Loading...
HomeMy WebLinkAbout2018-289Resolution No. 2018-289 RESOLUTION NO. 2018-289 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH THE COUNTY OF SAN BERNARDINO FOR THE CANCELLATION OF PROPERTY TAXES ON CERTAIN PARCELS OF REAL PROPERTY, AND CERTAIN RELATED ACTIONS WHEREAS, in or about March 2011 and thereafter, the Redevelopment Agency of the City of San Bernardino ("RDA") transferred certain parcels of property ("SBEDC Parcels") located in the City of San Bernardino ("City") to the San Bernardino Economic Development Corporation ("SBEDC"), a California nonprofit corporation affiliated with the RDA, for the purpose of facilitating the redevelopment of the parcels; and WHEREAS, in or about March 2011 and thereafter, the RDA transferred or caused to be transferred certain parcels of property ("Transferred AHS Parcels") located in the City to Affordable Housing Solutions of San Bernardino, Inc. ("AHS"), another California nonprofit corporation affiliated with the RDA, for the purpose of facilitating the redevelopment of the parcels; and WHEREAS, at various times the RDA also provided AHS with funds from the RDA's Low- and Moderate -Income Housing Fund ("LMIHF") established pursuant to California Health and Safety Code section 33334.3, which funds AHS used to acquire parcels of property from third parties (the "LMIHF AHS Parcels"); and WHEREAS effective February 1, 2012 the RDA was dissolved pursuant to legislation enacted by the California Legislature in 2011 and amended and supplemented in 2012 and thereafter ("Dissolution Laws"), and the assets and affairs of the RDA were transferred to the City as the successor agency to the RDA ("Successor Agency"); and WHEREAS, pursuant to the Dissolution Laws, the California State Controller's Office ("SCO") and California Department of Finance ("DOF") reviewed the activities of the RDA prior to its dissolution; and WHEREAS, upon such review, the SCO and/or the DOF asserted that the transfers of the SBEDC Parcels and the Transferred AHS Parcels by the RDA to SBEDC and AHS, and the transfer of LMIHF funds from the RDA to AHS for the acquisition of the LMIHF AHS Parcels, were unauthorized under the Dissolution Laws, and said parcels had to be transferred by SBEDC and AHS to the Successor Agency; and WHEREAS, pursuant to the direction of the Controller and DOF, the SBEDC Parcels, Transferred AHS Parcels, and LMIHF AHS Parcels were transferred by SBEDC and AHS to the Successor Agency beginning in 2014; and Resolution No. 2018-289 WHEREAS, in May 2012, Neal T. Baker Enterprises, Inc. donated to AHS four parcels of real property in the City (the "Baker AHS Parcels"), which parcels or the proceeds thereof have been or will be transferred by AHS to the City; and WHEREAS, the Transferred AHS Parcels, LMIHF AHS Parcels, and Baker AHS Parcels are collectively referred to as the "AHS Parcels"; and WHEREAS, the County of San Bernardino ("County") assessed property taxes ("Taxes") on the SBEDC Parcels and AHS Parcels for the period of time that record legal title to said parcels was in the names of SBEDC and AHS; and WHEREAS, following negotiations involving the City, Successor Agency, County, and the San Bernardino Assessor -Recorder -County Clerk ("Assessor"), those parties in October 2017 entered into that certain Mutual Release and Settlement Agreement ("Settlement Agreement"), designated as County Contract No. 17-831, pursuant to which the County and Assessor agreed to cancel the Taxes assessed on certain of the SBEDC Parcels during the time that SBEDC held record legal title to said parcels, on specified conditions and without prejudice to consideration of the cancellation of the Taxes on the remaining SBEDC Parcels and the AHS Parcels at a future date; and WHEREAS, the County and Assessor have now agreed to cancel the Taxes on the remaining SBEDC Parcels and the AHS Parcels subject to terms and conditions set forth in a second written agreement ("Agreement") between the City, Successor Agency, County and Assessor, attached to this Resolution as Exhibit "A"; and WHEREAS, it is necessary that the execution of the Agreement on behalf of the City be authorized by the Mayor and City Council as governing body of the City. BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The City Manager or designee is hereby authorized to execute the Agreement on behalf of the City, subject to such clerical or other non -material revisions as, in consultation with the City Attorney, may be deemed necessary and appropriate to effectuate the intent and purposes of the Agreement, and to take such further actions as may be necessary to accomplish the effectiveness and implementation of the Agreement. SECTION 2. The City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in questions may have a significant effect on the environment, the activity is not subject to CEQA. Resolution No. 2018-289 SECTION 4. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable. SECTION 5. Effective Date. This Resolution shall become effective immediately. APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 17th day of October 2018. R. Carey Da City of San 1 Attest: L � Georgeann Wanna, CMC, C y -Clerk Approved as to form: Gary D. Saenz, City Attorney Resolution No. 2018-289 CERTIFICATION STATE OF CALIFORNIA) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, Georgeann Hanna, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2018-289 adopted at a regular meeting held at the 17th day of October 2018 by the following vote: Council Members: AYES NAYS ABSTAIN ABSENT MARQUEZ BARRIOS VALDIVIA k SHORETT k NICKEL RICHARD k MULVIHILL _I WITNESS my hand and official seal of the City of San Bernardino this 17th day of October 2018. Georgeann arena, CMC,16ty Clerk Resolution No. 2018-289 EXHIBIT A Mutual Release and Settlement Agreement MUTUAL RELEASE AND SETTLEMENT AGREEMENT This Mutual Release and Settlement Agreement ("Settlement Agreement") is entered into by and among the City of San Bernardino, a charter city and municipal corporation ("City"), the Successor Agency to the Redevelopment Agency of the City of San Bernardino ("Successor Agency"), the County of San Bernardino, a public body, corporate and politic ("County"), and the San Bernardino Assessor -Recorder -County Clerk ("Assessor"). City, Successor Agency, County and Assessor are sometimes hereafter referred to individually as a "Party" and collectively as the "Parties". RECITALS A. WHEREAS, on June 28, 2011, the Governor of the State of California signed into law Assembly Bill 26 (AB 1X 26, Chapter 5, Statutes of 2011, First Extraordinary Session), providing for the elimination of redevelopment agencies ("RDAs"), commencing with the fiscal year 2011-12 State budget. B. WHEREAS, AB 1X 26 prohibited RDAs from engaging in new business, established mechanisms and timelines for dissolution of the RDAs, and created RDA successor agencies to oversee the dissolution of the RDAs and redistribution of the RDA assets. C. WHEREAS, the provisions of AB 1 X 26 and AB 1484, enacted as cleanup legislation to AB 1X 26, prohibit the transfer of assets to a city, county, city and county, or any other public agency after January 1, 2011. D. WHEREAS, AB 1X 26 requires the State Controller to review the activities of RDAs to determine whether an unauthorized asset transfer has occurred between January 1, 2011 and the date on which the RDA ceases to operate, or January 31, 2012, whichever is earlier. E. WHEREAS, in accordance with the requirements of AB 1X 26, the State Controller conducted an asset transfer review of transactions among the City of San Bernardino Mutual Release and Settlement Agreement Page 1 of 20 Economic Development Agency ("City RDA"), the City, and/or other public agencies and issued its findings in a report, dated March 2013 (the "Report"). F. WHEREAS, among other findings, the State Controller identified the transfer of parcels (the "SBEDC Parcels") from the City RDA to the San Bernardino Economic Development Corporation ("SBEDC") that occurred during the period of January 1, 2011 to January 31, 2012. G. WHEREAS, upon the transfer of the SBEDC Parcels from the City RDA to the SBEDC, the Assessor reclassified the SBEDC Parcels as taxable parcels. H. WHEREAS, the State Controller determined that the SBEDC is an entity under the control of the City and that the RDA made an unallowable transfer to SBEDC, and therefore ordered that the SBEDC Parcels be turned over to the Successor Agency. I. WHEREAS, the City/Successor Agency contested the findings and determinations made by the State Controller in connection with the asset transfer review, arguing in part, that at the time of the transfer, that transaction was allowable, legally authorized, enforceable, binding and valid. J. WHEREAS, between December 3, 2014 and December 17, 2014, the SBEDC complied with the State Controller order and transferred the SBEDC Parcels to the Successor Agency. K. WHEREAS, upon notice of the transfer of the SBEDC Parcels to the Successor Agency, the Assessor reclassified the SBEDC Parcels as tax exempt. L. WHEREAS, between January 1, 2011 and January 31, 2012, the City RDA transferred, directly or through SBEDC, certain parcels of property (the "Transferred AHS Parcels") to Affordable Housing Solutions of San Bernardino, Inc. ("AHS"), a California nonprofit tax-exempt 501(c)(3) corporation acquired by the City RDA in 2009 to assist the City RDA in its statutory mission under California Health and Safety Code section 33334.2 of Mutual Release and Settlement Agreement Page 2 of 20 increasing, improving, and preserving the availability of affordable housing in the City of San Bernardino. The Transferred AHS Parcels were transferred pursuant to a Housing Capitalization Funding Agreement dated March 3, 2011 between the City RDA and AHS. Following the transfer of the Transferred AHS Parcels to AHS, the Assessor reclassified the Transferred AHS Parcels as taxable parcels. M. WHEREAS, the California Department of Finance (the "DOF"), the state agency vested with primary responsibility for implementing the wind -down and dissolution of RDAs pursuant to AB 1X 26, objected to the Housing Capitalization Funding Agreement and the transfer of the Transferred AHS Parcels to AHS, and