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01/14/2014
CITY OF- GRAND TERRACE - AGENDA & STAFF REPORTS FOR THE REGULAR MEETING OF THE CITY COUNCIL AND THE CITY COUNCIL AS THE SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY & THE GRAND TERRACE HOUSING AUTHORITY TUESDAY, January 14, 2014 6:00 P.M. Regular Meeting _ COUNCIL CHAMBERS GRAND TERRACE CIVIC CENTER — 22795 BARTON ROAD GRAND TERRACE, CA92313 s 1FILE CORY J O tiny TIB�ZACE1 4 s The Grand Terrace City Council meets on the Second and Fourth Tuesday of each month at 6 00 p.m The Grand Terrace City Council meets on the Second and Fourth Tuesday of each month at 6 00 p.m It, r '' CITY OF GRAND TERRACE 0 CITY COUNCIL AGENDA • JANUARY 14, 2014 Council Chambers Regular Meeting 6 00 PM Grand Terrace Civic Center • 22795 Barton Road The City of Grand Terrace complies with the Americans with Disabilities Act of 1990 If you require special assistance to participate in this meeting, please call the City Clerk's office at (909) 824-6621 at least 48 hours prior to the meeting If you desire to address the City Council during the meeting, please complete a request to speak form available at the entrance and present it to the City Clerk Speakers will be called upon by the Mayor at the appropriate time Any documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection in the City Clerk's office at city hall located at 22795 Barton Road during normal business hours In addition, such documents will be posted on the City's website at www cityofgrandterrace org CALL TO ORDER Convene City Council and City Council as the Successor Agency to the Community Redevelopment Agency r Invocation Pledge of Allegiance Roll Call -Attendee Name i _ Present -Absent --Cafe- ArFwed4 Mayor Walt Stanckiewitz ❑ ❑ ❑ Mayor Pro Tern Bernardo Sandoval ❑ ❑ ❑ Council Member Darcy McNaboe ❑ ❑ ❑ Council Member Jackie Mitchell ❑ ❑ ❑ Council Member Sylvia Robles ❑ ❑ ❑ ITEMS TO DELETE 2 SPECIAL PRESENTATIONS A Updates for Legislative Representatives (Federal, State & County) 3 CONSENT CALENDAR The following Consent Calendar items are expected to be routine and noncontroversial They will be acted upon by the Council at one time without discussion Any Council Member, Staff Member, or Citizen may request removal of an item from the Consent Calendar for discussion City of Grand Terrace Page 1 Updated 41412013 11 29 AM Agenda Grand Terrace City Council January 14, 2014 ADJOURN The Next Regular City Council Meeting will be held on Tuesday, January 28, 2014 at 6 00 PM Agenda item requests must be submitted in writing to the City Clerk's office no later than 14 calendar days preceding the meeting City of Grand Terrace Page 3 Updated 4/4/2013 11 29 AM �(ctiTy 3 B CITY OF GRAND TERRACE 0 ,OF CITY COUNCIL MINUTES - OCTOBER 22, 2013 Council Chambers Regular Meeting 6 00 PM Grand Terrace Civic Center - 22795 Barton Road 1 2 A 3 CALL TO ORDER Attendee'Name Title Status Afrnred Walt Stanckiewitz Mayor Present Bemardo Sandoval Mayor Pro Tern Present Darcy McNaboe Council Member Present Jackie Mitchell Council Member Present Sylvia Robles Council Member Present Betsy Adams City Manager Present Tracey Martinez CMC, City Clerk Present Richard Shields Community Development Director Present Sandra Molina Deputy Community Development Director Present Steve Elam Finance Department Present Cynthia Fortune Finance Manager Present Richard Adams City Attorney Present Steve Dorsey San Bernardino County Sheriffs Department Present Rick McClintock San Bernardino County Fire Department Present Convene City Council arid City Council as the Successor Agency to the Community Redevelopment Agency Invocation - Pastor Andy McRae, Azure Hills Seventh-Day Adventist Church Pledge of Allegiance The Pledge of Allegiance was done during the presentation of the POW/MIA flag to the City ITEMS TO DELETE SPECIAL PRESENTATIONS Presentation of POW/MIA Flag - Veterans Committee On behalf of the Veterans Committee, Bob Levin presented a POW/MIA Flag to the City to hang in front of City Hall A presentation and hanging of the flag was done by Colton High School ROTC CONSENT CALENDAR The Consent Calendar was approved with the removal of item 313 Measure I Capital Needs Analysis for Fiscal Year 2014-2015 through 2018 - 2019 and with Councilmember McNaboe recusing herself from Item 3D Request by the Foundation of Grand Terrace for a Waiver of City Special Event and Facility Use Fees Related to the Annual Halloween Haunt and Item 3E Request by the Foundation of Grand Terrace Dog Park Committee for a Waiver of Special Event Filing Fees City of Grand Terrace Page 1 Updated 1211212013 4 46 PM Packet Pg 4 ;3 B4 Minutes Grand Terrace City Council October 22, 2013 4 PUBLIC COMMENT Donald Farley Stated that it is obvious that Michigan needs work but not if it adversely affects the residents He suggested that Commerce Way could be a place holder under the Measure I Capital Needs for the future Bobbie Forbes Reported that over the past few weeks there have been attempted burglaries with knock, knocks at the door The incidents were by the High School and the Catholic Church She encouraged residents to pay attention She feels that maybe license plate recognition cameras could help with some of the issues related to law enforcement in town She reported that Channel 3 is not working She indicated that there is a detour sign on Grand Terrace Road that should be moved because it is causing a lot of close calls with vehicles Jeffrey McConnell Also commented on the attempted burglaries in town and would also like to see the Sheriffs Department use the license plate recognition cameras Barney Karger Feels that the City Manager gets paid a lot of money He feels that we should get rid of a Deputy He feels that the City has too many deputies for its low crime rate Patricia Farley Feels that using Michigan as a place holder for in the Measure I Capital Needs Analysis is not right She feels that Michigan should not be used as a major street and that it is undermining the residential community She also indicated that she does not agree with Measure C and feels that residents should not vote for it if they don't understand it She stated that impact fees have not been paid, business licenses have not been paid She can't support the measure and feels that it doesn't represent the true needs of the City Burga Laesser Replied to an article in the City News that was written by Mr Wilson She stated that rules and regulations have changed and encouraged Mr Wilson to check his numbers before having them published She stated that out of 50 City Manager's, Grand Terrace's salary is 39th based on statistics She indicated that Mr McConnell has also made statements with regard to the City's Budget that is incorrect Michael Auld Indicated that he is a member of the Foundation of Grand Terrace He stated that the Foundation brings events and culture to the City He thanked the Council for the waiver of the fee for the garage sale and the community for their support They were able to raise $1,122 that will benefit the proposed dog park He stated that they need more volunteers He announced that there will be a dog costume contest at the upcoming Halloween Event Sally McGuire Reported that the Foundation held a Community Clean-up day on October 12 and thanked all of the volunteers that participated She announced that the Halloween Festival will be held on October 31, 2013 from 5 30 p m to 8 00 p m She indicated that they are currently doing a candy drive for the event City of Grand Terrace Page 3 Updated 1211212013 4 46 PM Packet,Pg 6 V 2 Minutes Grand Terrace City Council October 22, 2013 A 7 8 A l B � J C IC PUBLIC HEARINGS 2013 California Budding Code Adoption Mayor Stanckiewitz opened the Public Hearing for discussion, there being none he returned discussion to the City Council The 2013 Budding Code Ordinance amending certain chapters of the Grand Terrace Municipal Code and adopting by reference the 2013 California Code of Regulation published by the California Budding Standards Commission which become effective on January 1, 2014 was introduced The second reading and adopting will be agendized for November 12, 2013 RESULT APPROVED [UNANIMOUS] } MOVER Darcy McNaboe, Council Member SECOND_ ER Jackie Mitchell, Council Member AYES Stanckiewitz, Sandoval, McNaboe, Mitchell, Robles � 7 c UNFINISHED BUSINESS NEW BUSINESS Law Enforcement Update for First Quarter of Fiscal Year 2013-2014 City Manager Betsy Adams gave an overview of information regarding response times after the reduction of one Deputy with the completion of the First Quarter of FY 2013-2014 Captain Steve Dorsey from the San Bernardino County Sheriffs Department also provided information regarding the same Ryan Stephens Stated that the report provided is interesting He stated that one of the qualities of Grand Terrace is public safety and he feels that it is eroding and deteriorating He stated that if Measure C fads, it will only get worse He stated that the numbers are real and not scare tactics Residents need to look at the facts The information that is untrue that is being spread throughout the community is doing a disservice to everyone Presentation Legal Overview on Outsourcing City Attorney Richard Adams gave provided information for the benefit of the City Council and the public related to outsourcing public employee positions Long -Range Property Management Plan Approve a Resolution adopting the Successor Agency's Long -Range Property Management Plan RESUIST APPROVED [UNANIMOUS] _ MOVER Darcy McNaboe; Council Member SECONDER 'Sylvia'R6bles, Council Member AYES z Stanckiewit7. z, Sandoval, McNaboe, Mitchell, Robles - = Patricia Farley Feels that the information provided in this plan is based on a General Plan that does not properly address the needs of the community It is alarming to her that the Council approve these items over and over again She feels that the needs of the community needs to be addressed She indicated that the photos of blighted areas that are provided in the plan is not as bad as the blight that was created by 2 City of Grand Terrace Page 5 Updated 1211212013 4 46 PM Facke Pg 8 µ rtr CITY OF GRAND TERRACE 0 3C_ TE CITY COUNCIL MINUTES • NOVEMBER 12, 2013 Council Chambers Regular Meeting 6 00 PM Grand Terrace Civic Center • 22795 Barton Road 1, CALL TO ORDER Convene City Council and City Council as the Successor Agency to the Community Redevelopment Agency Invocation - Pastor Andy McRae, Azure Hills Seventh-Day Adventist Church Pledge of Allegiance - Led by Bob Lavin Attendee Name ' V Tale ' _ , r '. _ _. Status _ armed— Walt Stanckiewitz Ma or Present Bemardo Sandoval Ma or Pro Tern Present Darcy McNaboe Council Member Present Jackie Mitchell Council Member Present Sylvia Robles Council Member Present Betsy Adams City Manager Present Tracey Martinez CMC, City Clerk Present Richard Shields Commune Development Director Present Sandra Molina Deputy Community Development Director Present Steve Elam Finance Department Present Cynthia Fortune Finance Manager