Butte County Board of Supervisors

Agenda Transmittal

Subject:

Department: Meeting Date Requested: Contact: Phone: Regular Agenda Consent Agenda

Department Summary: (Information provided in this section will be included on the agenda. Attach explanatory memorandum and other background information as necessary).

Fiscal Impact:

Personnel Impact:

Action Requested:

Clerk of the Board Use Only

Agenda Item:

Administrative Office Review:

4.06

Resolution of Intention to Establish County of Butte Community Facilities District No. 2013-1 (Clean EnergyProgram)

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There is no fiscal impact. Costs associated with the formation and implementation of this program will be funded by quarterlyreimbursements from Ygrene.

Upon program implementation, it is estimated that staff will spend approximately 30 minutes per month reviewingapplications.

Shari McCracken, Deputy Chief Administrative Officer

Administration August 13, 2013

Jennifer Macarthy 538-2554

1. Approve Agreement with Ygrene and authorize Chair to sign.2. Approve Letter Agreement with Orrick, Herrinton & Sutcliff, LLP and authorize Chair to sign.3. Adopt a Resolution of Intention and authorize the Chair to sign.

Property Assessed Clean Energy (PACE) financing is a vehicle which provides cities and counties with the power to levyassessments on the county property tax bill for financing the installation of renewable energy and energy and water efficiencyimprovements that are permanently affixed to the property. PACE programs are typically operated by a third partyadministrator. During the March 26, 2013 Board of Supervisors meeting, the Board requested staff work on the necessaryapproval documents to operate a PACE program in the County to be administered by Ygrene Energy Fund.

The Ygrene PACE program is based on the Mello-Roos Community Facilities Act as amended by Senate Bill 555 (2011),enabling the financing of energy efficiency, renewable energy generation, and water conservation measures through a Mello-Roos District. The first step in creating such a PACE program through SB 555 is the adoption of a Resolution of Intention toestablish a program and a Community Facilities District and levy special taxes therein to finance clean energy improvements.

DATE: July 15, 2013 TO: Members of the Board of Supervisors FROM: Jennifer Macarthy, Economic and Community Development Manager RE: Resolution of Intention to Establish County of Butte Community Facilities

District No. 2013-1 (Clean Energy Program) BACKGROUND Recent changes to state law (AB811 (2008) and SB 555 (2011)) enable cities and counties to set up property supported financing in which property owners may obtain financing for the acquisition, installation and improvement of energy efficiency, water conservation and renewable energy improvements to or on real property. Property owners would repay the financing through payment of assessments or special taxes on their property tax bills over a set period of time. This type of program is referred to as "Property Assessed Clean Energy" (PACE) financing. PACE financing is completely voluntary: no property owner would be subject to PACE financing without the property owner's express willing consent. Recognizing the benefits of offering a PACE program in Butte County, on March 26, 2013 the Board of Supervisors authorized the County to offer the FIGTREE PACE program within the unincorporated area of Butte County, and adopted the necessary documents to finalize the approval of this program. The Board of Supervisors also directed staff to work with Ygrene, another provider of PACE programs, toward adoption of the necessary documents to begin to offer this program to property owners within the unincorporated area of the County as well. Since that time, the FIGTREE PACE Program, which is based on AB 811, has become operational; and staff has been working with Ygrene staff to develop the necessary documents to establish a SB 555-based financing district. SB 555 OVERVIEW The Ygrene PACE program is based on SB 555, which went into effect January 1, 2012. SB 555 amended the Mello-Roos Community Facilitates Act of 1982 to authorize jurisdictions to establish Community Facilities Districts (CFDs) to finance and refinance the acquisition, installation, and improvement of energy efficiency, water conservation, and renewable energy improvement to or on real property, including homes and commercial buildings. Pursuant to SB 555, County CFD is to be established initially containing the entire County territory designated as Future Annexation Area (FAA). Property owners within the FAA interested in obtaining PACE financing would voluntarily request to be annexed to the CFD via the unanimous written approval of the parcel owner(s). Property owners not interested in obtaining PACE financing would not be annexed into the CFD. Property owners within the incorporated areas in the County would not be able to obtain PACE financing via the County's program unless the city in which they are located takes affirmative action to "opt-in" to

BUTTE COUNTY ADMINISTRATION

25 COUNTY CENTER DRIVE, SUITE 200 OROVILLE, CALIFORNIA 95965-3380

Telephone: (530) 538-7631 Fax: (530) 538-7120

PAUL HAHN Chief Administrative Officer

MEMBERS OF THE BOARD

BILL CONNELLY LARRY WAHL

MAUREEN KIRK STEVE LAMBERT

DOUG TEETER

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the County's program. Cities within the County that want to "opt-in" can do so by passing a simple resolution. YGRENE PROGRAM SUMMARY The following provides a summary of the Ygrene program, which Board directed staff to work toward adopting on March 26, 2013.

• Eligible Improvements - renewable energy, energy efficiency, and water conservation improvements which are permanently affixed to the property.

• Minimum Project Amount - $2,500

• Lien Requirements - Senior lien required. Lien is on par with property taxes.

• Notice to Lenders - The Ygrene program does not require lender consent, as was the requirement for the Figtree PACE program. Ygrene requires lender notification. Ygrene requires the property owner to notify all lenders by Certified Mail of the property owner's intent to participate in the PACE program. The Notice states that lender has 30 days to provide documentation demonstrating that program liens would violate existing loan covenants. After 20-days of the waiting period has lapsed, if the property owner has not been contacted by the lender, the property owner is to send an additional Notice by Certified Mail stating that the project is scheduled for funding approval in 10 days.

• Loan-to-Value Ratio - 85% loan-to-value. Total amount of assessment must not exceed 15% of the value of the property.

• Rates - Wall Street Prime Rate (currently 3.25%) plus 3.2%.

• Term - up to 20 years based on useful life of the improvements.

• Sources of Funding - issuance of municipal bonds, free market sourcing, and warehouse lending.

• Program Cost to Property Owner - Application fee of $50 plus various additional fees depending on the project for processing, underwriting, recoding, and disbursement.

• Program Cost to Contractors - Contractors charged a fee not to exceed 3% of the bid amount for each project submitted for funding.

• County Staff Time Requirement - Administration - reviews, approves, and signs all applications (approximately 30 minutes per month). Clerk Recorder's Office - records assessments against participating properties. Auditor-Controller - places annual assessment on tax roll.

• Program Revenues to the County - Will negotiate amount to reimburse County for time spent to review/approve applications. In addition, Ygrene pays (through the property owner fees) costs noted above to Clerk Recorder and Auditor/Controller.

• Indemnification - Ygrene provides full indemnification to the County.

• Validation Process - The successful completion of a validation action will be required prior to the Ygrene PACE program being offered in Butte County. The County will be responsible for preparing and filing the validation. Any costs incurred by the County for the Action will be reimbursed by Ygrene.

The Agreement for Services between Ygrene Energy Fund and Butte County details the facts stated above as well as other details on program operation and management.

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CFD DISTRICT FORMATION PROCESS Due to the fact that the Ygrene program is based on SB 555, the approval process is different than the process the County went through to establish a program through FIGTREE, which is based on AB 811. SB 555 allows for the creation of a Community Facilities District (CFD) for purposes of offering financing for Clean Energy Improvements. This process requires two public hearings as is detailed below. The first public hearing, being held August 13, 2013, includes the following action:

Adopt a Resolution of Intention (ROI). The ROI declares the County's intention to establish a CFD and levy special taxes therein to finance or refinance acquisition, installation and improvement of energy efficiency, water conservation and renewable energy improvements (Resolution 1). The ROI also sets the future public hearing date to hear testimony related to the formation of the CFD. Attached to the ROI is the proposed boundaries of the territory of the CFD for annexation in the future (Exhibit A), a list of what types of improvements can be financed (Exhibit B), and what expenses can be financed through the CFD (Exhibit C). The second public hearing, to be held at the time/date specified in the ROI will include the following:

1. Adopt a Resolution of Formation (ROF) of the CFD. The ROF includes a statement that the special tax rate shall be established in an amount required to finance or refinance the authorized improvements and to pay the district's administrative expenses.

2. Adopt a Hearing Report. The Hearing Report describes how the program will function. It also acts as a user guide, providing information on program benefits, requirements and parameters, eligible improvements, how property owners and contractors can participate, etc. Attached to the Hearing Report are the following documents:

• Unanimous Approval Agreement. Specifies the terms and conditions under which property owners unanimously approve annexation of their property to the district and levy of the special property tax.

• Assignment Agreement. Agreement between County and Ygrene whereby the County assigns the tax revenue stream to Ygrene upon funding of each project.

• Lender Notification. Letter sent to lender(s) with loans on the participating property notifying them of the proposed special tax and lien, and providing them 30 days to provide documentation demonstrating that program liens would violate existing loan covenants.

• Notice of Special Tax Lien. A Special Tax Lien on the property secures the financing. The Notice of Special Tax Lien is recorded prior to commitment of funds and commencement of construction.

3. Adopt Ordinance Levying Special Tax.

4. Adopt Authorization for Validation Suit. A validation action is a summary legal proceeding brought to confirm the validity of certain types of documents associated with a public agency's financial transaction. Since PACE financing is a new form of financing, a validation action provides the County and other transaction participants certainty, before embarking on the transaction, that a subsequent legal challenge will not invalidate or unwrap the transaction. The County will be responsible for preparing and filing the validation. Any costs incurred by the County for the action will be reimbursed by Ygrene. SPECIAL LEGAL COUNSEL AND JOINT REPRESENTATION In order to assist with the preparation of the legal documents related to the formation of a PACE program through SB 555, County Counsel and Ygrene Energy Fund will be assisted by Orrick, Herrington & Sutcliff, LLP (Orrick). Therefore, County Counsel's Office recommends entering into a Joint Representation Agreement with Orrick. As a provision of the agreement, all attorney fees and County staff time will be paid directly by Ygrene.

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ACTION REQUESTED 1. Approve Agreement and authorize Chair to sign. 2. Approve Letter Agreement with Orrick, Herrington & Sutcliff, LLP and authorize Chair to sign. 3. Adopt a Resolution of Intention to Establish the County of Butte Community Facilities District No.

2013-1 (Clean Energy) and to Levy Special Taxes Therein to Finance or Refinance the Acquisition, Installation, and Improvement of Energy Efficiency, Water Conservation, and Renewable Energy Improvements Permanently Affixed to or on Real Property on in Buildings.