determined that the Housing Capitalization Funding Agreement was not an enforceable obligation. N. WHEREAS, the City RDA also provided AHS with funds from the City RDA's Low and Moderate Income Housing Fund (the "LMIHF") established pursuant to California Health and Safety Code section 33334.3, which funds AHS used to acquire parcels of property from third parties (the "LMIHF AHS Parcels"), and which parcels the Assessor classified as taxable parcels for the period during which AHS held title to the parcels. O. WHEREAS, the DOF objected to all transfers from the LMIHF to AHS. P. WHEREAS, in or about February 2016, AHS transferred to the Successor Agency (1) the Transferred AHS Parcels, with the exception of certain parcels that had been acquired by the City RDA with federal funding provided to the City RDA by the City, and (2) the LMIHF AHS Parcels. Upon the transfer of the Transferred AHS Parcels and the LMIHF AHS Parcels from AHS to the Successor Agency, the Assessor reclassified the parcels as tax exempt. Q. WHEREAS, on May 3, 2012, Neal T. Baker Enterprises, Inc., gifted to AHS four (4) parcels (the `Baker AHS Parcels"), which parcels the Assessor classified as taxable parcels for the period during which AHS held title to the parcels. These parcels or the proceeds thereof were or will be transferred by AHS to the City. Mutual Release and Settlement Agreement Page 3 of 20 R. WHEREAS, the City has elected to serve as the Successor Housing Agency to the City RDA pursuant to California Health and Safety Code section 34176(a)(1). Said section provides that all housing assets of the City RDA, defined in subdivision (e)(1) of said section to include any real property acquired for low- and moderate -income housing purposes, shall be transferred to the City. S. WHEREAS, consistent with California Health and Safety Code section 34176, certain of the Transferred AHS Parcels and/or the LMIHF AHS Parcels were subsequently transferred by the Successor Agency to the City, acting as Successor Housing Agency. T. WHEREAS, in addition to the federally -funded parcels referred to in Recital P., AHS directly acquired certain other parcels using federal funding provided to the City RDA by the City and provided by the City RDA to AHS, which parcels the Assessor classified as taxable parcels. Under California law, AHS presumptively acquired all of said federally -funded parcels (collectively, the "Federally -Funded AHS Parcels") on behalf of and for the benefit of the City, as payor. Accordingly, the Federally -Funded AHS Parcels have been transferred by AHS to the City. The Transferred AHS Parcels, the LMIHF AHS Parcels, the Federally -Funded AHS Parcels, and the Baker AHS Parcels are collectively referred to herein as the "AHS Parcels." U. WHEREAS, the Successor Agency and the City have requested that the County cancel the real property taxes levied by the County on the SBEDC Parcels and the AHS Parcels that are applicable to the period of time that the SBEDC and AHS held title to such properties consistent with the order and determination of the State Controller as delineated in the Asset Transfer Review, the objection of DOF to the transfers of assets from the City RDA to AHS, and the provisions of California law relating to the beneficial ownership of property and to taxation of property owned by charitable organizations. V. WHEREAS, pursuant to that certain "Mutual. Release and Settlement Agreement" executed by the Parties on or about October 31, 2017, the County agreed to cancel the Mutual Release and Settlement Agreement Page 4 of 20 real property taxes levied on certain of the SBEDC Parcels, leaving the remaining SBEDC Parcels for future disposition (the "Remaining SBEDC Parcels"). W. WHEREAS, the Parties have been engaged in investigation, analysis and discussions to determine the legal, financial and operational consequences of complying with the Successor Agency's and the City's request that the County cancel the real property taxes levied on the Remaining SBEDC Parcels and the AHS Parcels that are applicable to the period of time that the SBEDC and AHS held title to such properties. X. WHEREAS, the Remaining SBEDC Parcels and the AHS Parcels are listed in Exhibit "A" to this Settlement Agreement. Y. WHEREAS, the Parties intend and desire hereby to settle any and all disputes between one another which arise out of (i) the initial transfers of the Remaining SBEDC Parcels and the AHS Parcels (the "Initial Transfers"), (ii) all subsequent transfers of one or more of the Remaining SBEDC Parcels or the AHS Parcels (the "Subsequent Transfers"), (iii) the classification and reclassification by the Assessor of one or more of the Remaining SBEDC Parcels or the AHS Parcels (the "Classifications"), and (iv) any and all actions taken by the Assessor and the County in connection with or relating to one or more of the Remaining SBEDC Parcels or the AHS Parcels from January 1, 2011 through and including the date of full execution of this Settlement Agreement (the "County Actions"), and to accomplish hereby a full and final settlement between the Parties of all claims which arise out of the Initial Transfers, the Subsequent Transfers, the Classifications and the County Actions. Hereinafter all disputes between the Parties which arise out of the Initial Transfers, the Subsequent Transfers, the Classifications and the County Actions shall be referred to as the "Released Claims." NOW, THEREFORE, in consideration of the terms, covenants, promises, representations, and conditions contained herein, and for other good and valuable consideration, Mutual Release and Settlement Agreement Page 5 of 20 the receipt, sufficiency, and adequacy of which are hereby acknowledged by each of the Parties, the Parties, and each of them, hereby represent and agree as follows: 1. The Recitals set forth above are true and correct and are incorporated herein by this reference. 2. It is agreed and understood that nothing contained herein shall be deemed as an admission of any liability on the part of any of the Parties with respect to the matters described in this Agreement. 3. CANCELLATION OF PROPERTY TAX ASSESSMENTS 3.1. Within thirty (30) business days of the date on which this Agreement is fully executed, which is the last date on which this Agreement is signed by all Parties, the Assessor shall cancel the real property assessments enrolled by the County on the parcels set forth on Exhibit "A," attached hereto and made a part hereof by this reference, that are applicable to the period of time during which the SBEDC or AHS held title to such properties as gifted and consistent with the order and determination of the State Controller as delineated in the Asset Transfer Review, the objection of DOF to the transfers of assets from the City RDA to AHS, and the provisions of California law relating to the beneficial ownership of property, recited above. 3.2. The Parties acknowledge and agree that as to approximately 22 of the parcels set forth on Exhibit "A," the County issued supplemental refunds based on transfers that occurred to AHS, because the re -assessed value of the parcels after the transfers was lower than the assessed value prior to the transfers. The refunds were claimed, but the City RDA also paid annual tax bills on the parcels. When the County changes the status of the parcels to non-taxable and cancels the re -assessment in accordance with this Settlement Agreement, the County will be required to process corrections to cancel the re -assessments. The Parties acknowledge and agree that bills will be created for the original refunds and new refunds will be issued for the annual tax bills that were previously paid as to the parcels. Mutual Release and Settlement Agreement Page 6 of 20 4. Notwithstanding the foregoing, the Assessor shall enroll a possessory interest ("PI") assessment for each of the relevant years for any parcel set forth on Exhibit "A" that the Assessor determines is or should have been subject to such PI assessment but for the acts of the Parties described herein. Within thirty (30) calendar days of the date on which this Settlement Agreement is fully executed, City and Successor Agency and each of them shall deliver to the Assessor any and all records, documents or other evidence of a possessory interest in any one or more of the parcels set forth in Exhibit "A" hereto and any supplemental information as may be requested by the Assessor. The PI assessments will be assessed to the party who holds or held the interest in the applicable parcel. Notwithstanding the foregoing, City shall pay or cause to be paid to the Tax Collector any PI assessments due and owing within fifteen (15) business days of written notification of the enrollment of such PI assessments for one or more of the parcels set forth in Exhibit "A" hereto. 5. CITY RELEASES 5.1. City, on behalf of itself and each of its elected and appointed officials, officers, directors, agents, employees, servants, successors, executors, administrators, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, hereby forever releases, acquits, and discharges the County and the Assessor (collectively, the "County Parties"), and each of their past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, from any and all claims, demands, actions, defenses, liabilities, obligations, and indebtedness, with respect to any and all breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasances, malfeasances, causes or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character whatsoever, whether in Mutual Release and Settlement Agreement Page 7 of 20 law or in equity, whether contractual, common law, statutory, federal, state, or otherwise, whether known or unknown, whether suspected to exist or not, whether liquidated or unliquidated, each as though fully set forth herein at length, which City has ever had, or hereafter may have or claim to have, by reason of, arising out of, or connected with or related to any acts, omissions, transactions, or occurrences arising out of the Released Claims. 