direclor of Bakersfield Senior Center ........ SCALE IN 1110 OF Alii INCIl... - . VILLA BI_lC E LOWF1 .L ADDITION-LC:M/ELL PARK, TRACT sO,,oog :~s'r./--/ ~_Z~) .' g-40 BLK.. 3 UNION ADDITION I (Z) : I i ' , , ,~(~ ~ 1~ '.' ~'-' I ~' BLOCK '~3 UNION ~U~ OF FINANCIAL SECTION SURVEY AND WINDOW Es'rZMATE OF PROPERTIES LISTED BELOW ~TotM . . ~ $444,160 DEMOLITION 'AND SITE CLEARANCE , ~ ~ ~ 604, 612, ~ St. mi ~ R S~. (s~ ~ a~lasm') $ 9,600 R~n~v~ ~ an~ cm=~c ~- vacating 5~ St. (~ ~ ~) S L3~ Tn~ ~ & ~ $ t16,~ Total Aeqnisition Cmt S ~68,182_ F. qulpmenl Y.rd & Offb.'. 7lb Sl~lnderd & Hw. y. gg Malll.g Addf. e.J*l:.P.O. I~Ox 8275 · ,.akerefleld. CA 93385 (OOS) 3gg-1703 (005) 072-5145 r^X(SOS) 3gg-5379 Conlrmclore Slate License No. 244632 $.Jan-0t Vernon Stro,g Alii!: Verlloil Pholte f/tSSl) Re : Demolish buildi.gs Gentlemen Valley Tree and Construction hereby proposes to furnish all supervision, equipment, a.d labor necessary Io demolish and remove all site Improvemenls las per your request. Scope of work: 604,6t2 5th Street, & 500 R Street. I Demolish and remove (3 house foundations) 2 Demolish and remove all concrele flat work. and block walls. 3 Demolish and remove all Irees and shrubs on silo. 4 Load and haul all concrele and asphall debris Io an approved land fill and Pay ell disposal fees. Lump Sum Price $ g,$o0.O0 Scope of wm:k: see R Street I Demolish and remove ( 2 two slory apartment buildings) . 2 Demolish and remove all asphall and concrele flat work. 3 Demolish and remove all Irees and shrubs on silo. 4 Load and haul all concrete and asphall and debris to an approved landfill and pay all disposal lees. Lump Sum Pries $ 12,800.00 Scope of work: Remove 5th Street 1 Provide necessary concrele and asphall sawing. 2 Demolish end remove asphall pavement (easl of R slreel) 3 Demolish and remove concrete curbs and gullers. 4 Remove concrele sidewalk soulh side of 5Ih streel. Lump Sum Pries $ 8,300.00 ExcIuslolls A Necessary Permits. 13 Conslruclion fence. C If any hazardous subslance of any kind I~ detecled it wlil become an extra work item Io conform with local, slate and lederal regulations for hazardous waste operations. D 'l'l~is proposal does nol Include Ihs asbeslos nollflcallon and site survey which Is a requhemenl of Ihs Air Pollullon Conlrol Dlslrlct. Said survey shall be conducted by a properly licensed consullanl and paid for by olhers. others. Va~~nstructlorl . O~13oneV: {Psdner) PROPERTY PROFILES .. '~le~ro$c,m / Kern Ou'ner : Bakersfield ~enior ~nler Inc Site : 530 4'i~ SI Bakersfield 93~04 RefdPN : Mail : 530 4Th SI Bakersfield Ca 93304 Xfered : 0912911995 tegal : CITY ABflR I.OWl.l.. CITY I.OT 13 OwaerPh : 661-325- Bcd..: flth: 7btRm: YB: B!dgSF: Ac: Owner : Sfl[anlolo Ki.ya & Masaye Parcel : 009 401 07 ~ 7 Sire : 604 5Th RI Unke~nfiehl 93304 Ref~PN : Mad : 223 Gamsey Ave Ilake~nfichl (:a 93309 A~wed : 0812511986 (~ : OlOI Res,Sgl Fmly Ren,R-I Zo.e Price : I.e~al : LO'l' 12 I]LOCK PI I 'IRACT LWLI'K Ow. erPh : Bed,',. : 3 Bth: 1.00 ~tgm: YB: 1948 BIdgSF: i,038 ~c: Ow. er : Jolmsm~ Willie Pmvel : 009 401 08 00 0 Site : 61 ~ 5Th NI Iln~c~ehl 93304 Ref~PN : Mail : 612 5Th St linSey,riehl Ca 93304 ~Tered '. 09/2411999 tl,~e : 0101 Ren.Sgl Fmly Res,R-I Zone Price : $52.000 Full Legal : CITY ABBR I.WI.AO, BLOCK P E, El'FY OwnerPh : Bcd,'m :2 Bth: 1.00 ~,tRm: YB: 1946 BldgSF: 1.298 Jc: Ow. er : Boydnhm Jolm A & Margaret A Parcel : 009 401 09 00 3 5ire : 618 5Th Si Bnke~sfiehl 93304 Ref~PN : Mail : 326 Chester Ave llnke~sfiehl Ca 93301 Afered : 04/30/1981 I t~c : 0300 Ren.'l'riplex O~ 'l'l.ee I hdls Price : l.e~al : LOT 9 T~C'[' LWI.PK Ow. erPh : 661-325-5851 Be, h,. : 2 Bth: 1.50 ?~tRm: YB: 1981 BhlgSF: 2.3a0 ~c: Ow. er : Boydnhm John E & Margaret A Parcel : 009 401 10 00 5 Site : 508 R SI Ilaketsfiehl 93304 Ref~PN : Mail : 326 Chcsle~ Ave Ilnke~nfiehl Ca 93301 ~fered : 04/30/1981 U.~e : 0400 Ren,Fomplex Or TI.ce Bails Price : i.e~.l : l.OT P 8 TRACT LWLPK OwnerPh : 661-325-5851 B,,dr,. : 2 Bth: 1.50 7b/Rm: YB: 1981 BldgSF: 3.120 dc: O.'.cr : lh~ydntuu h,lm U S~ & Ma~'ga~el El Al Parcel : 009 401 I I 00 Site · ~00 R ~1 Bakernfichl q3304 R~f~PN : Mail : 326 Cheslcr Av~ Bakersfield Ca 93301 Xfered : 12126/1990 U.~e : 0101 Ren,Sgl Fmly Res. R-i Zone Price : l.e~al : CITY AI]IIR VII.LA, BLOCK E, Cl'l'Y LOT OwnerPh : 661-325-5851 Bcd,'m : 2 Bdt: 1.00 TotEm: YB: 1928 BIdgSF: 808 Jc: O.'.cr : lloyd~hm J.Im Ii & Ms,gavel A Parcel : 009 401 12 00 I Site : *No Rile Add,cnn* Ref~PN : Mail : 326 Chcnlcr Ave llakc~nfichl Ca 93301 .~Tered ' : 04/3011981 fl.~e : Ool0 Vncnul.O-! Ac,R-I Zo.e Price : I. cgal : LOWEI.L I'K 'IR RI[SUB BI.K E LOWELL .'. O~erPh : 661-325-5851 Red,',.: Bth: 7btRm: }'B: BIdESF: ~c: Ow. er : Bake~sfichl Senim Ceulcr I.c Pmvel : 009 403 l0 00 9 Site : 530 4Th ~1 I]nkcr~ficld 93304 RefJPN : Mail : 530 4Th SI Bakersfield Ca 93304 Afered : 09/29/1995 I. cgal : ('ITY AIlllR UNION, BLOCK 3, CITY LOT OwaerPlt : 661-325-1113 Bcth'm : Bib: 7~tRm: YB: BhlgSF: ~c: ?he I.fi~rmntton Pein'Ideal h Deemed Rellnhle. B,t Is Not G~m~n~eed. ' " Prelmred For: Vernon Strong PrepAred By= Beverly Watklns Pmcel : 009 40J 07 00 7 Tolnl : $23.457 Owner : Sakamoto Klnya & Masaye L8nd : Sg,493 CoOwner . stmct : $13,g64 Slle : 604 5Th St Bakersfield g3304 Olher : Mnil · 223 O;rnsey Ave g;kersfield C; g330g %lmpwd : 60 Xfered · 08/2511986 Doc ~ : 5008-1887 Exempt : Price ' · PrDo~: Type : Pr Xfer : Deed : Ts~re8 :00t00~ PrPrlce · ag-00 Tax: $594.9~ Fhsl TD : LnndUse : 0~0~ Res. Sgl Fmly Res,Rd Zone M~p~rld LegM ' LOT ~2 BLOCK PJ J TRACT LWLPK * Phone · Owner : Census ' Tract ' 2~.00 Block : 2 Tenant : 68~-325-5853 School Dlslricl: Bakersfield I'RO~ERTY CIIA~CTERISTIC8 Bedrooms : 3 Building SqFI : t,038 Lot Acres : BMhrooms ' ~.00 Jsl Floor SqFI : g~2 Lot SqFI Fireplace : 2nd Floor SqFI: Lot Dlmen : Air Cond : Basemenl SqFt: Lot Locln : /" Heal Mlhd ' GarageType : Garage YearBuill : 1948 Unlls ' Garage SqFI : 520 Pool : Slorles' : Addlnl Rm SqFI: Bldg Class SAbES AND ~OAN INFORMATION t=m're,I Prior Sale Price : Sale Price: Loan Amounl · Prior Dale: Lender · Doc # : Documenl # ' 5908-t887 Loan Type : Remember American Title for ell your Title needs III 20t New Stine Road, Suite 300 - Bakersfield, CA 93309 - Phone (66t) 398-7t00 - FAX (66t) 26t-7t24 604 ~th S~ Bakersfield, PROPERTY ~}ESCRPI~I'ON~ 38R CONSTRUCT~ONx FRAME ANCO FOUNDATION: CRAWL SPACE . Comparable .Properties COMPARABLE STATISTICS LOW. ~ HIGtl Sale Price : S8,000.0(! S211.571 .OO S65.OOO.OO Bulhll#R S(luflre FmdnRe t 7RO 982 1167 L,I Square Fm~lnRe : 4026 5280 6534 Number ,f Bedro,ms ~ I 2 3 Number,f Bnlhrfmms ~ I.OO I.I I 2.~ Year Built ~ 1931 1947 1967 C,~I Per Square Fred ~ $7.62 S28.08 ] 11119 ItRO 09 IIIl 4 Ttn,srer Dale: ORllllllX~ Lot Sq Ft : Year Built: 1938 Sa,lb,,ex Jose Ihmdnlupe S,les Plice : SR.OO0 F B,ildi,g Sq Fl: 1.050 Uu[~ I,l,) R RI CosIIRqFI : $7.62 B~othr~ms : I I I.~' Pml : j 009 lO2 gl O0 9 Ttn,sFer Date: 1010512(~ Lot ~q Fl : 4.026 Y~r Built: 1967 Di,z A,dres;Rivnn Mmlhn Rose Ri,con S,les Ptlce : $22.000 F I)uildi,8 Sq Fl: 787 Uni~ : loll4 M ~t C,nt/~qFI : $27.95 Be~nlh~tns : 2 1 I.~ P~I : lllfl II~l I I llfl7 'l'tn,nFer Date: 0RI2112~0 ~t 8q Fl : Year Built: 1947 U,ited Compnoies Lemli,g Co,milo, ~nles Price : $35.000 ~uildi,8 ~q Fl: 1.05~ Units 2l)1 T ~t Cost/~qFI : $33.24 ~,lhr~ms : 3 / I.~ ~ fllOliS2 160fl9 'l'r,,nFerD,ie :05/11~0 LotSqFt : YeerBuilt: 1947 Stevet~,, I.inda ~nlen Price : S65.000 F Building ~q Ft: 1.167 Un[~ : 2fir T ~t CosI/~qFI : $5~.90 B~nlhr~mn : 3 / I.~ 1110 flS2 IR fill 5 l'tmtnl~r Il.lc: (16/1)2120~ Lot ~q Ft : Yenr Built: 1947 (;o,~.nle~ Mnrin Dolme~ Cu~ Snles I'dce : S29.01~ F Buildi,g ~q Fl: i.167 U,lts : 216 T ~1 C.sl/~ql:! : $24.R5 Be~nlht~ms : 3 1 I.~ P~I I [ fllf111~4 gl fill 2 'l'r,,nret Date: O3~RI20(~ I.ot ~q Fl : Year Built: 1947 ~ lie,er, AIRms, C;M.t,les Cmlo~ C lit Al ~.le~ I'dce : $2~.O~) F I]uildi,8 ~q Ft: I.~O Units : 337 T St CosIIS(iFI : S2~.O0 llet~ntl,~ms : 3 I I lhe I,fonnntion ~ovided I. Dee,~ Rellablq But In Not Ountnnt~ · ! I l I ilitttl ~ ~l - SB,lllll) ~ llR/21/2lltlll I I.flO i,flSO S7.62 ! I ih,I I~ Not I N~3)! .-I0 ,LLNFIOD ~ ' ' 01~- 6~'ON dVIN ~:BOS;:b'"]S:S'¥./S, ~//,. " NOI..L)O0¥ ~, NOINn £,,. ~DO'3E) ~ _ - AMERICAN 8erring.the AmeriCan Dreom:~ 'i' ii:..:.i', :ii: ~:~ ~:~:.~:':~' Prepared Fer: Vernon Strong ~r~pared BT: Beverly Watkins Parcel · 009 40t 08 00 0 Total · $35,182 Owner · Johnson Willie Land · $14,099 CoOwner · Stm~ · $21,083 Site ; 612 5Th St Bakersfield 93304 Other · Mail · 612 5Th St Bakersfield Ca 93304 %lmpwd · 60 Xfered · 09/24/1999 Doc ~ · 138258 Exempt · Price · $52,000 Full PrDo~ · Type · Pr Xfer ' Deed · Grant Deed Ta~rea · 001001 PrPrice · 99-00 Tax: $732.20 First TD · GRANT DEED LandUse · 0101 Res,Sgl Fmly Res,R-1 Zone MapGrid · 227 A4 Legal · CI~ ABBR LW~D, BLOCK P E, CI~ Phone · Owner · Census · Tract · ~,~0 Block · 2 Tenant · Seller · TOY CHET R & SMITH VICKI School District: Bakersfield PROPERTY CHARACTERISTICS Bedrooms · 2 Building SqFt ' 1,298 Lot Acres · Bathrooms · 1.00 1st Floor SqFt · 1,298 Lot SqFt · Fireplace · I 2nd Floor SqFt · Lot Dimen · Air Cond · Basement SqFt' Lot Loctn ' Heat Mthd · Garage Type · Garage Year Built · 1946 Units .: Garage SqFt ' 768 Pool · Stories · Addtnl Rm SqFt: Bldg Class · SALES AND LOAN INFORMATION ! Current Prior I' Sale Price · $52,000 Full Sale Price - Loan Amount · $51,813 Prior Date · 09/30/1974 Lender : Beneficial California Inc Doc # : I Document # · 138258 Loan Type :Conventional I Remember American Title for all your Title needs ,! i201 New Stine Road, Suite 300 - Bakersfield, - (661) - (661) CA 93309 Phone 398-7100 FAX 281-7124 The In]"ormatio~ Provided lz Deemed Reliable. But l.~ Not G#aranteed ST~ Bakersfie~d~ CA PROPERTY ~}ESCRPT~ON: 2BR 1BA~ oOL FMLY RES CONSTR~CTHFN: FRAME AND ~a~ YUC, CC FO~JNDAT~ON: CRA¢2% SPAC s Comparable Properties I COMPARABLE STATISTICS Sale Price i $8,000.00 $38,937.00 $65,000.00 I Buihling Square Footage: 980 1239 1605 I Lot Square Footage . 6534 7467 8400 I Numher of'Bedrooms : i 2 3 Number of Bathrooms : i.00 1.33 2.00 Year Built : l~S 1947 1956 I Cost Per Square Foot : $7.62 $30.3~ $55.70 I~ Transfer Date: 08/21/2000 Lot Sq Ft : Year Built: 1938 . / Santbanez Jose l-~adalu~ Sales Price : 58,000 F Building Sq Ft: i,050 U~ts : 1 1000 S St Cos~SqFt : 57.62 B~a~rooms : 1 / 1.00 P~I : OlO 041 02 O0 8 Tran~ fer Date: 02/! i/2000 Lot Sq Ft : 8,400 Year Built: 1952 I Bradford Clarence T/Ola M Sales Price : 562,000 F Building Sq Ft: !,605 Uni~ : I I~ Cos~SqFt :538.63 Be~a~m~ :3/ 2.00 Pool~ i 010051 0200 I Transfer Date :08/31/2000 LotSqFt : YearBuilt: 1947 Valencia Ramiro Sales Price : 560,000 F Building Sq Ft: !,518 Units : 1 237 T St Cos~SqFt : 539.53 B~at~ms : 3 / 2.00 P~! : I United Companies Lending Co~oration Sales Price : 535,000 Building Sq Ft: 1,053 Units : 1 201 T St · Cos~SqFt : 533.24 Be~at~ooms : 3 / 1.00 P~I : I 010052 16009 Transfer Date :05/11~000 ~tSqFt : Y~rBuilt: 1947 I Steverson Linda Sales Price : 565,000 F Building Sq Ft: 1,167 Uni~ : I' 208 T St CosgSqFt : 555.70 Be~at~ooms : 3 / 1.00 P~l : I C~a~s Mari~oiores Cu~ Sales Price : 529,000 F Building Sq Ft: 1,167 Uni~ : 216 T St CosffSqFt : 524.85 Be~athrooms : 3 / 1.00 Pool : ~e I~o~ation Provided 1~ D~m~d R~li~hl~, But In Not Oua~nteed . '1 Comparative Sales AnalySis SIN tP [JIO si #APLL ~! 'J1el * 91H SI ~ [ i# ~ ... C,[$1[ tN ~-' lOll[tl II I1 II [ IIII Il -- cN[~'l. II "I:" "'J~/' '1: =" " ~ "" :' ~"'"'"""'"- I r-'- :~: ~,,, = ' ~, , : L... IP~L# ~ _,T~IHIIR$ON .II.~IOR HIOH KIIOOL .,,,.. ,,,,i ,,I~ .,,,,, ., ~~  8ire Address 8ell ~ice Dare Rooms Beds Baths 8q~ ~qFL 8old ~torles lO00 S St $8,000 F 08/21/2000 I 1.00 1,050 $7.62 ' 153 T St $62,000 F 02/I 1/2000 6 3 2.00 1,605 I 237 T St $60,000 F 08/31/2000 4 3 2.00 1,518 201 T SI $35,000 08/21/2000 3 I.O0 1,053 208 T SI ~65,000 F 05/I 1/2000 3 1.00 1,167 $55.70 '~ 216 T St $29,000 F 06/02/2000 3 1.00 1,167 $24.85 201 U St $28,500 F 05/05/2000 2 1.00 1,575 $18.10 337 T St $26,000 F 03/08/2000 3 i.00 1,040 $~5.00 1405 lOTh SI $33,000 F 08/25/2000 I ~ 2.00 980 $33.67 I I I I 'llte hllbmmli~m Provided I.q I)eemed Relinhle. I)ul h Idol Oumrmdeed. ! I- 40 VILLA BLK. E LOWELL ADDITION- LOWELL PARK TRAC'I' ~.oo- m~'r./- / .-40 BLK. 3 UNION ADDITION ~ ~LOCK '"~3 UNION ''° ADDITION ~ ,fT~ ~ ST'ASSESSORS MaP NO_ 9- 40 ,: ~ COUNTY OF KEEN , .I AMERIC Prepnred Far: Vernon .Strong Prepared B:),: Beverly Watklns Parcel · 009 401 0g 00 3 Tolal :.$70,200 Owner · Boydstun John A & Margaret A Lend : $t6,000 CoOwner ' Struct : $54,200 Sile : 6f8 STh St Bakersfield 93304 Olher : Mall ' · 326 Chester Ave Bakersfield Ca 93301 %lmprvd : 77 Xfered · 0413011981 Doc# : 5369-t145 Exempt : Price · PrDoc~ ' Type : Pr Xfer ' Deed : Tax. Area : 001001 PrPrlce · 99-00 Tax: $1,379.64 First TD · LandUse : 0300 Res,Triplex Or Three Units MapGdd : 227 A4 Legal · LOT 9 TRACT LWLPK phone · Owner : 66t-325-5851 Census ' Tract · 20.00 Block : 2 Tenant : 661-323-t845 Seller · School Dlstricl: Bakersfield PROPERTY CilARACTEilISTIC$ Bedrooms ' 2 Building SqFI : 2,340 Lot Acres : Balhrooms ' 1.50 1si Floor SqFI : t,tT0 Lot SqFI : Fireplace ' 2nd'Floor SqFI : t,t70 Lol Dlmen : Air Cond · Basement SqFI: Lol Locln : ..' Heal Mlhd ' Garage Type ' YearBullt : 1981 Unlls ' Garage SqFI : Pool : Slorles · 2 Addlnl Rm SqFl: Bldg Class : I ' . SALES AND LOAN INFORMATION I Currenl Prior I Sale Price ' Sale Price: Loan Amount · Prior Date: Lender : Doc # : Documenl # : 536gd 145 I Loan Type : Remember American Title for all your Title needs Il! ! ! I 20t New Stlne Road, Suite 300 - Bakersfield, CA 93309 - Phone 188t) 398-7100 - FAX ($$t) 28t-7124 The I,formntlo. Prm, lded h Deemed Reliable. fl.! h Nor (luaranteed I Comparable properties' COMPARABLE STATISTICS . LOW. AVERAGE. HIGH Sale Price : $47,000.00 $96,000.00 $t65,000.00 Ehrlldlng Sqtmre Footage : 360 77t t008 Lei Square Footage '. 0 0 0 Number of Bedrooms : 1 2 3 Number of Bathrooms : t .00 1.25 t.75 Year Built : t 939 t951 1964 Cost Per Squme Foot: $46.63 $46.63 ttt 00t 262 t4 O0 Il Transfer Date: 0?I3tlIOgB Lot gq FI: Yr Blt: t052 rfnnk Ca,lelml gales Price : $t65,000 F Building gq Ft: 947 Unlls: t926 26Th gl CosllgqFI : $174.23 gedlgethrooms: 2 1t.00 Pool: Res. Triplex And g~l Fmly Res Legal : MAP t532, LOT t3 o02 0Bt 16 00 2 Transfer Dale: 071081t90B Lot Sq FI: Yr git: ~939 Robmt Roulhler gales Price : ~Bg,g00 F Building ~q Fl: 360 Units: 9o6 3tgi st CosUgqFt : $t9t.67 ~edlgMHrboma: t 1t.00 Pool: Res.Three Sepmale Residences Legal : CITY ABBR HOMPK, BLOCK 8, CITY LOT 002 06t 04 00 7 Transfer Dale: 0d~812000 Lot gq Fl: Yr git: 1964 H ~mbafa J Knoll Sales Pdce : la1,000 F Building gq Ft: 4,00O ;Unlle: Waller & 716 31gl gl Cos~SqPl : $46.63 ged/Bathrooms: 3 1t.76 Pool: Res,Three Separate Residences Legal : CITY ABBR HOMPK, ~LOCK ~, CI~ LOT 166 082 08 oo 3 Transfer Dole: t21t711099 Lei Sq Fl: Yr ~lt: B~enl Meglaughlln gales Price : $~03,000 F ~ulldlng gq FI: Units: * Cos~gqFI : gedlgMhroom~: I Pool: 1928 Eye Res,Three Sepmele Residences Legal : SECTION 7, TOWN~HIP 30, ~NGE I .; I he hd~Hmntt-. I'.wlded I, I)eemed Rellnl,le, Ih,I I~ Hal {hmrmdeed, I I I I 'lhe I.fi,mmllr,. I'eovhled I. I)eem,~d Rellshle. Ilul In Not (hmwdeed. ! .- 40 VILLA BLK. E LOWELL ADDITION - LOWELL PARK TRACT ~<:~:x~ o~'..'r./- / ~-40 eLK. 3 UNION ADOITION ._1 Ik,"' '? .,,,.., , ® 0 J! - ~ 2LOCK "'3 UNION ''¢ ADOITION-- I 47'H ~. $77'A$SES$OR~couNTyMAPoFNO-KERfl g -40 · m m . m m mm m m m m ,--m ~.m .