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AGREEMENT by and between the

YGRENE ENERGY FUND CALIFORNIA, LLC and the

COUNTY OF BUTTE, CALIFORNIA

THIS AGREEMENT is made and entered into by and between the COUNTY OF BUTTE, a political subdivision of the State of California, hereinafter referred to as "COUNTY," and YGRENE ENERGY FUND CALIFORNIA, LLC, a California limited-liability company, hereinafter referred to as "CONTRACTOR."

RECITALS WHEREAS, COUNTY desires to establish a voluntary special tax program to reduce the upfront costs associated with energy efficiency, renewable energy and water conservation projects that are affixed to real property and proposed by property owners (Clean Energy Program); WHEREAS, COUNTY desires to promote widespread retrofits in accordance with Government Code Section 53313.5(l), thereby reducing greenhouse gas emissions, promoting energy security, and improving water conservation while stimulating economic opportunities; WHEREAS, as authorized by Senate Bill 555 (Statutes of 2011, Chapter 493) COUNTY intends to utilize the Mello-Roos Community Facilities Act of 1982 (the “ACT”) to establish a community facilities district through which COUNTY will implement the Clean Energy Program; WHEREAS, CONTRACTOR has experience in the administration and funding of similar programs; WHEREAS, COUNTY and CONTRACTOR desire to contract for the administration and funding of the County’s Clean Energy Program, which will use a community facilities district to provide special tax financing to property owners who desire to install renewable energy, energy efficiency and water efficiency improvements on their real property within the district; . WHEREAS, COUNTY AND CONTRACTOR desire to enter into this Agreement on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, COUNTY and CONTRACTOR agree as follows:

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AGREEMENT I. SCOPE OF SERVICES

CONTRACTOR shall provide services in the amount, type and manner described in Exhibit A, which is attached hereto and incorporated herein. During the term of this Agreement, CONTRACTOR shall have the right to provide or operate a Clean Energy Program in the COUNTY pursuant to Senate Bill No. 555. The initial program shall only be for non-residential properties. Should the Board of Supervisors subsequently decide to extend the Clean Energy Program to include residential properties (four units or less), such amendment to the scope of this agreement shall require Board of Supervisors approval.

II. TERMS

A. This Agreement shall be effective and commence as of the date it is approved by both parties (the “Effective Date”) and shall remain in effect for five years after a final, incontestable judgment has been entered in the validation action (the “Initial Term”).

B. The parties may renew this Agreement; provided, however, that any renewal shall require approval by the Board of Supervisors.

C. In the event that the Agreement is not renewed by the parties, CONTRACTOR shall be authorized during the two-year period following the Initial Term or any renewed term (“Wind Down”), to take all necessary actions to complete any projects approved during the Initial Term or the renewed term of the Agreement in a manner consistent with Exhibit A herein. In such circumstances, CONTRACTOR shall provide ongoing management of assessments related to any projects completed under CONTRACTOR’s auspices, shall provide all of the services required of CONTRACTOR in a professional manner in accordance with the Agreement, and shall in good faith assist COUNTY with the termination of the Program and/or transfer of the Program to another administrator.

D. In consideration of CONTRACTOR’s continued performance of the services during the Wind Down period, and so long as legally permissible and no material breach of contract exists, CONTRACTOR shall have the right during the Wind Down period to continue to approve projects, completion of which (including placement on the tax roll) shall not extend beyond the second tax roll date following commencement of the Wind Down period. To insure CONTRACTOR’s performance of the services outlined in Section II C, including its obligation to provide cost recovery to COUNTY, CONTRACTOR shall, prior to the commencement of the Wind Down period, and annually thereafter, provide COUNTY with a $50,000 irrevocable letter of credit in favor of COUNTY to cover COUNTY’s estimated costs to provide continued services during the two year period referenced in Subsection C of this Section. Failure to comply with

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the applicable provisions of this Agreement, including but not limited to Exhibit A, during the Wind Down period shall be deemed a material breach of the Agreement.

III. COMPENSATION

CONTRACTOR shall perform the services described in Exhibit A at no cost to COUNTY. COUNTY shall not be obligated to compensate or reimburse CONTRACTOR from any public funds for CONTRACTOR’s performance of such services or for any costs that CONTRACTOR may incur in the performance of this Agreement. CONTRACTOR’s source of compensation shall be derived from the special taxes paid by property owners who obtain financing from CONTRACTOR and/or recovery of fees for costs related to Contractor certification in accordance with the terms and conditions contained in Exhibit A.

IV. LICENSES, PERMITS AND CONTRACTUAL GOOD STANDING

A. CONTRACTOR shall possess and maintain all necessary licenses, permits, certificates and credentials required by the laws of the United States, the State of California, County of Butte and all other appropriate governmental agencies, including any certification and credentials reasonably required by COUNTY. Failure to maintain the licenses, permits, certificates, and credentials shall be deemed a breach of this Agreement and constitutes grounds for the termination of this Agreement by COUNTY.

B. CONTRACTOR further certifies to COUNTY that it and its principals are not debarred, suspended, or otherwise excluded from or ineligible for, participation in federal, State or county government contracts. Contractor certifies that it shall not contract with a Subcontractor that is so debarred or suspended.

V. PERFORMANCE STANDARDS

CONTRACTOR shall perform its services under this Agreement in accordance with the industry and/or professional standards applicable to CONTRACTOR's services.

VI. COUNTY RESPONSIBILITIES COUNTY acknowledges that the ACT reserves authority and responsibility to local governments for establishing the District, and executing the Unanimous Approval Agreements (“UAAs”) with property owners. COUNTY shall perform any actions required of them in good faith, including the following actions: A. Authorize and adopt resolutions/and or ordinances required to form the

DISTRICT; B. Adopt resolutions and approve documents authorizing the program; C. Execute documents required by the Act including, but not limited to, UAAs;

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D. Without cost to the County and subject to reimbursement, act in good faith to fulfill other requirements of the ACT and/or Ygrene’s funding sources that can only be performed by the government agency sponsoring the program.

Notwithstanding the above, all actions requiring Board of Supervisors action shall be subject to Board of Supervisors approval.

VII. OWNERSHIP OF WORK PRODUCT

All technical data, evaluations, plans, specifications, reports, documents, or other work products developed by CONTRACTOR hereunder shall be the exclusive property of COUNTY and shall be delivered to COUNTY upon completion of the services authorized hereunder. CONTRACTOR may retain copies thereof for its files and internal use. Publication of the information directly derived from work performed or data obtained in connection with services rendered under this Agreement must first be approved in writing by COUNTY. COUNTY recognizes that all technical data, evaluations, plans, specifications, reports, and other work products are instruments of CONTRACTOR's services and are not designed for use other than what is intended by this Agreement. Notwithstanding anything in this Section VI, the parties understand and agree that CONTRACTOR’s administrative software is proprietary, leased technology and is not subject to a claim of ownership or other rights by COUNTY.

VIII. STATUS OF CONTRACTOR

A. It is understood and agreed that CONTRACTOR (including CONTRACTOR’s employees) is an independent contractor and that no relationship of employer-employee exists between the parties hereto. CONTRACTOR’s assigned personnel shall not be entitled to any benefits payable to employees of COUNTY. COUNTY is not required to make any deductions or withholdings from the compensation payable to CONTRACTOR under the provisions of this agreement; and as an independent contractor, CONTRACTOR hereby indemnifies and holds COUNTY harmless from any and all claims that may be made against COUNTY based upon any contention by any third party that an employer-employee relationship exists by reason of this agreement.

B. It is further understood and agreed by the parties hereto that CONTRACTOR in the performance of its obligation hereunder is subject to the control or direction of COUNTY as to the designation of tasks to be performed, the results to be accomplished by the services hereunder agreed to be rendered and performed, and not the means, methods, or sequence used by CONTRACTOR for accomplishing the results.

C. If, in the performance of this agreement, any third persons are employed by CONTRACTOR, such person shall be entirely and exclusively under the direction, supervision, and control of CONTRACTOR. All terms of employment, including hours, wages, working conditions, discipline, hiring, and discharging, or any other terms of employment or requirements of law, shall be determined by CONTRACTOR, and the

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COUNTY shall have no right or authority over such persons or the terms of such employment.

D. It is further understood and agreed that as an independent contractor and not an employee of COUNTY, neither the CONTRACTOR nor CONTRACTOR’s assigned personnel shall have any entitlement as a COUNTY employee, right to act on behalf of COUNTY in any capacity whatsoever as agent, nor to bind COUNTY to any obligation whatsoever. CONTRACTOR shall not be covered by COUNTY's worker’s compensation; nor shall CONTRACTOR be entitled to compensate sick leave, vacation leave, retirement entitlement, participation in group health, dental, life and other insurance programs, or entitled to other fringe benefits payable by the COUNTY to employees of the COUNTY.

E. It is further understood and agreed that CONTRACTOR must issue W-2 and 941 Forms for income and employment tax purposes, for all of CONTRACTOR's assigned personnel under the terms and conditions of this agreement.

IX. CONTRACTOR IDENTIFICATION

CONTRACTOR shall provide the COUNTY with the following information for the purpose of compliance with California Unemployment Insurance Code section 1088.8: CONTRACTOR’S name, address, telephone number, social security number, and whether dependent health insurance coverage is available to CONTRACTOR.

X. BENEFITS WAIVER

If CONTRACTOR is unincorporated, CONTRACTOR acknowledges and agrees that CONTRACTOR is not entitled to receive the following benefits and/or compensation from COUNTY: medical, dental, vision and retirement benefits, life and disability insurance, sick leave, bereavement leave, jury duty leave, parental leave, or any other similar benefits or compensation otherwise provided to permanent employees pursuant to the County Code, Public Employees’ Retirement System and/or any and all memoranda of understanding between COUNTY and its employee organizations. Should CONTRACTOR or any employee or agent of CONTRACTOR seek to obtain such benefits from COUNTY, CONTRACTOR agrees to indemnify and hold harmless COUNTY from any and all claims that may be made against COUNTY for such benefits.

XI. RETIREMENT BENEFITS/STATUS

CONTRACTOR acknowledges and agrees that COUNTY has not made any representations regarding entitlement, eligibility for and/or right to receive ongoing retirement benefits during the term of this Agreement. By entering into this Agreement, CONTRACTOR assumes sole and exclusive responsibility for any consequences, impacts or action relating to such retirement benefits that is or will be occasioned as a result of the services provided by CONTRACTOR under this Agreement. CONTRACTOR waives any rights to proceed against COUNTY should any COUNTY

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retirement system or plan modify or terminate retirement benefits based on CONTRACTOR's provision of services under this Agreement.