5.2. City acknowledges, represents, and warrants that there may be claims arising out of the Released Claims by reason of acts, omissions, transactions or occurrences, against the County Parties, as well as against the past and present employees, servants, successors, attorneys, and assigns, if any, of the County Parties of which, at the time this Settlement Agreement is executed, it has no knowledge or suspicion. City hereby agrees and represents that this Settlement Agreement is specifically intended to, and does, extend to any and all such claims, whether or not known, claimed, or suspected by it. Therefore, City, on behalf of itself, as well as on behalf of each of its officers, directors, agents, employees, servants, successors, executors, administrators, attorneys, heirs, trustees, trustors, parent corporations, subsidiaries, beneficiaries and assigns, if any, hereby expressly waives the benefits of Section 1542 of the California Civil Code which provides: "Section 1542. GENERAL RELEASE, EXTENT. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." Mutual Release and Settlement Agreement Page 8 of 20 5.3. City hereby acknowledges, represents, and warrants, to the County Parties as follows: 5.3.1. The person signing this Settlement Agreement as or on behalf of City understands the meaning and effect of Section 1542 of the California Civil Code set forth above. 5.3.2. WITH REGARD TO SECTION 1542 OF THE CALIFORNIA CIVIL CODE, CITY AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THE RELEASES CONTAINED IN THIS SECTION 5 (THE "CITY RELEASES") IN FAVOR OF THE COUNTY PARTIES AND CITY HEREBY WAIVES AND RELEASES ALL RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. 5.3.3. EACH PERSON SIGNING THIS SETTLEMENT AGREEMENT AS OR ON BEHALF OF CITY HAS READ THE FOREGOING RELEASES. SAID PERSON FULLY UNDERSTANDS THAT THE CITY RELEASES HAVE IMPORTANT LEGAL CONSEQUENCES. SAID PERSON REALIZES HE OR SHE IS RELEASING ANY AND ALL CLAIMS THAT THE CITY HAS AS SET FORTH ABOVE. CITY HAS HAD A LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THE CITY RELEASES. THE PERSON SIGNING AS OR ON BEHALF OF CITY WARRANTS AND REPRESENTS THAT HE OR SHE IS AUTHORIZED TO MAKE THE FOREGOING RELEASES IN THE REPRESENTATIVE CAPACITY INDICATED, IF ANY. Mutual Release and Settlement Agreement Page 9 of 20 5.3.4. The City Releases set forth in this Section 5 shall not be construed to be and do not constitute an admission of any liability on the part of City. Said City Releases shall constitute an absolute bar to any claim of any kind, whether any such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. City specifically agrees that any attempt to assert a claim barred by said City Releases shall subject the party asserting said claim to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous, or baseless claims or causes of action. 5.4. The City Releases set forth in this Section 5 shall inure to the benefit of the past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, of the County Parties. 6. SUCCESSOR AGENCY RELEASES 6.1. Successor Agency, on behalf of itself, as well as on behalf of each of its elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, hereby forever releases, acquits, and discharges the County Parties, as well as each of their past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, from any and all claims, demands, actions, defenses, liabilities, obligations, and indebtedness, with respect to any and all breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasances, malfeasances, causes or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character whatsoever, whether in law or in equity, whether contractual, common law, statutory, federal, state, or otherwise, whether known or unknown, Mutual Release and Settlement Agreement Page 10 of 20 whether suspected to exist or not, whether liquidated or unliquidated, each as though fully set forth herein at length, which Successor Agency has ever had, or hereafter may have or claim to have, by reason of, arising out of, or connected with or related to any acts, omissions, transactions, or occurrences arising out of the Released Claims. 6.2. Successor Agency acknowledges, represents, and warrants that there may be claims arising out of the Released Claims by reason of acts, omissions, transactions or occurrences, against the County Parties, as well as against the past and present employees, servants, successors, attorneys, and assigns, if any, of the County Parties of which, at the time this Settlement Agreement is executed, it has no knowledge or suspicion. Successor Agency hereby agrees and represents that this Settlement Agreement is specifically intended to, and does, extend to any and all such claims, whether or not known, claimed, or suspected by it. Therefore, Successor Agency, on behalf of itself, as well as on behalf of each of its officers, directors, agents employees, servants, successors, executors, administrators, attorneys, heirs, trustees, trustors, parent corporations, subsidiaries, beneficiaries and assigns, if any, hereby expressly waives the benefits of Section 1542 of the California Civil Code which provides: "Section 1542. GENERAL RELEASE, EXTENT. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." Mutual Release and Settlement Agreement Page 11 of 20 6.3. Successor Agency hereby acknowledges, represents, and warrants, to the County Parties as follows: 6.3.1. The person signing this Settlement Agreement as or on behalf of Sucessor Agency understands the meaning and effect of Section 1542 of the California Civil Code set forth above. 6.3.2. WITH REGARD TO SECTION 1542 OF THE CALIFORNIA CIVIL CODE, SUCCESSOR AGENCY AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THE RELEASES CONTAINED IN THIS SECTION 6 (THE "SUCCESSOR AGENCY RELEASES") IN FAVOR OF THE COUNTY PARTIES AND SUCCESSOR AGENCY HEREBY WAIVES AND RELEASES ALL RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. 6.3.3. EACH PERSON SIGNING THIS SETTLEMENT AGREEMENT AS OR ON BEHALF OF SUCCESSOR AGENCY HAS READ THE FOREGOING SUCCESSOR AGENCY RELEASES. SAID PERSON FULLY UNDERSTANDS THAT THE RELEASES HAVE IMPORTANT LEGAL CONSEQUENCES. SAID PERSON REALIZES HE OR SHE IS RELEASING ANY AND ALL CLAIMS THAT THE SUCCESSOR AGENCY HAS AS SET FORTH ABOVE. SUCCESSOR AGENCY HAS HAD A LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THE SUCCESSOR AGENCY RELEASES. THE PERSON SIGNING AS OR ON BEHALF OF Mutual Release and Settlement Agreement Page 12 of 20 SUCCESSOR AGENCY WARRANTS AND REPRESENTS THAT HE OR SHE IS AUTHORIZED TO MAKE THE FOREGOING SUCCESSOR AGENCY RELEASES IN THE REPRESENTATIVE CAPACITY INDICATED, IF ANY. 6.3.4. The Successor Agency Releases set forth in this Section 6 shall not be construed to be and do not constitute an admission of any liability on the part of Successor Agency. Said Successor Agency Releases shall constitute an absolute bar to any claim of any kind, whether any such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. Successor Agency specifically agrees that any attempt to assert a claim barred by said Successor Agency Releases shall subject the party asserting said claim to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous, or baseless claims or causes of action. 6.4. The Successor Agency Releases set forth in this Section 6 shall inure to the benefit of the past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, of the County Parties. 7. COUNTY PARTIES RELEASES 7.1. The County Parties, on behalf of themselves, as well as on behalf of each of their respective elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, hereby forever release, acquit, and discharge City, City RDA, Successor Agency, SBEDC, and AHS (collectively, the "City Parties"), as well as each of the past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, Mutual Release and Settlement Agreement Page 13 of 20 of each of the City Parties from any and all claims, demands, actions, defenses, liabilities, obligations, and indebtedness, with respect to any and all breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasances, malfeasances, causes or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character, whatsoever, whether in law or in equity, whether contractual, common law, statutory, federal, state, or otherwise, whether known or unknown, whether suspected to exist or not, whether liquidated or unliquidated, each as though fully set forth herein at length, which the County Parties have ever had, or hereafter may have or claim arising out of the Released Claims. 7.2. The County Parties acknowledge, represent, and warrant that they may have claims arising out of the Released Claims by reason of acts, omissions, transactions or occurrences, against the City Parties, as well as against the past and present directors, officers, employees, servants, successors, attorneys, trustees, trustors, beneficiaries, insurers and assigns, parent corporations or subsidiaries, if any, of each of the City Parties, respectively, of which, at the time this Settlement Agreement is executed, the County Parties have no knowledge or suspicion. The County Parties hereby agree and represent that this Settlement Agreement is specifically intended to, and does, extend to any and all such claims, whether or not known, claimed, or suspected by any of them. Therefore, the County Parties on behalf of themselves, as well as on behalf of their respective directors, officers, agents, employees, servants, trustees, trustors, successors, attorneys, and assigns, if any, hereby expressly waive the benefits of Section 1542 of the California Civil Code which provides: "Section 1542. GENERAL RELEASE: EXTENT. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR Mutual Release and Settlement Agreement Page 14 of 20 HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." 7.3. The County Parties hereby acknowledge, represent, and warrant, to the City Parties, as follows: 7.3.1. The persons signing this Settlement Agreement as or on behalf of the County Parties understand the meaning and effect of Section 1542 of the California Civil Code set forth above. 7.3.2. WITH REGARD TO SECTION 1542 OF THE CALIFORNIA CIVIL CODE THE COUNTY PARTIES AGREE TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THE RELEASES CONTAINED IN THIS SECTION 7 (THE "COUNTY PARTIES RELEASES") IN FAVOR OF THE CITY PARTIES, AND THE COUNTY PARTIES HEREBY WAIVE AND RELEASE ALL RIGHTS AND BENEFITS WHICH THEY AND EACH OF THEM MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. 