Present Richard Adams City Attorney Present Steve Dorsey San Bernardino Coun Sheriffs Department Present Rick McClintock San Bernardino County Fire Department { Present ITEMS TO DELETE 2 SPECIAL PRESENTATIONS 3 CONSENT CALENDAR Approve the Consent Calendar with the following amendment to the check register Voucher 69818 removed RESULT, APPROVED [UNANIMOUS] MOVER Darcy McNaboe, Coupcil Membeir SECONDER Jackie Mitchell, Council Member AYES, y Stanckiewitz, Sandoval, McNaboe, Mitchell, Robles A Waive Full Reading of Full Ordinances on Agenda B Award of Traffic Signal Maintenance Contract C Second Reading and Adoption of Ordinance No, Adopting the 2013 California Code of Regulations eLo M r m c� m 0 v IL 0 0 W M T_ 0 N N T 0 z 0 N d d c w a d a 0 City of Grand Terrace Page 1 Updated 4/4/2013 1129 AM Packet Pg 10 3C Minutes Grand Terrace City Council November 12, 2013 1 Would like to see the community move forward to reach a solution She suggested that the Council appoint a committee to look at the budget and come up with suggestions and solutions and feels that habits need to be changed She stated that using the Foundation as a way to raise money for the City is an idea that she supports and will donate to Jason Greeley Stated that change will happen He feels that the Facebook page 92313 is a forum for cyber bullying and that it needs to stop 5 COUNCIL REPORTS Council Member Jackie Mitchell Reported that she attended the Veteran's Day ceremony and it was a wonderful event She stated that the people have spoken and it is the Council's lob to carry out the will of the people She thanked those V who have stepped up The community needs to work together for a brighter Grand Terrace and not °1 continue to look back t� c Council Member Darcy McNaboe H Thanked everyone that came out and voted, no matter how they voted A lot of changes will have to be v made on how services are provided to the community She does not support disincorporation of the City 2 She would like to have discussion at a future agenda on separating the parks and the senior center funds Q, into a separate fund so that if grants and donations are received they can be kept separate The Council oc needs to consider long term and the possibility of having a special district for funding the parks and m seniors There are a lot of citizens that want to step forward and help and it is her hope that they find a M way to allow that to happen o Council Member Sylvia Robles Reported that there has been quite a bit going on She was able to participate in the Annual Woman's Z Club Barbeque She attended a half day conference on Redevelopment Agencies and redevelopment A c lot of good information was presented and she is looking forward to the next conference that they will be M holding She attended the Veteran's Memorial event She stated that there was an overwhelming no vote against Measure C We have to move on She likes the idea of some type of citizen oversight =_ committee of the budget She doesn't do social media and stated that if the residents don't come to the 2 Council Meetings or write a letter she doesn't hear them She would like to see the community move 4) forward She thanked everyone for voting whichever way they voted a Mayor Pro Tern Sandoval Feels that this community is very special He has been a long time resident He feels that the outcome of a N the election was not based on information that was provided by the yes or no side The leaders of the community did not come together He became engaged in the Measure because of his heart -felt concern for the City He feels that there were so many ulterior motives on so many levels He ran for City Council 2 because he cares If we are going to be able to do anything we must be able to let go of the past The community is going to experience great change Law Enforcement is very important and he will choose it over parks This community can be great He thanked everyone that worked on supporting the measure Mayor Walt Stanckiewitz Reported that the Veteran's Day Memorial was a wonderful event He thanked Cheryl Brown for the certificate that the City received for the event People have spoken about saving the parks because that is the most visible item that the residents will see. Law Enforcement is his main priority The City has invested heavily in Law Enforcement and that is how Grand Terrace became the safe community that it is The people have spoken that Law Enforcement is not important, parks are not important and the senior services are not important and that there are too many employees that have fat salaries and cuts City of Grand Terrace Page 3 Updated 41412013 11 29 AM r Packet Pg _ 12 3C Minutes Grand Terrace City Council November 12, 2013 i B Public Employees Performance Evaluation Pursuant to Government Code Section 54957 (B) Title City Manager The Council met in Closed Session regarding Public Employees Performance Evaluation Pursuant to Government Code Section 54957 (B) Title City Manager, there was no reportable action taken ADJOURN The meeting was adjourned at 9 10 p m The Next Regular City Council Meeting will be held on Tuesday, November 26, 2013 at 6 00 PM Mayor of the City of Grand Terrace City Clerk of the City of Grand Terrace City of Grand Terrace Page 5 Updated 41412013 11 29 AM - - x Packet )Pg 14 Minutes Grand Terrace City Council p�3DsTM November 26, 2013 3 CONSENT CALENDAR RESULT - rAPPROVEb [UNANIMOUS] - 'MOVER-, Darcy McNaboe, ,Council Member, SECONDER <+ Jackie Mitchell, Council Member.- AYES" - x Stanckiewitz Sandoval McNaboe Mitchell, Robles ' A Waive Full Reading of Full Ordinances on Agenda B Accept Historical and Cultural Activities Committee Minutes of September 9, 2013 and October 7, 2013 C Approval of Minutes — Regular Meeting — 10/08/2013 L D Fitness Park Change Orders and Increase in Contract Award Amount E Approval of Check Register No 11-26-2013 and Approval of Check No 69687 Ta v r c d 4 PUBLIC COMMENT c 0 c� 5 COUNCIL REPORTS a Council Member Jackie Mitchell K 0 Indicated that she was late because her husband is in the hospital possibly needing surgery She wished M everyone a Happy Thanksgiving c N Council Member Sylvia Robles N ' Expressed some of her thoughts during this holiday season She requested that the meeting be 0 adjourned in memory of Clara Roque o Council Member Darcy McNaboe co Wished everyone a Happy Thanksgiving = Mayor Pro Tern Bernardo Sandoval m Echoed some of the sentiments of Councifinember Robles He expressed his gratitude and appreciation a for the life they have in Grand Terrace and feels that the community will come together 4) a A Mayor Walt Stanckiewitz Reported that Wdden Pump will be holding a blood drive on December 9, 2013 He also echoed the = sentiments of Council member Robles He wished everyone a Happy Thanksgiving and to remember just g how fortunate we are [�-I;013111111[of:l:F_17Ii!ni T UNFINISHED BUSINESS 8 NEW BUSINESS A Redevelopment Property Tax Trust Fund City of Grand Terrace Page 2 Updated 41412013 11 24 AM Pabk6t Pg 16Y 0 CITY OF GRAND TERRACE CITY COUNCIL MINUTES • DECEMBER 10, 2013 Council Chambers Regular Meeting 6 00 PM Grand Terrace Civic Center • 22795 Barton Road CALL TO ORDER Convene City Council and City Council as the Successor Agency to the Community Redevelopment Agency Invocation - Pastor And McRae, Azure Hills Seventh-Day Adventist Church Pledge of Allegiance - Led by JoAnn Johnson Attendee Name _ s- _ Title r- _ Status` Ari!ved' Walt Stanckiewitz Mayor Present Bemardo Sandoval Mayor Pro Tern Present Darcy McNaboe Council Member Present Jackie Mitchell Council Member Present Sylvia Robles Council Member Present Betsy Adams City Manager Present Trace Martinez CIVIC, City Clerk Present Richard Shields Commune Development Director Present Sandra Molina Deput:XEommunity Development Director Present Steve Elam Finance Department, Present G nthia Fortune Finance Manager Present Richard Adams City Attorney Present Rick McClintock San Bernardino County Fire Department Present Steve Dorsey San Bernardino County Sheriffs Department Present 1 ITEMS TO DELETE 2 SPECIAL PRESENTATIONS A Special Recognition - JoAnn Johnson A Certificate of Commendation was presented to JoAnn Johnson, commending her for her countless hours of dedication to the community and recognizing her retirement of volunteer services after 26 years of service B Special Recognition - Rick McClintock A Certificate of Commendation was presented to Rick McClintock thanking him for his services and recognizing his retirement from the San Bernardino County Fire Department after 29 years of service C Updates by Legislative Representatives (Federal, State & County) Jon Gaede, Representative for Cheryl Brown Wished everyone Happy Holidays He announced that they will be holding their annual toy drive at their district office now through the 21st of December City of Grand Terrace Page 1 Updated 1 / 1012014 8 45 AM Packet Pg 18 M3 E Minutes Grand Terrace City Council December 10, 2013 6 7 A 8 A Thanked Richard Shields and Tracey Martinez for all of their work throughout the years and for doing a wonderful job She indicated that she is looking forward to working with Sandra Molina in her new capacity She announced that the City Birthday Celebration will be held on December 11 at 6 00 p m and that on December 12, a SANBAG/Caltrans public hearing will be held where they will go over the on and off ramp alternatives for Barton Road She wished everyone a Merry Christmas and Happy Holidays Council Member Sylvia Robles Thanked Richard Shields and Tracey Martinez and expressed her appreciation for their work and that they will be sorely missed Council Member Jackie Mitchell Expressed her disappointment with the timing of when the Council found out about the unanticipated revenues She has full trust in the Ad -hoc Committee and City Staff She feels that it is very important to move forward She thanked Richard Shields and Tracey Martinez for their work and wished them the best She wished everyone a Merry Christmas and Happy Holidays - Mayor Pro Tern Bernardo Sandoval There is a beauty to this community that is maintained by the people He is not angry with those who voted no against Measure C The money that has been discovered in not the answer The budget is so tight, difficult decisions will need to be made The community will need to get engaged He ran for City Council because of his passion and concern for the residents of the community Mayor Walt Stanckiewitz Commended the contractor on doing an excellent job on the DeBerry Street Project It took three years to save enough Measure I funds to move forward with the project He thanked Richard Shields for all of his efforts He requested to receive regular reporting of those businesses that do not have a business license in Grand Terrace He thanked Richard Shields, Tracey Martinez and Alisa Flann for their service to the City and wished them well He wished everyone a Merry Christmas and Happy New Year Mayor Pro Tern Bernardo Sandoval Wished everyone a Merry Christmas and a Happy New Year PUBLIC