XII. CONFLICT OF INTEREST

CONTRACTOR and CONTRACTOR’s officers and employees shall not have a financial interest, or acquire any financial interest, direct or indirect, in any business, property or source of income which could be financially affected by or otherwise conflict in any manner or degree with the performance of services required under this Agreement.

XIII. NONDISCRIMINATION IN EMPLOYMENT, SERVICES, BENEFITS AND FACILITIES

A. CONTRACTOR agrees and assures COUNTY that CONTRACTOR and any subcontractors shall comply with all applicable federal, state, and local anti-discrimination laws, regulations, and ordinances and to not unlawfully discriminate, harass, or allow harassment against any employee, applicant for employment, employee or agent of COUNTY, or recipient of services contemplated to be provided or provided under this Agreement, because of race, ancestry, marital status, color, religious creed, political belief, national origin, ethnic group identification, sex, sexual orientation, age (over 40), medical condition (including HIV and AIDS), or physical or mental disability. CONTRACTOR shall ensure that the evaluation and treatment of its employees and applicants for employment, the treatment of COUNTY employees and agents, and recipients of services are free from such discrimination and harassment.

B. CONTRACTOR represents that it is in compliance with and agrees that it will continue to comply with the Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.), the Fair Employment and Housing Act (Government Code §§ 12900 et seq.), and regulations and guidelines issued pursuant thereto.

C. CONTRACTOR agrees to compile data, maintain records and submit reports to

permit effective enforcement of all applicable antidiscrimination laws and this provision. D. CONTRACTOR shall include this nondiscrimination provision in all subcontracts

related to this Agreement. XIV. INDEMNIFICATION

Contractor shall indemnify, defend, and hold harmless COUNTY, its Board of Supervisors, officers, directors, agents, employees and volunteers from and against any and all claims, demands, actions, losses, liabilities, damages, and costs, including reasonable attorneys’ fees, arising out of or resulting from the performance by CONTRACTOR or its subcontractors of this Agreement, regardless of whether caused in part by a party indemnified hereunder. The indemnity obligation shall survive the termination or expiration of the Agreement.

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XV. INSURANCE Without limiting CONTRACTOR’S indemnification, CONTRACTOR shall maintain in

force at all times during the term of this Agreement and any extensions or modifications thereto, insurance as specified in Exhibit B. It is the responsibility of CONTRACTOR to notify its insurance advisor or insurance carrier(s) regarding coverage, limits, forms and other insurance requirements specified in Exhibit B. It is understood and agreed that COUNTY shall not pay any sum to CONTRACTOR under this Agreement unless and until COUNTY is satisfied that all insurance required by this Agreement is in force at the time services hereunder are rendered. Failure to maintain insurance as required in this agreement may be grounds for material breach of contract.

XVI. TERMINATION A. Should CONTRACTOR materially fail to perform any of the terms and

conditions contained in this Agreement in the time and/or manner specified, and fail to cure such default within ten days following written notice by COUNTY, COUNTY may immediately terminate this Agreement. Upon request by CONTRACTOR the ten-day cure period may be extended upon written agreement by both parties. Both parties shall not unreasonably refuse to extend the cure period. In the event of such termination, CONTRACTOR shall not approve any projects after the termination date, but shall take all necessary actions to complete any previously approved projects in a manner consistent with Exhibit A hereto. In the event of such termination, COUNTY may proceed in any manner deemed proper by COUNTY to wind down, transfer and/or assign responsibilities for administering and funding the Program to a different administrator.

B. Notwithstanding any other provision of this Agreement, COUNTY may suspend

this Agreement immediately, upon either giving written notice to CONTRACTOR in the event that (1) any state or federal court enjoins and/or prohibits all or a portion of the Clean Energy Program or otherwise invalidates the provisions of its implementing legislation; or (2)a court action subsequent to the validation judgment results in a determination that the COUNTY’s implementation of the Clean Energy Program is unlawful and/or otherwise unable to continue in the manner anticipated in this Agreement. In the event that events contemplated by the Section XVI (B) affect only a portion of the Program, the parties shall determine by mutual agreement whether the remaining portions of the Program are legally and financially viable and should continue. If the events contemplated by Section XVI (B) are not resolved within a six (6) month period of time, contract shall be terminated unless parties mutually agree to extend the suspension period.

XVII. PROGRAM SUSPENSION A. CONTRACTOR may, upon consultation with the COUNTY, and upon thirty (30)

days written notice to COUNTY, suspend the Clean Energy Program for a maximum of six (6) months under the following circumstances:

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1. Conditions in the financial markets and dependent interest rates make it impossible to operate the Clean Energy Program in a fiscally prudent manner.

2. Federal or state law statutory changes or judicial decisions invalidate the Clean Energy Program

3. Federal or state law statutory changes or judicial decisions invalidate COUNTY’s authority to provide special tax lien priority.

B. At the conclusion of such six (6) month suspension period, CONTRACTOR may request from COUNTY an additional six (6) months suspension. COUNTY may, in its sole discretion, grant or deny the requested additional suspension period or may, notwithstanding Section XV of this Agreement, terminate this Agreement upon one hundred eighty days notice.

XVIII. REPORTS

CONTRACTOR shall, without additional compensation therefore, make fiscal, program evaluation, progress, and such other reports as may be reasonably required by COUNTY concerning CONTRACTOR's activities as they affect the contract duties and purposes herein.

XIV. AUDITS AND RECORDS

A. Upon COUNTY's request, COUNTY or its designee shall have the right at reasonable times and intervals to audit, at CONTRACTOR's premises, CONTRACTOR's financial and program records as COUNTY deems necessary to determine CONTRACTOR's compliance with legal and contractual requirements and to determine that proper accounting and disposition of taxes collected by COUNTY and forwarded to CONTRACTOR for purposes of the Clean Energy Program has occurred. CONTRACTOR shall maintain such records for a period of five years following termination of the Agreement, and shall make them available for copying upon COUNTY's request at CONTRACTOR's expense.

B. CONTRACTOR shall provide an annual audit report of its activities under this Agreement and shall annually present such report to the Board of Supervisors. C. Failure to comply with this provision shall constitute a material breach of this Agreement.

XX. CONFIDENTIALITY A. During the performance of this Agreement, CONTRACTOR may gain access to

and use COUNTY information regarding governmental affairs, processes, trade secrets, technical matters, systems, facilities, customer lists, copyright data, client information and other vital information (COUNTY information) that are valuable, special and unique assets of COUNTY. CONTRACTOR shall protect all COUNTY information and treat it as strictly confidential and shall not at any time, either directly or indirectly, divulge,

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disclose or communicate in any manner any COUNTY information to any third party without the prior written consent of COUNTY. B. All confidential or proprietary information received by COUNTY from CONTRACTOR may be disclosed upon receipt of a Public Records Act request; provided however that if any information is marked as “confidential” when it is provided to COUNTY, COUNTY shall give notice to CONTRACTOR of any request for the disclosure of such information prior to its release. Upon notification of such request, CONTRACTOR shall defend and hold harmless COUNTY, its Board of Supervisors, officers, directors, agents and employees from and against any action, demands, claims, liabilities, losses, damages and costs, including reasonable attorneys’ fees resulting from COUNTY asserting the confidentiality of such confidential information.

XXI. INFORMATION TECHNOLOGY ASSURANCES CONTRACTOR shall take all reasonable precautions to ensure that any hardware,

software, and/or embedded chip devices used by CONTRACTOR in the performance of services under this Agreement, other than those owned or provided by COUNTY, shall be free from defects, including worms, viruses, all other malicious modifications or intrusions harmful to the computer or peripherals of the consumer or the COUNTY. Nothing in this provision shall be construed to limit any rights or remedies otherwise available to COUNTY under this Agreement.

XXII. SUBCONTRACTS, ASSIGNMENT A. CONTRACTOR shall obtain prior written approval from COUNTY before

subcontracting any of the services delivered under this Agreement, which approval will not be unreasonably withheld. CONTRACTOR remains legally responsible for the performance of all contract terms including work performed by third parties under subcontracts. Any subcontracting will be subject to all applicable provisions of this Agreement. CONTRACTOR shall be held responsible by COUNTY for the performance of any subcontractor.

B. This Agreement is not assignable by CONTRACTOR in whole or in part, without

the prior written consent of COUNTY, except for assignment to a parent or subsidiary company of CONTRACTOR. CONTRACTOR shall not assign COUNTY indemnification provisions without prior consent of COUNTY. CONTRACTOR shall remain jointly and severally liable for all conduct or performance related to the Clean Energy Program.

XXIII. AMENDMENT AND WAIVER

Except as provided herein, no alteration, amendment, variation, or waiver of the terms of this Agreement shall be valid unless made in writing and signed by both parties. Waiver by either party of any default, breach or condition precedent shall not be construed as a waiver of any other default, breach or condition precedent, or any other right hereunder. No interpretation of any provision of this Agreement shall be binding upon COUNTY

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unless agreed in writing by COUNTY and counsel for COUNTY or a court of competent jurisdiction.

XXIV. SUCCESSORS

This Agreement shall bind the successors of COUNTY and CONTRACTOR in the same manner as if they were expressly named.

XXV. TIME

Time is of the essence of this Agreement. XXVI. INTERPRETATION

This Agreement shall be deemed to have been prepared equally by both of the parties, and the Agreement and its individual provisions shall not be construed or interpreted more favorably for one party on the basis that the other party prepared it.

XXVII. NOTICE

Any notice, demand, request, consent, or approval that either party hereto may or is required to give the other pursuant to this Agreement shall be in writing and shall be either personally delivered or sent by mail, addressed as follows: TO COUNTY Paul Hahn, CAO Butte County Administration 25 County Center Dr., Ste. 200 Oroville, CA 95965

TO CONTRACTOR Ygrene Energy Fund California 100 B Street, SU 210 Santa Rosa, CA 95401

Either party may change the address to which subsequent notice and/or other communications can be sent by giving written notice designating a change of address to the other party, which shall be effective upon receipt.

XXVIII.COMPLIANCE WITH LAWS

COUNTY and CONTRACTOR shall observe and comply with all applicable Federal, State, and County laws, regulations and ordinances.

XXIX.GOVERNING LAWS AND JURISDICTION This Agreement shall be deemed to have been executed and to be performed within the

State of California and shall be construed and governed by the internal laws of the State of California. Any legal proceedings arising out of or relating to this Agreement shall be brought in the County of Butte, California.