7.3.3. EACH PERSON SIGNING THIS SETTLEMENT AGREEMENT AS OR ON BEHALF OF THE COUNTY PARTIES HAS READ THE FOREGOING COUNTY PARTIES RELEASES. SAID PERSONS FULLY UNDERSTAND THAT THE COUNTY PARTIES RELEASES HAVE IMPORTANT LEGAL Mutual Release and Settlement Agreement Page 15 of 20 CONSEQUENCES. SAID PERSONS REALIZE THEY ARE RELEASING ANY AND ALL CLAIMS THAT THE COUNTY PARTIES HAVE AS SET FORTH ABOVE. THE COUNTY PARTIES HAVE HAD A LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THE COUNTY PARTIES RELEASES. EACH OF THE PERSONS SIGNING AS OR ON BEHALF OF THE COUNTY PARTIES WARRANTS AND REPRESENTS THAT HE OR SHE IS AUTHORIZED TO MAKE THE FOREGOING COUNTY PARTIES RELEASES IN THE REPRESENTATIVE CAPACITY INDICATED, IF ANY. 7.3.4. The County Parties Releases set forth in this Section 7 shall constitute an absolute bar to any claim of any kind, whether any such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. The County Parties specifically agree that any attempt to assert a claim barred by said County Parties Releases shall subject the County Parties to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous, or baseless claims or causes of action. 7.4. The County Parties Releases set forth in this Section 7 shall inure to the benefit of the elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, of the City Parties. 8. INDEMNIFICATION Successor Agency and City and each of them agree to indemnify, defend (with counsel reasonably approved by the County Parties) and hold harmless the County Parties and each of their respective authorized officers, employees, agents and volunteers from any and all claims, actions, losses, damages, and/or liability arising out of the performance of this Settlement Agreement from any cause whatsoever, including the acts, errors or omissions of any person and for any costs or expenses incurred by the County Parties on account of any claim except where Mutual Release and Settlement Agreement Page 16 of 20 such indemnification is prohibited by law. This indemnification provision shall apply regardless of the existence or degree of fault of the indemnitees. Each of the City's and the Successor Agency's indemnification obligations apply to the County Parties' "active" as well as "passive" negligence but do not apply to the County Parties' "sole negligence" or "willful misconduct" within the meaning of Civil Code Section 2782. 9. GENERAL TERMS 9.1. Pursuant to Evidence Code Section 1123, this Settlement Agreement is enforceable, binding, admissible in a court of law, and may be disclosed by any party hereto. 9.2. Each individual executing this document on behalf of a party hereto hereby warrants and represents that he or she has been duly authorized to do so. 9.3. This Settlement Agreement, and all documents executed by the Parties, either concurrently herewith or subsequent hereto as provided for herein, shall represent the entire understanding and agreement among the Parties, and the same may not be altered or amended except by a subsequent written agreement executed by all of the Parties, or their respective successors, executors or administrators. The Parties acknowledge and agree that no representations, express or implied, have been made or relied upon in executing and agreeing to be bound by this Settlement Agreement, except as specifically set forth herein. 9.4. This Settlement Agreement and all documents and instruments required hereunder shall be governed by and construed in accordance with the laws of the State of California. 9.5. The terms, covenants, promises, conditions and representations contained in this Settlement Agreement shall inure to and be binding upon the successors and assigns of all of the Parties and each of them. Except as otherwise expressly provided for herein, this Settlement Agreement is not intended to be for the benefit of any person other than the Parties. Mutual Release and Settlement Agreement Page 17 of 20 9.6. If any provision of this Settlement Agreement shall be held prohibited by or invalidated under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or rendering ineffective the remainder of such provision, or any other provision of this Settlement Agreement. 9.7. Time is of the essence with respect to the performance of each and every term, covenant, promise and condition contained herein. 9.8. If legal action shall be instituted to enforce any of the provisions of this Settlement Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees incurred thereby. 9.9. Each of the Parties hereby acknowledges the receipt of advice of legal counsel regarding this Settlement Agreement prior to executing it. 9.10. This Settlement Agreement supersedes any and all prior and contemporaneous agreements between or among any of the Parties with respect to the subject matter of this Settlement Agreement. 9.11. The execution, delivery, or performance of this Settlement Agreement and any documents provided for hereunder are not in contravention of nor in conflict with any agreement by which the Parties, or any of them, are legally bound. 9.12. In construing the terms of this Settlement Agreement, the singular shall include the plural, and the plural shall include the singular. 9.13. The Parties agree to execute all documents and take all actions to fulfill the purposes of this Settlement Agreement. 9.14. This Settlement Agreement may be executed in counter -part and the signature pages combined to form one document which is binding on all of the Parties. Facsimiles of the signatures of the Parties are deemed to be binding and the Parties will send the originals of Mutual Release and Settlement Agreement Page 18 of 20 their signatures on this Settlement Agreement to the Office of County Counsel with respect to the County Parties and to the Office of City Attorney with respect to the City Parties. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Mutual Release and Settlement Agreement Page 19 of 20 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective authorized officers. Dated: i 0 (2- Dated: Mutual Release and Settlement Agreement Page 20 of 20 CITY OF SAN BERNARDINO A California arter City an Municipal Corporation By: ��r�A I C- 14d, LA An . Miller, City Manager ATTEST: Georgeann "Gi ' Hanna, Ci Clerk APPROVED AS TO FORM: Gary D. Saenz, City Attorney By: kf L�X� L N'u� SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF �AN BERNARDINO By: ea M. Miller, Executive Director ATTEST: B Xle: 2 Georgeann "G' i" Hanna, 61y Clerk APPROVED AS TO FORM: Gary D. Saenz, City Attorney By: � Oht a- R. EXHIBIT "A" CITY PARCELS (Identified by assessor Parcel Numbers) 0134014240000 0134291110000 0147224200000 0134014250000 0134301220000 0147224240000 0134014260000 0139172360000 0147224250000 0134014270000 0140012110000 0147224280000 0134021260000 0140033220000 0154125070000 0134021270000 0140041290000 0154126010000 0134021280000 0140134060000 0154126020000 0134021290000 0140143380000 0154126300000 0134053200000 0140171160000 0155451100000 0134053210000 0140192200000 0268394100000 0134053220000 0140222260000 1191031180000 0134053230000 0140282050000 1191031190000 0134053250000 0140282710000 1191031230000 0134053260000 0140282730000 1191031240000 0134054070000 0140282740000 1191031250000 0134054080000 0142522080000 1191031270000 0134054090000 0142522090000 1191031290000 0134054240000 0142522110000 1191051240000 0134054250000 0142522120000 1191051380000 0134054260000 0142522130000 1191051420000 0134061210000 0142522140000 1191051440000 0134061220000 0142522150000 1191051450000 0134061250000 0142522160000 1191051480000 0134061300000 0142522170000 1191051530000 0134093050000 0142522250000 1191051540000 0134093060000 0142522350000 1191051550000 0134101020000 0142522360000 1191051590000 0134101030000 0142522370000 1191051600000 0134101040000 .0142522380000 1191051610000 0134101050000 0142522410000 1191051660000 0134101060000 0142522420000 0134101280000 0143191740000 0134181280000 0143191750000 0134211340000 0145171110000 0134211380000 0146031040000 0134221450000 0146045140000 0134231270000 0146053270000 0134231280000 0146072020000 0134231290000 0147224110000 Rev 7-12-16 REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS OF SAN BERNARDINO COUNTY, CALIFORNIA AND RECORD OF ACTION November 6, 2018 FROM: BOB DUTTON, Assessor -Recorder -County Clerk Assessor -Recorder -County Clerk SUBJECT: AGREEMENT FOR CANCELLATION OF REAL PROPERTY TAXES DUE TO DISALLOWED PARCEL TRANSFERS RECOMMENDATION(S) Approve a Mutual Release and Settlement Agreement No. 18-797 by and between the City of San Bernardino, the Successor Agency to the Redevelopment Agency of the City of San Bernardino, the County of San Bernardino, and the San Bernardino County Assessor -Recorder - County Clerk relating to the cancellation of real property taxes in connection with the former Redevelopment Agency of the City of San Bernardino's transfer of 108 parcels disallowed by the State Controller. (Presenter: Bob Dutton, Assessor -Recorder -County Clerk, 382-3900) AND CHIEF EXECUTIVE OFFICER GOALS A Operate in a Fiscally -Responsible and Business -Like Manner. Pursue County Goals and Objectives by Working with Other Agencies. FINANCIAL IMPACT Approval of this item will result in impacts to Discretionary General Funding (Net County Cost) as a result of refunds issued due to the cancellation of property taxes. The transfer of the 108 parcels has been deemed void by the Assessor -Recorder -County Clerk in reliance on guidance by the State Board of Equalization, and the County is not legally entitled to the assessed taxes. The City of San Bernardino paid delinquent taxes on certain parcels subject to this Settlement Agreement. Upon reclassification by the Assessor -Recorder -County Clerk of such parcels as tax exempt, refunds of any taxes paid will be generated through the office of the Auditor -Controller. In March 2011, the Redevelopment Agency of the City of San Bernardino (SBRDA), in anticipation of the eminent passage of redevelopment dissolution legislation, transferred 229 parcels of property (SBEDC Parcels) to a nonprofit corporation, the San Bernardino Economic Development Corporation (SBEDC). SBEDC was governed and staffed by City of San Bernardino (City) and SBRDA