~m mm m ~,m m ~m m . AMEHiCAN ;: T . ~eWlilg the Amorl¢oM I~eont ';' '~ :"~::: ~:~ :.:;~ ", ~':~: I'relmred Fro' t vernon Strong Prepared B7~ Beverly Watklns Parcel : 00; 40t ~0 00 6 Tolal : $03,600 Owner : Boydstufl John E & Margarel A Land : $~4,000 CoOwner : glruel : $7g,600 gila ~ 608 R St Bakersfield 9330~ Olher : Mall * 326 Chesler Ave Bakersfield Co g330~ %lmp~d : 85 Xfered : 0413011981 Doc~ : 536gd~43 Exempl Price · PrDo~: Type : Pr Xfer ' Deed : Tn~rea : P~P~Ic~ · ge-00 Tax: $2.tt5.57 Fhsl TO La,dUse : 0400 Res. Fomplex Or Three Unlls Map~rld : 22~ A4 Legal ' LOT P 8 TRACT LWLPK : Owner : 681-325-5851 Ce,sus : Tracl : 2~.00 Block : 2 Tenanl : 661-324-1878 g~ller : School Dlshicl: Bnkefslleld BuIIOI,~ ~qFI : 3,t20 Lot Acres : ~edrooms 2 ~nlhrooms : 1.50 1si Floor SqFI : t,580 Lei SqFI : Fheplace : 2nd Floor SqFI: ~,560 Lei Dlmen : Air Coral · gnsemenl SqFI: Lei Locln : Heal Mlhd : Garage Type : YearBulll : 1981 Unlls : Oarnge SqFI : Pool : glades · · 2 Addlnl Rm SqFI: Bide Class: I.... SALES AND LOAN INFORMATION I Cttt'rcn! PI'htr Sale Price ' Sale Price: I Loan Amounl ' Prior Dale: Lender : Doe # : DOCtlmenl f/ ' 5369-1143 '. I Loan Type ' Remember Ame~fcan Title for ell your Title needs II! I I 20t New Stlne Road, Suite 300 - Bakersfield, CA g330g - Phone (G6t) 398-7100. FAX (66¶) 281-7t24 I P©ilNDAII©N: SLA~3 I C,ml,lrnble Properties ' I ( ~OMI'AI~AIU, E $'rATISTIC$ LOW. AVEI~GE. IIIGII  ~.le Price Ihdhll,R Sq,nre F.,I.Ee ~ 7RI) g40 980  I.,I ~q,nre Fm~f,~e t 4026 5280 6534 : Hm,l~r ,t ~ednmm~ ~ 2 2 2 H,ml~er ed II,lhrmmi~ ~ I.I)O 1.25 2.00  ~'enr ~,ill ~ 1931 1949 1967 C,~I Per gqm,'e Fred t ~21.79 $27.R I $33.67 J 11119 1f12 Ill lilt 9 'l't,,~l~r I),le: 101115120(H) I.,I .~q Fl : 4,fl26 Yenr Built: 1967 I )i.x. A,.he~;l{ivn~ Umllm I{.~e I~i.c.. g,lc~ I'fh'e : S22,n(lO F Ihdldi,R ~q Fl: 787 U,iIp I..4 M RI C.~IIg,IFI : S27.9~ Iled~hdhr(mtn~ : 2 / I.~ P~I Ih.h,w~ Scr~i,/A,hmitt S,le~ I'ftce : $~.()()fl ~ Ihdldi,R gq Fl: 980 U,il~ : J l:mr,lc~ Rcy..hh)~..tm g,le~ I'lke : SIT.(IIIU F Ihlihll,g ~q FI: 780 Utiila : 139 391 Ill fill $ 'l',m~lkr Ilnte: II,Ill/II)till Lot 8q Fl : Yenr Built: 1945 viii, I.m,, A l~l Al ~,1~ I'dce : ~22.fl0(l P lhdldi,8 ~q FI: 81G U.itn : I I : 'll~e I,Ihmmlhm I'f,whled h I)eemed Rel;d.le. Ih'I I.q Not (hmlnnleed . I ] Con, lmrative Sales Analysis .! Addre.~s ~ell ~ice Date ,%ld ~tarles Raams Be~ Baths ~ ~ite 91{I K ~1 $4~.01l(1 F (16114/211(111 Z 2 1.00 2,67~ $16.~4 t](lll K SI $711,01)11 F O~/l~/2llOl) 2 I 1.00 2,672 S26.20 612 ~'lh SI ~Eh $92.099 09/I 5/2110{I 2 2 1.50 3,J06 121 K SI $~3.11110 F 04/20/2UU0 2 2 ' l.O0 3,480 I I I 11~. lurommllon' Provhl;& I. Deemed R~ll.hle, Bul Is Nol VILLA E~I_K. E LOWELL. AO01TICN-L.(:::NVELL PARK TRACT sc~c~ums'r./-/ .-4.0 ~-40 E~t.~. 3 UNION AOOIT1ON [..,,. 40 f 5'0 ® I I @ I I I I - / "':~ UNION "" AD01TION ~ · 4T~ STA~$~R~ .MAP NO_ 9- 4.0 ', ,,,COUNTY OF KEg, N :'1 -. A.MERICAN , ,~en4hg the Amerlcarl C)~earrl I'relmred FE,r: Vernon Strong Prepflred By: Beverly Watkins i Pmcel : 009 401 IJ 00 8 Total : $tB,602 Owner · Boydslu. Jolt. ESr & Margaret El Al Land : $6,t t 8 CoOwner * glrucl : $t2,484 B' Silo : $00 R St Bakerslleld 93304 Olher : Mall : 326 Chesler Ave Bakersfield Ca g3301 %lmprvd : 67 Xlmed * t212Oltgg0 Doc# : 646gd245 Exempt : i Price ' PtDoc#: Type : Pr Xfer ' Deed : TaxArea : 00t001 P;Prlce · gg-o0 Tax: $538.07 Fhsl TD * LnndUse · 0101 Res,S.OI Fmly Res,Rd Zo.e MapGrld : 227 A4 legal · CITY ABBR VILLA, BLOCK E, CITY LOT Plmne · p owner : 661-325-585t ' cmr~us : Tfncl ' 20.00 Block : 2 Tmnanl : ~8t-325-2028 I Sell~.r · · ~chool Dlshlcl: Bakersfield I I'IIOI'ER'I'Y CIIARACTERISTICS ~1 I~edmoms : 2 Building SqFI : 808 : Lot Acres 13nlhrooms : 1.00 1si Floor SqFI : 808 Lol gqFt : . Fheplnce ' 2nd Floor SqFI : Lot Dlmen : I Air Co,d ' Bnsemenl SqFI: Lot Locln : ".. ' HeM Mlhd · Garage Type : Garage Year Built : 1928 Unll.~ · Grange SqFI '. ~80 Pool : "1 Slmles ' Addlnl Rm SqFI: ' Bldg Class : I SALES AND LOAN INFORMATION I (;urre. I Prior "~ Sale Price ' gale Price: I Lom~ Amounl ' Prior Date: Lender ' Doe # Oocmne.I # : 646gd245 . * / ' Lan, Type : - Remember Amedcan Ulle for all your Title needs !!1 i 1 201 New Stl.e Road, Suite 300 - Bakersfield, CA 93309 - Phone {66t) 398-7t00 - FAX {$6t) 28t-7t24 FRAN' AND STUCCO POi.!N~AIION; CRAWL SPAC , COMPARABLE STATISTICS LOW AVERAGE. ItlGH Sale Price : $ I 7,000.00 $24,000.00 $33,000.00 fl.ihlinR S(Ittare Fro)taRe: 780 840 980 I..I Square F(mtnEe .' 4O26 S2RO 6534 Nnmher or fledt'mmts : 2 2 2 ~ttmher,r Bflihroom~ ~ 1.00 1.25 2.00 11o9 IO20I 009 'l*t,n~rcr Date: IOIO5120(10 Lot ~q Fl : 4,026 Year Built: 1967 l)i,z A,(Ire~;Rivns Mnllhn Rose Ri.con Rnlen Price : S22,0o0 F Baildi.s Sq Fl: 787 Units : 1004 M SI C.~llSql:l : S27.gs Bed~hdlmmmn : 2 1 I.~ P~I : J 0IR 061 SI O0 4 'l't.nsrcr Dale: OR/ZSlZO00 Lot Sq Fl : 6,S~4 Y~r Built: 1956 I R.I.. Sergio/Anlonia Snle~ Price : $33,000 F Building 8q FI: 980 UuJts : L I J9 331 tll 1111 7 'Dnn~l~r Date: 0310RI2(}00 Lot gq Fi : Year Built: 1931 F,etttc~ ITeynnldo~ormn ~nlcs Price : ~17.000 F U,ilding Sq Ft: 780 Units : 2111 W,od ~1 Co~l/S(IFt : S21.79 De~lathr~tnn : 2 / i.00 P~I / : I 139 ~91 Iii ilo 5 Tf,nsrer Date: 05/31/2000 Lot ~(I Fi : Year Built: 194~ Viii, I...tn A Et Al Stiles I'fice : S22.000 P Building Sq Ft: 816 Uni~ : I 'llte Inlbm~nlion Provided In Deemed Relinl,le, I)ul In Not O.ntanteed . i I,,S'ite Address ,Yell Price Date ~¥ald Stories Roams Beds Baths 10114 M SI $22.11110 F lll/llS/20(}O 4 2 i.00 ?87 $27.95 I,I115 loTh SI S33.001} F 0g/25/21)1)0 i 2 2.00 980 S33.67 m 2fib Wood si $17.0o0 ~ 03/0R/2000 2 1.00 ?R0 $21.79 14, Li~gcll SI $22,~00 P 05/31/2(}00 2 1.00 NI6 S26.96 I ' i 'l'he h,fi,mmlh,n Pfuvhled In Deemed Relinhle. But I.q Hol ChiRon.iced. 'l .VILLA BLK. E. LOWELL ADDrrlON-LOWE:LL PARK TRACT ~C~.K>O~. O~a'r. I-I ~-40 ,' 40 BLK. 3 UNION ADDITION ..j I ' · ~ J , ! I 6 I $ , I I I -- ,t ~LO,C,K z3 UNION ''° ADDITION ~ 4T/-I.. ~. 'S"g'ASSF'SSORSCOUNTY M~,PoF. No.__9 KERN-40 . MERICAN : TITLE ! I P repared For: Vernon Strong Prepared By: Beverly Watkins Parcel · 009 401 12 00 1 Total · $9,054 Owner · Boydstun John E & Margaret A Land · $9,054 CoOwner · Struct · Site ': *No Site Address* Other · Mail ' 326 Chester Ave Bakersfield Ca 93301 %lmprvd · I Xfered · 0413011981 Doc # · 5369-1143 Exempt · ,. Pdce · PrDoc~ · Type · Pr Xfer · Deed : TaxArea · 001001 I PrPrice · 99-00 Tax: $466.18 , First TD · · LandUse · 0010 Vacant,0-1 Ac.R-1 Zone MapGrid · I Legal · LOWELL PK TR RESUB BLK E LOWELL Phone · ADD. Owner · 661-325-5851 Census · Tract · Block · Tenant · Seller · 'i School District: Bakersfield l, PROPERTY CHARACTERISTICS Bedrooms · Building SqFt · Lot Acres · l, Bathrooms · 1st Floor SqFt · Lot SqFt · Fireplace · 2nd Floor SqFt · Lot Dimen · Air Cond : Basement SqFt · Lot Loctn · i1 Heat Mthd .' Garage Type · Year Built · Units · Garage SqFt : Pool · Stories · Addtnl Rm SqFt: Bldg Class · I SALES AND LOAN INFORMATION i Current Prior Sale Price · Sale Price · ~ Loan Amount · Prior Date · i Lender · Doc # · Document # · 5369-1143 Loan Type · 1 Title for all Title needs !!! Remember Arnerican your 201 New Stine Road, Suite 300 - Bakersfield, CA 93309 - Phone (661) 398-7100 - FAX (661) 281-7124 The Information Provided 15 Deemed Reliable, But Is Not Guaranteed 71h,tro,','can / ICern ¢)..,rr : Ilnket.~fithl ge.h, Ce.let I.c Parch ~ 009 401 OO ~ 4 .S,~ : 5~0 4'Ih gl Ilnke~sllehl 9.~04 Re~H M, il : 5~0 4'1 h ~1 Ilnketnfiehl ~n 9.t304 A~(ered ~ 091291]995 IIq,, : 1912 Rec.Meeli,g I1~11 ,.,,,I : '('I'I'Y AIIIIII I.()Wl.I,. CITY I.(H' I~ O,~terPh ~ G61-325-I 113 Ih..h m : Pdt: 7beRm: ~fl: flld~$F~ ¢).'nrr : gnknm. I. KI.yn ~ Mn~nye Parcel : 009 401 07 0O 7 Ah,I : 2~ Linttts~y Ave Ilnkelsllchl ('n ~J3OY A~.rwl : O~/ZS/19~G I.,.~,,I : I.U I'. 12 BI.(R'K I' I I '1 RACT I.W I.I'K OWIIfI'PII Ile,hm : ~ Ild,: I.flO 7b~,m: rB: 1948 flld~F: 1,038 o..ntr : h,h.~.ll Willie P~rc~l : 009 401 g800 g ~h,I : 61~ 5Ih ~111nk~tnflehl (~n 93304 ,~t'~d ~ ~9124~1999 UIOI Refl. R-I 7..., Prlc~ ~ S52.000 ~ull Fmly I.~,,I : UH'Y AllI~I[ I.WI.AIL UL~K P I~, CITY ~n,net.~h ~,',l,m :? Ihh: I.t)l) 7~;/Rm: }'fl: 194G ~hl~SF: 1.298 dc: ¢).',~r : II.yd~hm J,h. A & Mntgntel A Pm'cci t 009 401 09 O0 3 M,,il : 326 (.'.he,Irt Ave IInket~fiehl Cn 93.1UI ~ered : 0413011981 f t~r : ll~llfl R~CI't ildC~ (h 'lhtre ~ I1111~ Prlre I ~,,I : I.U'I' 9'II[ACT I.WI.I'K O,'nerPA : GGI-3.25-~851 lb.,h,, : 2 flth: 1.50 l~,Rm: I'fl: 1981 aI, I~SF: 2~340 ¢hr, er : Ih,ydshm hdm I~ A Mntgn~el A Parcel : oo9 4ol Io oo 5ire : 5fir R SI Ilnk~f~lirhl 9.13(14 Ref~PN M,il : ~6 ('lt~lc~ Av~ Ilnke~fichl ('n fl~3(/I .~¢red ·: 041301198 I I.r~,l : I.UI' I' g 'IRACT I,WLI'K O,~et'Ph : GGI-325-5851 ~,.,fl.,, : ~ ~r6: I.SO 71,R,l: rtl: 1981 BhlgSF: 3.120 dc: f),,rr : II.yd~lm~ J.Im E ~t R MntRntel Et Al fldrcel : 009 401 I I O0 8 a~,~il : .126 Cheviot Ave It~ke~sfiehl Co 933UI ~ered : 1212G11990 I.,'~,,I: CHY AIIlIR VII.I.A. III.OCK I~. CITY LOT On~erPh t GG1-325-5851 ~r,hm : 2 ,11~: I.flO rotR,t: )'B: 1928 ahl8SF: 80S ~).m.r : II.yd~hm J.h. I~ A Mnlgntcl A I'm'cfi : 009 i .Sire a~f AP~ M, il : ~ vt II.ket~llehl ('n 9.1.101 .~et'ed ~ I,,.~,1 : I.OWI~I.I. I'K '1R RI~SUU UI.K E I.UWELL ... Olmtt'Plt : GG1-325-5851 ¢).',cr : Ilaketgfiehl Se.i.f Ce.let I.c flw'cel : 009 403 I0 O0 9 ,Sit~ : 5.1~) 4'1'1, gt Itnke~sfithl 9~3t14 Re~flN t al. il : 5~fl 4'Ih SI Cn 9~3114 09/29/199~ II.~r : 1912 Rrr. Mrrti,~ Ilnll Pr/ce f.,.~,d .: CI I'Y AIIIIlT UNIUN. III.UCK .1. CH'Y LUi' O,'nerPh : 661-~25-1 i Ih',h,, : Ihh: 7htRm: I'D: BhlgSF: ll,~ h,~,,,,,,',,, I',,,,.hl~,l h ~rrm~d ~rll,l, le. ~,t b ~ot I VILLA BLK. E LOWELL ADDITION-LOWELL PARK TRACT ~o~ms?./-/ g-40 BLK. 3 UNION ADDITION ! I ~ ~ I 5 t . ' I I R STREET FROM 4TH STREET LOOKING NORTH 4TH STREET FROM R ST~ LOOKING ~AST THE END OF 5TH STREET LOOKING EAST 5TH STREET LOOKING EAST OTHER REPORTS AND MAPS .. " ~ 3-12 I 4688c-4q - ) CHIP t23 ~ . 0 ~I HI.Z? A'FFER RECORDINO, RETURN TO: '..~. Ii F~FIC GAS AND ELECTRIC COMPANY Oeparfment ~ ~ersfleld, CA g3301 I,neatlon: CI ty/Unlnc Co~p,~to~ on Full V~lue or Fr~perty Conveyo~. or Cn~.te~ ~. Full Velue I.eus Lion0 & tnc~roncot US~ ONLY) EASEMENT I CITY OF BAKERSFIELD CALIFORNIA, a municipal corporation, i hereinafler called first parly, hereby grants to PACIFIC {:lAS AND ELI=-CTRIC COMI'ANY, a CalifonJia corpor.alion, h,ereinafler e, all ,ed second parly, Iht right from time It, lime Io conslr.ucl, reconslruct, mstall, ,nsp~l, mature,n, replace, remove, and use facilities of Iht type heremafler specllied, together with a right of way therefor, within a strip or I parcel of land or along a route as hereinafler set forth, and also ingress thereto and e~ress II,erefrom, over and across Iht lands silUale in lilt city of Bakersfield County t,r Ke£n , Stale or California, described as follows: A lO-foot wide .trip of land described as tlie north 10 feet of the south 31 feet of that vacated portion of 5th street (60 feet vide) in Lowell Park Trace, in the City of Bakersfield, being that portion lying between the ..outherly prolongation of the ve~[ line .of Lot and the westerly rip, hi of way line of the Kern Island Canal as eaid I .,:treat, lot end canal are shown on Lowell Park Tract filet{ December 30, 1926, in Book 3 of Haps, Page lB& in the Offic~ of the Kern County Recorder. i Said facilities shall consist of: I O.~. or more underground plpe~ with suitable service pipet and connections, ~eeond party deems necessary, for the conveyance of gas to be installed said strip. The legal description herein, or the map'-attached hereto, defining the location of thl..~ utility di.,tributton ea.ement, ua~ prepared by Pacific Oa~ and Company pursuant ~o Section 8730 (e) of the Business and Profeamiong Code. " First party further grant~ to second party the right to a~sign to another -- public utility as daftned in Section 216 of cha California Public Utility tl,~ right to i.stall, tn~p.ec, maintnin, replace, remove and ume eo~unieaCton [acilitt~ .itl,in said ~crtp (includi.s l.gr~ thereto and egre~e ~here~rom). I... 5'"':" -.~ Iirst pnrl~' shall not erect or construct any building or other structure or drill or operate any well withtn said strip or parcel o1' land. ' ions hereof shall inure Id the benefit of and bind the successors and assigns of the ihe pr<)vlS especlive parties hereto. .,,/ 19 ',/ CITY OF BAR£RS£IELJ) CALIFORHIA. a municl, pal cot-potation, Clarence E. Hedders - Hayo~: By:_ Prepared by: ~heeked by: RD5 Executed tn the presence oE: ~t~ne~s -.., . 1991 ___.0'~0". ~tflO Y P -_ .... z,~. I IIIUmlnl II ~ . lobe~hepersonwnoe"wcm"~ ..... n -- '~ - ~[C~DS~ CO [aL~vL~ . d knowludged lo me Ihsl Iht ~ IW~MIII~I~'OI~I ,,,~m,~,.~'~'"'*'"'" . . ./- "_~:' -., .'~'/~ /' ;~ ..... o~ICIAL SE~__ r ', · ' ...... .,. T ~ -'%'~'"~ U.S. De~rtmentof Housing and U~an Development ~ Los Angeles Ama Omce, Pacific/Hawaii "'~ ! ~ ~C 0 ~ ~ 611West Sixth Street, Suite8~ ~=: ti~i ~.~ LOS Angeles, California 90017 NOV 30 Laverne Joseph, R. President Retirement Mousing Foundation 911 N. Studebaker Road Long Beach, CA 90815 Dear Ms. Joseph: SUBJECT: Notification of Selection for a Section 202 Fund Reservation Project No.: 122-EE164-WAH-NP/CA16-S001-001 Project Name: _Bakersfield Senior Mousinq No. of Units: 80 Location: 624--4~n Street City and State: Bakersfield, CA I am pleased to advise you that your application for a Fund Reservation to construct 80 units of housing for the elderly under the Section 202 Supportive Housing Program has been approved for 79 one-bedroom units and one two-bedroom for the resident manager. Capital Advance authority in the amount of $6,770,500 has been reserved for this project, along with Project Rental Assistance contract and budget authority of $272,900 and $1,364,500, respectively. In accordance with the provisions of the Departments of Veterans Affairs and Mousing and Urban Development, and Independent Agencies Appropriations Act of 1997, the amount of the Project Rental Assistance Contract authority reserved for this project is based on 75 percent (rather than on 100 percent) of the current operating cost standards applicable to Section 202 projects in Bakersfield, CA. This takes into account the average tenant contribution toward rent. In addition, the term of the Project Rental Assistance Contract is 5 (five) years. Please indicate by signing in the sPa~e provided whether or not accept this Notification including the special conditions you or requirements that are specified herein and certify to your understanding that the project must be developed in accordance with the terms set forth in this Notification. Return by Certified Mail -- Return Receipt Requested two signed copies of this Notification, along with the original of a completed Form MUD-.2530, Previous Participation Certificate, and resume for the consultant (if a consultant has been/will be used) to this Office within 14 days from the date you receive this letter. If the Sponsor will be the consultant, the submission of these documents 2 on the consultant may be deferred until after formation of the Owner corporation. If such is the case, the documents on the consultant must be submitted to this Office immediately upon completion of the contractual arrangements. Please advise this Office whether or not a consultant has been/will be used and the type of consultant by completing the following: ( ) Sponsor/Consultant (~<) Independent Professional Consultant ( ) No Consultant has been or will be used FUND RESERVATION TERMS AND CONDITIONS Your of this Notification acceptance constitutes a certification and agreement by the Sponsor that: (1) There will not be made any sale, assignment, conveyance, or any other form of transfer of this Notification, the Fund Reservation, the property or project, or any interest therein, except transfer from the Sponsor to an approved single-purpose Owner organized by it. (2) The Fund Reservation will be canceled if construction, rehabilitation or acquisition has not commenced within 18 months from the date of this Notification, unless limited extensions of up to 24 months are approved by HUD. Such ~extensions will be based upon HUD's determination that the Owner has established a reasonable schedule and is making sufficient progress toward the start of construction. 