HEARINGS UNFINISHED BUSINESS Reconsideration of Scheduled Budget Reductions Defer all budget reductions to June 30, 2013 with a full mid -year budget review and address any issues at that time RESULT APPROVED [UNANIMOUS] - MOVER Darcy McNaboe, Council Member w SECONDER Walt Stanckiewitz,,Mayor y AYES Stanckiewitz, Sandoval, McNaboe, Mitchell, Robles F NEW BUSINESS Council Ad Hoc Committee on Redevelopment Dissolution Appoint Mayor Pro Tern Bernardo Sandoval and Council Member Sylvia Robles to the Council Ad -Hoc Committee on Redevelopment Dissolution City of Grand Terrace Page 3 2 Updated 1 / 1012014 8 45 AM Packet Pg 20 - F-- CITY OF GRAND TERRACE CITY COUNCIL MINUTES - DECEMBER 16, 2013 Council Council Chambers Special Meeting 3 00 PM 1 2 1 2 3 Grand Terrace Civic Center - 22795 Barton Road CALL TO ORDER Convene City Council Meeting Attendee Name 4 T ` _ - T --Title �� ' _ Status Arrived Walt Stanckiewitz Mayor Present Bernardo Sandoval Mayor Pro Tern Absent Darc McNaboe Council Member Present Jackie Mitchell Council Member Present Sylvia Robles Council Member Present Tracey Martinez CIVIC, City Clerk Present Richard Adams City Attorney Present PUBLIC COMMENT CLOSED SESSION Public Employee Appointment - Pursuant to Government Code 54957 (b) (1) - Title Interim City Manager Conference with Labor Negotiator - Pursuant to Government Code 54957 6 - City Representative Richard L Adams II, City Attorney - Unrepresented Employee City Manager Report from Closed Session Item 1 Council will defer this item until December 17, 2013 Item 2 Council met in closed session to conduct interviews with Tom Evans and Thomas Mauk for the position of Interim City Manager There was no reportable action taken ADJOURN The Next Regular City Council Meeting will be held on Tuesday, January 14, 2014 at 6 00 PM Mayor of the City of Grand Terrace City Clerk of the City of Grand Terrace City of Grand Terrace Page 1 Updated 41412013 11 29 AM 1Packet,Pg 22 3G CITY OF GRAND TERRACE 0 CITY COUNCIL MINUTES - DECEMBER 17, 2013 Council Chambers Special Meeting 3 00 PM Grand Terrace Civic Center - 22795 Barton Road 1 2 1 �J 2 3 CALL TO ORDER Convene City Council Meeting Attendee Name r `Title WEB W Status x'; I_� Arrived - Walt Stanckiewitz Mayor Present Bernardo Sandoval Mayor Pro Tern Present Darcy McNaboe Council Member Present Jackie Mitchell Council Member Present Sylvia Robles Council Member Present Tracey Martinez CIVIC, City Clerk Present Richard Adams City Attorney Present PUBLIC COMMENT CLOSED SESSION Public Employee Appointment - Pursuant to Government Code 54957 (b) (1) - Title interim City Manager Conference with Labor Negotiator - Pursuant to Government Code 54957 6 - City Representative Richard L Adams II, City Attorney - Unrepresented Employee City Manager Report from Closed Session Item 1 The Council met in closed session to interview Ken Henderson and Andre Dupret for the position of Interim City Manager The Council gave direction to the City Attorney to negotiate a contract with their primary candidate for interim City Manager Mayor Stanckiewitz and Council Member McNaboe will be on the Ad -Hoc Committee for the contract of the City Manager Item 2 Direction was given to the City Attorney, no reportable action was taken ADJOURN The Next Regular City Council Meeting will be held on Tuesday, January 14, 2014 at 6 00 PM Mayor of the City of Grand Terrace City Clerk of the City of Grand Terrace City of Grand Terrace Page 1 Updated 1212612013 2 20 PM Packet Pg 23 r11 TITLE PRESENTED BY AGENDA REPORT January 14, 2014 Council Item Approval of a First Amendment to the City Manager's Employment Agreement Richard Adams, City Attorney RECOMMENDATION The City Council Ad Hoc Committee on City Manager appointments recommends approving the contract amendment to the employment agreement for the existing City Manager BACKGROUND. On November 3, 2009, the City Council approved an employment agreement with Betsy M Adams to serve as City Manager from December 1, 2009 through November 30, 2013 DISCUSSION - On November 12, 2013, the City Manager advised the City Council,that she did not wish to renew the employment agreement along with her willingness to continue working for the City while the Council selected an Interim City Manager This necessitated a minor contract amendment The Council subsequently appointed an Ad ,Hoc Committee to work with the City Attorney on this As an unrepresented employee, Government Code Section 54957 6 requires the amendment to be approved by the Council at a public meeting The proposed first amendment to the City Manager's employment agreement has been structured so the that City Manager will continue as City Manager until January 31, 2614 to facilitate a smooth transition of the responsibilities and duties to the Interim City Manager The amendment also transfers accrued Administrative Leave Time from 2013 to 2014 in return for the City Manager's agreement not to use the leave time ,in December when there was a critical need for her to be on duty It also provides that the City Manager would be allowed to "vacation out " This means that instead of paying the City Manager a lump sum for her accrued vacation on January 31, 2014, she will be kept on payroll through May 17, 2014 and will be essentially on vacation and leavefrom February 1, 2014 through May 17, 2014 at which time she shall retire Finally, the agreement provides that the City Manager will be available to answer any questions that the Interim City Manager may have during the vacation/leave period FISCAL IMPACT - The Fiscal Year 2013-14 budget allocates the cost of the City Manager position equally between the General Fund and the Successor Agency The contract amendment does not increase the budgeted expense for the position Packet Pg 24 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT THIS FIRST AMENDMENT ("Amendment") to the Employment Agreement (`Agreement") is made and entered into this _ day of January, 2014, by and between the City of Grand Terrace, a municipal corporation, hereinafter referred to as "City," and Betsy M Adams, an individual, hereinafter referred to as "Employee " WITNESSETH WHEREAS, the City and Employee entered into an Agreement for the Employment of Employee as the City Manager for City on or about December 1, 2009, WHEREAS, the Agreement was for a term of four (4) years which expired on November 30, 2013, and WHEREAS, it is the desire of the City Council of the City to extend the Agreement for an period ending on May 17, 2014 NOW THEREFORE, for and in consideration of the mutual promises, covenants, and conditions contained herein, the parties hereto agree to amend the Agreement as follows 1 TERM The term of the Agreement is hereby extended to May 17, 2014 ("Extension Period") During the Extension Period Employee will continue to actively serve as City Manager until January 31, 2014 Between January 15, 2014 and January 31, 2014, Employee will assist with the transfer of the duties and responsibilities of the City Manager position to the appointed Interim City Manager In lieu of a lump sum payout of vacation time on January 31, 2014, Employee will take vacation time commencing February 1, 2014 through the end of the extension period Employee will make herself available during the vacation portion of the Extension Period to answer any questions that the interim city manager may have, to facilitate a smooth transition 2 COMPENSATION During the Extension Period, Employee shall continue to receive the base salary that she is currently receiving In addition, Employee will be allowed, one time only, to transfer all of her Administrative Leave Time accrued through December 31, 2013 to the 2014 Calendar year 3 TERMINATION AND SEVERANCE PAY The provisions of Section 3 in the Agreement is replaced in its entirety with the following If the City Council wishes to terminate the employment of Employee or the Employee wishes to resign from said employment prior to the end of the Extension Period, the City or the Employee shall provide the other with at least thirty (30) days prior written notice of the termination of employment, unless the termination is for cause as set forth in Exhibit "A" to the Agreement, in which case termination shall be immediately 1 Packet Pg r,6 TITLE PRESENTED BY AGENDA REPORT January 14, 2014 Council & Successor Agency Item Annual Financial Reports and Related Documents for Year Ended June 30, 2012 Cynthia Fortune, Finance Manager RECOMMENDATION Receive and file the Annual Financial Report and related documents for the year ended June 30, 2012 BACKGROUND Each year the City has an independent audit conducted of its financial statements and related internal control procedures The audit for the year ended"June 30, 2012 was delayed due to a turnover of Finance Department personnel in late 2012 and ensuing challenges in closing the books The audit has now been completed and the Annual Financial Report issued by the City's auditor, Rogers, Anderson, Malody & Scott, LLP The various reports are dated October 1, 2013, which represents the date the audit work was completed Since the'submittal of this report, the audit for the City's Measure I has been completed Measure I is the Y2 cent sales tax collected throughout San Bernardino County for transportation improvements The San Bernardino Assocfated Governments (SANBAG) administers Measure I revenue and is responsible for determining which projects receive Measure I funding, and ensuring that transportation projects are implemented The Financial Statements and Independent Auditors' Report was issued by SANBAG's auditor, Vavrinek, Trine, Day & Co , LLP DISCUSSION One of the key aspects of any annual financial audit is the Independent Auditor's Report, which is provided on page 1 of the Annual Audit Report (Exhibit A) The Independent Auditor's Report provides its opinion on whether or not the financial statements fairly present, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information as of the end of the fiscal year, and the respective changes in financial position and cash flows, where applicable, ;in conformance with Generally Accepted Accounting Pnnciples (GAAP) The resulting "opinion letter' is either unqualified or qualified The "opinion letter" received by the Citi for its financial statements for the period ended June 30, 2012 is unqualified, indicating that the financial statements fairly represent the City's financial position in accordance with GAAP Packet Pg 28 • Appropriations Limit Agreed -Upon Procedures (Exhibit E) Identifies any exceptions to the Appropriation (Gann) Limit calculations No exceptions were noted Measure I The Independent Auditor's Report for Measure I, found on page 1 of the Measure I Fund Financial Statements (Exhibit F), states the auditor's opinion that the financial statements referred to present fairly, the financial position of the Measure I fund of the City as of June 30, 2012 Exhibit G provides the auditor's management letter which provides recommendations for enhancing internal controls for