officials and staff. SBRDA also entered into agreements with cc: ARC - End Ier w/ agreement Contractor c% ARC w/ agreement ARC - Dutton CAO - Hernandez -Barker File - w/ agreement mr 11/9/2018 MOTION LAUnBY ITEM 11 DATED: H. Record ber Page 1 of 3 of Supervisors MO) 5 AGREEMENT FOR CANCELLATION OF REAL PROPERTY TAXES DUE TO DISALLOWED PARCEL TRANSFERS NOVEMBER 6, 2018 PAGE 2OF3 SBEDC assigning its tax increment revenues to SBEDC and SBEDC agreed to expend the funds on redevelopment activities. Upon SBRDA's conveying the SBEDC Parcels to SBEDC, the San Bernardino County Assessor -Recorder -County Clerk (ARC) informed the SBRDA that the conveyances would result in reappraisal and taxability of the SBEDC Parcels. SBRDA determined to proceed with the conveyances, including the Carousel Mall, the Theater Square, San Manual Stadium, City Hall, and the City's main Police Station. On June 28, 2011, the Governor of the State of California signed into law Assembly Bill 26 (ABx1 26, Chapter 5, Statutes of 2011, First Extraordinary Session), providing for the elimination of redevelopment agencies (RDAs), commencing with the fiscal year 2011-12 State budget. ABx1 26 prohibited RDAs from engaging in new business, established mechanisms and timelines for dissolution of the RDAs, and created RDA Successor Agencies to oversee the dissolution of the RDAs and redistribution of the RDA assets. The provisions of ABx1 26 and AB 1484, enacted as cleanup legislation to ABx1 26, prohibit the transfer of assets to a city, county, city and county, or any other public agency after January 1, 2011. ABx1 26 requires the State Controller (SCO) to review the activities of RDAs to determine whether an unauthorized asset transfer has occurred after January 1, 2011, and the date at which the RDA ceases to operate, or January 31, 2012, whichever is earlier. In accordance with the requirements of ABx1 26, the SCO conducted an asset transfer review of transactions between the SBRDA, the City, and/or other public agencies and issued its findings in a report, dated March 2013 (Report). Among other findings, the SCO identified transfer of 229 parcels (SBEDC Parcels) from the SBRDA to the SBEDC that occurred during the period of January 1, 2011, and January 31, 2012. The SCO determined that the SBEDC is an entity under the control of the City, that the "RDA made an unallowable transfer" to SBEDC and, therefore, ordered the SBEDC Parcels be turned over to the Successor Agency to the SBRDA (Successor Agency). The City and the Successor Agency contested the findings and determinations made by the SCO in connection with the asset transfer review. The City and the Successor Agency argued, in part, that at the time of the transfer, that transaction was allowable, legally authorized, enforceable, binding and valid." The City and Successor Agency also stated that "the City does not have legal authority to order or cause SBDEC to take" the action ordered by the SCO. Nevertheless, between December 3, 2014, and December 17, 2014, approximately 21 months after being ordered by the SCO to do so, the SBEDC transferred the SBEDC Parcels to the Successor Agency. Upon notice of the transfer of the SBEDC Parcels to the Successor Agency, the ARC reclassified the SBEDC Parcels as tax exempt. Subsequently, the Successor Agency, by a letter dated January 7, 2015, requested that the County "[c]ancel the real property taxes levied by [the County] on the 229 parcels that are applicable to the period of time that the SBEDC held title to such properties consistent with the order and determination of the SCO as delineated in the Asset Transfer Review." City, Successor Agency, and County staff engaged in extensive negotiations over a 2.5 -year period during which the ARC sought and received informal guidance from the State Board of Equalization affirming that the disallowed transfers should be treated as void transactions as the legal basis for cancelling the real property taxes on the SBEDC Parcels. The Successor Agency 11/6/2018 #11 AGREEMENT FOR CANCELLATION OF REAL PROPERTY TAXES DUE TO DISALLOWED PARCEL TRANSFERS NOVEMBER 6, 2018 PAGE 3OF3 subsequently identified and requested an additional 56 parcels to be included among those for which the real property taxes were requested to be cancelled, bringing the total number of parcels to 285. These additional 56 parcels were determined to meet the same criteria as the first 229 original parcels. On October 31, 2017, the Board of Supervisors approved Agenda Item No. 17, a Mutual Release and Settlement Agreement_, resolving the property tax issues with the 285 parcels. The Successor Agency has subsequently identified and requested an additional 108 parcels be included among those for which the real property taxes were requested to be cancelled. The ARC Department agreed to further discussions with the City and the Successor Agency on the additional and remaining 108 parcels to determine if these parcels qualified for real property tax cancellation on the same or similar legal basis as applied to the initial 285 parcels. The ARC, the City, and the Successor Agency have concluded discussions and the ARC has determined that the 108 additional parcels do qualify for cancellation of real property taxes in connection with disallowed transfers that should be treated as void transactions. Accordingly, the ARC, the City, and the Successor Agency have negotiated and prepared this Mutual Release and Settlement Agreement to dispose of the real property tax issues for the remaining 108 parcels relating to the SBRDA's and City's transactions in connection with the State's dissolution of redevelopment agencies commencing in 2011. Section 4 of the Agreement provides that the County will assess a possessory interest against parcels on which it cancels property taxes, but on which it determines a possessory interest tax would have applied had the parcels been treated as exempt from property tax, but for actions of the City and the Successor Agency, where warranted. Section 8 of the Agreement requires the City and the Successor Agency to indemnify and defend the County against any liability arising out of the performance of the Agreement. On October 16, 2018, the Agreement was approved by the City Council of the City of San Bernardino and by the City Council of the City of San Bernardino acting as the Oversight Board to the Successor Agency to the Redevelopment Agency of the City of San Bernardino. PROCUREMENT Not applicable. REVIEW BY OTHERS This item has been reviewed by County Counsel (Robert Messinger, Principal Assistant County Counsel, 387-8979) on October 3, 2018; Finance (Paloma Hernandez -Barker, Administrative Analyst, 387-5426) on October 10, 2018; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on October 22, 2018. 11/6/2018 #11 SAN BERNARDINO COUNTY Contract Number SAP Number N/A Assessor -Recorder -County Clerk Department Contract Representative Telephone Number Contractor Contractor Representative Telephone Number Contract Term Original Contract Amount Amendment Amount Total Contract Amount Cost Center Erik Endler, Assistant Assessor 909-387-6703 City of San Bernardino and Successor Agency to the Redevelopment Agency of the City of San Bernardino Andrea M. Miller, City Manager 909-384-5122 Effective 11-6-18 N/A N/A N/A N/A Briefly describe the general nature of the contract: A Mutual Release and Settlement Agreement relating to the cancellation of real property taxes in connection with the former Redevelopment Agency of the City of San Bernardino's transfer of 108 parcels disallowed by the State Controller. FOR COUNTY USE ONLY Approvs t L al Form lL��_ Robert r. Messinger Principal Assistant County Counsel Date Reviewed for Contract Compliance Date Reviewed/Approved by Department Date Bob Dutton Assessor -Recorder -County Clerk Non -Standard Contract Coversheet Revised 10/18/17 MUTUAL RELEASE AND SETTLEMENT AGREEMENT This Mutual Release and Settlement Agreement ("Settlement Agreement') is entered into by and among the City of San Bernardino, a charter city and municipal corporation ("City'), the Successor Agency to the Redevelopment Agency of the City of San Bernardino ("Successor Agency"), the County of San Bernardino, a public body, corporate and politic ("County"), and the San Bernardino Assessor -Recorder -County Clerk ("Assessor"). City, Successor Agency, County and Assessor are sometimes hereafter referred to individually as a "Party" and collectively as the "Parties". RECYTAURR A. WHEREAS, on June 28, 2011, the Governor of the State of California signed into law Assembly Bill 26 (AB 1X 26, Chapter 5, Statutes of 2011, First Extraordinary Session), providing for the elimination of redevelopment agencies ('RDAs'), commencing with the fiscal year 2011-12 State budget. B. WHEREAS, AB 1X 26 prohibited RDAs from engaging in new business, established mechanisms and timelines for dissolution of the RDAs, and created RDA successor agencies to oversee the dissolution of the RDAs and redistribution of the RDA assets. C. WHEREAS, the provisions of AB 1 X 26 and AB 1484, enacted as cleanup legislation to AB 1X 26, prohibit the transfer of assets to a city, county, city and county, or any other public agency after January 1, 2011. D. WHEREAS, AB 1X 26 requires the State Controller to review the activities of RDAs to determine whether an unauthorized asset transfer has occurred between January 1, 2011 and the date on which the RDA ceases to operate, or January 31, 2012, whichever is earlier. E. WHEREAS, in accordance with the requirements of AB 1X 26, the State Controller conducted an asset transfer review of transactions among the City of San Bernardino Mutual Release and Settlement Agreement Page 1 of 20 Economic Development Agency ("City RDA"), the City, and/or other public agencies and issued its findings in a report, dated March 2013 (the "Report"). F. WHEREAS, among other findings, the State Controller identified the transfer of parcels (the "SBEDC Parcels") from the City RDA to the San Bernardino Economic Development Corporation ("SBEDC") that occurred during the period of January 1, 2011 to January 31, 2012. G. WHEREAS, upon the transfer of the SBEDC Parcels from the City RDA to the SBEDC, the Assessor reclassified the SBEDC