202 Capital Advance and Project Rental (3) The Section Assistance funds reserved for the project identified herein may not be used in connection with any other project. (4) This Fund Reservation will be subject to cancellation, at HUD's option, in the event there comes into existence or HUD becomes aware of a pre-existing conflict of interest involving the project on the part of officers or directors of either the Sponsor or Owner organizations (including affiliates). (5) An attempt will be made to obtain exemption from State and/or local real and/or personal property taxes. Evidence of filing, together with the response received from the taxing authority, must be submitted with the Application for Firm Commitment in one of the following forms: (a) Tax exemption (c) Payment in lieu of Taxes (PILOT) (b) Tax abatement (d) Ineligibility for any tax relief for (a), (b), or (c) must be supported by a copy Eligibility of the appropriate legislation or ordinance. (6) HUD will not amend the amount of the Fund Reservation approved for this project before initial closing has occurred. Therefore, based on HUD's review of the Firm Commitment Application, the Sponsor/Owner will be liable for the cost of any front-end cash requirement should the cost to develop the project exceed the Fund Reservation amount. After initial closing, HUD ~ay consider an amendment to the Fund Reservation, if necessary, but only for increases resulting from approved change order items during construction subject to the availability of funds· (7) HUD will n6t consider any increases in the Project Rental Assistance Contract reservation approved herein until after one full year of project operation. (8) Special Conditions or Requirements. This Notification of Selection is issued subject to: a. Formation of a legally acceptable single purpose Owner corporation within 30 days from the date of this Notification. b. Capitalization of the Owner corporation in a sufficient amount to permit the Owner to meet its obligations in connection with the project. This includes the minimum capital investment, start-up costs, excess land costs, ineligible amenities, excessive construction costs and any other funds the Sponsor specifically commits to the project. c. Evidence that the site is under the Owner's control at the time the Application for Firm Commitment is submitted. d. Submission of Forms HUD-2530, Previous Participation Certificate, for all officers and directors of the boards of the Sponsor and Owner within 90 days and subsequent clearance thereof. e. Credit investigation clearance of Owner's officers of the board. f. Submission of an Application for Firm Commitment in full compliance with HUD's design and cost standards and programmatic requirements within 380 days from the date of this letter. The design and cost standards apply to all projects regardless of the proposed operating cost level. The design must not include any prohibited features and must be cost efficient. g. Submission of Conflict of Interest and Disclosure Certifications for each officer and director of both the Sponsor and Owner and Identity of Interest and Disclosure Certifications for all known developmen~ team members. NOTE: At any time the new development team member is identified or changed, an Identity of Interest and Disclosure Certification must be submitted. Likewise, at time the Sponsor or Owner any changes any officers or director, a Conflict of Interest and Disclosure Certification must be submitted for the new persons. h. Submission of the land appraisal within 30 days from the date of this Notification. For Section 811 projects approved for funding without site control, submission of the land appraisal within 30 days of HUD's notification of site approval. i. Site Requirements: SITE SUITABILITY - The following exhibits must be submitted to HUD prior to further project design for review by the Architectural & Engineering staff: Foundation Soils Report (x) Preliminary The soil report/geotechnical investigation must reflect a sufficient-number of test borings of the site to indicate existing subsurface and field conditions. At least two to three exploratory borings must be taken within the footprint of the proposed rectilinear structure; where the footprint of ! the proposed structure is non-rectilinear, additional borings are to be taken. When historical data indicates potential subsurface cesspools, septic tanks, sumps, buried structures, organic debris fill, or groundwater existed - additional borings must be taken to determine and evaluate the nature of the subsurface soil conditions with regard to their potential effect on the proposed construction. (x) Grading Plan (x) Drainage Plan STATE HISTORIC PRESERVATION - This site may be historic in nature or located in a historic area or may affect historic properties. Therefore, clearance must be obtained from the State Historic Preservation Office prior HUD will initiate and complete the process. to approval. ARCHEOLOGICAL CONSIDERATIONS - Our inspection of the proposed site revealed that it is a vacant lot or there are buildings to be demolished. In accordance with the instructions given, by.the State Historical Preservation Office pursuant to.the.-~Section 106 process mandating the preservation of historic or archeological properties affected by federal actions, an Archeological Report on the proposed site must be provided to us to complete the process. The report can be obtained by contacting: South Central Information Center Department of Anthropology, C.S.U. Bakersfield 9001 Stochdale Hwy. Bakersfield, CA 93311-1099 (805) 664-2289 or 3153 Telephone: NATURAL HAZARDS (EARTHQUAKE) - Thi~ area has earthquake potential. The following exhibit"must be submitted to HUD for review: (x) Evidence that the structures are designed in compliance with the present Uniform Building Code (UBC) . AIR QUALITY - Mitigation measures must be incorporated into the building design to reduce the indoor airborne particulate level of pollution. The Area Office Architectural & Engineering Section and the Environmental Clearance Office must be consulted in developing appropriate measures. COMPATIBILITY WITH SURROUNDING DEVELOPMENT - The project must be designed to comply Qith HUD M.P.S. and density requirements. HAZARDOUS MATERIALS - The'phase I has noted the following problems which require clean up using proper methods'for disposing of the problem, prior to issuance of a firm commitment. · There are 55 gallon drums that need to be removed. Prior to removal their contents need to be determined; and if of hazardous material, they require proof of proper disposal. There was previously noted an area of stained soil on. the southwestern parcel. In the update it was not found. An explanation of what the stain was and what happened'to the stained soil needs to be provided. If just covered over and a hazardous material, depth and area need to be determined and proper removal accomplished. ASBESTOS/LEAD BASE PAINT ABATEMENT - Asbestos and/or lead based paint may be present. An analysis is required to ascertain the presence of these materials. If either of the above items are present, abatement measures must be taken which comply with current regulations prior to any demolition. If the structure is to be refurbished and asbestos can be (non friable.condition) and is to be left in place, an ongoing maintenance needs to be program established. To provide you and your'architect wi~h assistance in the development of a project which meets HUD's cost and design standards, immediately contact Lester Fleming, Supervisory Project Manager, (Team Coordinator) at (213) 894-8000, extension 3802 to discuss the design of the project. 7 In addition, HUD has developed new procedures applicable to the submission, review and processing of Section 202 Applications for Firm Commitments through final closing. We have enclosed a copy of. Notice H 96-102 which outlines the Section 202 program changes. Please read the Notice very carefully because the revised procedures will affect not only your project fund reservation but also your responsibilities for project completion. If two copies of this Notification indicating acceptance are not returned within 14 days of your receipt of this letter, or if you accept and a single purpose Owner fails to submit an . Application for Firm Commitment within the specified period, .HUD may rescind this Notification and cancel the fund. reservation. If you have any questions regarding the requirements for submission of the Application for Firm Commitment and to .obtain information about your required attendance at the ..Office's - Project Planning Conference, please call Dana Hendr.ix, Senior ProjeCt Manager at (213) 894-8000, extension 3'863. ' We look forward to working with yod toward'.the successful completion of this project. ~ . .' . 'e i y yours, ~' Los Angeles Multifamily Hub Enclosures ' Not : ~' ~/ Accept (Signature of Authorized Officer) taverne R. Joseph ... Title: ,President & CEO Date: December 5, 2000 . . _-,.~ :: / DIS'rRIBIJIIOI~I: ~L.~,~ ~ '~, HOI~IORABLE I~L~YOR AND crl'Y COIJlqCIL ,-- · COMPLETE APPRAISAL SUMMARY REPORT ,. BAKERSFIELD HOMELESS CENTER 1600 E. Truxtun Avenue Bakersfield, CA 93305 Client City of Bakersfield Economic and Community Development 515 Truxtun Ave. Bakersfield, CA 93301 As of January 23, 2001 Prepared by Michael C. Burger, MAI Michael Burger & Associates · ' 3512-B Coffee Road ... Bakersfield, CA 93308 Michael Burger & Associates Real Estate Appraisal · Consultation January 25, 2001 City of Bakersfield Re: File//526-00: Appraisal: Economic and Community Development Bakersfield Homeless Center 515 Truxtun Avenue 1600 E. Truxtun Ave. Bakersfield, CA 93301 Bakersfield, CA 93305 Attention: Vince Zaragoza, Principal Planner Ladies and Gentlemen: Pursuant to.your request, I inspected the facility referred to above on January 23, 2001, in order to appraise "use value" as of this date. The purpose, intended use and scope of this appraisal, as well as property rights appraised are summarized on pages 11 - 13 of the enclosed report. Assumptions and Limiting Conditions are stated on pages 9 - 11. As a result of my investigation, it is my opinion "Use Value," as of January 23, 2001, is: $1,190,000 (ONE MILLION ONE HUNDRED NINETY THOUSAND DOLLARS) The building was constructed when asbestos may have been used as a material. For purposes of this appraisal, it is assumed no hazardous-toxic material contamination has occurred. Therefore, the cost of clean-up, encasement or removal and its effect on value, have not been considered. No adverse easements or encroachments were evident. Because no title policy was made available to the appraiser, he assumes no responsibility for such items of record not disclosed by his customary investigation. No consideration has been given in this appraisal as to the value of the property located on the premises considered by the appraiser to be personal property, nor has he given consideration to the cost of moving or relocating such personal property; only the real property has been considered. Specifically, all dental equipment in the dental office, beds, washers, dryers and movable equipment in the dormitories and the stove, hood-fan, and walk-in freezers and refrigerators in the kitchen are considered personal equipment and not included in this appraisal. 3512-B COFFEE ROAD, BAKERSFIELD, CALIFORNIA 93308 TEL 661.587.1010 FAX 661.834.0748 mburger@lightspeed.net City of Bakersfield Economic and Community Development -2- January 25, 2001 The facility is specifically designed as a homeless and social services center. As a specialty designed building utilized for a specific purpose, "in use" value has been determined. Further, as a publicly owned facility operated by Bethany Services, a non-profit agency, the property would not be placed on the open market. The client has requested this appraisal for gifting and tax purposes. Due to specialty features and related construction cost, value "in use" is higher than market value should the property be exposed to the open market. The client has requested that this appraisal consider the Cost Approach to value, only. The Income and Sales Comparison Approaches are not applicable in this appraisal, as public buildings are very seldom sold or rented. !' Food and/or shelter service agencies are only allowed with a conditional use permit. It is unknown whether one exists for the subject facility. However, the enclosed grant deed includes a "Covenant that Real ProPerty will be used Only as a Homeless Shelter." Further, as a' governmental entity, the City is exempt from taxes and zoning restrictions. Therefore, it is assumed existing use is legally nonconforming and will remain so after transfer, as long as this use is not discontinued for more than a year. This letter of transmittal must remain attached to the appraisal report, which contains 34 pages ', plus related exhibits, in order for the value opinion set forth to be considered valid. The value conclusion is the result of a complete appraisal' communicated as a summary report, to which your attention is directed. Sincerely, MCB:mt Encl. II TABLE OF CONTENTS PHOTOGRAPHS SUMMARY OF SALIENT FACTS AND CONCLUSIONS ..................... 8 ASSUMPTIONS AND LIMITING CONDITIONS ............................ 9 IDENTIFICATION OF SUBJECT PROPERTY ............................ 11 PURPOSE OF APPRAISAL AND DEFINITIONS .......................... 11 INTENDED USE & USERS OF APPRAISAL ......................... ;; .... 13 SCOPE OF APPRAISAL PROCESS ..................................... 13 REGIONAL ANALYSIS Environmental Location Economic Government Oil-Energy ........................................... 16 Industrial Retail Social Employment-Population Data ............................... 22 Conclusion-Trend NEIGHBORHOOD ANALYSIS Location Surrounding Use Trend .' .................................................. 26 ~ PROPERTY DATA ............................................... 26 ':; Legal Description .... - .................................. ~ .... 26 -.~ Owner of Record ................................... . ......... 26 · '~ Assessments and Taxes ........................................ 26 Utilities Street Improvements ........, .................................. 27 IMPROVEMENT DESCRIPTION ..................................... 28 HIGHEST AND BEST USE ......................................... 29 As Vacant ~ As Improved ............................................... 30 METHOD OF VALUATION ........................................ 30 COST APPROACH Site Value Replacement Cost of Improvements ............................. . . . 31 Accrued Depreciation ......................................... 33 Recapitulation of Cost Approach .................................. 33 CERTIFICATION ................................................ 34 ADDENDA Appraiser's Qualifications Grant Deed Building Area Calculations FILE #526-00 As of 1-23-00 Street scene looking east along Truxtun Ave. 3. Street scene looking west along Truxtun Ave. BAKERSFIELD IIOMELESS CENTER / 1600 E. TR UXTUN A I 'E. ] FILE//526-00 3. Front view of the Bakersfield Homeless Center. 4. Front view of the administration building. B.4KIJRSI-'II:'LD IIOMELESS CENTER / 1600 E. TRUXTI/N A V/:'. 2 FILE #526-00 5. Front view of social services/child care center. 6. Rear view of social services/child care center. B.4KERSFIELD IIOMELESS CENTER / 1600 E. TRtLYTUN A I/E. 3 FILE #526-00 7. Interior view of social services/child care center. 