Measure I funds Included in Exhibit G are the management responses provided by the City FISCAL IMPACT There is no fiscal impact associated with the receipt of the Annual Financial Reports and related documents for the year ended June 30, 2012 ATTACHMENTS • Exhibit A_Annual Financial Report-6-30-12 • Exhibit B_Audit Overview Letter • Exhibit C_Internal Control & Compliance Report • Exhibit D_Internal Control Recommendations • Exhibit E Appropriations Limit Agreed -Upon Procedures • Exhibit F=Annual Financial Report -Measure 1 06-30-12 • Exhibit G_Measure I Management Letter APPROVALS Cynthia Fortune Completed 01/09/2014 12 23 PM Finance Completed 01/09/2014 12 28 PM City Attorney Completed 01/09/2014 1 14 PM City Manager Completed 01/09/2014 1 25 PM City Council Pending Packet Pg ;30 y s3'1`a City of Grand Terrace Annual Financial Report For the year ended June 30, 2012 Table of Contents Independent Auditor's Report PAGE 1 Management's Discussion and Analysis 3 Basic Financial Statements Government -Wide Financial Statements Statement of Net Assets 14 Statement of Activities 15 Fund Financial Statements Governmental Funds Balance Sheet 17 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 19 Statement of Revenues, Expenditures, and Changes in Fund Balances 20 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 22 l ` Proprietary Fund Statement of Net Assets 23 Statement of Revenues, Expenses, and Changes in Fund Net Assets 24 Statement of Cash Flows 25 Fiduciary Fund Statement of Fiduciary Net Assets 26 Statement of Changes in Fiduciary Net Assets 27 Notes to Financial Statements 28 Required Supplementary Information Budgetary Comparison Schedule General Fund 59 Street Improvement Fund 60 Redevelopment Agency Low -Mod Housing Fund 61 Nonmajor Governmental Funds Combining Balance Sheet 62 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 65 �ryPa_cket' �Pg 32 ,s _r'�31a In accordance with Government Auditing Standards, we have also issued our report dated October 1, 2013 on our consideration of the City's internal control over financial reporting and on our tests of its compliance With certain provisions of laws, regulations, contracts, and grant agreements and other matters The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information, as listed on the table of contents, be presented to supplement the basic financial statements Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's financial statements as a whole The combining nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the financial statements The combining nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements The information has been subjected to the auditing procedures applied to the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole 13ma� aL&uv 001 C soar 'Luo San Bernardino, California October 1, 2013 -2- `Packet Pg 3.4 These two statements report the City's net assets and changes in them The City's net assets - the difference between assets and liabilities - are one way to measure the City's financial health, or financial position Over time, increases and decreases in the City's net assets are one indicator of whether its financial health is improving or deteriorating You will need to consider other nonfinancial factors, however, such as changes in the City's property tax or sales tax base and the condition of the City's roads, to assess the overall health of the City The Statement of Net Assets and the Statement of Activities are divided into two kinds of activities ■ Governmental activities - Most of the City's basic services such as public safety, streets and roads, economic development and parks maintenance, are reported here Sales taxes, property taxes, state subventions, and other revenues finance most of these activities ■ Business -type activity - The City charges a fee to customers and budgets expenses so it covers all costs of services accounted for in this fund The government -wide financial statements include the Community Redevelopment Agency of the City of Grand Terrace (for the 7 month period prior to dissolution on January 31, 2012) and the Grand Terrace Public Financing Authority (component units), along with the City of Grand Terrace (the primary government) Although legally separate, these component units are important because the City is financially accountable for them Reporting the City's Most Significant Funds The fund financial statements provide detailed information about the City's most significant funds - not the City as a whole Some funds are required to be established by State law or by bond covenants However, City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting oversight responsibilities for using certain taxes, grants, or other money The City's two kinds of funds - governmental and proprietary - use different accounting approaches Governmental funds - Most of the City's basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year end that are available for spending These funds are reported using the modified accrual U. accounting method, which measures cash and all other current financial assets that can 3 readily be converted to cash The governmental fund statements provide a detailed short-term = view of the City's general government operations and the basic services it provides Q Governmental fund information helps you determine whether there are more or fewer financial a resources that can be spent in the near future to finance the City's programs Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this W comparison between governmental funds and governmental activities c d E Proprietary funds - When the City charges customers for the services it provides, these services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of a Activities In fact, the City's enterprise fund is the same as the business -type activities we report in the government -wide statements, but provide more detail and additional information, such as cash flows, for the proprietary fund We do not use internal service funds (the other to facilitate this comparison between governmental funds and governmental activities -4- ,,Packet 31a A summary of the government -wide Statement of Activities for the year ended June 30, 2012 and 2011 are as follows Table 2 Changes in Net Assets Governmental Activities Business -type Activities Total 2012 2011 2012 2011 2012 2011 Revenues and transfers Program revenues Charges for services $ 1,407,809 $ 1,472,183 $ 1,604 588 $ 1 486 213 $ 3 012 397 $ 2 958 396 Operating contributions and grants 559,490 884,198 - - 559 490 884 198 Capital contributions and grants 708,163 740 808 - - 708 163 740 808 General revenues Property tax 3,843 700 7,878,434 - - 3,843,700 7,878,434 Sales tax 889,422 868 099 - - 889 422 868,099 Motor vehicle in lieu 6 519 64 147 - - 6 519 64,147 Othertaxes 821,010 580,771 - - 821,010 580,771 Sale of property 358,374 - 358,374 Other revenues 538 096 220 438 5,267 10,357 543 363 230 795 Transfers 131,440 107,939 (131440) (107,939) - - Total revenues and transfers 9 264 023 12 817,017 1478,415 1 388 631 10 742 438 14 205,648 Expenses General government 1,397,889 1 377,335 - - 1,397,889 1,377,335 Public safety 1 927 217 2 193 407 - - 1,927,217 2,193 407 Public works 1 369,119 1 826 365 - - 1,369,119 1 826,365 Economic development 585,469 3499,728 - - 585,469 3,499,728 Cultural and recreation 1,279 189 1349,274 - - 1 279 189 1349,274 Interest on long-term debt 137,523 1 113 023 - - 137 523 1 113 023J Waste water disposal - - 1,437,945 1,397,633 1,437 945 1 397,633 Total expenses 6,696,406 11 359 132 1 437 945 1 397,633 8 134 351 12 756,765 Extraordinary item Loss on RDA dissolution (9 539 468) - - - (9 539 468) - Change in net assets (6 971 851) 1 457 885 40 470 (9,002) (6 931 381) 1,448 883 Beginning net assets 22,479,706 21 021,821 7110497 7 119 499 29 590 203 28 141,320 Ending net assets $ 15,507,855 $ 22,479,706 $ 7,150,967 $ 7 110 497 $ 22,658,822 $ 29,590,203 The increase or decrease in net assets can provide an Indication as to whether the overall financial position of the City Improved or deteriorated during the year From operations, total net assets for the City decreased by $6,931,381 during the fiscal year Taken separately, governmental activities net assets decreased by $6,971,851 while business -type activities net assets increased by $40,470 Total expenses of $8,134,351 were offset by total revenues of $10,742,438 In the Statement of Activities, expenditures do not include the cost of assets capitalized during the year or payments made on principal of outstanding debt Depreciation is shown for governmental funds on this table, but the expense is not recorded in each individual fund N r 1 0 M d a c W m } 1: 0 C. m lX R V c R c LL io c c Q v N 0 M WI a d R 0 c m c U. c C QI Q r x W C a) E r -6- Packet Pg 38 a 31a Revenues by Source - Governmental Activities $9,264,023 nth orrovonnoc Othertax 9% Motor ve in lie 0% Sales tax 10% _r", ', «� 41% Trancforc hargesfor services 15% Operating ontributions and grants 6% prtal buttons ;rants 8% Expenses by Function - Governmental Activities - $6,696,406 Cultural and recreation 19% Economic developmen 9% ruuiiu wur Kb 20% Intereston long-term dPht ffm General Government 21% Public safety 29% Packet Pg 40 The significant highlights in activities, revenues and expenditures of the City's General Fund from the prior year are as follows General Fund revenues and transfers in exceeded expenditures and transfers out by $584,931 Total fund revenue decreased by $957,667 or 17 3 percent from FY 2010 -11 The decrease was primarily due to the marked decrease in revenues classified as "other' which went down to only $307,847 in FY 2011 -12 from $1,225,545 in FY 2010 -11 Total expenditures decreased by $510,540 from FY 2010 -11 primarily due to budget reductions Other Sources and (Uses) increased by $79,034 compared to FY 2010-11 The increase was primarily due to one time revenue recognition • Property tax received decreased by only 0 5% percent from $1,389,542 to $1,382,935 • Sales tax and Sales tax —in -lieu increased 11 0 percent from $868,099 to $963,438 • Motor vehicle to -lieu tax decreased by 89 8 percent from $64,147 to $6,519 due to the elimination of the direct allocation of the motor vehicle license fee revenue to local governments • Charges for services overall remained close to the previous year at $1,103,323 Building and Planning fees decreased 2 7% to $149,589 from only $153,717 in FY 2010 -11 Child Care Center revenues actually decreased 5 0 percent to $878,700 from $925,419 in FY 2010 -11 • Use of money and property category decreased by 49 8 percent to $40,941 • General Fund recognized one time revenue of $358,373 in FY 2011 -12 consisting of • $116,548 Sale of monopole lease located at Rollins Park • $241,825 Sale of monopole lease locate at Grand Terrace Fire Station No 23 • General Fund overall operating expenditures decreased a net 9 9 percent over the prior year, due to various budget reductions The City is continuing many budget reduction measures instituted