Parcels as taxable parcels. H. WHEREAS, the State Controller determined that the SBEDC is an entity under the control of the City and that the RDA made an unallowable transfer to SBEDC, and therefore ordered that the SBEDC Parcels be turned over to the Successor Agency. I. WHEREAS, the City/Successor Agency contested the findings and determinations made by the State Controller in connection with the asset transfer review, arguing in part, that at the time of the transfer, that transaction was allowable, legally authorized, enforceable, binding and valid. J. WHEREAS, between December 3, 2014 and December 17, 2014, the SBEDC complied with the State Controller order and transferred the SBEDC Parcels to the Successor Agency. K. WHEREAS, upon notice of the transfer of the SBEDC Parcels to the Successor Agency, the Assessor reclassified the SBEDC Parcels as tax exempt. L. WHEREAS, between January 1, 2011 and January 31, 2012, the City RDA transferred, directly or through SBEDC, certain parcels of property (the "Transferred AHS Parcels") to Affordable Housing Solutions of San Bernardino, Inc. ("AHS"), a California nonprofit tax-exempt 501(c)(3) corporation acquired by the City RDA in 2009 to assist the City RDA in its statutory mission under California Health and Safety Code section 33334.2 of Mutual Release and Settlement Agreement Page 2 of 20 increasing, improving, and preserving the availability of affordable housing in the City of San Bernardino. The Transferred AHS Parcels were transferred pursuant to a Housing Capitalization Funding Agreement dated March 3, 2011 between the City RDA and AHS. Following the transfer of the Transferred AHS Parcels to AHS, the Assessor reclassified the Transferred AHS Parcels as taxable parcels. M. WHEREAS, the California Department of Finance (the "DOF"), the state agency vested with primary responsibility for implementing the wind -down and dissolution of RDAs pursuant to AB 1X 26, objected to the Housing Capitalization Funding Agreement and the transfer of the Transferred AHS Parcels to AHS, and determined that the Housing Capitalization Funding Agreement was not an enforceable obligation. N. WHEREAS, the City RDA also provided AHS with funds from the City RDA's Low and Moderate Income Housing Fund (the %MlHF") established pursuant to California Health and Safety Code section 33334.3, which funds AHS used to acquire parcels of property from third parties (the "LM11IF AHS Parcels'), and which parcels the Assessor classified as taxable parcels for the period during which AHS held title to the parcels. O. WHEREAS, the DOF objected to all transfers from the LM HF to AHS. P. WHEREAS, in or about February 2016, AHS transferred to the Successor Agency (1) the Transferred AHS Parcels, with the exception of certain parcels that had been acquired by the City RDA with federal funding provided to the City RDA by the City, and (2) the LMIHF AHS Parcels. Upon the transfer of the Transferred AHS Parcels and the LMIHF AHS Parcels from AHS to the Successor Agency, the Assessor reclassified the parcels as tax exempt. Q. WHEREAS, on May 3, 2012, Neal T. Baker Enterprises, Inc., gifted to AHS four (4) parcels (the "Baker AHS Parcels"), which parcels the Assessor classified as taxable parcels for the period during which AHS held title to the parcels. These parcels or the proceeds thereof were or will be transferred by AHS to the City. Mutual Release and Settlement Agreement Page 3 of 20 R. WHEREAS, the City has elected to serve as the Successor Housing Agency to the City RDA pursuant to California Health and Safety Code section 34176(a)(1). Said section provides that all housing assets of the City RDA, defined in subdivision (e)(1) of said section to include any real property acquired for low- and moderate -income housing purposes, shall be transferred to the City. S. WHEREAS, consistent with California Health and Safety Code section 34176, certain of the Transferred AHS Parcels and/or the LNEW AHS Parcels were subsequently transferred by the Successor Agency to the City, acting as Successor Housing Agency. T. WHEREAS, in addition to the federally -funded parcels referred to in Recital P., AHS directly acquired certain other parcels using federal funding provided to the City RDA by the City and provided by the City RDA to AHS, which parcels the Assessor classified as taxable parcels. Under California law, AHS presumptively acquired all of said federally -funded parcels (collectively, the "Federally -Funded AHS Parcels") on behalf of and for the benefit of the City, as payor. Accordingly, the Federally -Funded AHS Parcels have been transferred by AHS to the City. The Transferred AHS Parcels, the LMlHF AHS Parcels, the Federally -Funded AHS Parcels, and the Baker AHS Parcels are collectively referred to herein as the "AHS Parcels." U. WHEREAS, the Successor Agency and the City have requested that the County cancel the real property taxes levied by the County on the SBEDC Parcels and the AHS Parcels that are applicable to the period of time that the SBEDC and AHS held title to such properties consistent with the order and determination of the State Controller as delineated in the Asset Transfer Review, the objection of DOF to the transfers of assets from the City RDA to AHS, and the provisions of California law relating to the beneficial ownership of property and to taxation of property owned by charitable organizations. V. WHEREAS, pursuant to that certain "Mutual Release and Settlement Agreement" executed by the Parties on or about October 31, 2017, the County agreed to cancel the Mutual Release and Settlement Agreement Page 4 of 20 real property taxes levied on certain of the SBEDC Parcels, leaving the remaining SBEDC Parcels for future disposition (the "Remaining SBEDC Parcels"). W. WHEREAS, the Parties have been engaged in investigation, analysis and discussions to determine the legal, financial and operational consequences of complying with the Successor Agency's and the City's request that the County cancel the real property taxes levied on the Remaining SBEDC Parcels and the AHS Parcels that are applicable to the period of time that the SBEDC and AHS held title to such properties. X. WHEREAS, the Remaining SBEDC Parcels and the AHS Parcels are listed in Exhibit "A" to this Settlement Agreement. Y. WHEREAS, the Parties intend and desire hereby to settle any and all disputes between one another which arise out of (i) the initial transfers of the Remaining SBEDC Parcels and the AHS Parcels (the "Initial Transfers"), (ii) all subsequent transfers of one or more of the Remaining SBEDC Parcels or the AHS Parcels (the "Subsequent Transfers"), (iii) the classification and reclassification by the Assessor of one or more of the Remaining SBEDC Parcels or the AHS Parcels (the "Classifications'), and (iv) any and all actions taken by the Assessor and the County in connection with or relating to one or more of the Remaining SBEDC Parcels or the AHS Parcels from January 1, 2011 through and including the date of full execution of this Settlement Agreement (the "County Actions"), and to accomplish hereby a full and final settlement between the Parties of all claims which arise out of the Initial Transfers, the Subsequent Transfers, the Classifications and the County Actions. Hereinafter all disputes between the Parties which arise out of the Initial Transfers, the Subsequent Transfers, the Classifications and the County Actions shall be referred to as the "Released Claims" NOW, THEREFORE, in consideration of the terms, covenants, promises, representations, and conditions contained herein, and for other good and valuable consideration, Mutual Release and Settlement Agreement Page 5 of 20 the receipt, sufficiency, and adequacy of which are hereby acknowledged by each of the Parties, the Parties, and each of them, hereby represent and agree as follows: 1. The Recitals set forth above are true and correct and are incorporated herein by this reference. 2. It is agreed and understood that nothing contained herein shall be deemed as an admission of any liability on the part of any of the Parties with respect to the matters described in this Agreement. 3. CANCELLATION OF PROPERTY TAX ASSESSMENTS 3.1. Within thirty (30) business days of the date on which this Agreement is fully executed, which is the last date on which this Agreement is signed by all Parties, the Assessor shall cancel the real property assessments enrolled by the County on the parcels set forth on Exhibit "A," attached hereto and made a part hereof by this reference, that are applicable to the period of time during which the SBEDC or AHS held title to such properties as gifted and consistent with the order and determination of the State Controller as delineated in the Asset Transfer Review, the objection of DOF to the transfers of assets from the City RDA to AHS, and the provisions of California law relating to the beneficial ownership of property, recited above. 3.2, The Parties acknowledge and agree that as to approximately 22 of the parcels set forth on Exhibit "A," the County issued supplemental refunds based on transfers that occurred to AHS, because the re -assessed value of the parcels after the transfers was lower than the assessed value prior to the transfers. The refunds were claimed, but the City RDA also paid annual tax bills on the parcels. When the County changes the status of the parcels to non-taxable and cancels the re -assessment in accordance with this Settlement Agreement, the County will be required to process corrections to cancel the re -assessments. The Parties acknowledge and agree that bills will be created for the original refunds and new refunds will be issued for the annual tax bills that were previously paid as to the parcels. Mutual Release and Settlement Agreement Page 6 of 20 4. Notwithstanding the foregoing, the Assessor shall enroll a possessory interest ("PP') assessment for each of the relevant years for any parcel set forth on Exhibit "A" that the Assessor determines is or should have been subject to such PI assessment but for the acts of the Parties described herein. Within thirty (30) calendar days of the date on which this Settlement Agreement is fully executed, City and Successor Agency and each of them shall deliver to the Assessor any and all records, documents or other evidence of a possessory interest in any one or more of the parcels set forth in Exhibit "A" hereto and any supplemental information as may be requested by the Assessor. The PI assessments will be assessed to the party who holds or held the interest in the applicable parcel. Notwithstanding the foregoing, City shall pay or cause to be paid to the Tax Collector any PI assessments due and owing within fifteen (15) business days of written notification of the enrollment of such PI assessments for one or more of the parcels set forth in Exhibit "A" hereto. 