8. Front view of day care/cafeteria-kitchen. BAKERSI"IELD 11031ELESS CENTER / 1600 E. TRUXTI.'.',,' A VE. 4 FILE #526-00 9. Rear view of day care/cafeteria-kitchen. 10. Front view of dormitory building. B,4 A'ER3'I"I ELD IIOMELESS CE,¥TER / 1600 E. TR U.¥TUN ,4 I'E. 5 FILE #526-00 1 View of men's restroom and showers. 12. View of men's dorm. BAKERSFIELD IIOMELESS CENTER / 1600 E. TR~ 5\'TUNA I,'£. 6 FILE #526-00 13. View of women's dorm. B.,IKI:_RSFIELD IIO,'*IELESS CENTF. R / 1600 E. 7'R~Lk'TUN A I'£. 7 FILE #526-00 II SUMMARY OF SALIENT FACTS AND CONCLUSIONS CLIENT City of Bakersfield OWNER OF RECORD City of Bakersfield PROJECT Bakersfield Homeless Center PROJECT LOCATION 1600 E. Truxtun Ave., Bakersfield, CA 93305 ASSESSOR'S PARCEL NO. 017-072-14 MAP REFERENCE Thomas Guide, Central Valley: 227/D-3 CENSUS TRACT 12.00 TYPE OF APPRAISAL Complete appraisal, summary report DATE OF INSPECTION January 23, 2001 INTEREST APPRAISED Fee simple estate PURPOSE AND INTENDED USE "Use value" relative to tax and gifting purposes. LAND AREA 63,000:1: sq.ft. TOXIC WASTE INFORMATION An Environmental Site Assessment has not been furnished or reviewed. For purposes of this appraisal, it is assumed no toxic-hazardous material contamination exists. Therefore, the cost of clean-up and its effect on value have not been considered. FLOOD ZONE Zone "C," area of minimal flooding ZONING M-2: General Manufacturing BUILDING IMPROVEMENTS The facility includes four buildings and a detached boiler room constructed from the 1950's to 1992-93. Area components are summarized as follows: Building #1: Administration 612 sq.ft. Building #2: Social Services/Child Care Center 1,840 sq.ft. Building #3: Day Center/Cafeteria-Kitchen 4,483 sq. ft. Building #4: Family Shelter/Dormitory 10,798 sq.ft. Boiler Room 208 sq.ft. Total 17,941 sq.ft. BdKERSFIELD HOMELESS CENTER / 1600 E. TRIJXTUN AVF~ 8 FILE//526-00 SITE IMPROVEMENTS The-site includes 12,000 sq.ft, of asphalt paving, 12,000 sq.ft, of concrete flatwork, 21,500 sq.ft, of landscaping- sprinklers, and misc. improvements to include 6 pole lights, wrought iron fencing at the front of the site, with 2 access gates, and perimeter chainlink fencing. HIGHEST AND BEST USE Continued use as the Bakersfield Homeless Center VALUE CONCLUSION $1,190,000 ANTICIPATED EXPOSURE TIME 12 months EFFECTIVE DATE OF VALUE January 23, 2001 ASSUMPTIONS AND LIMITING CONDITIONS This appraisal, which is confined to setting forth analyses, opinions and conclusions of the property described herein, is subject to the following contingent and limiting conditions: 1. The date of value to which the conclusions and opinions expressed in this report apply, is set forth in the letter of transmittal. Further, the dollar amount of any value opinion rendered is based upon the purchasing power of the American dollar existing on that date. 2. The appraiser assumes no responsibility for economic or physical factors which may affect the opinions in this report which occur after the date of the letter transmitting this report. 3. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 4. The appraiser reserves the right to make such adjustments to the analyses, opinions and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available. 5. No opinion as to title is rendered. Data related to ownership and legal description was obtained from Kern County Assessor's Office 2000-01 tax roll records and is considered reliable. Title is assumed to be marketable and free and clear of all liens and encumbrances, easements and restrictions, except those specifically discussed in the report. The property is appraised assuming it to be under responsible ownership and competent management, and available for its highest and best use. 6. The appraiser assumes no responsibility for hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for arranging for engineering studies that may be required to discover them. 7. The property is appraised assuming it to be in full compliance with all applicable federal, state, and local regulations and laws, unless otherwise stated. 8. The property is appraised assuming that all applicable zoning and use regulations and restrictions have been complied with, unless otherwise stated. BAKERSFIELD HOMELESS CENTER / 1600 E. TRUXTUN A V~ 9 FILE #526-00 9. The p~operty is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based, unless otherwise stated. 10. No engineering survey has been made by the appraiser. Except as specifically stated, data relative to size and area was taken from sources considered reliable and no encroachment of real property improvements is considered to exist. 11. No opinion is expressed as to the value of subsurface oil, gas or mineral rights or whether the property is subject to surface entry for the exploration or removal of such materials, except as is expressly stated. 12. Maps, plats and exhibits included in this part are for illustration only, as an aid in visualizing matters discussed within the report. They should not be considered as surveys or relied upon for any other purpose, nor should they be removed from, reproduced, or used apart from this report. 13. No opinion is intended to be expressed for matters which require legal expertise or specialized investigation or knowledge beyond that custom~ily employed by real estate appraisers. 14. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 15. That possession of this report, or a copy of it, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event only with proper written qualification and only in its entirety. 16. Unless otherwise stated in this report, the existence of toxic or hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances, such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 17. Because no title policy was made available to the appraiser, he assumes no responsibility for such items of record not disclosed by his customary investigation. 18. Endangered species may be prevalent in undeveloped land in the area. Visual inspection denotes no presence of an endangered species of habitat. However, the appraiser is not an expert in the identification of endangered species or habitats, and this report should not be relied upon to determine whether sensitive ecological issues impact the property. This fact can only be determined by a biological survey of the property. Existence of such species or habitats on the property could affect potential uses and value. Further, it should be emphasized, this appraisal report was prepared for the sole use of the client and does not constitute an expert biological assessment of the subject property. 19. No detailed soil studies covering the subject property were available to the appraiser. Therefore, any premises as to soil qualities employed in this report are not conclusive but have been discussed with the client and considered consistent with information available to the appraiser. BAI~ERSFIELD HOMELESS CENTER/1600 E. TRUXTUN .4 lIE. 1 0 FILE/t526-00 20. Testii-nony or attendance in court or af any other hearing is not required by reason of rendering this appraisal, unless such arrangements are made a reasonable time in advance. It is assumed that there are no structural defects hidden by floor or wall coverings or any other hidden or unapparent conditions of the property; that all mechanical equipment and appliances are in good working condition; and that all electrical components and the roofing are in good condition. 21. The appraiser has personally inspected the subject property and finds no obvious evidence of structural deficiencies, except as stated in this report; however, no responsibility for hidden defects or conformity to specific governmental requirements, such as fire, building and safety, earthquake or occupancy codes can be assumed without provision of specific professional or governmental inspections. 22. No termite inspection report was available. It is assumed that there is no significant termite damage or infestation unless otherwise stated. 23. No consideration has been given in this appraisal as to the value of the property located on ~ premises considered by the appraiser to be personal property, nor has he given consideration to the cost of moving or relocating such personal property; only the real property has been considered. Specifically, all dental equipment in the dental office, beds, washers, dryers and movable equipment in the dormitories and the stove, hood-fan, and walk-in freezers and refrigerators in the kitchen are considered personal equipment attd not included in this appraisal. 24. The liability of Michael Burger & Associates, its employees and associates is limited to the client only and to the amount of the fee actually received. There is no accountability, obligation, or liability to any third party. If the appraisal report is disseminated to anyone other than the client, the client shall make such party or parties aware of all limiting conditions and assumptions affecting the appraisal assignment. Michael Burger & Associates is not responsible for any costs incurred to discover or correct any physical, financial, and/or legal deficiencies of any type present in the subject property. In the case of limited parmerships or syndication offerings or stock offerings in real estate, the client agrees that, in the event of a law suit brought by a lender, a partner or part owner in any form of ownership, a tenant or any other party, the client will hold Michael Burger & Associates completely harmless in such action with respect to any and all awards of settlement of any type in such law suit. The property being appraised is commonly known as the Bakersfield Homeless Center at 1600 E. Truxtun Ave., operated by Bethany Services. A full legal description is contained within a grant deed which is included with the Addenda of this appraisal. The site is further identified as APN 017-072-14. PURPOSE OF APPRAISAL AND DEFINITIONS The objective of this appraisal is to estimate "use value" of the fee simple estate in the surface rights of the property under analysis, as of January 23, 2001 Market Value: According to Federal Reserve System 12 CFR, Parts 208 and 225, (Regulation H, Regulation Y; Docket No. R-0685) Appraisal Standards for Federally Related Transactions, Section 225.62 Definitions, [fi, market value is defined as follows: "Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. BAKERSFIELD HOMELESS CENTER / 1600 E. TRUXTUN AVE. 11 FILE #526-00 Impficit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. both parties are well informed or well advised, and acting in what they consider their own best interests; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. the price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." "In Use" Value: The value a specific property has for a specific use. NOTE: In use value assessment is based on value of the property as it is currently used, not on its market value considering alternative uses. Fee Simple Estate: According to The Dictionary of Real Estate Appraisal, Third Edition, published by the Appraisal Institute: "The fee simple estate relates to all of the rights of absolute ownership, unencumbered by any other interest or estate, of real property subject to governmental control relative to zoning and other health-safety standards, as well as the power of condemnation, escheat and taxation, and in consideration of easements-surface restrictions relative to the right of use of others." Although Bethany Services leases the center, this lease is below market at $1.00/sq.ft. Therefore, only value of the fee simple estate is considered. Reasonable Exposure Time: According to Standards No. 6 (SMT-6), USPAP Standard Rules: "The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consununation of a sale at market value on the effective date of the appraisal; a retrospective opinion based upon an analysis of past events assuming a competitive and open market." The opinion of the time period for reasonable exposure is not intended to be a prediction of a date of sale or a one-line statement. Instead, it is an integral part of the analyses conducted during the appraisal assignment. The opinion may be expressed as a range and can be based on one or more of the following: · Statistical information about days on market; · information gathered through sales verification; and · interviews of market participants. Based on sales discussed within this appraisal, anticipated exposure time to achieve a sale on the property is 12 months. · "~ B,4KERSFIELD HOMELESS CENTER / 1600 E. TRUXTUN ,4 VE. 1 2 FILE #526-00 This appraisal report has been prepared for the exclusive benefit of the City of Bakersfield for tax and gifting purposes, as the City is deeding the property to Bethany Services, who operate the center. This appraisal report may not be used or relied upon by any other party. Any party who uses or relies upon any information in this report, without the preparer's written consent, does so at his own risk. This appraisal has been prepared and completed in conformance with Uniform Standards of Professional Appraisal Practice (USPAP), as developed by the Appraisal Standards Board of the Appraisal Foundation, minimum appraisal standards mandated by Title XI of the Federal Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA), and the Ethics and Standards of the Appraisal Institute. This appraisal is not based on a requested minimum, a specific valuation or the approval of a loan. Emphasis has been given to valuation on a cash or equivalent basis. SCOPE OF APPRAISAL PROCESS In acceptance of this assignment, I have determined that I have the necessary knowledge and experience to complete this appraisal, as I have appraised numerous special purpose properties throughout Bakersfield and Kern County and am familiar with the subject neighborhood. In April 2000, I appraised the Bakersfield Museum of Art at 1930 "R" St., for San Joaquin Bank. Within the area, I appraised Mercado Latino at 2105 Edison Hwy., for Wells Fargo Bank. My qualifications are attached. This appraisal was requested by Vince Zaragoza, Principal Planner, City of Bakersfield Economic and Community Development, on December 19, 2000. Mr. Zaragoza provided a locational map and deeds on the property. Louis Gil:l, Jr., Executive Director, provided access to the facility on January 23, 2001, which is the effective date of this appraisal. Subsequent to inspection, further specifics relative to the site were investigated, to include flood hazard classification, utility availability and zoning. Regional, area and neighborhood trends are developed to support projections. Pursuant to the client's instructions, only the Cost Approach is utilized. In application of the Cost Approach, sales of similar sites have been investigated. Marshall & Swift cost guides are utilized in determining replacement cost of improvements. BAKERSFIELD HOMELESS CENTER / 1600 F~ TR LrXTUN ,4 g'F~ 13 REGIONAL MAP ~ ,,~ ~2~' ~ ,~ ,."2'~: ~ ..... ~ ~ ~ ), ,~ ~ckso~ ~ ~ T.27S. ~ , ~ 2' ) ~o Knob Ilill , : ' IIIg' ' '~,LY..z:' Avenu~ : . NORTH KERN GOLF ~OURSE :, ~ Po~y .; ~ ~..1 5HL539 .... '~.~2 / :~:~ COUNTY' :~? " ~i~ ' ~:~ J 24 "~.T.29S ~.3~E. sds' Pamps BAKERSYlELD ~IRPARK' ~ I BAKERSFIELD · ' : ~ -$~[N OA~S ...... ~ ...) ~:~6~' ": ~.F~4 13 MUNICIPAL ~GU~E~LUB ~ ~S T.30S, R.30E ~~2 ~ensinger23 Rd~ T,30S, R,28Ex 2~ 2T ~ 2~ fid OLD Rd.! 3 ~ 2 HANCltO Et :. 2 I DiGiorgio '~ '-'~ ;ear Mountain Boulevlrd ~,' . ,. ~,~' 33 34 34 35 Kenm~r Ln. 9 ~ Io ~ ~ 12 Hecri~ : .... : ..... : i ~ ~ ,:: I ~5 ~ ~3 / ~.325. ~ F 32S R .... ~ , Comanche Point ~ I ~2~F ~.