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XXX. DISPUTES

In the event of any dispute arising out of or relating to this Agreement, the parties shall attempt, in good faith, to promptly resolve the dispute mutually between themselves. Pending resolution of any such dispute, CONTRACTOR shall continue without delay to carry out all its responsibilities under this Agreement unless the Agreement is otherwise terminated in accordance with the Termination provisions herein. COUNTY shall not be required to make payments for any services that are the subject of this dispute resolution process until such dispute has been mutually resolved by the parties. If the dispute cannot be resolved within 15 calendar days of initiating such negotiations or such other time period as may be mutually agreed to by the parties in writing, either party may pursue its available legal and equitable remedies, pursuant to the laws of the State of California. Nothing in this Agreement or provision shall constitute a waiver of any of the government claim filing requirements set forth in Title 1, Division 3.6, of the California Government Code or as otherwise set forth in local, state and federal law.

XXXI. PRIOR AGREEMENTS This Agreement constitutes the entire contract between COUNTY and CONTRACTOR

regarding the subject matter of this Agreement. Any prior agreements, whether oral or written, between COUNTY and CONTRACTOR regarding the subject matter of this Agreement are hereby terminated effective immediately upon full execution of this Agreement.

XXXII. SEVERABILITY If any term or condition of this Agreement or the application thereof to any person(s) or

circumstance is held invalid or unenforceable, such invalidity or unenforceability shall not affect other terms, conditions, or applications which can be given effect without the invalid term, condition, or application; to this end the terms and conditions of this Agreement are declared severable.

XXXIII. FORCE MAJEURE Neither CONTRACTOR nor COUNTY shall be liable or responsible for delays or

failures in performance resulting from events beyond the reasonable control of such party and without fault or negligence of such party. Such events shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, acts of government agencies other than COUNTY, fire, power failures, nuclear accidents, earthquakes, unusually severe weather, acts of terrorism, or other disasters, whether or not similar to the foregoing, and acts or omissions or failure to cooperate of the other party or third parties (except as otherwise specifically provided herein).

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XXXIV. SURVIVAL OF TERMS All services performed and deliverables provided pursuant to this Agreement are subject

to all of the terms, conditions, price discounts and rates set forth herein, notwithstanding the expiration of the initial term of this Agreement or any extension thereof. Further, the terms, conditions and warranties contained in this Agreement that by their sense and context are intended to survive the completion of the performance, cancellation or termination of this Agreement shall so survive.

XXXV. DUPLICATE COUNTERPARTS This Agreement may be executed in duplicate counterparts. The Agreement shall be

deemed executed when it has been signed by both parties. XXXVI. AUTHORITY TO EXECUTE Each person executing this Agreement represents and warrants that he or she is duly

authorized and has legal authority to execute and deliver this Agreement for or on behalf of the parties to this Agreement. Each party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such party's obligations hereunder have been duly authorized.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first written above. COUNTY OF BUTTE, a YGRENE ENERGY FUND political subdivision of the State CALIFORNIA, LLC of California By ______________________ By _______________________ Bill Connelly, Chair (name), (Title) Butte County Board of Supervisors Attest: By:__________________________ Paul Hahn, Chief Administrative Officer and Clerk of the Board of Supervisors

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EXHIBIT A CONTRACTOR shall provide the following services in connection with the Clean Energy Program. 1. CONTRACTOR shall administer and fund the Clean Energy Program in a manner that is consistent with the terms and conditions adopted and implemented by the Board of Supervisors and defined in this Exhibit A.

a. The Clean Energy Program and the Community Facilities District within which it operates may include both incorporated and unincorporated territories of Butte County consistent with the terms and conditions adopted by the Board of Supervisors. Any incorporated territories joining the District after its initial formation shall comply with all terms and conditions of the Clean Energy Program as adopted by the Board of Supervisors and the Agreement.

b. The Clean Energy Program and the Community Facilities District within which it operates shall be formed and validated to serve all properties legally permitted pursuant to Government Code Section 53313.5(l); provided, however, that residential properties of four units or less shall not be eligible to participate in the Clean Energy Program until such time as the Board of Supervisors authorizes their inclusion. Upon such authorization by the Board of Supervisors, this Agreement shall be amended accordingly.

c. On the Effective Date of this Agreement, CONTRACTOR shall be responsible for performing and/or assisting in the performance of, those services and activities necessary for the formation of the Clean Energy Program and the Community Facilities District within which it operates and for validation of that program in accordance with Section 860 through 870.5 of the California Code of Civil Procedure.

1. CONTRACTOR shall be responsible for all costs attributable to the formation of the Community Facilities District, including but not limited to COUNTY staff time and attorney’s fees. 2. CONTRACTOR shall be responsible for all costs attributable to such validation action, including but not limited to COUNTY staff time and attorneys’ fees.

d. CONTRACTOR shall not be responsible for the performance of any of the remaining services and activities described in this Exhibit A until such time as the Community Facilities District has been formed and a final, incontestable judgment has been entered in the above-referenced validation action.

2. CONTRACTOR shall administer the Clean Energy Program including, but not limited to, processing applications, funding projects, providing customer service, managing Special Tax Financing and District reporting and managing the Certified Contractor program. In administering the Clean Energy Program:

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a. CONTRACTOR shall evaluate applications and process them on a first come first served basis.

b. CONTRACTOR shall timely communicate pre-approval, approval and denial to Clean Energy Program applicants.

c. CONTRACTOR shall provide personal assistance to property owners throughout the process of applying for Clean Energy Program participation and selecting contractors, either at the Outreach Center, by telephone or by email.

d. CONTRACTOR shall ensure that property owners understand and agree in writing to Clean Energy Program terms.

e. Following project submittals, CONTRACTOR shall monitor project status throughout the bid acceptance process.

f. CONTRACTOR shall prepare and present the Unanimous Approval Agreement to the property owner and COUNTY.

g. Unless the property owner is installing the improvements, for purposes of participation in the Clean Energy Program, CONTRACTOR will authorize the property owner and Certified Contractor to obtain permits and begin construction only after a construction contract has been executed between the property owner and a Certified Contractor.

h. Upon notification of receipt of the final inspection from the Building Department with jurisdiction over the property, and notification that all eligible improvement liens through the Clean Energy Program have been released, CONTRACTOR shall accept the project for final approval and payment.

i. CONTRACTOR shall coordinate the timely recording of each Notice of Special

Tax Lien and the payment of any associated fees. j. CONTRACTOR shall participate in and attend meetings of the Board of Supervisors, the governing bodies of other participating Butte COUNTY jurisdictions, and administrative meetings as necessary in order to implement and administer the Clean Energy Program.

3. CONTRACTOR shall coordinate ongoing management and verification of properties in the Clean Energy Program Community Facilities District, annual special tax levies and special tax delinquencies. CONTRACTOR shall provide the following services utilizing a Subcontractor:

a. Accept electronic import from CONTRACTOR’s administrative software to maintain a database of the parcels within the Clean Energy Program Community Facilities District including APN, original project cost, annual special tax levy,

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amortization schedule, principle and interest allocation and any other relevant data as agreed by the parties. CONTRACTOR will format data according to specifications provided by Subcontractor for electronic import.

b. Submit the annual assessment levy to the COUNTY on the date specified by the Auditor-Controller for inclusion on the consolidated property tax bills. Subcontractor will verify inclusion of the levies on the tax roll for all participating properties in the Community Facilities District, and coordinate payment of any associated cost for placing the levies on the tax roll.

c. Review COUNTY records, within a reasonable timeframe following statutory payment dates to identify delinquencies and prepare a delinquency detail report for CONTRACTOR. Subcontractor will also monitor and record reinstatements and other tax record activities relevant to the tax levies.

d. Provide a toll-free number to field inquiries from District staff, property owners, and COUNTY regarding tax levies, prepayments and other issues related to the Clean Energy Program.

e. Under separate agreement, license access to Subcontractor software to CONTRACTOR for purposes of demonstration and integration with CONTRACTOR’s administrative software.

f. Prepare annual Community Facilities District special tax report(s) as required by the COUNTY Auditor-Controller and/or COUNTY staff.

g. Provide such other services as mutually agreed upon by Subcontractor and CONTRACTOR that are determined to be useful and appropriate in the furtherance of CONTRACTOR’s administration of the Clean Energy Program.

4. CONTRACTOR shall implement the Clean Energy Program in accordance with COUNTY authorization as follows:

a. CONTRACTOR shall provide Special Tax Financing only for categories of properties approved by COUNTY. Special Tax Financing shall not be available under the Clean Energy Program for residential properties consisting of four units or less, until such time as authorized by the Board of Supervisors.

b. The Clean Energy Program shall finance only Eligible Improvements, a list of which is attached as Attachment 1 to this Exhibit. COUNTY and CONTRACTOR may jointly authorize additional or alternative improvements on a case-by-case basis. The list of Eligible Improvements may also be modified to comply with state law.

c. Any rebates or incentives received by participating property owners prior to completion of project shall be deducted from the requested Special Tax Financing.

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d. To receive Special Tax Financing, the property owner shall be required to execute a Unanimous Approval Agreement and to agree to a special tax levy sufficient to repay the Principal Amount received from the Program, interest on the Principal Amount, COUNTY cost recovery and initial and on-going Clean Energy Program expenses. The term “Principal Amount” means the total of all financed project costs, including implementation costs such as permits, audit expenses, application fees and capitalized interest. The special tax shall appear on the property owner’s property tax bill.

e. The rate of interest paid by the property owner on the principal amount to be financed will be a fixed rate – though the COUNTY may establish an option for property owners to elect a variable rate at some point in the future. The rate offered to property owners will vary from time to time depending on CONTRACTOR’s cost of funds. The not to exceed 2% annual increase in the special tax provided for in the Mello-Roos Act will not apply to fixed rate financing.

f. As a result of administrative delays involved in placing the special tax levy on COUNTY tax rolls, the first tax year’s special tax will be added to the total amount upon which later special tax installments are based should it not appear on property tax bills in the first year.

g. Failure of a property owner to pay the special tax when due may result in penalties, interest and foreclosure.

h. CONTRACTOR shall require property owner to notify all lenders of record by Certified Mail Return Receipt of property owner's intent to participate in the Clean Energy Program prior to providing funding. Such notification shall state that lender has 30 days to provide documentation demonstrating that program liens would violate existing loan covenants. After 20 days, if lender(s) has not contacted property owner regarding proposed Clean Energy Program funding, property owner shall provide lender an additional notification by Certified Mail Return Receipt, which states that the 30-day period is closing, and that the project is scheduled for funding approval in 10 days. Property owner shall provide CONTRACTOR confirmation of the lender notifications by means of the signed and dated Return Receipts. Contractor shall not authorize funding until such time as the specified waiting periods have lapsed, unless lender(s) of record signs the Lender Notice prior to completion of the notice period.

i. CONTRACTOR shall require property owners, in connection with any sale, to make all legally mandated disclosures pertaining to the existence of the special tax lien on the property.

j. Minimum eligible funding request under the Clean Energy Program is $2,500.

k. Project funding under the Clean Energy Program shall be structured to ensure that the aggregate annual property tax, including the special tax, shall not exceed the maximum allowable under State law.