in previous years such as a 10 percent employee salary furlough, elimination and deferral of some employee benefits, deferral of merit increases, accounting changes and reallocation of some employee salaries to other funds Total law enforcement expenditures equate to 38 1 percent of the net General Fund operating expenditures The next largest General Fund cost center is Child Care Center representing 18 0 percent of net General Fund operating expenditures Other major governmental funds include the Street Improvement Fund, the Housing Authority Fund, It the Grand Terrace Community Redevelopment Agency Low- Mod Fund, the Grand Terrace w Community Redevelopment Agency Debt Service Fund, the Community Redevelopment Agency Capital Projects Fund and the Community Redevelopment Agency Protect Trust Fund The Street Improvement Fund which became a major fund in FY 2011-12 has a net change of a negative $1,636 during the fiscal year a The fund balance of the Housing Authority Fund increased by $1,926,007 over FY 2010-11 This fund accounts for the housing assets as a result of the recently dissolved community redevelopment agency of the City -10- Packet Pg 42- �3fa Land Buildings Improvements Equipment Vehicles Infrastructure Sewer mains Sewer laterals Sewer manholes Construction in progress Total Long -Term Debt Capital Assets (net of depreciation) Governmental Activities Business -type Activities Total 2012 2011 2012 2011 2012 2011 $ 2,177,069 $ 1 579 379 $ - $ - $ 2177,069 $ 1 579 379 3680,334 3,835,936 - - 3680,334 3835,936 1 930 767 2128,609 147,493 155,921 2078,260 2284,530 180 167 210,531 - - 180 167 210 531 100 540 126,430 - - 100 540 126,430 3 120 087 2,720,067 - - 3,120 087 2720,067 - - 2,775 081 2819,782 2 775 081 2,819 782 - - 1 391,871 1,412 881 1,391 871 1412,881 - - 925,243 939,674 925 243 939,674 297,832 824,254 - - 297,832 824 254 $ 11 486 796 $ 11,425,206 $ 5,239 688 $ 5328,258 $ 16 726,484 $ 16 753 464 At the end of the current fiscal year, the City had debt outstanding of $874,811 Of this amount, $27,807 represents outstanding leases, and $847,004 other debt comprised of an OPEB obligation and compensated absences payable $88,377 of all debt is due and payable within one year With the dissolution of the City of Grand Terrace Community Redevelopment Agency, Its Successor Agency has taken over debt obligations totaling $ 24,603,026, comprised of $22,755,000 in bonds payable and $ 1,848,026 in lease obligations as of February 1, 2012 Outstanding Debt Governmental Activities 2012 2011 2004 Refunding tax allocation bonds CRA $ - $ 3650,000 2011 Tax allocation bonds, Series A - 15 175,000 2011 Tax allocation bonds Series B - 5,650,000 OPEB obligation 604 724 444,393 Leases payable 27,807 1,983,841 Compensated absences 242,280 264,959 Total outstanding debt $ 874 811 $ 27,168,193 The City's total debt decreased by $26,293,382 (97 percent) during the current fiscal year, mainly due the transfer of debt obligations of the Grand Terrace Community Redevelopment Agency to Its Successor Agency during the fiscal year The City adopted GASB Statement No 45 and recognizes a liability of $604,724 for retiree health benefits -12- Packet Pg 44 Attachment Exhibit A Annual Financial Report 6-30-12 (Annual Financial Report - Year Ended 6130112) S -c 0) CD c� a m Pr CD O 7 C1 zo Attachment Exhibit A Annual Financial Report 6-30-12 (Annual Financial Report - Year Ended 6/30/12) City of Grand Terrace Statement of Activities For the year ended June 30, 2012 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities General government $ 1,397,889 $ 47,939 $ - $ - Public safety 1,927,217 75,097 152,263 671,094 Public works 1,369,119 213,022 407,227 37,069 Economic development 585,469 171,464 - - Cultural and recreation 1,279,189 900,287 - - Interest on long-term debt 137,523 - - - Total governmental activities 6,696,406 1,407,809 559,490 708,163 Business -type activity Waste water disposal 1,437,945 1,604,588 - - Total $ 8,134,351 $ 3,012,397 $ 559,490 $ 708,163 General revenues Property taxes, levied for general purposes Property taxes, tax increment, restricted Franchise taxes Sales taxes Motor vehicle in lieu taxes Public service taxes Use of money and property Other Sale of property Extraodmary item - loss on dissolution of redevelopment agency Transfers Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The accompanying notes are an integral part of these financial statements 15 Packet ,Pg 50 Attachment Exhibit A Annual Financial Report 6-30-12 (Annual Financial Report - Year Ended 6/30112) 31ra 0 City of Grand Terrace Balance Sheet Governmental Funds June 30, 2012 Special Revenue Funds Redevelopment Street Agency General Improvement Housing Authority Low -Mod ASSETS Cash and investments $ 3966,516 $ 1 296 863 $ - $ - Interest receivable 1,068 315 - - Accrued revenue 16,555 - - - Due from other funds 86,305 - - - Due from other governments 247,451 - 448 636 - Prepaid expense 22,463 - - - Advances to other funds - - 168 205 - Loans receivable 364 - 78 481 - Notes receivable - - 669 000 - Property held for resale - - 640 166 - Total assets $ 4 340 722 $ 1 297 178 $ 2004,488 $ - LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 139,594 $ - $ - $ - Accrued liabilities 24 779 - - Due to other funds - - - - Due to other governments 3 219 888 - - - Advances from other funds 168 205 - - - Deferred revenue 1 296 - 78,481 - Refundable deposits - 4 663 - - Total liabilities 3 553 762 4 663 78 481 - Fund balances Restricted for Public works - 1,292 515 - - Low -mod income housing - - 1,926 007 Community development - - - - Unassigned 786 960 - - - Total fund balances 786 960 1 292,515 1 926 007 - Total liabilities and fund balances $ 4 340 722 $ 1 297,178 $ 2 004 488 $ - The accompanying notes are an integral part of these financial statements 17 N 0 CO d c W 2 ea } 1` 0 C. m W is v c co c LL is c c Q N 0 CM mi 0 M d is v c ca S LL m 0 c C QI a w s x w w c d E s 0 0 Q Packet Pg 54 L a' W w Attachment Exhibit A Annual Financial Report 6-30-12 (Annual Financial Report - Year Ended 6/30/12) City of Grand Terrace Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the year ended June 30, 2012 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Use of money and property Developer fees Other Special Revenue Funds Redevelopment Street Agency General Improvement Housing Authority Low Mod $ 2 379 612 $ - $ $ - 638 036 - 96 494 - 1 103 323 20 355 40 941 2 928 12 448 307 847 - Total revenues 4 586 608 15 376 EXPENDITURES Current General government 1 126 440 Public safety 1 770 817 - Public works 606 454 - Economic development - - Cultural and recreation 1 117,024 - Debt service Principal 26 507 - Interest and other charges 2 312 Capital outlay Project improvement costs - Total expenditures 4 649 554 - Excess (deficiency) of revenues over expenditures (62 946) 15 376 OTHER FINANCING SOURCES (USES) Proceeds from sale of assets 358 374 - Transfers in 363 587 - Transfers out (74 084) (17 012) Total other financing sources (uses) EXTRAORDINARY AND SPECIAL ITEMS Gain/loss on dissolution of redevelopment agency Net change in fund balances Fund balances beginning Fund balances ending 647 877 (17 012) 1 077 1 077 386 280 386 280 (385 203) 91 228 (6 026) 85 202 1 926 007 (2 154 479) 584 931 (1 636) 1 926 007 (2 454 480) 202 029 1 294 151 - 2 454 480 $ 786 960 $ 1 292 515 $ 1 926 007 $ - The accompanying notes are an integral part of these financial statements 20 Packet Pg 58 City of Grand Terrace Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the year ended June 30, 2012 Net change in fund balances - total governmental funds $ (32 939,603) Amounts reported for governmental activities in the statement of activities are different because Governmental funds report capital outlays as expenditures However in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense or are allocated to the appropriate functional expense when the cost is below the capitalization threshold This activity is reconciled as follows Cost of assets capitalized, less disposals at net book value $ 1,137,907 Depreciation expense (617 950) 519,957 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds Neither transaction however, has an effect on net assets Principal payments on long-term debt 1,828,008 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds Change in OPEB obligation $ (160 331) Change in insurance payable (27,115) Change in compensated absences payable 22,679 Change in accrued interest payable on long-term debt 253 698 88,931 Revenues that are not available in the current period are deferred in the governmental funds, but not in the statement of activities 112 141 Extraordinary gain in closing of the former redevelopment agency - 23,418 715 Change in net assets of governmental activities $ (6,971 851) The accompanying notes are an integral part of these financial statements 22 Packett Pg fi0 City of Grand Terrace Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Fund For the year ended June 30, 2012 Business -type N Activity c Waste Water o Disposal d OPERATING REVENUES c Charges for services $ 1,600,628 wL. Connection fees 3,960 } Total operating revenues 1,604,588 a d a OPERATING EXPENSES Personnel services 52,363 c Employee benefits 26,708 c Depreciation 88,570 Contract services 1,211,153 Repairs and maintenance 15,775 C a Other expenses 43,376 N Total operating -expenses 1,437,945 m �I Operating income 166,643 C c. d NONOPERATING REVENUES co Interest income 5,267 CO c Income before transfers 171,910 �o Transfers out (131,440) c ai Change in net assets 401470 a s x Total net assets - beginning 7,110,497 m c d Total net assets - ending $ 7,150,967 E a The accompanying notes are an integral part of these financial statements 24 Packet Pg 7 City of Grand Terrace Statement of Fiduciary Net Assets June 30, 2012 Successor Agency Private Purpose Trust Fund Agency Fund ASSETS Cash and investments $ 24,428,247 $ 344,205 Cash and investments with fiscal agents 3,058,099 - Receivable Interest 5 895 - Due from other governments 3,219,889 - Amortizable deferred charge asset 384,075 - Capital assets, net 438 682 - Land held for resale 4,842,472 - Total assets $ 36 377,359 $ 344,205 LIABILITIES Accounts payable $ 368,541 $ 1,717 Accrued liabilities 479,451 - Intergovernmental payable - City 488,111 Due to other governments 2,208,923 - Deferred revenue 97 - Noncurrent liabilities Due within one year 2,582,887 - Due in more than one year 21,772,324 - Refundable deposits - 342,488 Total liabilities 27,900,334 $ 344 205 NET ASSETS Held in trust for the Successor Agency $ 8 477 025 0 The accompanying notes are an integral part of these financial statements 26 =Packet Pg 64 Attachment Exhibit A Annual Financial Report 6=30-12 (Annual Financial Report - Year Ended 6/30/12) ' 31a City of Grand Terrace Notes to Financial Statements June 30, 2012 SIGNIFICANT ACCOUNTING POLICIES Note 1 Organization and Summary of Significant Accounting Policies a Description of the reporting entity The City of Grand Terrace (the "City") was incorporated