~ ;, ~ I -:' FILE//526-00 According to The Appraisal of Real Estate, 10th Edition, page 43: "The value of real property reflects and is influenced by the interaction of basic forces that motivate human activity. These forces are divided into four major categories: social trends, economic circumstances, governmental controls and regulations and environmental conditions." The interaction of these forces and their effects are analyzed to determine future trends for the subject region, as follows: .. ~. ENVIRONMENTAL Location: Kern County is the third largest county in California. Geographically, the county is approximately one-third desert, one-third mountainous and the remaining one-third, valley. It is strategically located approximately 110 miles north of Southern California and 280 miles south of San Francisco Bay area marketplaces, interconnected by Fwy. 99 and I-5. In addition, the county is served by 13 public, four private and two government airports, as well as Amtrak passenger rail service. As a result of its central location, freeway systems and proximity to major western cities, there are nearly 200 truck carrier operations in Kern County. Kern County is situated at the southern end of the San Joaquin Valley, with the Temblor Range on the west, Tehachapi Mountains on the south and the Sierra Nevada's on the east. Elevation levels range from 200-400 feet above sea level in the valley, to 3,000 feet in the desert and 9,000 feet in the mountains. Diverse geography creates large climatic variations, with annual temperature ranges from 20-115°. Average temperature is 65° Average annual rainfall in the valley is 5-6 inches and in the mountains, 10-40 inches. ECONOMIC Agriculture, government and oil Sectors continue to dominate Kern County economy, with finance, food processing and distribution industries also playing a prominent role. Agriculture: California produces about $26.8 billion worth of agricultural products, nearly double the next highest state, Texas, who produces about $i5.9 billion worth. California produces 55 % of the nation's fruits, nuts and vegetables while using only 3 % of the land. California and Kern County literally feed the world. The United States has the lowest per capita expenditures for food of any industrialized nation. Each farmer can produce enough food and fiber for 129 people, which includes 97 people in the U.S. and 32 people abroad. The Kern County agricultural industry relates to 915,000 acres of irrigated farmland, primarily on the valley floor surrounding Bakersfield. Kern County is ranked fourth in farm returns, both in the U.S. and in California, behind Fresno, Tulare and Monterey.Counties. It is one of the most diverse farming regions in the nation, producing over 250 different crops to include more than 30 BAKERSFIELD HOMELESS CENTER /1600 F~ TRUXTUN A VE. 14 FILE #526-00 types of fr~Jits and nuts, over 40 types of vegetables, and over 20 field crops, as well as lumber, nursery stock, livestock, poultry and dairy products. Kern County exports approximately $350 million worth of agricultural commodities. Leading export commodities include: almonds, apples, carrots, cotton, garlic, grapes, onions, oranges, pistachios, plums, and roses. These commodities are exported to over 85 foreign countries. The Asian rim receives the majority of the exported commodities. According to an article appearing in The Bakersfield Californian, May 16, 2000: "The value of Kern County's cotton crop strongly rebounded in 1999 from a poor growing season the year before, which was marked by a chilly, wet spring, agricultural officials said Monday. Total value of the county's farm production was $2.1 billion, up 2 percent from 1998 levels, according to a new summary .of farm receipts compiled by the state Department of Agriculture. The value of the cotton crop rose 55 percent from $150.8 million to $233.5 million. Citrus growers, who suffered a freeze in 1998, didn't fare nearly as well, reporting sales fell 42.5 percent from $301.8 million to $173.9 million. Last year, cotton growers were able to follow their usual planting pattern from mid-March to mid-April, said Mark Bagby, spokesman for Calcot Ltd., a Bakersfield-based cooperative. ... As usual, grapes were the biggest commodity grown, with $491.2 million in sales ... In a down year for citrus, grapes weren't the only fruit on the rise. The number of acres of cherry trees that bare fruit increased by a third in 1999, the report said." The "Kern County 1999 Crop Report" ranks the top 10 crops produced in the county, summarized as follows: 1999 TOP 10 CROPS IN KERN COUNTY Grapes $491.3 1 1 Cotton (including processed cottonseed) 233.5 2 4 Citrus (fresh & processed) 173.9 3 2 Milk (market and manufactured) 164.0 4 5 Almonds (including by-products) 143.3 5 3 Carrots (fresh and processed) 107.7 6 6 Nursery crops 99.1 7 8 Cattle & calves 85.2 8 9 Hay, alfalfa 82.4 9 10 Potatoes (fresh & processed) 76.3 10 11 .~n,,,~,.. SC... r' .... O~ Dep~¢iment of Agriculture The county leads the state in .production of almonds, pistachios, carrots, watermelons, sheep and wool. Approximately one out of every four jobs in the county is in agriculture and agricultural related occupations compared to one out of every ten state-wide. Related agricultural activities BAKERSFIELD HOMELESS CENTER / 1600 ~ TRUXTUN A v~. 15 FILE #526-00 range from "backward-linkages" industries, which provide farm infrastructure, services, and inputs, to "forward-linkages" industries, which facilitate processing, marketing, and distribution of outputs. However, farmers and agricultural advocates worry that a possible water shortage, combined with rising energy costs, may result in higher costs for farms in the next year. According to an article appearing in The Bakersfield Californian, dated January 8, 2001: ... To date, rainfall and snowfall have totaled barely 20 percent of normal rainfall. Less rainfall means that less water will be delivered through the California Aqueduct, which serves the west side of the valley, and the Friant-Kern Canal, which serves the east side. Because there is less surface water, farmers will have to pump more groundwater. ... To prepare for a dry period, several water districts have been saving water in the Kern Water Bank. So far, 1.2 million acre-feet have been stored in the 20,000-acre area, said Rick Iger, engineering and operations manager for the Kern County Water Agency. That is enough to supply the urban Bakersfield area and some outlying agricultural areas for about four years." Government: Governmental controls and regulations, to include services, zoning, building and health codes, fiscal policies and environmental protection have a grea.t impact on land use. The unincorporated area is governed by the county which is administered by a 5-member elected Board of Supervisors operating under a council-city manager form of government. County Planning and Public Works Departments oversee zoning and public improvements. Both the city and county planning departments developed a 2010 General Plan to recommend new, consistent development over the next 20 years. Kern County's populat'ion is projected to increase from 648,157 in 1998 to more than a million in 2020. This population increase will result in increased housing and retail developments. Of primary concern is the competition for land use between agriculture and encroaching urban development. Although urban sprawl makes housing more affordable, the relationship between housing affordability and sprawl is not a simple one, but a complex relationship that involves, among other things, government intervention at federal, state and local levels. Edwards Air Force Base and NaVal Air Warfare Center in the desert of eastern Kern County are the primary military employers. Edwards, near Mojave, is the primary landing site for the space shuttle. The Warfare Center is the U.S. Navy's premier weaponry research, development 'and test center. The long-term outlook for these divisions cannot be foreseen as efforts to reduce defense spending and close facilities nationWide continues. However, sizable land holdings, low cost of living and minimal encroachment into nearby cities should result in extended futures for Kern County military. .. Oil-Energy: The county has four of the top five largest oil fields in California with a combined cumulative production of nine billion barrels. Kern County has four of the nation's 10 largest oilfields and is the nation's number one oil producing county, providing 66% of California's oil production from more than 35,000 active wells. B/IKERSFIELD HOMELESS CENTER / 1600 E. TRUXTUN et VF. 16 FILE//526-00 The petroleum industry contributes significantly to the growth and vitality of. the region. Approximately 1/3 of Kern County's total property tax revenue, or approximately 150 million dollars annually, comes from the petroleum industry. Fifteen oil-related companies appear in the list of major employers with 100 or more employees. On a per capita basis, the average annual wages and salaries for the industry's labor force is $50,000 while the same figure for all others is at $30,000 annually. According to an article in the "Kern Economic Journal, Vol. 1, Issue 3, 1999 Third Quarter," natural resources in Kern County is 3.5 billion dollars, with 8 % of the total county payroll attributed to the petroleum industry. Over the last six years, oil prices and production have fluctuated sharply dependant on worldwide cost/demand established by OPEC, with prices ranging from $6.50 to $29/barrel. In 1997, the county's benchmark heavy, Kern River crude was worth an average of $15.02/barrel. 'In 1998, Kern River crude prices averaged $8.45/barrel, a 43% reduction. The price increased to $20.25/barrel in December 1999. Prices further increased to $29/barrel in September 2000. According to The Bakersfield Californian, in its article, "Volatility Stymies Rebound in Oil Patch," dated May 13, 1999: "Local crude oil prices have surged more than 60 percent since the first of the year, but don't expect oil companies to suddenly begin rehiring workers or go out and start drilling more new wells. Oil prices simply remain too volatile, and still too low, for a big rebound. Ample evidence of the instability of the oil market was there for all to see Wednesday, when crude prices on national markets fell for the third straight day. ... Acta, Texaco and Chevron underwent painful downsizings in the past year, as the companies' business plans were drastically modified to take into account rock-bottom crude oil prices ... The executives believe they sized their operations right, although they know there's no knowing where prices will go next. ... Companies that provide services for oil companies have suffered the most from low oil prices. Drilling companies don't see much relief in sight, nor do service companies who sell parts, provide technical expertise or do heavy maintenance on wells ... But the rebound in crude prices has begun to be felt at some local businesses." An upturn in crude oil prices is anticipated to continue through the year 2000. According to The Bakersfield California, in its article "Prices Up, Work Plentiful and Local Oil "As Good 'as it Gets," dated September 7, 2000: "... The price of crude oil in the southern end of the San Joaquin Valley basin broke 10-year- old records this week, rising higher than they were since the Gulf War... Prices for Kern River crude pushed to $29 a barrel on Wednesday, paralleling a global rise of petroleum prices... Some companies in Kern, California's biggest oil-producing county, have doubled their drilling from last year, and many companies have been reporting worker shortages, especially for drilling and oil service workers. Aera Energy, the state's biggest oil producer, believes the strong crude oil prices will last at least six months, said Gene Voiland, the company's president and chief executive, in a recent interview." Overall production over the past 14 years are summarized in the following table: BAKERSFIELD HOMELF_,,~ CENTER / ! 600 E. TR UXTUN ,4 gE. 17 FILE #526-00 14-YEAR OIL AND GAS PRODUCTION 1984 241.3 160.1 .... 1985 255.8 165.1 3,335 1986 255.0 161.5 3,184 1987 255.6 1~.8 1,843 I988 252.0 153.5 2,146 1989 235.9 145.1 1,811 1990 229.7 132.6 1,743 1991 231.4 128.2 2,023 .. 1992 222.7 111.6 1,842 1993 214.8 1~.9 1,002 1994 211.1 1~.3 1,116 1995 207.7 101.1 1,164 1996 212.0 109.7 1,470 1997 213.0 125.2 1,500 1998 (est.) 215.0 ...... Source: Annum Repo~ of the StYe Og and Gas Supe~isor, CMifo~ia Dep~lent of Conse~on The county also accounts for one-third of the state's ~on-oil mining production such as gold, borax, rhinestone, gypsum and pumicite. A l~ge percentage of the electricity used in the state is made from natural gas, with a depleting supply due a former decline in production. As wi~ oil, natural gas depletion has resulted in higher prices. According to an article entitled "Sun Shining on Producers of Natural Gas," as published May 14, 2000, in The Bakersfield Californian:" "El sol ~ shag on the natural gas b~ess now, ~th rising pric~ stronger than predictions from the California Energy Co~ssion had forec~t. ~ Kern County, that has meant that some producers have redoubled their efforts to sell more gas ... ~is is spurr~g new ~ter~t from energy compani~ to improve gas lines ... ~e Kern ~ver ~peline recently announced plans to enhance and exten~ its g~ conduit ... El P~o Ener~ Co. recently closed a $129 ~llion purch~e of the former Plai~ All American ~peline ... ~th pla~ to convert it from an oil carrier to natural gas." Industrial: As in ~e previous two years, California has once again outpaced ~e nation in employment grow~. California's economic expansion has been sustained primarily by its industries led prominently by construction and business services. In Kern Count, ~ere has been ~ aggressive effort to diversi~ ~e local economy from oil, agriculture and military to compatibl6 industrial grow~. Primary emphasis has been directed to the county's location in consideration of plenti~l l~d and affordable housing, abundant and affordable office ~d industrial space, large labor force with a strong work ethic and wages lower. than the national average. B~KE~FIELD HOME~ CENTER / 16o0 ~ TR~TUN ~F~ 18 FILE//526-00 According to a 1998 Kern County & Metro Bakersfield Market Overview, "Discover Kern County, California": "Kern County represents the best of what California has to offer: affordable land, an abundant and qualified workforce and excellent dist~,ibution pattern. These pro-business qualities combined with California's recent efforts to become more competitive, make Kern County a smart choice for business. Wayne Kress, CB Richard Ellis, states that overall vacancy for industrial space has declined since last year. Vacancy was 4% last year and is now 3.455 or 1.955 if properties in escrow are factored in. With fewer buildings available for lease, the absorption rate is beginning to slow down. Building absorption was 67,481 sq.ft, during the first six months of this year, compared with 520,464 sq.ft, for the same period last year. In 1999, total absorption was 741,450 sq.ft., down from nearly 1.6 million sq.ft, in 1998. In addition, during the first six months of the year, CB Richard Ellis tracked 31.71 acres of finished land sales, more than a 50% decline from 66.8 acres last year. As a result of declining availability of both building and land area, inVestors will be searching for raw land that can be developed into finished lots. Companies are looking toward Kern County as an alternative to prior locations that may have become too expensive or have been developed to maximum levels. With transportation and freeway access, the county can offer same-day delivery to about 35 million people