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5. For all Special Tax Financing under the Clean Energy Program, CONTRACTOR shall ensure that, as a condition of a property owner’s participation in the Clean Energy Program:

a. The property owner shall deliver to CONTRACTOR the property owner's acknowledgement of sole responsibility to deal with lenders. b. Each holder of title to the property executes applicable Clean Energy Program documents.

c. The property owner shall make a diligent effort to participate in applicable federal, state, utility and COUNTY-sponsored incentive programs.

d. The property owner shall provide CONTRACTOR with access to the property’s utility usage records for up to two years prior to and following project processing.

e. The property owner shall be current in the payment of all debt obligations secured by the property and shall have been current for all such obligations during the previous three years (or since the property owner has held title to the property, if for less than three years).

f. There shall be no involuntary liens on the property, including but not limited to construction liens. g. No notices of default or other evidence of debt delinquency shall have been recorded for the preceding three years or the entire term of ownership of the current owner, whichever is shorter. h. The total mortgage debt on the property shall not exceed 85% of the market value of the property, as derived from either assessed value, an appraisal or an estimate of value based upon data supplied by Subcontractor. The term “total mortgage debt” means the total debt secured by the property, including mortgages, promissory notes, equity lines of credit and the Principal Amounts of any fixed assessment liens on the property, before recordation of the Notice of Special Tax Lien.

i. CONTRACTOR shall require an energy audit for all properties other than residential properties of four units or less. The audit shall show that the financial benefits to the property owner exceed the cost of installing the Eligible Improvements over the useful life of the improvements. If the Board of Supervisors authorizes residential properties (four units or less) to participate in the Clean Energy Program, CONTRACTOR shall encourage such property owners to conduct an energy audit.

j. In addition to the requirements in Section 6 (a-g) stated above, for Special Tax Financing of more than $250,000 but less than $500,000, the following underwriting requirements shall apply:

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1. CONTRACTOR shall open an escrow with a local title company and obtain a Preliminary Title Report that designates the owners of record and any exceptions to the title that might interfere with the financing.

2. The property owner shall be required to submit a Natural Hazard Zone Disclosure Report on the Property. If the report indicates the possible presence of environmental contaminants, then CONTRACTOR shall require that the property owner submit a Phase I Environmental Assessment for review by CONTRACTOR. Based on that review, CONTRACTOR may disapprove the property owner’s participation in the Clean Energy Program.

k. In addition to the requirements in Section 6 (a-h) stated above, for Special Tax Financing of more than $500,000, the following underwriting requirements shall apply:

1. The required energy audit, and the determination of estimated energy savings, shall be conducted by a qualified engineering firm.

2. CONTRACTOR shall encourage property owners to obtain insurance that will guarantee the energy-cost savings, as predicted by the engineered audit.

l. In order to be eligible for Special Tax Financing, a property owner shall utilize only Certified Contractors to install Eligible Improvements, unless a property owner is installing the improvements for participation in the Program. Owner/Installers will not be eligible for reimbursement of labor costs, and all applicable building permits and licensing requirements shall apply.

m. Upon review of the proposed project and the bid(s) submitted by the property owner, CONTRACTOR shall issue either a Project Approval Letter or a Project Denial Letter. If the project is denied, the Project Denial Letter shall outline available remedial action.

n. CONTRACTOR shall require the property owner to execute a Unanimous Approval Agreement that authorizes COUNTY to record a Notice of Special Tax Lien on the property to secure the Special Tax Financing. The Notice of Special Tax Lien shall be recorded prior to commitment of funds and commencement of construction. Upon recordation of the Notice of Special Tax Lien, CONTRACTOR shall issue a Notice to Proceed.

o. CONTRACTOR shall not disburse any Clean Energy Program financing until CONTRACTOR receives and verifies the following: 1) a final sign-off on the building permit for the project; 2) a signed funding request from the property owner; 3) a Utility Authorization to Release information; and 4) an Assignment of Right to Receive Financing Proceeds, if the payment is to be assigned to someone other than the property owner. Failure to submit the documents described above within fifteen (15) calendar days after completion of the project, or within 180 days of the Notice to Proceed may result in a different interest rate than originally applicable.

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p. CONTRACTOR shall make a final determination of eligibility and shall calculate the final special tax. Upon the property owner’s acceptance thereof, CONTRACTOR and COUNTY shall schedule the special tax for inclusion on the tax roll and shall approve issuance of checks as directed by the property owner.

q. In the event that the property owner cancels the Special Tax Financing after submittal of a request for funding, CONTRACTOR shall be entitled to collect from the property owner all expenses incurred by the Clean Energy Program related to recordation and removal of the Notice of Special Tax Lien. The recorded Notice of Special Tax Lien shall not be removed until the property owner has reimbursed such incurred costs.

r. Any revision of the Clean Energy Program terms and underwriting standards shall require COUNTY approval; provided, however, that no revision shall affect a participant’s obligation to pay the special tax set forth in the Unanimous Approval Agreement. Board of Supervisors approval shall be required of any material revision. COUNTY staff shall have authority to approve non-material revisions.

6. CONTRACTOR shall provide COUNTY with a Hearing Report (Report), subject to COUNTY approval, that shall include the following:

a. A description, map or diagram of the District boundaries

b. Provisions indicating the terms and conditions under which cities can opt into the District.

c. A draft agreement specifying the terms and conditions under which property owners may unanimously approve annexation of their property to the District and levy of the special property tax (Unanimous Approval Agreement). Such agreement shall be approved by COUNTY Counsel.

d. A description of the funding source(s) to be offered through the Clean Energy Program for work financed by Special Tax Financing (Finance Plan). The Finance Plan shall include 1) a method for determining the interest rate and time period during which property owners shall pay Special Tax Financing; 2) the establishment of any necessary reserve fund(s); 3) provisions for the apportionment to the property owners of all or any portion of the costs incidental to financing, administration and collection of the special tax; and 4) discussion of matters as may be necessary for funding and financing.

e. A payment schedule provided to both COUNTY and each participating owner that identifies the amount and timing of payments to be made during the term of the Special Tax Financing at the Clean Energy Program interest rate. Such schedule shall be the basis for the special tax that will be annually submitted to the Butte County Tax Collector for inclusion on property tax bills.

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f. A description of the applicant criteria for participation in the Clean Energy Program.

g. Periodic reports as may be required by COUNTY.

7. CONTRACTOR shall draft policies for use of Special Tax Financing to finance Eligible Improvements (Policy Statement) which shall be approved by COUNTY. The Policy Statement shall identify the COUNTY officials that have been authorized to enter into Unanimous Approval Agreements with participating property owners, Eligible Improvements, the method for processing and prioritizing requests for participation in the Clean Energy Program, and the Clean Energy Program timelines (including the schedule for establishment of the Clean Energy Program and performance goals for Program components such as application processing, approval notification, tax processing, project funding and other customer service related guidelines). 8. CONTRACTOR shall provide COUNTY with a portfolio of bilingual forms to be used by property owners seeking to participate in the Clean Energy Program. Such forms shall be posted on the Clean Energy Program website and shall be updated by CONTRACTOR as required by law and/or COUNTY program changes. The forms shall include, but not be limited to, Frequently Asked Questions (FAQs), schedule of fees, list of Eligible Improvements, underwriting terms, application and documentation checklist, application, Unanimous Approval Agreement, truth in lending, notice of approval, notice to proceed, notice to lender of proposed special tax, property owner’s acknowledgment of sole responsibility to deal with lenders, project bid, Clean Energy Program contract, funding request checklist, project completion approval, utility authorization to release information, closing checklist and list of language appropriate contact personnel. 9. CONTRACTOR shall assist COUNTY in all public hearings required for the adoption of the Clean Energy Program, including preparation of the Hearing Report, provision of necessary materials and information, and presentation of the Clean Energy Program at any public hearings conducted by COUNTY with respect to the Clean Energy Program. 10. CONTRACTOR shall be responsible for developing and implementing a marketing plan with respect to the Clean Energy Program. The marketing plan shall include, but not be limited to:

a. Training and managing contractors as a prerequisite for their participation in the Clean Energy Program, using state contracting standards, nationally recognized programs and systems training;

b. Identification and segmentation of COUNTY and participating cities properties based on age, geographic location, assessed value and other relevant attributes in order to provide a basis for an outreach program;

c. Establishment of a localized website, utilizing CONTRACTOR’s proprietary software;

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d. Opening an Outreach Center that provides for education, outreach, customer service, contractor liaison and information resources.

11. CONTRACTOR shall develop and host a localized website that includes the following: FAQs, an assessment calculator, pre-qualification tool, project application, identification of Eligible Improvements, program forms, authorized contractor bid request tool, program evaluation, contact information, contractor communication tool, contractor information, and a comprehensive document management system that allows password protected access to all Clean Energy Program and project documents by CONTRACTOR,COUNTY and participating cities that have opted into the District.. CONTRACTOR shall provide all website maintenance, technical support and updates for the Clean Energy Program. 12. CONTRACTOR shall maintain a list of licensed and certified contractors qualified to install Eligible Improvements (Certified Contractor). Any Certified Contractor shall be required to exercise professional skill in the installation of Eligible Improvements financed through the Clean Energy Program. CONTRACTOR shall develop and maintain policies reflecting CONTRACTOR’s requirements for the removal and disposition of chlorofluorocarbon (CFC’s) and other greenhouse gases, for the use of professional industry standards in the installation of Eligible Improvements, and for attendance of training required by CONTRACTOR. Failure of a Certified Contractor to comply with such policies may be the basis for CONTRACTOR to revoke a Certified Contractor’s eligibility to participate in the Clean Energy Program. Nothing in this section is intended to require CONTRACTOR to monitor the contracts between property owners and Certified Contractors. 13. CONTRACTOR shall provide software that is capable of providing Certified Contractors with the ability to manage the project submission and approval process and to track the progress of payments due under their contracts. CONTRACTOR’s software shall also provide a set of standards that can be used to calculate a benefits-to-costs ratio (BCR) for commercial and industrial projects using approved audit tools. 14. CONTRACTOR shall provide, as necessary, training to ensure that Certified Contractors meet Clean Energy Program requirements. 15. CONTRACTOR shall be required to submit an annual audit of the Clean Energy Program and an annual report to the Board of Supervisors. 16. CONTRACTOR shall provide COUNTY and cities that opt into District, sortable by jurisdiction, with quarterly updates on Clean Energy Program status and data, including but not limited to, website analytics, number of calls to the 800 number, number of inquiries, number of applications requested, number of applications submitted, value of improvements requested, number of applications processed, number of applications approved, program funding levels and total fund status, Certified Contractors and certification levels, final inspections of completed projects, estimated energy saved through completed projects, estimated greenhouse gas reductions achieved through completed projects, and estimated job creation impact of completed projects.

