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Exhibit 2 <br />DOWNTOWN MERCHANTS FUND <br />OPERATING AGREEMENT <br />This OPERATING AGREEMENT made and entered into this day of , 2017, <br />by and between the City of Santa Ana, a charter city and municipal corporation duly organized and <br />existing under the Constitution and laws of the State of California ("City"), and the Santa Ana <br />Business Council, a California non-profit corporation ("SABC"). <br />RECITALS <br />A. On August 4, 2015, the City Council adopted the Downtown Enhancements and Parking <br />Modernization Plan to address the need to modernize parking structures, enhance public <br />amenities, and address deferred maintenance in the downtown (Santa Ana Ordinance No. NS - <br />2880). <br />B. Downtown business associations and stakeholders agreed to an increase in parking rates and <br />the implementation of new smart meters in the downtown area with the understanding that <br />increased revenue from these new rates and smart meters would be reinvested back into the <br />downtown. <br />C. As part of the Plan, it was proposed that a Downtown Merchants Fund ("DMF") be created <br />for continued promotion of the downtown. This funding will continue to support strong <br />marketing efforts and will allow for successful year-round administration of events for the <br />downtown. <br />D. Both SABC and Downtown, Inc. have provided budgets for the administration of the DMF. <br />This additional $100,000 per organization will complement the existing funds each <br />association receives from the City's Business Improvement District ("BID"). <br />E. The City and SABC under this Operating Agreement propose to: (1) confirm that SABC will <br />receive $100,000 from the DMF each calendar year that such funding is approved by City <br />Council; (2) to provide that SABC's use of said DMF funds will be consistent with its <br />approved DMF Annual Budget; and, (3) to provide for auditing of SABC's DMF funds. <br />WHEREFORE, and in consideration of the mutual and respective covenants and promises hereinafter <br />set forth, and subject to the terms and conditions of this Operating Agreement, the parties hereto do <br />hereby agree as follows: <br />ARTICLE 1 <br />PRELIMINARY MATTERS <br />§ 1.01 Definitions <br />As used in this Operating Agreement, the following terns shall have the following meanings: <br />25D-15 <br />