and is becoming a higher profile location in terms of manufacturing and distribution. The International Trade and Transportation Center (ITTC) is situated on a 702-acre parcel at 7th Standard Road and Hwy. 43, within the city limits of Shafter, approximately 10 miles north of Bakersfield. The Allen Group of Visalia is the developer and has committed a substantial amount of money in developing the project which is predicted to house manufacturers and distributors that will employ more than 3,000 people. The ITTC is part of the Port of Los Angeles Foreign Trade Zone which offers companies freedom from having to pay import taxes and duties as long as goods are in the zone. The property adjoins the Northern-Santa Fe Rail lines who is negotiating an intermodal rail hub. The ITTC is attracting interest due to its willingness to build speculative space. In addition, the Tejon Industrial Complex at I-5 and Laval Road is starting to attract larger users. IKEA plans on developing a diStribution warehouse on 80 acres in the complex. In addition, several companies have been relocating to larger facilities as they expand or need newer technology. Ground has broken on an 88-acre Car Quest development near 7th Standard Road, between Quinn Road and Porterville Hwy. Colombo Construction stated the 140,000 sq.ft, distribution center will be a consolidation of some of its warehouses. Retail: Retail sales for the county are shown in the following chart: BAKERSFIELD HOMELESS CENTER / 1600 E. TR UXTUN ,4 gE. 19 FILE #526-00 KERN COUNTY RETAIL SALES 1987 $3,792,894,000 -- 1988 $4,178,763,000 10.2 % 1989 $4,319,024,000 3.4 % 1990 $4,850,289,000 12.3 % 1991 $4,957,291,000 2.2% 1992 $4,650,635,000 -6.2 % 1993 $4,705,543,000 1.2 % 1994 $4,878,005,000 3.7 % 1995 $5,073,477,000 4.0% 1996 $5,291,665,000 4.3 % 1997 $5,630,747,000 6.4% Source: Taxable Sales in Callfdrnla (Sales and Use Tax), California State Board oflEquali~ation In 1997, Kern County retail sales totaled $5,630,747,000, up slightly from the 1996 figure of $5,291,665,000. The local effects of the economic recovery in California can be seen in sales increases from 1993 to 1997. However, the influx of major retailers has weakened the market for smaller tenants, as denoted by vacancy in small strip and neighborhood centers. Valley Plaza, formerly the only regional center serving the county, has doubled its size since it was constructed, 23 years ago, to spread over 1.1 million square feet. The renovated plaza has 35 small retail shops and 5 major department stores, to include Macy's, J. C. Penneys, Gottschal~ks, Sears and, most recently, Robinsons May Company. The plaza is now one of the largest single-level enclosed complexes in the country. According to a survey completed by ASU Associates, commercial leasing agents, retail store space serving the entire community totals approximately 5.4 million square feet. East Hills shopping area, initiated in the fall 1989, presently contains 764,000 square feet, with ultimate capacity at 1.15 to 1.2 million square feet. The mall includes 80 shops, a 7-screen United Artists cinema, Food Pavilion and Harris-Gottschalks and Mervyns Department Stores, containing 420,000 square feet. Additional parcels have been developed to a 135,000-square-foot Wal-Mart, 57,213-square-foot Pavilion ShoPping Center, 10,000-square-foot Pier 1 Imports, 103,000-square- foot Target store, and 40,000-square-foot Kaiser Permanente clinic. The Promenade, a 22,659- square-foot strip center, adjoins East Hills Pavilion, with approximately 80,000 square feet of additional in-line retail space, to include a Vons supermarket, Target & Blockbuster Video. Another shopping center is planned on Rosedale Hwy. within proximity of Fwy. 99 that will include an Edwards Theater. Bakers field's retail real estate market, more resistant to interest rate hikes than residential, is still strong. According to CB Richard Ellis, projects in the southwest, northeast and southeast have filled up or are poised to fill up nearly 300,000 sq.ft, of retail space. A project is in the works for a 105,000 sq.ft, building on Ming Ave. that was the former Builders Square. Other large projects include a planned move of Urner's Appliance Center to the southwest, two grocery store B4 KERSFIELD HOMELESS CENTER / 1600 E. TR UXTUN /I ~'F~ 20 FILE #526-00 openings in the northeast and one in the ~;outhwest. Vacancy rates are declining, which could result in increased rental rates. Office: According CB Richard Ellis, overall vacancy rate for office space in Bakersfield increased about 2% from March 1999 to April 2000. Vacancy in Class "A", prime corporate office space in the southwest is at a level of 29.9 %, up slightly from 29 % for the first quarter this year. Increases are largely the result of Occidental petroleum leaving Bakersfield, and Aera Energy vacating its 150,000 sq.ft., 12-story tower at 5060 California Ave. and relocating to a smaller building on Ming Ave. Rental rates are static, typically ranging from $1.45 to $1.65/sq. ft., excluding janitorial and utilities. However, the market for smaller office space is tightening. Typically, newly constructed small businesses make up Class "B" office space, while older, smaller offices comprise Class "C" space. Class "B" vacancies in southwest Bakersfield declined from 7.8% to 6.25% during the first quarter of 2000. Vacancy rate in central Bakersfield is under 8 %. Rents for Class B" space have increased 5-7%, ranging from $1.05 to $1.35/sq.ft. compared to $1.00 to $1.25/sq.ft. for the first quarter 2000. Mid-year Class "C" vacancies dropped to 8.86% from 13 % for the fu'st quarter of 2000. Housing: California's housing market continues to outpace the nation. According to a real estate association survey released by the California Association of Realtors, homes in the Central Valley, Sacramento and high desert regions northeast of Los Angles were listed among the most affordable on the list. According .to an article appearing in The Bakersfield Californian, dated October 22, 2000, entitled "Home Sales Hold Steady," home builders and real estate agents indicate that, contrary to the expected seasonal slow-down, sales of new homes and home resales continue strong. This is a direct result of favorable interest rates. Mortgage rates, which peaked at 8.64 % in May, continue to decline. The average rate on the 30-year mortgage has remained below 8 %, according to Freddie Mac. The average interest rate on 30-year fixed-rate mortgages was 7.73 % in the last week of September 2000. The average number of days on the market was 73 days in March, 64 in June and 58 in September. Homes in Bakersfield sold about 40 percent faster in September than they did in September four years ago, when the average selling time was 82 days. Bakersfield, which is part of the Central Valley region, ranked second in affordable homes among 47 cities in the western region in the fourth quarter of 1999. It had an affordability index of 71.6% during the first quarter of this year, the most recent local numbers available. The city's median family income was $38,700 and the median home sales price was $92,000 in Bakersfield. Closed sales for the year through September was 432, down 9% for the same period 1999. However, pending sales are up by almoSt 5 %. Year-to-date pending sales through September totaled 4,236 compared with 4,046 during the same period last year. Sales of new single-family homes remain on course for the second-best year on record and are likely to finish the year close to the record units sold in 1999. BAKERSFIELD HOMELESS CENTER / 1600 E. TR VXrUN A V~. 21 FILE #526-00 SOCIAL Employment-Population Data - Kern County continues to be the most affordable area for home buyers in California. According to the American Chamber of Commerce Research Association (ACCRA) overall, Bakersfield enjoys the lowest cost of living among ten cities in California, on the basis of six price indices, summarized as follows: COST OF LIVING COMPOSITE : :i:~'~iii:Cl~!~i ~;~: ~iHOUSYiNGi i ~iG'ROigER~ :UTIEDES!:, ~:~RANS~ORTATIONi~ ~.~E,~ ~i'~'~,~SERVICESi~%i ~;~INDEX?~-~~:~"~ ........ ~?; Bakersfield 93.5 114.5 121.1 109.1 122.9 102.1 104.9 Fresno 95.9 113.3 133.9 116.5 110.1 104.2 107.2 .., LA-Long Beach 115.5 110.0 119.8 113.5 114.3 107.0 123.1 i Palm Springs 108.3 121.6 J.48.3 115.9 140.0 111.0 116.9 Riverside 117.6 107.2 121.6 111.7 123.4 106.8 112.4 Sacramento 96.1 114.1 115.1 125.8 133.5 100.0 106.6 San Diego 158.7 122.5 104.0 121.1 122.4 108.4 126.4 Lompoc 158.1 113.3 113.4 120.4 119.6 95.4 121.0 Visalia 91.6 109.4 117.3 115.3 114.0 109.9 106.0 Pleasanton 249.9 121.6 107.3 134.0 146.8 174.7 156.6 e ..... e: ~,,,,t, ·, 3rdquarter 1999 , The most attractive features of living in Bakersfield is affordable housing, low-cost transportation, and a wide range of household consumer goods and services. Population trends for the incorporated communities of Kern County are summarized as follows: POPULATION STATISTICS ARVIN 9,612 1 l, 660 21.31% BAKERSFIELD 185,405 222,352 19.93 % CALIFORNIA CITY 6,077 9,553 57.20% DELANO 23,275 35,085 50.74% MC FARLAND 7,163 8,081 12.82% MARICOPA 1,390 1,378 -0.87 % RIDGECREST 28,562 30,307 6.11% SHAFTER 9,616 11,509 19.69% TAFT 6,213 9,103 46.52% TEHACHAPI 11,842 12,237 3.34 % WASCO 12,675 20~478 61.56% Source: Population Estimates Program, U.S. Census Bureau BAKERSFIELD HOMELESS CENTER/1600 E. TRU'XTUN A lIE. 22 FILE #526°00 According ~o an article appearing in The Bakersfield Californian, October 21, 2000: ".. Kern County grew by 17 percent, bringing the population to 642, 495... Kern County's unemployment rate came in at 9.0 percent in September, according to preliminary numbers from the state Employment Development Department. That number is expected to return to 10 percent and higher through the winter months... From April 1990 to Jan. 1, 2000, the rise in Kern County housing slightly exceeded the county's percentage increase in number of residents. At the start of 2000, Kern County contained 234,487 housing units, which includes everything from apartments to mobile homes, according to state Department of Finance numbers ... That's an increase of 18 percent from what the county contained nearly 10 years before. ... Throughout Kern County, there were 2,469 building permits pulled for single-family houses, according to city and county numbers ... School construction also kept a steady pace in the '90s. From 1990 to 1998, there were 41 schools built throughout the county, according to Steve Talbot, public information specialist for Kern County Superintendent of Schools. ~Since then, the county has added an average of three schools yearly, he said. Wasco saw the most growth of any city in Kern County with 61.6 percent more residents in 1999 than 10 years earlier. Most of that can be attributed to the construction in 1991 of Wasco State Prison with a current inmate population of 5,900, all of Whom are counted as residents in the city." According to the State of California Employment Development Department, Labor Market " Information Division, in its monthly release January 10, 2001, preliminary employment distribution for the county through December 2000 is summarized as follows: DECEMBER 2000 PRELIMINARY KERN COUNTY EMPLOYMENT DISTRIBUTION* ALL INDUSTRIES TOTAL [ 237~000 I 100.0% Agricultural 42,200 17.8 % Non-Agricultural 194~800 82.2% Mining 8,400 4.3 % Construction 10,200 5.2% Manufacturing 10,100 5.2% Transportation/Public Utilities 11,500 5.9% Wholesale Trade 8,800 4.6 % Retail Trade 36,700 18.8 % Finance, Insurance and Real Estate 7,200 3.7% Services 48,400 24.8 % Government 53,500 27.5 % *Source: Employment Development Department State of California According to the January release: "The unemployment rate in the Bakersfield MSA was an estimated 11.3% during December 2000. Total wage and salary employment increased to 237,000, up 1,600 jobs between November and December 2000. Gains were noted in nonfarm employment (up 300 jobs) as BAKERSFIELD HOMELESS CENTER / 1600 E. TR UXTUN A gE. 23 FILE 11526-00 well-as farm payrolls (up 1,300 jobs). Trade posted the largest gain of 200 jobs, all in the retail trade segment because of the holiday season. Job gains of 100 jobs each occurred in construction, transportation and public utilities, and government. Manufacturing and services each posted job losses of 100, while mining and transportation and public utilities remained unchanged. Over the year (December 1999 to December 2000), total wage and salary employment in the Bakersfield MSA increased by 900 jobs. Gains in nonfarm employment (up 1,900 jobs) were offset by losses in farm payrolls (down 1,000 jobs). The largest gain occurred in government (up 1,800 jobs due mostly to hiring in the local education). Also posting gains were construction, manufacturing, and transportation and public utilities (each up 200 jobs), and mining (up 100 jobs). Losses occurred in trade (down 400) and services (down 200). The finance, insurance, and real estate industry remained unchanged. Current crop activities include vineyard pruning and the harvest of navel oranges." Major employers in the governmental and private sectors are summarized as follows: MAJOR EMPLOYERS OF KERN COUNTY Employer I No. Employer I No. Edwards Air Force Base 16,510 Giumarra Farms 4,200 Kern County Public Schools 16,400 Catholic Healthcare West 3,200 County of Kern 7,700 Grimmway Enterprises 2,500 China Lake Naval Air Weapons 6,500 Wm. Bolthouse Farms, Inc. 2,000 State of California (excluding prisons) 5,700 State Farm Insurance Co. 1,1251 U.S. Government 3,100 Texaco Exploration 1,100 Dryden Flight Research Center 2,000 San Joaquin Hospital 1,091 Kern Community College District 2,154 Sun World 1,025 North Kern State Prison 1,200 WB Picar Farm ! ~hor Constructor. 