November 1978 under the General Laws of the State of California The City operates under a Council -Manager form of government and provides the following services public safety (law enforcement), highways and streets, cultural and recreational activities, public improvements, planning and zoning, budding and safety, low and moderate income housing programs, and general administrative services As required by generally accepted accounting principles, these financial statements present the City of Grand Terrace (the primary government) and its component units The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationship with the City These entities are legally separate from each other However, the City of Grand Terrace's elected officials have a continuing full or partial accountability for fiscal matters of the other entities The financial reporting entity consists of 1) the City, 2) organizations for which the City is financially accountable, and 3) organizations for which the nature and significance of their relationship with the City are such that exclusions would cause the City's financial statements to be misleading or incomplete An organization is fiscally dependent on the primary government if it is unable to adopt its budget, levy taxes or set rates or charges, or issue bonded debt without approval by the primary government In a blended presentation, component unit balances and transactions are reported in a manner similar to the balances and transactions of the City Component units are presented on a blended basis when the component unit's governing body is substantially the same as the City's or the component unit provides services almost entirely to the` City The following component units of the City have been included in the financial reporting entity as blended component units A description of these component units and the method of incorporating their financial information in the accompanying general purpose financial statements are summarized as follows The Community Redevelopment Agency of the City of Grand Terrace The Community Redevelopment Agency of the City of Grand Terrace (the "Agency") was formed, s pursuant to the State of California Health and Safety Code, Section 33000 entitled "Community tL Redevelopment Law " Its purpose is to carry out plans for improvement, rehabilitation and redevelopment of blighted areas within the territorial limits of the City of Grand Terrace The City Council also acts as the governing body of the Agency On December 29, 2011, a California Supreme Court ruling directed that all redevelopment agencies be dissolved on February 1, 2012, R therefore, the redevelopment agency funds account for activities of the Agency only through a January 31, 2012 See note 14 for additional information on the redevelopment agency dissolution 28 _ y Packet Pg` Ti 31a� City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 1 Organization and Summary of Significant Accounting Policies (continued) c Measurement focus, basis of accounting, and financial statement presentation The government -wide statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the cash flows Accordingly, all of the City's assets and liabilities, including capital assets, as well as infrastructure -assets, and long-term liabilities, are included in the accompanying statement of net assets The statement of activities presents changes in net assets Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred The types of transactions reported as program` revenues for the City are reported in three categories 1) charges for services, 2) operating grants and contributions, and 3) capital grants and contributions Governmental fund financial statements are reported using the current financial resources measurement focus and the modified -accrual basis of accounting Under the modified -accrual basis of accounting, revenues are recognized in these funds when susceptible to accrual (i e , when they are both measurable and available) "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period For this purpose, the City considers property taxes collected after year-end as available, if they are collected within 60 days of the end of the current fiscal period Other revenue susceptible to accrual includes sales tax, state gasoline taxes, investment income, and certain other intergovernmental revenues Expenditures in the governmental funds are generally recognized in the accounting period in which the related fund liability is incurred, if measurable, except for unmatured principal and interest on general long-term debt, as well as compensated absences and claims and judgments, which are recognized when due r The City reports the following major governmental funds The General Fund is the government's primary operating fund It accounts for all financial resources of the general government, except those required to be accounted for in another fund The Street Improvement Fund accounts for the fees used for street maintenance, right-of-way acquisition and street construction Sources of revenue are traffic fines and forfeitures collected The Housing Authority Fund accounts for the housing assets transferred from the former X redevelopment agency and Low and Moderate housing activities of the City The fund activities are w restricted to the same requirements as the former Low and Moderate Income Housing Fund of the Agency E The Community Redevelopment Low Income Fund is used to account for the financial resources a used in supplying the low and moderate income housing throughout the City The fund was closed on January 31, 2012 as part of the dissolution of the Agency (see (Vote 14) The Community Redevelopment Debt Service Fund is used for the accumulation of resources to be used for the repayment of Agency debt The fund was closed on January 31, 2012 as part of the dissolution of the Agency (see Note 14) 30 Packet P,g 70 City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 1 Organization and Summary of Significant Accounting Policies (continued) Proprietary funds distinguish operating revenues and expenses from nonoperating items Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations The principal operating revenues for the Waste Water Disposal Fund are charges to customers for sales and services Operating expenses for the same Enterprise Fund include the cost of sales and services, administration expenses, and depreciation on capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses Other Accounting Policies Receivables and payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i e , the current portion of interfund loans) or "advances to/from other funds" (i e , the non -current portion of interfund loans) All other outstanding balances between funds are reported as "due to/from other funds " Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances " Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources The County of San Bernardino collects property taxes for the City Tax liens attach annually as of 12 01 A M on the first day in March preceding the fiscal year for which the taxes are levied The tax levy covers the fiscal period July 1 to June 30 All secured personal property taxes and one-half of the taxes on real property are due November 1, the second installment is due February 1 All taxes are delinquent, if unpaid, on December 10 and April 10, respectively Unsecured personal property taxes become due on the first of March each year and are delinquent, if unpaid, on August 31 Cash and cash equivalents For purpose of the statement of cash flows, the City considers cash and cash equivalents as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near A their maturity that they present insignificant risk of changes in value because of, -changes in interest x rates The City follows the practice of pooling cash and investments of all funds Since cash and w investments are pooled, the City utilizes the assumption that the cash and investments in the Enterprise Fund are cash and cash equivalents E Investments a The City reports its investments at fair value in the balance sheet All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement 32 Packet Pg 72 City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 1 Organization and Summary of Significant Accounting Policies (continued) Use of estimates The financial statements have been prepared in accordance with generally accepted accounting principles accepted in the United States of America and necessarily include amounts based on estimates and assumptions by management Actual results could differ from those amounts Long-term obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net assets Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method Bonds payable are reported net of the applicable bond premium or discount Bond issuance costs are reported as deferred charges and amortized over the term of the related debt In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenditures Fund equity The City implemented GASB Statement No 54, Fund Balance Reporting and Governmental Fund Type Definitions during the year ended June 30, 2012 This statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government's fund balance more transparent The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used • Nonspendable — amounts that are not in a spendable form (such as inventory) or are required to be maintained intact a • Restricted — amounts constrained to specific purposes by their providers (such as a grantors, bondholders and higher levels of government), through constitutional provisions or by enabling legislation • Committed — amounts constrained to specific purposes by a government itself, W using the highest level of decision -making authority, to be reported as committed, d amounts cannot be used for any other purpose unless the government takes the = same highest level action to remove or change the constraint • Assigned — amounts a government intends to use for a specific purpose, intent can a be expressed by the governing body or by an official or body to which the governing body delegates the authority • Unassigned — amounts that are for any purpose, positive amounts are reported only in a general fund 34 Fa-pkeit Pg 74 F^ 3 1 a City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 1 Organization and Summary of Significant Accounting Policies (continued) b Deficit fund balances As of June 30, 2012 the following funds have deficit fund balances Amount Special Revenue Funds AB 3229 COPS $ (433) Traffic Safety (13,221) CDBG (42,166) Capital Projects Fund Barton/Colton Bridge (31,263) Capital Projects (36,821) These deficits will be funded by future revenues or transfers from other funds c Excess of expenditures over appropriations Excess of expenditures over appropriations in individual funds are as follows Fund Expenditures Appropriations Excess General Fund Cultural and Recreation $ 1,117,024 $ 1,112,083 $ (4,941) Special Revenue Fund Air Quality Public works 5,775 (1,600) (7,375) Landscape & LGTG Assessment