5. CITY RELEASES 5.1. City, on behalf of itself and each of its elected and appointed officials, officers, directors, agents, employees, servants, successors, executors, administrators, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, hereby forever releases, acquits, and discharges the County and the Assessor (collectively, the "County Parties"), and each of their past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, from any and all claims, demands, actions, defenses, liabilities, obligations, and indebtedness, with respect to any and all breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasances, malfeasances, causes or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character whatsoever, whether in Mutual Release and Settlement Agreement Page 7 of 20 law or in equity, whether contractual, common law, statutory, federal, state, or otherwise, whether known or unknown, whether suspected to exist or not, whether liquidated or unliquidated, each as though fully set forth herein at length, which City has ever had, or hereafter may have or claim to have, by reason of, arising out of, or connected with or related to any acts, omissions, transactions, or occurrences arising out of the Released Claims. 5.2. City acknowledges, represents, and warrants that there may be claims arising out of the Released Claims by reason of acts, omissions, transactions or occurrences, against the County Parties, as well as against the past and present employees, servants, successors, attorneys, and assigns, if any, of the County Parties of which, at the time this Settlement Agreement is executed, it has no knowledge or suspicion. City hereby agrees and represents that this Settlement Agreement is specifically intended to, and does, extend to any and all such claims, whether or not known, claimed, or suspected by it. Therefore, City, on behalf of itself, as well as on behalf of each of its officers, directors, agents, employees, servants, successors, executors, administrators, attorneys, heirs, trustees, trustors, parent corporations, subsidiaries, beneficiaries and assigns, if any, hereby expressly waives the benefits of Section 1542 of the California Civil Code which provides: "Section 1542. GENERAL RELEASE- EXTENT. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." Mutual Release and Settlement Agreement Page 8 of 20 5.3. City hereby acknowledges, represents, and warrants, to the County Parties as follows: 5.3.1. The person signing this Settlement Agreement as or on behalf of City understands the meaning and effect of Section 1542 of the California Civil Code set forth above. 5.3.2. WITH REGARD TO SECTION 1542 OF THE CALIFORNIA CIVIL. CODE, CITY AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THE RELEASES CONTAINED IN THIS SECTION 5 (THE "CITY RELEASES') IN FAVOR OF THE COUNTY PARTIES AND CITY HEREBY WAIVES AND RELEASES ALL RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. 5.3.3. EACH PERSON SIGNING THIS SETTLEMENT AGREEMENT AS OR ON BEHALF OF CITY HAS READ THE FOREGOING RELEASES. SAID PERSON FULLY UNDERSTANDS THAT THE CITY RELEASES HAVE IMPORTANT LEGAL CONSEQUENCES. SAID PERSON REALIZES HE OR SHE IS RELEASING ANY AND ALL CLAIMS THAT THE CITY HAS AS SET FORTH ABOVE. CITY HAS HAD A LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THE CITY RELEASES. THE PERSON SIGNING AS OR ON BEHALF OF CITY WARRANTS AND REPRESENTS THAT HE OR SHE IS AUTHORIZED TO MAKE THE FOREGOING RELEASES IN THE REPRESENTATIVE CAPACITY INDICATED, IF ANY. Mutual Release and Settlement Agreement Page 9 of 20 5.3.4. The City Releases set forth in this Section 5 shall not be construed to be and do not constitute an admission of any liability on the part of City. Said City Releases shall constitute an absolute bar to any claim of any kind, whether any such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. City specifically agrees that any attempt to assert a claim barred by said City Releases shall subject the party asserting said claim to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous, or baseless claims or causes of action. 5.4. The City Releases set forth in this Section 5 shall inure to the benefit of the past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, of the County Parties. 6. SUCCESSOR AGENCY RELEASES 6.1. Successor Agency, on behalf of itself, as well as on behalf of each of its elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, hereby forever releases, acquits, and discharges the County Parties, as well as each of their past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, from any and all claims, demands, actions, defenses, liabilities, obligations, and indebtedness, with respect to any and all breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasances, malfeasances, causes or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character whatsoever, whether in law or in equity, whether contractual, common law, statutory, federal, state, or otherwise, whether known or unknown, Mutual Release and Settlement Agreement Page 10 of 20 whether suspected to exist or not, whether liquidated or unliquidated, each as though fully set forth herein at length, which Successor Agency has ever had, or hereafter may have or claim to have, by reason of, arising out of, or connected with or related to any acts, omissions, transactions, or occurrences arising out of the Released Claims. 6.2. Successor Agency acknowledges, represents, and warrants that there may be claims arising out of the Released Claims by reason of acts, omissions, transactions or occurrences, against the County Parties, as well as against the past and present employees, servants, successors, attorneys, and assigns, if any, of the County Parties of which, at the time this Settlement Agreement is executed, it has no knowledge or suspicion. Successor Agency hereby agrees and represents that this Settlement Agreement is specifically intended to, and does, extend to any and all such claims, whether or not known, claimed, or suspected by it. Therefore, Successor Agency, on behalf of itself, as well as on behalf of each of its officers, directors, agents employees, servants, successors, executors, administrators, attorneys, heirs, trustees, trustors, parent corporations, subsidiaries, beneficiaries and assigns, if any, hereby expressly waives the benefits of Section 1542 of the California Civil Code which provides. "Section 1542. GENERAL RELEASE: EXTENT. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR" Mutual Release and Settlement Agreement Page 11 of 20 6.3. Successor Agency hereby acknowledges, represents, and warrants, to the County Parties as follows: 6.3.1. The person signing this Settlement Agreement as or on behalf of Sucessor Agency understands the meaning and effect of Section 1542 of the California Civil Code set forth above. 6.3.2. WITH REGARD TO SECTION 1542 OF THE CALIFORNIA CIVIL CODE, SUCCESSOR AGENCY AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THE RELEASES CONTAINED IN THIS SECTION 6 (THE "SUCCESSOR AGENCY RELEASES") IN FAVOR OF THE COUNTY PARTIES AND SUCCESSOR AGENCY HEREBY WAIVES AND RELEASES ALL RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. 6.3.3. EACH PERSON SIGNING THIS SETTLEMENT AGREEMENT AS OR ON BEHALF OF SUCCESSOR AGENCY HAS READ THE FOREGOING SUCCESSOR AGENCY RELEASES. SAID PERSON FULLY UNDERSTANDS THAT THE RELEASES HAVE IMPORTANT LEGAL CONSEQUENCES. SAID PERSON REALIZES HE OR SHE IS RELEASING ANY AND ALL CLAIMS THAT THE SUCCESSOR AGENCY HAS AS SET FORTH ABOVE. SUCCESSOR AGENCY HAS HAD A LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THE SUCCESSOR AGENCY RELEASES. THE PERSON SIGNING AS OR ON BEHALF OF Mutual Release and Settlement Agreement Page 12 of 20 SUCCESSOR AGENCY WARRANTS AND REPRESENTS THAT HE OR SHE IS AUTHORIZED TO MAKE THE FOREGOING SUCCESSOR AGENCY RELEASES IN THE REPRESENTATIVE CAPACITY INDICATED, IF ANY. 6.3.4. The Successor Agency Releases set forth in this Section 6 shall not be construed to be and do not constitute an admission of any liability on the part of Successor Agency. Said Successor Agency Releases shall constitute an absolute bar to any claim of any kind, whether any such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. Successor Agency specifically agrees that any attempt to assert a claim barred by said Successor Agency Releases shall subject the party asserting said claim to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous, or baseless claims or causes of action. 6.4. The Successor Agency Releases set forth in this Section 6 shall inure to the benefit of the past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, of the County Parties. 7. COUNTY PARTIES RELEASES 7.1. The County Parties, on behalf of themselves, as well as on behalf of each of their respective elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, hereby forever release, acquit, and discharge City, City RDA, Successor Agency, SBEDC, and AHS (collectively, the "City Parties'), as well as each of the past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, Mutual Release and Settlenient Agreement Page 13 of 20 of each of the City Parties from any and all claims, demands, actions, defenses, liabilities, obligations, and indebtedness, with respect to any and all breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasances, malfeasances, causes or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character, whatsoever, whether in law or in equity, whether contractual, common law, statutory, federal, state, or otherwise, whether known or unknown, whether suspected to exist or not, whether liquidated or unliquidated, each as though fully set forth herein at length, which the County Parties have ever had, or hereafter may have or claim arising out of the Released Claims. 