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17. CONTRACTOR shall provide COUNTY and participating cities in the District, sortable by jurisdiction, with password-protected, on-line access to real-time project data. 18. CONTRACTOR shall coordinate with COUNTY to establish procedures for placing Special Tax Financing on COUNTY property tax rolls.

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Attachment 1 to EXHIBIT A Listed below are improvements that are Eligible Improvements under the Clean Energy Program. Energy-Efficiency Measures Air sealing and ventilation Air filtration Building envelope Duct sealing Bathroom, ceiling, attic, and whole-house fans Insulation Defect correction Attic, floor, walls, roof, ducts Weather stripping Sealing Geothermal exchange heat pumps HVAC systems Evaporative coolers (coolers must have a separate ducting system from air conditioning and heating ducting system) Natural-gas-storage water heater (Energy Star listed) Tank-less water heaters Solar-water-heater systems Reflective insulation or radiant barriers Cool roofs Windows and glass doors (U value of 0.40 or less and solar-heat-gain coefficient of 0.40 or less) Window filming Skylights Solar tubes Additional building openings to provide addition natural light Lighting (Energy Star listed – no bulb, only retrofits) Pool equipment (e.g., pool-circulating pumps) Occupancy sensor lighting fixtures SMART parking-lot bi-level fixture SMART parking-garage bi-level fixtures SMART pathway lighting SMART wall-pack fixtures Task ambient office lighting Classroom lighting Refrigerator case LED lighting with occupancy sensors Wireless daylight-lighting controls Kitchen exhaust variable air-volume controls Wireless HVAC controls & fault detection Renewable-Energy Sources (Photovoltaic and Solar-Thermal Equipment) Solar thermal hot water systems Solar thermal systems for pool heating

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Photovoltaic systems (electricity) Emerging technologies (following the custom-projects track – see Section 4 below, “Custom Projects”). Water-Conservation Measures Faucet aerators Core-plumbing system Gray-water system Instantaneous hot-water heater Recirculation hot-water system Demand initiated hot-water system Hot-water pipe insulation Irrigation-control system Irrigation system Rainwater cistern Low-flow showerhead High-efficiency toilets Demand water softener Whole-house water-manifold system Cooling-condensate reuse Cooling-tower conductivity controllers Deionization Filter upgrades Foundation drain water Industrial-process water-use reduction Pre-rinse spray valves Recycled water source Urinals Waterless urinals Custom Projects. The custom-projects track is a process by which CONTRACTOR can evaluate and, in consultation with the COUNTY, approve funding for projects that are not “off the shelf” Eligible Improvements (“Custom Projects”). Custom Projects may involve large-scale industrial or commercial energy-efficiency improvements; processing or industrial mechanical systems; and renewable energy-generation from sources such as geothermal and fuel cells. The measures below are examples of Custom Projects that will be considered for Program funding: Building energy-management controls HVAC duct zoning-control systems Irrigation pumps and controls Lighting controls Industrial- and process-equipment motors and controls Fuel cells Wind-turbine power system

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Natural gas Hydrogen fuel Other fuel sources (emerging technologies) Co-generation (heat and energy)

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EXHIBIT B INSURANCE REQUIREMENTS Contractor shall procure and maintain for the duration of this contract, insurance against claims for injuries to persons or damages to property that may arise from, or be in connection with the performance of the Work hereunder by Contractor, Contractor’s agents, representatives, employees, and subcontractors. At the very least, Contractor shall maintain the insurance coverage, limits of coverage and other insurance requirements as described below. Before the commencement of work, Contractor shall submit Certificates of Insurance and Endorsements evidencing that Contractor has obtained the following forms of coverage and minimal amounts specified: A. MINIMUM SCOPE OF INSURANCE 1.) Commercial General Liability coverage (Insurance Services Office (ISO) “occurrence”

form CG 0001 1185). 2.) Automobile Liability Insurance – standard coverage offered by insurance carriers

licensed to sell auto liability insurance in California. Construction contracts only - Insurance Services Office’s Business Auto Coverage form number CA 0001 0187 covering “any auto” and endorsement CA 0029 1288 Changes in Business Auto and Truckers Coverage forms - Insured Contract.

3.) Workers’ Compensation Insurance - As required by the State of California with Statutory

Limits and Employer’s Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury and disease. (Not required if Contractor provides written verification he or she has no employees.)

4.) Professional Liability Insurance - when the contract involves professional services such

as engineering architectural, legal, accounting, instructing, and consulting, professional liability insurance is required. (If not contracting for professional services, delete this paragraph.)

B. MINIMUM LIMITS OF INSURANCE

1.) General Liability: At least $1,000,000 combined single limit per occurrence coverage for bodily injury, personal injury and property damage, plus an annual aggregate of at least $2,000,000. If a general aggregate limit is used, then either the general aggregate limit shall apply separately to this project/location, or the general aggregate limit shall be twice the required per occurrence limit. The contractor or contractor’s insurance carrier shall notify County if incurred losses covered by the policy exceed 50% of the annual aggregate limit.

2.) Automobile Liability: At least $100,000 to cover bodily injury for one person and

$300,000 for two or more persons, and $50,000 to cover property damages. However,

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policy limits for construction projects shall be at least $1,000,000 combined single limit per accident for bodily injury and property damage for autos used by the contractor to fulfill the requirements of this contract, and coverage shall be provided for “Any Auto”, Code 1 as listed on the Accord form Certificate of Insurance.

3.) Workers’ Compensation and Employer’s Liability: As required by the State of California

with Statutory Limits and Employer’s Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury and disease. (Not required if Contractor provides written verification he or she has no employees.)

4.) Professional Liability Insurance (If not contracting for professional services, delete this

paragraph) Professional liability insurance covering professional services shall be provided in an amount of at least $1,000,000 per occurrence or $1,000,000 or on a claims made basis. However, if coverage is written on a claims made basis, the policy shall be endorsed to provide at least a two-year extended reporting provision.

C. DEDUCTIBLES AND SELF-INSURED RETENTIONS

Any deductibles or self-insured retention must be declared on certificates of insurance and approved by the County. At the option of the County, either the contactor shall reduce or eliminate such deductibles or self-insured retentions, as respects the County, its officers, officials, employees and volunteers, or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses.

D. OTHER INSURANCE PROVISIONS

1. General liability insurance policies shall be endorsed to state:

a.) The County, its officers, officials, employees and volunteers are to be covered as additional insured as respects liability arising out of activities performed by or at the direction of the Contractor, including products and completed operations of the Contractor; premises owned, occupied or used by the Contractor; or automobiles owned, leased, hired or borrowed by Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the County, its officers, officials, employees or volunteers.

b.) Contractor's insurance coverage shall be primary insurance as respects the County, its

officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the County, its officers, officials, employees or volunteers shall be excess of the Contractor's insurance and shall not contribute with it.

c.) Contractor's insurance shall apply separately to each insured against whom claim is

made or suit is brought, except with respect to the limits of the insurer's liability.

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2. Construction contracts. Construction contracts must also provide an endorsement for Automobile liability insurance, which includes the items listed in D1 above.

E. ACCEPTABILITY OF INSURANCE CARRIERS. Insurance is to be placed with insurers who are licensed to sell insurance in the State of

California and who possess a Best’s rating of no less than A-: VII. If the contractor’s insurance carrier is not licensed to sell insurance in the State of California, then the carrier must possess a Best rating of at least A: VIII. (For Best ratings go to http://www.ambest.com/)

F. VERIFICATION OF COVERAGE. Contractor shall furnish the County certificates of insurance and original endorsements

affecting coverage required by this clause. All certificates of insurance and endorsements are to be received and approved by the County before work under the contract has begun. The County reserves the right to require complete, certified copies of all insurance policies required by this contract.

Certificates of insurance shall state that the insuring agency agrees to endeavor to mail to County written notice 30 days before any of the insurance policies described herein are cancelled. Contractor agrees to notify County within two working days of any notice from an insuring agency that cancels, suspends, reduces in coverage or policy limits the insurance coverages described herein.

G. SUBCONTRACTORS. Contractor shall include all subcontractors as insured under its policies or require all

subcontractors to be insured under their own policies. If subcontractors are insured under their own policies, they shall be subject to all the requirements stated herein, including providing the County certificates of insurance and endorsements before beginning work under this contract.

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EXHIBIT C 1. CONTRACTOR shall reimburse COUNTY for COUNTY’s costs incurred in the preparation of resolutions and all other documents and activities required for the establishment, implementation and administration of the Community Facilities District (District). Such documents shall include but not be limited to the identification of the types of properties to be served and the types of Eligible Improvements that may be financed through Clean Energy Program, a description of the boundaries of the District, a description of the proposed Clean Energy Program, and the COUNTY policies concerning the Clean Energy Program. 2. CONTRACTOR shall be responsible for the administrative, marketing, legal and other costs of operating the Clean Energy Program. COUNTY shall not be responsible for any of those costs. 3. CONTRACTOR’s initial target interest rate for property owners participating in the Clean Energy Program shall be 6.95% (Program Interest Rate) and is based on a current estimated cost of funds from Ygrene Funding of 6.45% (the estimated Funding Rate), resulting in an interest rate spread of 0.50% to provide for the operating and administrative costs of the Clean Energy Program (Operating Capital). The Program Interest Rate may be changed to provide adequate Operating Capital. 4. CONTRACTOR shall be entitled to charge Clean Energy Program fees to property owners in order to fund operations. Those fees shall be as follows: Fee Description

Amount Collected

Application $50 - $200 based on property type

Upon application submittal May be financed

Processing & Underwriting

Not to exceed $250 At disbursement

COUNTY cost recovery Estimated at $100 At disbursement Recording & disbursement

Not to exceed $250 At disbursement

Escrow Third-party fee based on project size

At disbursement

This fee schedule may be amended only upon approval by the COUNTY. All fees, including the application fee may be paid through the special tax. 5. COUNTY will submit to CONTRACTOR a budget estimating its annual net administrative and other costs attributable to the Program (COUNTY Program Costs). At the beginning of each calendar quarter during the term of this Agreement, COUNTY will calculate and notify CONTRACTOR in writing of its actual COUNTY Program Costs for the immediately preceding calendar quarter. CONTRACTOR shall reimburse COUNTY in full for these costs within 30 days following receipt of COUNTY’s written notice. CONTRACTOR may adjust the