Public works 12,528 7,122 (5,406) Capital Project Fund Capital Project Bond Proceed Capital Outlay 188,504 - (188,504) Former Redevelopment Debt Service Fund 22,015 15,500 (6,515) N 0 M co d M c w en 0 e. d L 0 c c ILL so c c a N T O M m ItI 0 a Ta 0 c LL c c al a .fl s x w c d E s E .1 36 _ Packet Pg 76 City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 2 Cash and Investments (continued) Investments authorized by debt agreements Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy The table below identifies the investment types that are authorized for investments held by bond trustees The table identifies certain provisions of these debt agreements that address interest rate risk, credit risk and concentration of credit risk Authorized Investment Type Government Obligations 'FHLB's FHLMC's Farm Credit Banks FNMA's Financing Corp Debt Obligations Resolution Funding Corp Debt Obligations Certificates of Deposit Deposits fully insured by FDIC USAID Guaranteed Notes Investment Agreements Bankers Acceptances Municipal Obligations rated Aaa Commercial Paper rated P-1 Repurchase Agreements Money Market Mutual Funds rated AAAm Disclosures relating to interest rate risk Maximum Maximum Maximum Percentage Investment in Maturity Allowed One Issuer None N None None None 360 days None 360 days None 270 days None None None None None None None None None None None None None None None None None None None None None None None None None None None None None None None Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations Information about the sensitivity of the fair values of the City's investments to market interest rate fluctuations are presented below Investment Type Money Market Mutual Fund Passbook Savings Account Certificates of Deposit Local Agency Investment Fund (LAIF) Local Gov Invest Pool (CAMP) Held by Trustee Money Market Funds Amount $ 1,081,009 250,020 13 ,109,572 9,111,826 3,876,447 12 Months or Less $ 1,081,009 250,020 13 ,109,572 9,111,826 3,876,447 3,058100 3,058100 Total $ 30 486,974 $ 30,486 974 38 Q Packet P,g 78 Sla, City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 2 Cash and Investments (continued) Investments in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAW for the entire LAIF portfolio (in relation to the amortized cost of that portfolio) The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis LAIF has reported to its participating agencies that, as of June 30, 2012, the carrying amount (at amortized cost) of the Pool was $60,514,457,551 and the estimated fair value of the Pool was $60,588,263,603 The City's proportionate share of the Pool's market value (as determined by LAIF) as of June 30, 2012, was $9,111,826 Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage -backed securities, other asset -backed securities, loans to certain state funds, and floating rate securities Local Government Investment Pool The City is a voluntary participant in the Local Government Investment Pool, "CAMP" (California Asset Management Program) CAMP is a California Joint Powers Authority, established to provide public agencies with professional investment services, and is directed by a Board of Trustees, which is made up of experienced local government finance directors and treasurers The CAMP Pool is a permitted investment for all local agencies under California Government Code Section 53601(p) The City reports its share in the investment pool at the estimated fair market value As of June 30, 2012, the City's share of the Pool (as determined by CAMP) is $3,876,447 Included in the CAMP's investment portfolio are U S treasury notes, bonds, bills or certificates of indebtedness or other obligations of the United States, federal agency or U S government -sponsored enterprise obligations, participations or other instruments, repurchase agreements, bills of exchange or time drafts, negotiable certificates of deposits, commercial paper of prime quality of the highest ranking or of the highest letter and number rating Pooled cash The City follows the practice of pooling cash and investments of all funds, except for funds required to x be held by outside fiscal agents under the provisions of bond indentures W c Interest income earned on pooled cash and investments is allocated to the various funds based on the cash balances Interest income from cash and investments with fiscal agents is credited directly to the related fund a 40 _ ,Packet Pg ,80` 31a City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 3 Interfund Receivable, Payable and Transfers (continued) Interfund transfers Fund Receiving Transfers Fund Making Transfers General Fund Nonmajor Governmental Funds Street Improvement Fund Waste Water Disposal Fund CRA Low -Mod Fund CRA Debt Service Fund CRA Capital Projects Fund CRA Low -Mod Fund CRA Capital Projects Fund CRA Debt Service Fund CRA Debt Service Fund Nonmajor Governmental Funds Nonmajor Governmental Funds General Fund Total Interfund Transfers Amount $ 64,649 17,012 131,440 6,026 114,176 30,284 (1) 363,587 91,228 (2) 91,228 1,071,000 (3) 1,071,000 214,274 74,084 (4) 288,358 $ 1,814,173 (1) These transfers were made for cost allocation (2) These transfers were made for the cost of goods and services (3) Transfer was for the funding of Michigan Street Design & ROW Project (4) These transfers were Franchise Sweep fees to gas tax and other various project fundings Note 4 Loans Receivable General Fund The City offers an employee loan program under which employees may be loaned, interest free, up to $2,000 towards the purchase of a computer The loans are repaid over a period not to exceed twenty-four months through payroll deductions The balance at June 30, 2012, is $364 42 PacketaPg 82_ City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 5 Capital Assets (continued) Beginning Balance Additions Business -type Activities Capital assets, being depreciated Sewer mains Laterals Manholes Improvements Total capital assets, being depreciated Less accumulated depreciation for Sewer mains Laterals Manholes Improvements Total accumulated depreciation Business -type activity capital Ending Deletions Balance $ 4 023 129 $ - $ - $ 4,023 129 1,890,943 - - 1,890 943 1 298 760 - - 1,298,760 202 274 - - 202 274 7 415 106 - - 7415,106 (1,203,347) (44,701) (478 062) (21,010) (359,086) (14,431) (46 353) (8 428) (2,086 848) (88 570) (1 248 048) (499,072) (373 517) (54 781) (2 175 418) assets, net $ 5 328 258 $ (88 5701 $ - $ 5,239 688 Depreciation expense was charged to functions of the primary government as follows Governmental activities General government $ 84 667 Public safety 18,160 Public works 235,392 Economic development 5,426 Culture and recreation 274 305 Total depreciation expense - governmental activities $ 617 950 44 N 0 M co V m c W L R d 0 a d c ca c U. is c c a v N 0 M COI 0 Q- d La 0 _ eo c LL Ta 3 c c Q� Q .Q s x W w d E s U l0 Packet^Pg 44 ~ City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 6 Long -Term Liabilities (continued) The minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2012, are as follows Year Ending June 30 Payments 2013 $ 28 820 total minimum lease payments 28,820 Less Amounts representing interest (1 013) Present value of minimum lease payments $ 27 807 Note 7 City Employees Retirement Plan Plan description The City contributes to the California Public Employees Retirement System (PERS), a cost sharing multiple -employer public employee defined benefit pension plan PERS provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries PERS acts as a common investment and administrative agent for participating public entities within the State of California Benefit provisions and all other requirements are established by State statute and City ordinance Copies of PERS' annual financial report may be obtained from their executive office 400 "P" Street, Sacramento, California 95814 Funding policy Participants are required to contribute 8% of their annual covered salary The City contributes 5% of the 8% required of the employees on their behalf and for their account The City is required to contribute at an actuarially determined rate, the current rate is 20 482% of annual covered payroll The contribution requirements of Plan members and the City are established and may be amended by PERS Annual pension cost For 2012, the City's annual pension cost of $316,814 for PERS was equal to the City's required contribution The required contribution was determined as part of the June 30, 2009, actuarial calculation using the entry age normal actuarial cost method THREE YEAR TREND INFORMATION FOR PERS Annual pension Percentage of Net Pension Fiscal year cost (APC) APC contributed obligation 06/30/10 $ 319,879 100% $ - 06/30/11 $ 301,174 100% $ - 06/30/12 $ 316,814 100% $ - c d E s ►; 46 iPacket Pg 86 F City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 8 Other Post Employment Benefits (continued) The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for 2012 and the two preceding years were as follows Fiscal Year Annual OPEB - Ended Cost June 30, 2010 $ 148,156 June 30, 2011 $ 155,057 June 30, 2012 $ 161,998 Funded status and progress Percentage of Annual OPEB Cost Contributed 0% 1% 1% Net OPEB Obligation $ 290,156 $ 444,393 $ 604,724 The funded status of the plan as of July 1, 2008 (the most recent valuation) was as follows Actuarial UAAL as a Actuarial accrued Unfunded percentage Actuarial value of liability AAL Funded Covered of covered Year valuation assets (AAL) (UAAL) ratio payroll payroll Ending date (a) (b) (b-a) (a/b) (c) [(b-a)/c] 6/30/2010 7/1/2008 * $ - $ 1,406,000 $ 1,406,000, 0 00% $ 2,014 286 69 80% 6/30/2011 7/1/2008 * $ - $ 1,406,000 $ 1,406 000 0 00% $ 1,911,101 73 57% 6/30/2012 7/1/2008 * $ - $ 1,406,000 $ 1,406,000 0 00% $ 1,674,924 83 94% * The City has not obtained an updated actuarial study The calculation is solely based on the consideration reported to 2008 actuarial report Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future Examples include assumptions about future employment, mortality, and the healthcare cost trend Amounts determined regarding the funded status of the Plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi -year trend information about whether the actuarial value of Plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for the benefits Actuarial methods and assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the Plan as understood by the employer and the Plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs to that point The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short- term volatility in actuarial accrued liabilities and the actuarial assets, consistent with the long-term perspective of the calculations 48 1 Packe`t,P 88 �_ � City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 10 Risk Management (continued) b Self-insurance programs of the Authority General Liability Each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year) After the close of a fiscal year, outstanding claims are valued A retrospective deposit computation is then