7.2. The County Parties acknowledge, represent, and warrant that they may have claims arising out of the Released Claims by reason of acts, omissions, transactions or occurrences, against the City Parties, as well as against the past and present directors, officers, employees, servants, successors, attorneys, trustees, trustors, beneficiaries, insurers and assigns, parent corporations or subsidiaries, if any, of each of the City Parties, respectively, of which, at the time this Settlement Agreement is executed, the County Parties have no knowledge or suspicion. The County Parties hereby agree and represent that this Settlement Agreement is specifically intended to, and does, extend to any and all such claims, whether or not known, claimed, or suspected by any of them. Therefore, the County Parties on behalf of themselves, as well as on behalf of their respective directors, officers, agents, employees, servants, trustees, trustors, successors, attorneys, and assigns, if any, hereby expressly waive the benefits of Section 1542 of the California Civil Code which provides: "Section 1542. GENERAL RELEASE: EXTENT_ A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR Mutual Release anal Settlement Agreement Page 14 of 20 HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." 7.3. The County Parties hereby acknowledge, represent, and warrant, to the City Parties, as follows: 7.3.1. The persons signing this Settlement Agreement as or on behalf of the County Parties understand the meaning and effect of Section 1542 of the California Civil Code set forth above. 7.3.2. WITH REGARD TO SECTION 1542 OF THE CALIFORNIA CIVIL CODE THE COUNTY PARTIES AGREE TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THE RELEASES CONTAINED IN THIS SECTION 7 (THE "COUNTY PARTIES RELEASES") IN FAVOR OF THE CITY PARTIES, AND THE COUNTY PARTIES HEREBY WAIVE AND RELEASE ALL RIGHTS AND BENEFITS WHICH THEY AND EACH OF THEM MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL, CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. 7.3.3. EACH PERSON SIGNING THIS SETTLEMENT AGREEMENT AS OR ON BEHALF OF THE COUNTY PARTIES HAS READ THE FOREGOING COUNTY PARTIES RELEASES. SAID PERSONS FULLY UNDERSTAND THAT THE COUNTY PARTIES RELEASES HAVE IMPORTANT LEGAL Mutual Release and Settlement Agreement Page 15 of 20 CONSEQUENCES. SAID PERSONS REALIZE THEY ARE RELEASING ANY AND ALL CLAIMS THAT THE COUNTY PARTIES HAVE AS SET FORTH ABOVE. THE COUNTY PARTIES HAVE HAD A LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THE COUNTY PARTIES RELEASES. EACH OF THE PERSONS SIGNING AS OR ON BEHALF OF THE COUNTY PARTIES WARRANTS AND REPRESENTS THAT HE OR SHE IS AUTHORIZED TO MAKE THE FOREGOING COUNTY PARTIES RELEASES IN THE REPRESENTATIVE CAPACITY INDICATED, IF ANY. 7.3.4. The County Parties Releases set forth in this Section 7 shall constitute an absolute bar to any claim of any kind, whether any such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. The County Parties specifically agree that any attempt to assert a claim barred by said County Parties Releases shall subject the County Parties to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous, or baseless claims or causes of action. 7.4. The County Parties Releases set forth in this Section 7 shall inure to the benefit of the elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, of the City Parties. 8. INDEMNIFICATION Successor Agency and City and each of them agree to indemnify, defend (with counsel reasonably approved by the County Parties) and hold harmless the County Parties and each of their respective authorized officers, employees, agents and volunteers from any and all claims, actions, losses, damages, and/or liability arising out of the performance of this Settlement Agreement from any cause whatsoever, including the acts, errors or omissions of any person and for any costs or expenses incurred by the County Parties on account of any claim except where Mutual Release and Settlement Agreement Page 16 of 20 such indemnification is prohibited by law. This indemnification provision shall apply regardless of the existence or degree of fault of the indemnitees. Each of the City's and the Successor Agency's indemnification obligations apply to the County Parties' "active" as well as "passive" negligence but do not apply to the County Parties' "sole negligence" or "willful misconduct" within the meaning of Civil Code Section 2782. 9. GENERAL TERMS 9.1. Pursuant to Evidence Code Section 1123, this Settlement Agreement is enforceable, binding, admissible in a court of law, and may be disclosed by any parry hereto. 9.2. Each individual executing this document on behalf of a party hereto hereby warrants and represents that he or she has been duly authorized to do so. 9.3. This Settlement Agreement, and all documents executed by the Parties, either concurrently herewith or subsequent hereto as provided for herein, shall represent the entire understanding and agreement among the Parties, and the same may not be altered or amended except by a subsequent written agreement executed by all of the Parties, or their respective successors, executors or administrators. The Parties acknowledge and agree that no representations, express or implied, have been made or relied upon in executing and agreeing to be bound by this Settlement Agreement, except as specifically set forth herein. 9.4. This Settlement Agreement and all documents and instruments required hereunder shall be governed by and construed in accordance with the laws of the State of California. 9.5. The terms, covenants, promises, conditions and representations contained in this Settlement Agreement shall inure to and be binding upon the successors and assigns of all of the Parties and each of them. Except as otherwise expressly provided for herein, this Settlement Agreement is not intended to be for the benefit of any person other than the Parties. Mutual Release and Settlement Agreement Page 17 of 20 9.6. If any provision of this Settlement Agreement shall be held prohibited by or invalidated under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or rendering ineffective the remainder of such provision, or any other provision of this Settlement Agreement. 9.7. Time is of the essence with respect to the performance of each and every term, covenant, promise and condition contained herein. 9.8. If legal action shall be instituted to enforce any of the provisions of this Settlement Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees incurred thereby. 9.9. Each of the Parties hereby acknowledges the receipt of advice of legal counsel regarding this Settlement Agreement prior to executing it. 9.10. This Settlement Agreement supersedes any and all prior and contemporaneous agreements between or among any of the Parties with respect to the subject matter of this Settlement Agreement. 9.11. The execution, delivery, or performance of this Settlement Agreement and any documents provided for hereunder are not in contravention of nor in conflict with any agreement by which the Parties, or any of them, are legally bound. 9.12. In construing the terms of this Settlement Agreement, the singular shall include the plural, and the plural shall include the singular. 9.13. The Parties agree to execute all documents and take all actions to fulfill the purposes of this Settlement Agreement. 9.14. This Settlement Agreement may be executed in counter -part and the signature pages combined to form one document which is binding on all of the Parties. Facsimiles of the signatures of the Parties are deemed to be binding and the Parties will send the originals of Mutual Release and Settlement Agreement Page 18 of 20 their signatures on this Settlement Agreement to the Office of County Counsel with respect to the County Parties and to the Office of City Attorney with respect to the City Parties. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Mutual Release and Settlement Agreement Page 19 of 20 EXHIBIT "A" CITY PARCELS (Identified by assessor Parcel Numbers) 0134014240000 0134291110000 0147224200000 0134014250000 0134301220000 0147224240000 0134014260000 0139172360000 0147224250000 0134014270000 0140012110000 0147224280000 0134021260000 0140033220000 0154125070000 0134021270000 0140041290000 0154126010000 0134021280000 0140134060000 0154126020000 0134021290000 0140143380000 0154126300000 0134053200000 0140171160000 0155451100000 0134053210000 0140192200000 0268394100000 0134053220000 0140222260000 1191031180000 0134053230000 0140282050000 1191031190000 0134053250000 0140282710000 1191031230000 0134053260000 0140282730000 1191031240000 0134054070000 0140282740000 1191031250000 0134054080000 0142522080000 1191031270000 0134054090000 0142522090000 1191031290000 0134054240000 0142522110000 1191051240000 0134054250000 0142522120000 1191051380000 0134054260000 0142522130000 1191051420000 0134061210000 0142522140000 1191051440000 0134061220000 0142522150000 1191051450000 0134061250000 0142522160000 119105.1480000 0134061300000 0142522170000 1191051530000 0134093050000 0142522250000 1191051540000 0134093060000 0142522350000 1191051550000 0134101020000 0142522360000 1191051590000 0134101030000 0142522370000 1191051600000 0134101040000 0142522380000 1191051610000 0134101050000 0142522410000 1191051660000 0134101060000 0142522420000 0134101280000 0143191740000 0134181280000 0143191750000 0134211340000 01451.71110000 0134211380000 0146031040000 0134221450000 0146045140000 0134231270000 0146053270000 0134231280000 0146072020000 0134231290000 0147224110000 Dated: Nov 0 6 2018 Dated:_u —a `] - 19 Mutual Release and Settlement Agreement COUNTY OF SAN BERNARDINO ROBERT A. LOVINGOOD, Chairman ATTEST: H. Welch, Clerk of the Approved as to Legal Form: MICHELLE D. BLAKEMORE,j�;6unty Counsel 91 Penny Al Lander-KelIW, Chief Assistant County Counsel ll SAN BERNARDINO COUNTY ASSESSOR - RECORDER -COUNTY CLERK C By: 440B —DURFTON, Assessor R-aeorder-Go ERIK ENMURIASSISTANTASS ESSCR ATTEST: I-YNA MONS L, OAISr- DEPUTY CLEw OF THE F3OARD Approved as to Legal Form: MICHELLE D. BLAKEMORE, County Counsel B r Y� Robert F. M ssinger Principal Assistant County Counsel