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fees charged to property owners for participation in the Program to cover the budgeted and actual COUNTY Program Costs. 6. CONTRACTOR may charge Certified Contractors a fee not to exceed 3.0% of the bid amount for each project contract for costs related to Contractor Certification, contractor training, marketing, and project management. 7. COUNTY and each participating city within the COUNTY shall own and hold the carbon credits and offsets, renewable-energy credits, solar renewable-energy credits, credits resulting from refrigerant gas destruction, and other environmental assets that result from projects financed through the Program (Carbon Credits) within their respective jurisdictional areas. CONTRACTOR shall implement and enforce procedures that provide for the transfer of title to Program generated Carbon Credits and refrigerant gasses to COUNTY or a participating city, as appropriate. Upon receipt, COUNTY and each participating city shall assign its rights and title to the Carbon Credits and refrigerant gasses to CONTRACTOR, which shall administer the development, accumulation and aggregation of the Carbon Credits on behalf of the COUNTY and each participating city. Such administration by CONTRACTOR shall include the certification, registration, sale, or other disposition of the Carbon Credits. At the close of each calendar year, CONTRACTOR shall provide a report and an accounting to the COUNTY and each participating city of all activity associated with the Carbon Credits, shall remit to the COUNTY and each participating city 50% of any net proceeds from the sale of Carbon Credits owned and held by each jurisdiction in accordance with the Section. At the discretion of COUNTY or a participating city, CONTRACTOR shall transfer to the requesting entity 50% of any unsold Carbon Credits. CONTRACTOR agrees that any payments made to COUNTY and each participating city under the terms of this section shall be in addition to, and shall not be used to fulfill, CONTRACTOR’s obligations to reimburse COUNTY and each participating city or to pay Program Costs. If a Property owner qualifies for an incentive or rebate program that requires transfer of Carbon Credits to an organization providing energy rebates or incentives, then CONTRACTOR, on behalf of COUNTY, and upon receipt of the rebate or incentive by the Property owner, shall assign the rights thereto to that organization.

Resolution No.

A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF BUTTE DECLARING ITS INTENTION TO ESTABLISH THE COUNTY OF BUTTE COMMUNITY FACILITIES DISTRICT NO. 2013-1 (CLEAN ENERGY PROGRAM) AND TO LEVY SPECIAL TAXES THEREIN TO FINANCE OR REFINANCE THE ACQUISITION, INSTALLATION, AND IMPROVEMENT OF ENERGY EFFICIENCY, WATER CONSERVATION, AND RENEWABLE ENERGY IMPROVEMENTS PERMANENTLY AFFIXED TO OR ON REAL PROPERTY OR IN BUILDINGS

WHEREAS, the Board of Supervisors (the “Board”) of the County of Butte (the “County”) has duly considered the advisability and necessity of establishing a community facilities district within the County’s jurisdictional boundaries and levying special taxes therein to finance the acquisition, installation, and improvement of energy efficiency, water conservation, and renewable energy improvements permanently affixed to or on real property and in buildings, whether the real property or buildings are privately or publicly owned (the “Authorized Improvements”), all in accordance with the Mello-Roos Community Facilities Act of 1982 as amended by Senate Bill No. 555 (Statutes 2011, chapter 493) (the “Act”) as set forth in chapter 2.5 (beginning with section 53311) of part 1 in division 2 of title 5 of the California Government Code; and WHEREAS, in section 8 of Senate Bill No. 555, the California Legislature made the following findings:

“The Legislature finds and declares that global warming poses a serious threat to the economic well-being, public health, natural resources, and the environment of the state, and that action taken by the state to reduce emissions of greenhouse gases will have far-reaching effects by encouraging other states, the federal government, and other countries to act. California has a tradition of environmental leadership and wishes to be at the forefront of national and international efforts to reduce emissions of greenhouse gases. In furtherance of these efforts to reduce emissions of greenhouse gases, the Legislature declares that a public purpose will be served by providing the legislative body of a local agency with the authority to use special taxes pursuant to the Mello-Roos Community Facilities Act of 1982 to finance the installation of energy efficiency and renewable energy improvements that are affixed, as specified in Section 660 of the Civil Code, to residential, commercial, industrial, or other property.

“The Legislature further finds and declares that the growing population, climate change, and the need to protect and grow California’s economy while protecting and restoring our fish and wildlife habitats make it essential that the state manage its water resources as efficiently as possible. Section 2 of Article X of the California Constitution declares: “It is hereby declared that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented, and that the conservation of those waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare.” Former Governor Schwarzenegger, in his Executive Order S-06-08, proclaimed a condition of statewide drought and ordered implementation of additional actions to promote water conservation which will contribute to achieving long-term reductions in water use. Former Governor Schwarzenegger called for a 20-percent per capita reduction in urban water use statewide by the year 2020. Reduced water use through conservation provides significant energy and environmental benefits, and can help protect water quality, improve streamflows, and reduce greenhouse gas emissions. There

are many water conservation practices that produce significant energy and other resource savings that should be encouraged as a matter of state policy. The Legislature also declares that a public purpose will be served by providing the legislative body of a local agency with the authority to use special taxes pursuant to the Mello-Roos Community Facilities Act of 1982 to finance the installation of water conservation improvements that are attached to residential, commercial, industrial, or other property;” and

WHEREAS, the Board has determined that establishing such community facilities district is consistent with and follows the local goals and policies concerning the use of the Act that have been adopted by the Board and are now in effect; and WHEREAS, the Board is fully advised in this matter. NOW, THEREFORE, the County of Butte resolves the following: Section 1. The Board intends, and hereby proposes, to establish a community facilities district in accordance with section 53328.1 of the Act, to be known and designated as “County of Butte Community Facilities District No. 2013-1 (Clean Energy Program)” (the “Community Facilities District”). Section 2. As authorized by section 53328.1 of the Act, the Community Facilities District will initially contain only territory proposed for annexation to the Community Facilities District in the future (the “Territory”). The Territory includes the entire current jurisdictional boundaries of the County and is more particularly described and shown on a map entitled “Proposed Boundaries of Territory Proposed for Annexation in the Future to County of Butte Community Facilities District No. 2013-1 (Clean Energy Program)” now on file in the office of the Clerk of the Board (the “Clerk”), which map is hereby approved by the Board. A reduced copy of the map is attached to this resolution as Exhibit A. The Board finds that the map is in the form and contains the matters prescribed by section 3110 of the California Streets and Highways Code. The Board hereby authorizes and directs the Clerk to certify the adoption of this resolution on the face of the map and to record a copy of the map with the County Recorder of the County in accordance with section 3111 of the California Streets and Highways Code. The Territory includes territory within the jurisdictional boundaries of certain cities located within the jurisdictional boundaries of the County. Any portion of the Territory located within the jurisdictional boundaries of any incorporated city shall only be annexed to the Community Facilities District after the consent of the legislative body of such city has been provided as required by Section 53315.8 of the Act. Section 3. The Board intends, in accordance with the Act, to facilitate the financing on a parcel-by-parcel basis of the acquisition, installation, and improvement of the Authorized Improvements shown on Exhibit B to this resolution as may be approved, in any particular instance, by the County or the County’s authorized program administrator. Section 4. The Board hereby finds that any property included within the Territory that is currently in agricultural use will, if annexed into the Community Facilities District, nonetheless benefit by the Authorized Improvements. Section 5. The Board hereby declares that the public convenience and necessity require that a debt (as defined in the Act and herein “debt”) be incurred to finance the cost of the Authorized Improvements. The cost of financing the acquisition, installation, and improvement of the Authorized Improvements includes all expenses incidental to the acquisition, installation and improvement, including but not limited to the following: the costs of planning and designing the Authorized Improvements, together with the costs of any environmental evaluations thereof; a proportionate share of the costs associated with the creation of the Community Facilities District, the incurrence of any debt and the making of financing arrangements, the determination of the amount of any special taxes, or the collection or payment of any special taxes; and any costs otherwise incurred to carry out the authorized purposes of the Community Facilities District. A representative list of incidental expenses proposed to be incurred is set forth on Exhibit C to this resolution.

Section 6. The Board intends (a) that a parcel within the Territory may be annexed to the Community Facilities District and subjected to the special tax only with the unanimous written approval of the owner or owners of the parcel when it is annexed (the “Unanimous Approval Agreement”); (b) that the rate of special tax for each parcel will be established in an amount required to finance or refinance (including the payment of interest and the funding and replenishment of any reserve fund for debt) the Authorized Improvements approved for the parcel and to pay the parcel’s appropriate share of the Community Facilities District’s administrative expenses; (c) that the maximum annual rate, method of apportionment, and manner of collection of the special tax will be specified in the Unanimous Approval Agreement for each parcel; (d) that the maximum principal amount of the debt to be incurred to finance or refinance the Authorized Improvements for the parcel will be the amount approved in the Unanimous Approval Agreement for each parcel; and (e) that the special-tax revenues may also be used to repay the appropriate portion of any funds the County advances for the Community Facilities District and to repay under any agreement (which will not constitute a County debt or liability) any advances of funds or reimbursement for the lesser of the value or cost of work in-kind provided by any person for the purposes of the Community Facilities District. Section 7. Upon recordation of a Notice of Special Tax Lien in accordance with sections 53328.1(a)(4) and 53328.3 of the Act and section 3114.5 of the California Streets and Highways Code, a continuing lien to secure each levy of the special tax will attach to each parcel annexed to the Community Facilities District, and this lien will continue in effect until the special-tax obligation is prepaid and permanently satisfied and the lien is cancelled in accordance with law or until the County no longer levies the special tax. The method of prepayment of the special-tax obligation, if any, will be as set forth in the Unanimous Approval Agreement. Section 8. The Board intends that the proposed special tax will be collected through the regular secured property-tax bills for the County. The Board further intends that the proposed special tax will be subject to the same enforcement mechanism and the same penalties and interest for late payment as regular ad valorem property taxes, although the Board reserves the right, but has no obligation hereunder, to use any other lawful means of billing, collecting, and enforcing the special tax, including direct billing, supplemental billing, and, when lawfully available, judicial foreclosure of the special-tax lien. Upon the County assigning the right to receive special tax revenues and foreclosure rights to Ygrene, Ygrene will assume responsibility for resolving delinquencies. Section 9. As required by the Act, (a) the maximum authorized special tax for financing the acquisition, installation, and improvement of the Authorized Improvements that may be levied against any parcel used for private residential purposes (which use begins when a certificate of occupancy or final inspection for private residential use is issued) will be specified as a dollar amount and may not increase by more than 2% each year; (b) the special tax may not be levied against such a parcel after the last tax date set forth in the Unanimous Approval Agreement; and (c) the special tax may not be increased on such a parcel, as a consequence of delinquency or default by the owner of any other parcel or parcels within the Community Facilities District, by more than 10% or by the amount specified in the Unanimous Approval Agreement, whichever is less. Section 10. In accordance with sections 53325.7 and 53328.1(a)(2) of the Act, the Board intends to establish the appropriations limit (as defined by section 8(h) of Article XIIIB of the California Constitution) for the Community Facilities District for the 2013-2014 fiscal year and for subsequent fiscal years as the sum of the amounts stated as the appropriations limit in each approved Unanimous Approval Agreement. The amount contributing toward the appropriations limit of the Community Facilities District in each Unanimous Approval Agreement will be subject to adjustment following the fiscal year in which the Unanimous Approval Agreement is fully executed, as provided in section 53325.7 of the Act. Section 11. At 9:30 a.m. on Tuesday, September 24, 2013, in the regular meeting place of the Board, Board of Supervisors Chambers, 25 County Center Drive, Oroville, California 95965, the Board will hold a public hearing to consider the establishment of the Community Facilities District, the designation of Authorized Improvements, the specification of the Territory, the incurrence of debt to finance and refinance the Authorized Improvements, and all other matters as set forth in this resolution. At the public hearing, any persons interested may appear and be heard, and the testimony of all interested persons for or against the establishment of the Community Facilities District, the