1,000 City of Bakersfield 1,727 Wasco State Prison 1,150 Cai State University Bakersfield 600 c^""ce: ~'- ~A~-omic Development CONCLUSION-TREND The trend is for gradual transition from agriculture, petroleum and military industries to manufacturing, service and retail. This transformation has evolved over the last decade, primarily as a result of higher costs within Los Angeles and San Francisco. Rainfall has been normal since 1996, with no curtailment of deliveries from the California Aqueduct. This has resulted in increased planted acreage, but cotton prices have been less than favorable from the 1995 crop, and a number of growers have shifted operations to other crops. Almond production and price in 1996 at $1.95/lb. was very favorable and this has resulted in an increase in planted acreage, which should result in substantial production increases within the year 2000 and a decline in prices, estimated by many growers, to approximately $1125/lb. B,4KERSFIELD HOMELESS CENTER ) 1600 E. TRUXTUN AVE. 24 AREA MAP FILE #526-00 Significant declines in oil prices in 1998, to as low as $6.50/barrel in December, resulted in many companies cutting back on expansion programs. Break-even price to produce a barrel of oil is $7- 7.50. However, prices have significantly increased to a current level of $21.50/barrel and production is again very strong. The oil market is anticipated to remain volatile and prices erratic during the foreseeable future. Industrial development for owner occupancy continues and national manufacturers have moved to Bakersfield. New retail development has been significant during the last year. Many real estate investment trusts have acquired Class "A" offices and shopping centers in Bakersfield. The National Association of Home Builders ranked Bakersfield the most affordable city in California for housing. The resale market is competing With significant new construction. However, recent figures indicate both the resale and new home market enjoyed record sales in 1998, which carried over into 1999 and 2000. Overall, the trend in Kern County is upward. NEIGHBORHOOD ANALYSIS LOCATION The homeless center is on the north side of E. Truxtun Ave., adjacent to the south of the railroad tracks, within an incorporated area of east Bakersfield. The city/county line is across the railroad tracks, to the east. Central downtown Bakersfield is two miles to the west. Mt. Vernon Ave. is the major north-south arterial through the area, 1/2 mile to the east. 1999 average daily traffic counts in the area are summarized as follows: ~. Edison Hwy. W. of Ogden 8,000 vehicles Kern Co. Dept. of Transportation California Ave. W. of Mt. Vernon Ave. 11,900 vehicles Kern Co. Dept. of Transportation i.J California Ave. between Beale Ave. & Williams 15,600 vehicles Bakersfield Public Works Dept. i! Sumner St. between Baker St. & Truxtun Ave. 4,325 vehicles Bakersfield Public Works Dept. ~.',~ i Truxtun Ave. between Beale & Haley 9,100 vehicles Bakersfield Public Works Dept. Mt. Vernon Ave. N. of California Ave. 25,900 vehicles Kern Co. Dept. of Transportation SURROUNDING USE The adjoining holding to the east was purchased in 1999 by Bethany Services for future expansion of the homeless center. This transaction is further shown as Sale 2 within this appraisal. The adjacent property to the west is Pacific Tire, with Greater Lighthouse Community Outreach to its west. Mercado Latino, agrocery store/warehousecomplex, encompasses the majority oftheblock east of the railroad tracks, fronting the south side of Edison Hwy. and bordered by Washington Ave. on the west, Ogden St. on the east and California Ave. on the south. An older, used car lot B~IKERSFIELD HOMELESS CENTER/1600 E. TRUXTUN AVF~ 25 ASSESSOR'S MAP FILE//526-00 is across the street, with service industrial~uses along E. Truxtun Ave. E. California Ave. is developed to secondary commercial industrial businesses. Older, single family residences, developed prior to 1960, in the 600-1,200 sq. ft. range, are to the southwest. Owens Intermediate School is ½ mile to the southwest. Owens Primary School is on the south side of E. California Ave., with Union Cemetery to its south. Mt. Vernon School is ~ mile to the southeast, with Bethel Christian School 1/2 mile to the southeast. Williams School is two blocks north of the subject, across the railroad tracks, on Kentucky St. East Bakersfield High School is one mile to the northeast, east of Mt. Vernon Ave. East Hills Mall is 1 I/2 miles to the northeast, at the southeast quadrant of Mt. Vernon Ave. and Hwy. 178. Other neighborhood and strip retail centers are within a two-mile radius. TREND Overall trend in the neighborhood is classed as static, with very limited new development. PROPERTY DATA LEGAL DESCRIPTION A full legal description is contained within a grant deed included in the Addenda of this appraisal. OWNER OF RECORD City of Bakersfield PROPERTY HISTORY The property has been under the same ownership since 1988. It was formerly developed to an older, service industrial building It was converted to the Bakersfield Homeless Center around 1992-93, with the addition of three new buildings. It now includes a family shelter (dormitory), a day center (cafeteria-kitchen), a social services/child care center and administrative building, with a capacity to sleep 170 people. It is currently operated by Bethany Services, who leases the buildings at the rate of $1.00/sq. ft. The City intends to transfer the property to the lessee and requires this appraisal to determine fair market value for tax and gifting purposes. ASSESSMENTS AND TAXES As the property is owned by a governmental entity, it is exempt from property taxes. After transfer to Bethany Services, a non-profit organization, it will also be exempt. BAKERSFIELD HOMELESS CENTER/1600 E. TR UXTUN AVE. 26 . ZONING MAP CITY OF OAKERSFIELO ZONING MAP 103-28 SEC. 28 T. 295 R. 28E LEGEND ........ Z(~q( DISTI~iCT B~d, fry CN C.ulCN FILE #526-00 SITE DATA Dimensions/Sizo Irregular in shape, the site contains 63?000± sq.ft. Topography Generally level at grade. Rear 10-!5' slope upward to railroad tracks. UTILITIES STREET IMPROVEMENTS Water Public Curb Concrete Sewer Public Gutter Concrete Gas PG&E Sidewalk Concrete Electricity PG&E Paving Asphalt ACCESS The parcel fronts the north side of E. Truxtun Ave. Southern Pacific Railroad tracks are to the rear of the site. Truxtun Ave. is a 4-lane arterial with no center turn-lane. EARTHQUAKE The property is not located in an Alquist-Priolo Special Studies Zone. The community has adopted a seismic element to the general plan and requires all construction to meet Zone 4 of the Uniform Building Code, which is in consideration of earthquake hazards associated with California. RESTRICTIONS A preliminary title report was not available. No adverse easements or encroachments are evident. Confirmation by a current title report is recommended. ENVIRONMENTAL Neither an Environmental Site Assessment nor Environmental Risk Disclosure Questionnaire has been furnished the appraiser. Visual inspection of the property denotes no apparent toxic or hazardous conditions. Further, it should be emphasized that the appraiser is not qualified to detect hazardous waste or toxic materials. Any comments by the appraiser that might suggest the possibility of presence of such substances should not be taken as confirmation of presence of hazardous waste or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraiser's descriptions and resulting comments are the result of the routine observations made during the appraisal process. FLOOD HAZARD According to Federal Emergency Management Agency's "FIRM" Community Panel No. 060075/1010B, effective 9-29-86, the property is located in a Zone "C,' areas of minimal flooding. SOILS No soils report was furnished the appraiser. However, soils appear stable, with no significant settlement or displacement evident in buildings. ZONING- M-2: Medium Industrial. The purpose of this district is to designate areas for general PRESENT USE manufacturing, processing, and assembly activities. Uses may not produce fumes, odor, dust, smoke, gas, or vibrations extending beyond zoning district boundaries. B`4KERSFIELD HOMELESS CENTER/1600 E. TRUXTUN ,4 FF.. 27 SKETCH ADDENDUM ~ No. Bon'ower Property Add~ess - - - City County State Zip Code Lender/Client Address BUILDING 3 DAY CENTER / CAFETERIA-KITCHEN 67' ....... · ..... ' Pantry 22' Kitchen ~ ~ R/R Offic 16' 81' .............. Cafeteria 59' Office Offic Storage Lobby , Covered i 7.5' 19' BUILDING 2 SOCIAL SERVICES / CHILD CARE CENTER 40~ Covered 5.5 ' BUILDING 1 Stg. Lounge Men' s ADMINISTRATION R/R R/R Dental Medical Recep. Office 46' 36' Conferenc, Office Room Recep. 17 ' Social Children' Services Waiting Officeffic Office Room ', Covered Covered ' 5 ' WInSketch by Jammin Softwmre } FILE #526-00 This zone classification allows any use permitted in a C-O, C-1 and C-2 zone; provided however, that no buildin~ shall be used as a dwellin~ except accessory buildings incidental to the permitted use. Food and/or shelter service agencies are only allowed with a conditional use permit. It is unknown whether one exists for the subject facility. However, the enclosed grant deed includes a "Covenant that Real Property will be used Only as a Homeless Shelter." Further, as a governmental entity, the City is exempt from taXes and zoning restrictions. Therefore, it is assumed existing use is legally nonconforming and will remain so after transfer, as long as this use is not discontinued for more than a year. The property has been developed to four buildings, identified below under Building Description. Building gl includes 3 offices, a reception and work area, with a 1/2 bath. Building//2 is divided into a lounge, reception, waiting room, medical office, dental office, conference room, social services office, children's room and a men's and women's restroom. Building//3 includes a kitchen, cafeteria, 2 offices, storage, lobby and 2, 1/2 baths. Building//4 includes men's and women's dorms, restrooms-showers, laundry room, clothing room, staff room, 1/2 bath, office, storage and electrical room. It includes a 744 sq.ft, attic with 4-6' wall height and wood subfloor. Buildings are further described as follows: BUILDING DESCRIPTION Building # 1: Administration Building #2: Social Services/Child Care Center Building #3: Day Center/Cafeteria-Kitchen Building #4: Family Shelter/Dormitory Year Built 1950's tO 1992-93 % Finished 100% Effective Age 8 years overall Land.Bldg. Ratio 3.51:1 Typical Life 40 years Quality Average Remaining Life 32 years Condition Average CONSTRUCTION Building #1 Building//2 Building #3 Building #4 Building Class Class "D" Class "D" Class "S" Class "S" Foundation Concrete Concrete Concrete Concrete (ptn. 4' dock height) Framing Wood Wood Preman.steel trusses Preman.steel trusses Roof - Composition Composition Metal Metal Exterior Walls Wood Wood Metal Metal --~ BJKERSFIELD HOMELESS CENTER / 1600 t: TRIfXTUN /ll/E. 28 SKETCH ADDENDUM File No. _526-00 Borrower City County State Zip Code Lender/Client Address BUILDING 4 FAMILY SHELTER - DORM E 51.5' 16' 38' 39' ' ' I ShedI 30' Men's Dorm Laundry Room Women's Men's Clothing Room R/R R/R Men' s Dorm & & 51' Staf~ Single Women Showers Showers Room Hall Elec. 61' : Women with Storage Lobby Office 11.5' , Coy. :7.5' 51.5' R/R i .......... Children ; 12.5' Covered [7.5' 18.5' 30' 30' [ Storage 40' 2nd Story-Loft/Storage FILE #526-00 INTERIOR Building gl Building//2 Building #3 Building #4 Walls Drywall, wood panel Drywall Drywall. Marlite in Drywall. Marlite & kitchen drywall in restroom Floor covering Carpet, vinyl tile Carpet, vinyl tile, Tile, vinyl tile. Tile, vinyl tile sheet vinyl Concrete in storage Ceiling Drywall Drywall Drywall, 2x4 T-bar. Drywall. Vinyl insul. Vinyl insul. 8-10' wall height. Equipment None (Dental&me&equip. (Walk-in refrig. & Capacity for 170 classed as personal freezers classed as people. (Beds-bedding property) personal property.) personal property) Plumbing I/2 bath w/toilet & sink Sinks in lounge, Sink in kitchen. I/2 3 sinks, 4 toilets, 5 medical & dental bath w/toilet & sink showers in wgmen's. offices. 2 toilets & 2 7 toilets, 7 sinks & sinks in women's shower in men's. '/2 restroom bath w/toilet & sink HVAC FA/AC FA/AC Evap./susp. heat Evap./susp. heat Fire Sprinklers Access Doors Standard Standard Standard Standard COMMENTS In addition to the four buildings described, the facility includes a detached, 208 sq.ft, boiler room. This is a steel framed structure with metal wall and roof cover, on a concrete slab. It houses the boiler for the dormitory building. . AREA Building #1: 612 sq.ft. Building #2: 1,840 sq.ft. Building #3: 4,483 sq.ft. Building #4: 10,798 sq.ft. Boiler Room: 208 sq.ft. Total: 17,941 sq.ft. SITE IMPROVEMENTS Asphalt Paving 12,000 sq.ft. Concrete Flatwork 12,000 sq.ft. Landscaping-Sprinklers 21,500 sq.ft. Miscellaneous 6 pole lights, wrought iron fencing at front, chainlink perimeter fencing II HIGHEST AND BEST USE Highest and best use as taken from the American Institute of Real Estate Appraiser's publication. "Appraisal Terminology and Handbook" 2nd Edition, is "the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value." The four criteria the highest and bestuse must meet are: 1. Legally permissible 2. Physically.possible 3. Financially feasible 4. Maximally profitable sAr, v.~rm~.o uoM~t.v, ss c~sr~.R , ,~oo ~. rRvxrwv ~,~. 29 · '~, FILE #526-00 As Vacant Zoning permits general manufacturing, as well as any use allowed in a C-O, C-1 or C-2 zone. Full utilities are available. The site is of sufficient size to accommodate a variety of commercial or industrial uses permitted by zoning. As publicly owned property, the site would be developed for public use and not for profit. The property is bounded on the north by the railroad tracks. Rail spur is not available to the subject parcel, nor is it required. Although periodic noise is evident, it is typical of the area. If vacant, likely, the site would be held for speculation in anticipation of future development or combined with an adjoining holding for expansion or additional parking. As Improved Although dwellings are not permitted by zoning, it is assumed current use of the facility as a homeless center is legally nonconforming. FloOr plans and layout are functional. The dormitories have a sleeping capacity for 170 people. Land-to-building ratio at 3.51:1 is typical. The facility is being transferred to the tenant for continued operation as the Bakersfield Homeless Center. This represents highest and best use, as improved. As already discussed, only the Cost Approach is considered in this appraisal. According to "The Dictionary of Real Estate Appraisal, Third Edition," published by the Appraisal Institute, the three -' · approaches utilized in property valuation are defined as follows: Cost Approach: A set of procedures through which a value indication is derived for the fee simple .... estate in a property by estimating the current cost to construct a reproduction of, or replacement for, the existing structure, deducting accrued depreciation from the reproduction or replacement cost; and adding the estimated land value plus an entrpreneurial profit. Adjustments may then be _.~ made to the indicated fee simple value of the subject property to reflect the value of the property interest being appraised. COST APPROACH SITE VALUE: In valuation of the subject site, the following sales are applicable: SUMMARY OF RECORD DATA 1 4/16/99 99-054053 Oena Uhalt Livin~ Trust Burt Family Trust 521 E. 21st St. 2 6/01/99 99-077546 H. E. Aaron Bethany Services 1626 E. Truxtun Ave. 3 4/07/00 00-041473 Billy & Carmelleta Brown Ramiro Catano de Casas 1502 E. Truxtun Ave. These transactions have been verified with buyer, seller or agent. Prices and physical characteristics are further detailed as follows: BAKERSFIELD HOMELESS CENTER/1600 E. TRUXTUN A gE. 30 SITE SALES MAP 'Lake FILE #526-00 SUMMARY OF SITE SALES I 3/01/99 0l~l~ & 07 99-225 $55,~ 37,5~ $1.47 M-I 2 5/12/99 017~72-07 99-251 65,~ 22,~ 2.95 M-2 3 11/09/99 017~72-~ ~-129 40,~ 24,3~ 1.65 M-2 Prices range from $1.47 to $2.95/sq.~. 'Sale 1 is at the southwest corner of 21st and Kern Streets, extending across the alley to ~e northwest corner of 19th and Kern Streets. This was a ~lly developed site with perimeter fencing. Terms included cash to a purchase money trust deed. Sale price was at market level. Sale 2 is the adjoining parcel to the east. It was purchased for consolidation with the subject holding, with the buyer motivated. Sale price was above market due to this factor, requiring a downward adjustment. Old structures on site are planned for removal. Any contributory value would be offset by cost of demolition. Terms included cash to a purchase money deed of trust. Sale 3 is at the northeast corner of E. Truxtun Ave. and Sumner St., 350 feet to the west of the subject. It is a used car lot with a small building of nominal value. This was a cash transaction at market level. Based on these transactions, in consideration of location and size of the subject parcel, market value is estimated at $1.50/sq.ft., as follows: 63,000 sq.ft. @ $1.50/sq.ft. = $94,500 Round to: $95,000 REPLACEMENT COST OF IMPROVEMENTS Replacement cost of improvements are derived from Marshall & Swift Publication Company's "Valuation Quarterly" cost guides for average quality Class "D" and "S" buildings, with related site improvements, as follows: BAKERSFIELD HOMELESS CENTER/1600 F. TRIfXTIJN AVE. 3 ] FILE #526-00 REPLACEMENT COST OF IMPROV£MENT$ DE S C RI ETI O N ~,~,~,~?