specification of Authorized Improvements, the extent of the Territory, the establishment of the appropriations limit, the incurrence of debt to finance or refinance the Authorized Improvements, or any other matter set forth in this resolution will be heard and considered. Section 12. Any protests to the proposals in this resolution may be made orally or in writing by any interested persons, except that any protests pertaining to the regularity or sufficiency of these proceedings must be in writing and must clearly set forth the irregularities and defects to which objection is made. The Board may waive any irregularities in the form or content of any written protest and at the public hearing may correct minor defects in the proceedings. Any written protest not personally presented at the public hearing by the author of the protest must be filed with the Clerk at or before the time fixed for the public hearing in order to be received and considered. Any written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Section 13. After the conclusion of the public hearing, if written protests by 50% or more of the registered voters residing and registered within the Territory have been filed and not withdrawn, or if written protests have been filed and not withdrawn by the owners of one-half or more of the land area that is within the Territory and not exempt from the special tax, then no further proceedings to form the Community Facilities District may be undertaken for at least one year from the date of the Board’s determination that a majority protest exists. If the majority protest is only against the furnishing of a specified type or types of Authorized Improvements, or against levying a specified special tax, or against any aspect of the incurrence of debt, then only those elements need be eliminated from the proceedings. Section 14. The public hearing may be continued from time to time but must be completed within 30 days. If, however, the Board finds that the complexity of the Community Facilities District or the need for public participation requires additional time, then the public hearing may be continued from time to time for a period not to exceed six months. Section 15. At the public hearing, the Board may modify this resolution by eliminating any of the Authorized Improvements, by reducing the Territory, or by making any other changes that reduce the authorizations proposed by this resolution. Section 16. At the conclusion of the public hearing, the Board may abandon these proceedings or may, after passing upon all protests, determine to proceed with establishing the Community Facilities District and the incurrence of debt. If the Board determines to proceed with establishment and incurrence of debt, then the election procedure will consist of the execution of Unanimous Approval Agreements as provided in sections 53328.1, 53329.6 and 53355.5 of the Act. Section 17. The County’s Chief Administrative Officer or such officer’s designee (the “CAO”) is hereby directed to study the Community Facilities District and, at or before the time of the public hearing, to cause to be prepared and filed with the Clerk a report that contains the following: copies of Exhibits B and C to this resolution, a recommended form of Unanimous Approval Agreement, recommendations for appropriate procedures and criteria for processing and evaluating applications for participation and inclusion in the Community Facilities District from the owners of property within the Territory, and an estimate of the related incidental expenses. The Clerk shall submit the report to the Board for review and shall make it available for inspection by the public. In addition, the Clerk shall make the report part of the record of the public hearing. The CAO may retain consultants to prepare the report. Section 18. The Clerk shall give notice of the time and place of the public hearing by publishing a Notice of Public Hearing in the form required by the Act once in THE ENTERPRISE RECORD, a newspaper of general circulation published in the area of the Community Facilities District, in accordance with section 6061 of the California Government Code, and publication must be completed at least seven days before the date of the hearing. Section 19. Nothing in this resolution shall override or conflict with any ordinance or County policy presently in effect. Section 20. This resolution shall take effect immediately upon its passage and adoption.

PASSED AND ADOPTED by the Butte County Board of Supervisors this 13th day of August 2013 by the following vote: AYES: NOES: ABSENT: NOT VOTING:

BILL CONNELLY, Chair Butte County Board of Supervisors

ATTEST: By: Paul Hahn, Chief Administrative Officer and Clerk of the Board of Supervisors

City of ChicoTown of Paradise

City of Oroville

City of Gridley

City of Biggs

ST70

ST162

ST32

ST149

ST99

ST191

ST162ST70

S kyway

Midway

Larki

n Rd

Cohasset

Rd

Pentz Rd

Agua

s Fria

s Rd

La Porte

Rd

Afton Rd

Neal Rd

Oro Quincy Hwy

Colusa Hwy

Humboldt Rd

Lumpkin Rd

Nelson Rd

7 Mile

Ln

Richvale Hwy

Nelson AveForbe stown Rd

River

Rd

Ord Ferry Rd

Oro Bangor Hwy

Durham-Pentz Rd

Dayto

n Rd

Keefer Rd

Nord Hwy

Paler

mo H

oncu

t Hwy

Cottonwood Rd

Penn

ington

Rd

Ramirez Rd (Yuba Co.)

La

Porte Rd

Riv er RdS kyway

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Butte County GISProject File: \projects\departments\administration\Community_Facilities_DistrictPrinted: July 2013

0 2.5 5 7.5 10Miles

LegendCFD - Future Annexation AreaIncorporated Areas

RoadsState HwysMajor

B-1

EXHIBIT B

COUNTY OF BUTTE COMMUNITY FACILITIES DISTRICT NO. 2013-1

(CLEAN ENERGY PROGRAM)

LIST OF AUTHORIZED IMPROVEMENTS

1. Energy Efficiency Improvements

• Air sealing and ventilation • Air filtration • Building envelope • Duct leakage and sealing • Bathroom, ceiling, attic, and whole-house fans • Insulation • Defect correction • Attic, floor, walls, roof, ducts • Weather‐stripping • Sealing • Geothermal exchange heat pumps • HVAC systems • Evaporative coolers (coolers must have a separate ducting system from ducting for

air-conditioning systems and heating systems) • Natural-gas-storage water heater • Tank-less water heater • Solar-water-heater system • Reflective insulation or radiant barriers • Cool roof • Windows and glass doors (U value of 0.40 or less and solar-heat-gain coefficient of

0.40 or less) • Window filming • Skylights • Solar tubes • Additional building openings to provide addition natural light • Lighting (fixture retrofits only) • Pool equipment (circulating pumps, etc.)

2. Other Non-residential Building Improvements

• Occupancy‐sensor lighting fixtures • SMART parking-lot bi‐level fixture • SMART parking-garage bi‐level fixtures • SMART pathway lighting • SMART wall-pack fixtures • Task ambient office lighting • Classroom lighting

B-2

• Refrigerator case LED lighting with occupancy sensors • Wireless daylight-lighting controls • Kitchen exhaust variable air-volume controls • Wireless HVAC controls & fault detection

3. Photovoltaic and Solar-Thermal Equipment

• Solar thermal hot-water systems • Solar thermal systems for pool heating • Photovoltaic systems (electricity) • Emerging technologies

4. Water Conservation Improvements

• Faucet aerators • Core-plumbing systems • Gray-water systems • Instantaneous hot-water heaters • Recirculation hot-water systems • Demand initiated hot-water systems • Hot-water pipe insulation • Irrigation-control systems • Irrigation systems • Rainwater cisterns • Low-flow showerheads • High-efficiency toilets • Demand water softeners • Whole-house water-manifold systems The following water conservation improvements are approved for non-residential applications: • Cooling-condensate reuse • Cooling-tower conductivity controllers • Deionization equipment • Filter upgrades • Foundation drain water • Industrial-process water-use reduction • Pre-rinse spray valves • Recycled water sources • Urinals • Waterless urinals

5. Custom Improvements

The program administrator can evaluate and approve financing for Authorized Improvements that are not “off the shelf” (“Custom Improvements”). Custom Improvements may involve large-scale industrial or commercial energy-efficiency improvements; processing or industrial mechanical systems; and renewable energy-generation from sources such as

B-3

geothermal and fuel cells. Custom Improvements that will be considered for funding include the following:

• Building energy-management controls • HVAC duct zoning-control systems • Irrigation pumps and controls • Lighting controls • Industrial- and process-equipment motors and controls • Fuel cells • Wind-turbine power systems • Natural gas • Hydrogen fuel • Other fuel sources (emerging technologies) • Co-generation (heat and energy)

C-1

EXHIBIT C

COUNTY OF BUTTE COMMUNITY FACILITIES DISTRICT NO. 2013-1

(CLEAN ENERGY PROGRAM)

REPRESENTATIVE LISTING OF INCIDENTAL EXPENSES AND FINANCING COSTS

The following incidental expenses may be incurred in the proposed legal proceedings to

establish and implement the Community Facilities District and may be payable from proceeds of debt or other financing or directly from the proceeds of the special tax:

• Fees and costs of special-tax consultants • Costs of review, oversight, and administration by County staff • Fees and costs of counsel • Fees and costs of financial advisors • Fees and costs of special-tax administrators • Fees and costs of appraisers and similar consultants • Fees and costs of financing and debt administration • The cost of publishing, mailing, and posting of notices • Recording fees • Underwriter’s discount • Reserve funds for any debt • Capitalized interest • Governmental notification and filing fees • Credit-enhancement costs • Rating-agency fees and costs • Fees and costs for continuing-disclosure services • Third-party administrator costs

The expenses of certain recurring services pertaining to the Community Facilities District

may be included in each annual special-tax levy.

The foregoing enumeration is not exclusive. Other incidental expenses of a like nature may be incurred from time to time with respect to the Community Facilities District, and those other expenses will also be payable from proceeds of debt or other financing or directly from the proceeds of the special tax.