~iy~ ~,~ ,~:~e~:~ ~ ~: ~.~?~, ~¥~ I~.~.' U N T,~S IZ E ~1~ ~iTU NIT~ h~:~,~i~' '~: R E P~C E M E N T~ COST~.~ BUILDING IMPROVEMENTS: Buildin[~ #1 612 scl.ft. $70.23 $ 42,981 Building #2 1,840 scI. ft. 60.42 111,173 Buildin8 #3 4,483 scl.ft. 54.49 244,279 Building #4 10,798 sq.ft. 51.36 554,585 Boiler Room 208 scl.ft. 63.27 13,160 Total Cost Building Improvements $966,178 SITE IMPROVEMENTS: Asphalt Paying 12,000 sq.ft. $1.20 $14,400 Concrete Flatwork 12,000 sq.ft. 2.50 30,000 Landscaping-Sprinklers 21,500 sq.ft. .50 10,750 Misc. N/A N/A 50,000 Total Cost Site Improvements 105,150 According to Marshall Valuation Service, costs shown do not include any allowance for the following items: 1) Costs of buying or assembling land such as escrow fees, legal fees, property taxes, demolition, storm drains, or rough grading, are considered as costs of doing business on land improvement costs. 2) Costs of land planning or preliminary concept and layout for large developments inclusive of developer's (entrepreneurial) overhead and profit are not included, nor is interest or taxes on the land, feasibility studies, E.I.R., appraisal or consulting fees, etc. 3) Discounts or bonuses paid for financing are considered a cost of doing business, as are funds for operating start up, project bond issues, developmental overhead or fixture and equipment purchases, etc. 4) Marketing costs to create first occupancy including model or advertising expenses or temporary operation of property owners associations. Discussion with local developers indicates profit incentives typically range from 5-15% of replacement or reproduction cost. Public buildings are not typically planned for rent or sale. Therefore, little or no profit is anticipated, with a 5 % allowance reasonable. Further discussion with local developers indicates indirect costs, such as land planning, interest or taxes on land, appraisal fees, financing fees and marketing costs to create first occupancy typically vary from 5-10 %. Greatest allowance would be for leasing commissions and rent-up cost associated with occupancy. As the building under analysis is designed for single-user occupancy, likely, these costs would be nominal. Therefore, a 5 % allowance for additional overhead related to items discussed is considered reasonable. As developer profit-overhead is computed as a percentage of total cost, it is reciprocal to replacement cost, exclusive of these items, allocated as follows: BAKERSFIELD HOMELESS CENTER / 1500 E. TRU'XTUN.~. 32 FILE//526-00 1) Replacement Cost: $1,071,328 2) Developer Profit-Overhead @ 5 %: $1,071,328 + 90% = $1,190,364 x 5% = 59,518 3) Indirect Costs @ 5 %' $1,071,328 + 90% = $1,190,364 x 5% = 59,518 4) Replacement Cost, Inclusive of Developer Profit-Overhead and Indirect Costs: $1,190,364 ACCRUED DEPRECIATION Accrued depreciation is the amount of deduction from an improvement's current reproduction or replacement cost and considers physical deterioration, curable (deferred maintenance) and incurable (deficiency or superadequacy of improvements), functional obsolescence, curable and incurable, and external obsolescence (generally incurable resulting from negative outside influences). Physical deterioration, incurable is estimated on the basis of tabular guides from "Valuation Quarterly," as follows: 1) Depreciable Base: $1,190,364 2) Effective Age: 8 years 3) Typical Life Expectancy: 40 years 4) % Physical Deterioration: 8% 5) Physical Deterioration: $1,190,364 x 8 % = $95,229 RECAPITULATION 'OF COST APPROACH Value indications by the Cost Approach are summarized as follows: 1) Site Value: $ 95,000 2) Replacement Cost of Improvements: $1,190,364 3) Less: Accrued Depreciation: 95,229 4) Depreciated Cost of Improvements: 1,095,135 5) Total Value by Cost Approach: $1,190,135 Round to: $1,190,000 BAKERSFIELD HOMELESS CENTER / 1~00 E. TRUXTUN AVE. 3 3 FILE #526-00 CERTIFICATION I certify that, to the best of my knowledge and belief .... · 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial and unbiased professional analyses, opinions, and conclusions. 3. I have no present or prospective interest in the property that is the subject of this report, and no personal interest or bias with respect to the parties involved. , 4. I have no bias with respect to the property that is the subject of this report or the parties involved with the assignment. ·: 5. My engagement in this assignment was not contingent upon developing or reporting predetermined results. '~- 6. My compensation for completing this assignment is not contingent upon reporting of a predetermined value or direction in ~ value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result or the occurrence of a subsequent event directly related to the intended use of this appraisal 7. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP), adopted by the Appraisal Foundation, minimum appraisal standards mandated by Title XI of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), the Code of Ethics and the Standards of Professional Practice of the Appraisal Institute. 8. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized '" representatives. ~! 9. I have made a personal inspection of the property that is the subject of this report. 10. As of the date of this report, I, Michael C. Burger, have completed requirements of the continuing education program of the Appraisal Institute. I am also a Certified General Appraiser, per the Office of Real Estate Appraisers, State of California, ' license number AG003817. I 1. No one provided significant professional assistance to the person signing this report. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the · appraiser or the firm with which he is connected, or any reference to the above appraisal organizations and designations) shall be disseminated to the public through advertising media, public relations media, news media, sales media or any other public means of communication, or to any other third parties, without the prior written consent and approval of the undersigned. Michael C. Burger, ~/CA AGOO3817 - Exp. 5-17-2004 ~ B/tKERSFIELD HOMELESS CENTER / 1600 E. TRUXTUN/1VF_.. 34 PROFESSIONAL QUALIFICATIONS MICHAEL C. BURGER, MAI 3512-B Coffee Road, Bakersfield, CA 93308 Office (661) 587-1010 FAX (661) 834-0748 E-Mail: mikeburger@ncinternet.net WORK EXPERIENCE MICHAEL BURGER & ASSOCIATES, REAL ESTATE APPRAISAL AND CONSULTATION, BAKERSFIELD, CALIFORNIA ......................................................................................... 7'97 to Present Bruce Beaudoin & Associates, Inc., Real Estate Appraisers and Consultants, Bakersfield, CA ..............................................6-87 to 7-97 Alpha Gamma Rho, Vice President Finance (National Agricultural Fraternity) San Luis 0bispo, CA ........................................ 10-85 to 12-86 John K. Richardson, General Contractor, Sea Ranch, CA ............................................................ 6-85 to 9.85 + 6-86 to 9-86 PROFESSIONAL CREDENTIALS AMERICAN SOCIETY OF FARM MANAGERS AND RURAL APPRAISERS: Scholarship 8-86 STATE OF CALIFORNIA: Certified General Appraiser. License No. AG003817 (exp. 5-17-04) APPRAISAL INSTITUTE: MAI designation- Member No. 11,093 (10-96) U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: Lender Selection Roster of Appraisers: FHA Approved CIVIC, VOLUNTEER AND PROFESSIONAL AFFILIATIONS BAKERSFIELD CHAPTER APPRAISAL INSTITUTE: 1998 President ALPHA GAMMA RHO ALUMNI ASSOCIATION: Director BAKERSFIELD ACTIVE 20~30 CLUB: 0irector and Secretary GREATER BAKERSFIELD CHAMBER OF COMMERCE-LEADERSHIP BAKERSFIELD Class of 2000 Additionally, Mr. Burger provided pro bono real estate appraisal and consulting services to the Bakersfield Police Activities League, Bakersfield Museum of Art, and the American National Red Cross. He had speaking engagements and was guest lecturer for the Bakersfield Board of Realtors, Executive Association of Kern County, and Advanced Real Estate Appraisal at Bakersfield College. EDUCATION GRADUATE: California Polytechnic State University, San Luis Obispo, CA ................................ 1987 MAJOR: Agricultural Management CONCENTRATION: Real Estate Finance and Appraisal REAL ESTATE COURSES COMPLETED: Rural Appraisal Cai Po]y Basic Real Estate Appraisal Bakersfield College: 12-87 Real Estate Finance Cai Poly Advanced Real Estate Appraisal Bakersfield College: 5-89 Principle of Real Estate Cai Po]y APPRAISAL INSTITUTE COURSES COMPLETED {19- to 40-hour courses) Course IA:1, Real Estate Principles 3-88 Course 2-2, Report Writing & Valuation Analysis 6-92 Course 1A:2, Basic Valuation Procedures 8-88 Standards of Professional Practice, Parts A & B 11.94 Course lB:A, Capitalization Theory & Tech., Part A 6.89 The Appraiser's Complete Review 1-96 Course 1B:A, Capitalization Theory & Tech., Part B 2-91 Condemnation Appraising 10-98 Course 2-1, Case Studies in Real Estate Valuation9-91 Standards of Professional Practice, Part C 11-99 INTERNATIONAL RIGHT OF WAY ASSOCIATION COURSE COMPLETED Course 401, The Appraisal of Partial Acquisitions (40 hours) 2-99 Course 803, Eminent Domain Law Basic {16 hours) 5-99 REAL ESTATE APPRAISAL SEMINARS Understanding Limited Appraisals. General 6-20-94 Valuation Considerations Regarding a Partial Acquisition 8-13-98 Appraising Complex Residential Properties 9-17-94 Valuation of Detrimental Conditions in Real Estate 3-25-99 Non. Residential Demonstration Appraisal Report 4-14-95 A Review of 1-4 Residential Forms . 7-15-99 O.R.E.A. Federal & State Laws & Regulations 10.23-97 Internet Sources for the California Appraiser 7-15-99 Loss Prevention Program for Real Estate Appraisers 10.23.97 The FHA and the Appraisal Process 9-16-99 Real Estate Appraiser Expert Witness 6-26-98 Appraisal of Nonconforming Uses 5-20-00 Trends in the Hospitality Industry 8-13-98 COURT EXPERIENCE Testified as an exped witness in Superior Court of Kern County SCOPE OF EXPERIENCE RESIDENTIAL COMMERClALIINDUSTRIAL SPECIAL PURPOSEIAGRICULTURAL Apartment complexes Bank branches Almond orchards Condominiums (individual & complexes) Convenience store,~ Almond holler/procassor Mobile homesttrailers (individual & parks) Industrial parks Boxing arena Planned unit development (indiv. & complexes) Mini-stnrage complexes Churches Single family residences (individual & tracts) Motels/hotels Citrus orchards Small resid, income units (indiv. & complexes) Office buildings (general, medical, multi-tenant) Cold storage/packing shed Restaurants (fast.food) Grape vineyards Retail stores Multi-purpose (motel/restaurant, residence/store, etc.) Shopping centers Open farm and rangeland Warehouse complexes Right-of-way valuation Truck stops PARTIAL CLIENT LIST BANKSILENDERS FIRMSICORPORATIONS LAW FIRMSIATTORNEYS Affinity Bank Hancock Savings Bank AEIGIS 8ancorp Jose R. 8enavides All American Mortgage Hanford Home Loans All American Pipeline 8ronson, Bronson & McKinnen (LA.) American Benefit Mortgage Heller Financial Americorp Relocation Clifford & Brown American Capital Funding Imperial Thrift & Loan AMRESCO Capital, L.P. Kates & Davis American City Mortgage Mission Bank Bergen Bmnswig Drag Co. Karen Gaul American Savings Bank Monument National Bank Cendant Asset Services Patrick Kavanagh Antelope Valley Bank Nazarene Credit Union Cendant Mobility Services Ken Kind Bank of America Norwest Mortgage Circle K Corporation Stephen Klink Bank of Commerce One Source Lending Coldwell Banker O'Neil & Widelock Bank of Hemet Pacific Guarantee Mortgage Corporate Relocation Services Edward J. Ouirk Bank of the Sierra Pacific Shore Funding Corporate Transfer Service Brace E. South Bank of Stockdale Patelco Credit Union CountryWide Home Loans Brace C. Stuart (Newport Beach) Bank of the West Redlands Federal Bank Daniells, Phillips, Vaughan & Bock Michael R. Young Bankers Financial San Joaquin Bank Fannie Mae Scott D. I~owry Borrego Springs Bank Sanwa Bank Fidelity National Title California Federal Bank Scott Valley Bank Heir Engineering Central Pacific Mortgage Sierra National Bank Jaco Oil Company Chevron Valley Credit Union Sumitomo Bank Kern Co. Elec. Workers Pension Trust GOVERNMENT AGENCIES Citizens Business Bank Suncoast Savings LendSafe Appraisal City of Arvin .~r City Commerce Bank Taft National Bank McDonald's Corporation City of Bakersfield Coast Federal Bank The California Stockmen's Bank Nation~ Title Insurance Co. City of California City ~!~ Conti Mortgage TriCounties Bank North American Mortgage City of Oelano ?'~ DiTech Funding Union Bank Pacific Bell Delano Joint Union High'School District El Dorado Bank U.S. Mortgage Prudential Relocation Housing Authority of Kern County Evangelical Christian Credit Union U.S. Small Business Administration S.T.A.R.S Kern County General Services Dept. Fidelity Federal Bank Valliwide Bank State Farm Insurance State Compensation Insurance Fund First Interstate Bank Valley Federal Land Bank Association Taco Bell Corporation Tehachapi Unified School District GMAC Mortgage Corp. Washington Mutual Tejon Ranch U.S. Oept. of Fish & Game- Wildlife Glendale Federal Bank Wells Fargo Bank United General Conservation Service Geleta National Bank Westamerica Bancorporation Valuation Administrators U.S. Marshall Service Government Funding Westchester Funding Westfall & Company, Inc. Great Western Bank World Wide Relocation Management 1-01 ~2/!9/00 TI_~ 17:31 FAX 505 328 1548 BFLD ECON & COM~ DE'¢' ~]005 ~ HAL~ ~1~, ~N~ ~3~ · ~8~8, In ~e Ogf~OO of ~ ~ r~t O~ wiy ot ~t ~A~ae8 ot ~nC~t~on of ~d 1~ ~ .b iI~-~ zl/tn',.J {~,z-i '~I~-...£8-t9~ t~Lli '~Y~31&Y~ LLI3~Ul.~..~OSJ . 11"80 O0-lt-lgr 712/19/00 T~ 17:31 FAX 805 328 t548 BF~ ECON & COM~I DEV ~006 ~n~g. p~y deaor~ed ~o~ n~tr ~ na~Xy a a~ee a~ ,,,,,-., ,,,e,,..~ ,,,,,_, 2~lc-ccO-iO0 '~'LLiJ. 'lVMOil¥i{ l.{.l'{{~{.{.4~O{h{ .{.t, BO ~12/19/00 TUE [7:32 FAX 805 328 1548 BFLD ECON & CO~ DEV ~007 12/19/00 TUE [7:32 FAX ~05 328 1348 BFI~ ECON & CO~ DEV 12/19/00 T[~ [7:33 FA[ 805 328 1545 BFLD ECON & CO~I~ DEV ~009 ~L _ ~ ~.m '~ .~ ~~~ ~ ~---~ ..... ~.  . a of the ~d~~h~u c~Cy o~ B~erO~ie~d A PART Dm~ ~av._23. 20Q7 .. O 8 , ~oomy~p tern J ,- ~__.....- ...- _ · !_, . ~~~~~ ........... I 712/19/00 TUE 1.7:33 FAX 805 328 1548 BFLD ECON & CO,IH DEV ~010 demi mo ~e~s ~h~, recorde~ XovemkeF 19. 3947 me Ooeuen~ b. curvl an are ~8tance of 2O.~a feet to %h~ end of Iltd Uper entre, ~%ne or sold b~cmr% Go,den Crut hker~oo pKU~A, 22~.0g fflt 712/19/00 TUE 17:34 FAX 805 328 1548 BFLD ECON & COMhi DEl' ~011 {{tpt-~f 21/Oi'd SSZ-I 2t,'GG-E~g-ig{ {1LIJ, 'IYHOILYN LJ, l~gdl,,i-flO{f:J gb':eo O0-ll-'~{' e12/19/00 TUE 17:34 FAX 805 328 I548 BFLD ECON & CO~ DEV ~]012 / 81B-~ ZL/LL'd 68Z-A ZYO~-£Eg-IgU ~qil! 1YNOt£Yd ALI~lld"RO~Id l~:8O Oe-.tl-'~r ~-12/19/00 TtVE 17:34 F_4~ml 805 328 1548 BFLD ECON & COM}l DEV ~]013 Ca1 ~ lr°"~a 199,1 ~,fore~ P=,I,R~Ia A. ~Car~ ~ry Pvb11~ , · ~ su~sc~e~ to the w~ln {n~ru~ and ~wle4~ed lo ~ ~nt hik~ exe~6d th~ arima in his~~ eu~url~ed oapacRy{~), and thai o~ Ihe en~ upon behlll of which the pe~) ~, exerted me ~st~ment. - ~~ ~ ~,~ -1- _  ~~A~ DecOr 14, 918-~ Zl/Zl'd 88Z-~ Z~aS-;Ia-Igg :{'1£11 IYN01IYN X£11;eq~0~J e~:~O OO-L&-]nr SKETCH ADDENDUM ~.o. 526-o0 City County State Zip Code Lender/Client Address SKETCH CALCULATIONS A1 : 7.0 x 20.0 = 140.0 Walk-In Freezer 140.0 A2 : 8.0 x 20.0 = 160.0 Walk-In Cooler 160.0 A3 : 26.0 x 4.0 = 104.0 A4 : 40.0 x 16.0 = 640.0 2nd Story-Loft/Storage 744.0 A5 : 16.0 x 13.0 = 208.0 Electrical Shed 208.0  A6 : 36.0 x 17.0 = 612.0 Building 1 612.0 ~--~ A7 : 40.0 X 46.0 = 1840.0 8ui lding 2 1840.0 AS : 51.5 x 38.0 = 1957.0 A9 : 81.5 x 1.0 = 81.5 Al0 : 142.5 × 51,0 = 7267.5 All : 81,5 x 11.5 = 937.3 Al2 : 30.0 :.: 18.5 - 555.0 Building 4 10798.3 -- A!4 : 51.0 x 59.0 = 3009.0 Bui id!hq 3 4483.0 Total ~ilding Area