made for each open claims year Claims are pooled separately between police and non -police Costs are spread to members as follows the first $30,000 of each occurrence is charged directly to the member's primary deposit, costs from $30,000 to $750,000 and the loss development reserves associated with losses up to $750,000 are pooled based on the member's share of losses under $30,000 Losses from $750,000 to $5,000,000 and the associated loss development reserves are pooled based on payroll Costs of covered claims from $5,000,000 to $50,000,000 are paid by excess insurance Costs of covered claims for subsidence losses from $15,000,000 to $25,000,000 are paid by excess insurance The protection for each member is $50,000,000 per occurrence and $50,000,000 annual aggregate Administrative expenses are paid from the Authority's investment earnings Workers' Compensation The City of Grand Terrace also participates in the workers' compensation pool administered by the Authority Each member pays a primary'deposit to cover estimated losses for a fiscal year (claims year) After the close of a fiscal year, outstanding claims are valued A retrospective deposit computation is then made for each open claims year Claims are pooled separately between public safety and non-public safety Each member has a retention level of $50,000 for each loss and this is charged directly to the member's primary deposit Losses from $50,000 to $100,000 and the loss development reserve associated with losses up to $100,000 are pooled based on the member's share of losses under $50,000 Losses from $100,000 to $2,000,000 and employer's liability losses from $5,000,000 to $10,000,000 and loss development reserves associated with those losses are pooled based on payroll Losses from $2,000,000 to $5,000,000 are pooled with California State Association of Counties — Excess Insurance Authority members Costs from $2,000,000 to $300,000,000 are transferred to reinsurance carriers Costs in excess of $300,000,000 are pooled among the Members based on payroll Protection is provided per statutory liability under California Workers' Compensation law Administrative expenses are paid from the Authority's investment earnings c Purchased insurance Property Insurance The City of Grand Terrace participates in the all-risk property protection program .� of the Authority This insurance protection is underwritten by several insurance companies The City x of Grand Terrace property is currently insured accordingly to a schedule of covered property submitted by the City of Grand Terrace to the Authority The City of Grand Terrace property currently has all-risk property insurance protection in the amount of $12,961,600 There is a $5,000 deductible E per occurrence except for non -emergency vehicle insurance which has a $1,000 deductible Premiums for the coverage are paid annually and are not subject to retroactive adjustments a 50 _ yjPacket Pg ,90} <3la City f Grand Terrace Notes to Financial Statements June 30, 2012 Note 14 Successor Agency Private -Purpose Trust Fund to the Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly 13111 X1 26, (the Bill) that provides for the dissolution of all redevelopment agencies in the State of California. Most of California cities had established a redevelopment agency that was included in the reporting entity of the city as a blended component unit (since the city council, in many cases, also served as the governing board for those agencies) The Bill provided that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the "Successor Agency" to administer assets, pay and adhere to the provisions of enforceable obligations, and to expeditiously settle the affairs of the dissolved redevelopment agency If the city declines to accept the role of Successor Agency, other local agencies may elect to perform this role If no local agency accepts the role of Successor Agency, the Governor is empowered by the Bill to establish a local "designated local authority" to perform this role On January 4, 2012, the City Council met and created the Successor Agency of the former Redevelopment Agency of the City of Grand Terrace in accordance with the Bill as part of the City of Grand Terrace After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments Subject to the control of a newly established oversight board, remaining assets could only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished, projects that were subject to legally enforceable, contractual commitments) In future fiscal years, successor agencies will only be allocated tax increment revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other private and public bodies that occurred after January1, 2011 If the body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011), all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity on February 1, 2012 Prior to that date, the final seven months of the activity of the redevelopment agency continued to be reported in the governmental funds of the City of Grand Terrace After the date of dissolution, January x 31, 2012, the assets, liabilities, and activities of the dissolved redevelopment agency are reported in a w fiduciary fund (private -purpose trust fund) in the financial statements of the City of Grand Terrace The private -purpose trust fund keeps its activities under the normal accrual method of accounting s The transfer of the assets and liabilities of the former redevelopment agency as of February 1, 2012 a (effectively the same date as January 31, 2012) from governmental funds to fiduciary funds was reported in the governmental funds as an extraordinary gain (loss) in the governmental fund statements The receipt of these assets and liabilities was reported in the private -purpose trust fund as an extraordinary gain in the fiduciary funds financial statements 52 rPacket P' 92 �1_ City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 14 Successor Agency Private -Purpose Trust Fund to the Former Redevelopment Agency (continued) Schedule of changes in long-term liabilities for the period from February 1, 2012 to June 30, 2012 Governmental Activities Bonds payable 2004 Refunding Tax Allocation Bonds 2011 Tax Allocation Bonds, Series A 2011 Tax Allocation Bonds, Series B Less deferred amounts on refunding Discount on bonds issued Plus Premium on issue Total bonds payable Capital leases Zions National Bank Total capital leases Beginning Ending Due Within Balance Additions Deletions Balance One Year $ 1930,000 $ - $ - $ 1,930 000 $ 1,930,000 15 175 000 - - 15 175 000 260 000 5,650 000 - - 5650,000 220 000 (106,397) - 106,397 - - (173 484) - 9,110 (164,374) - 23 901 - (23,901) - - 22 499 020 - 91 606 22 590 626 2 410 000 1 848,026 - (83 4.41) 1 764 585 172,887 1.848026 - (83 441) 1,764,585 172 887 Total long-term liabilities $ 24,347 046 $ - $ 8,165 $ 24,355,211 $ 2 582 887 a 2004 Refunding Tax Allocation Bonds In August of 2004, the former CRA issued the $13,000,000 Refunding Tax Allocation Bonds, Series 2004 The Bonds were Issued to refund the $3,695,000 outstanding Tax Allocation Bond Series 1993 A, the $1,290,000 outstanding Zions First National Bank loan, the $2,780,000 outstanding Tax Allocation Bond Series 1993 B, and to finance certain redevelopment activities of the former CRA Interest varies from 2 00% to 3 75% and is payable semiannually on March 1 and September 1, commencing March 1, 2005 Principal payments are due annually commencing September 1, 2005 through September 1, 2012 The former CRA deposited $8,241,183 of the proceeds in an irrevocable trust and purchased ai U S Government State and Local Government Securities for the purpose of generating a resources which will be used to call the bonds As a result, the refunded bonds are considered Z to be defeased and the liability has been removed from the statement of net assets The reacquisition price exceeded the net carrying amount of the old debt by $851,183 This amount W is being netted against the new debt and amortized over the remaining life of the new debt This m advance refunding was undertaken to reduce total delft service payments over 14 years by E $464,691 and resulted in an economic gain of $631,303 The 2004 Refunding Tax Allocation Bond was transferred to the Successor Agency on February 1, 20i2 as a result of the a Redevelopment Agency closure 54 Packet P, '= IV City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 14 Successor Agency Private -Purpose Trust Fund to the Former Redevelopment Agency (continued) c 2011 B Taxable Tax Allocation Bonds In June of 2011, the former CRA issued the $5,650,000 Community Redevelopment Project Area Taxable Tax Allocation Bonds, Issue of 2011 B The Bonds were issued for the purpose of acquiring land for resale and development in the Project Area Interest vanes from 7 10% to 7 70% and is payable semiannually on March 1 and September 1, commencing September 1, 2011 Principal payments are due annually commencing September 1, 2012 through September 1, 2026 The Bonds are payable from and secured by a pledge of Tax Increment, less amounts required to make payments under the Pass -Through Agreements, annual debt service of the 2004 Bonds and the Housing Set -Aside Amount The 2011 B Tax Allocation Bond was transferred to the Successor Agency on February 1, 2012 as a result of the Redevelopment Agency closure Debt service payments to maturity for the 2011 B Taxable Tax Allocation Bonds are as follows Year Ending June 30 2013 2014 - 2015 2016 2017 2018-2022 2023-2027 Total d , Lease Payable Principal ^$ 220,000^ 235,000 255,000 270,000 290,000 1,800,000 2,580,000 Interest $ 419 090 403,470 386 785 368 680 349 510 1,406,750 626,010 $ 5 650 000 $ 3 960 295 On August 28, 2009, the City entered into a Lease Agreement (Lease) with Zions First National c Bank in order to refinance the City of Grand Terrace Refunding Certificates of Participation, a Issue of 1997, which was issued to finance city hall and other public improvements The City used the proceeds of the Lease of $2,162,000 and funds on hand of $358,000 to current refund ° the $2,520,000 of outstanding 1997 Certificates of Participation Under the Lease, the City is to w lease property to Zions and in return Zions will lease the property back to the City in consideration of the payment by the City of semiannual lease'payments commencing March 1, d 2010 through September 1, 2020 at 4 76% interest The lease payable was identified as part of s the former redevelopment agency's long-term debt The lease was transferred to the Successor Agency on February` 1, 2012 as a result of the Redevelopment Agency closure a 56 ,�P�acket Pgh�96= City of Grand Terrace Notes to Financial Statements June 30, 2012 Note 15 Subsequent Events (continued) Special Municipal Election to Consider Utility Users' Tax In April 2013, the City Council was presented with a Five -Year Financial Analysis and Budget Stabilization Plan (Plan), which identified projected ongoing budgetary deficits in the General Fund and the depletion of General Fund reserves during FY 2013-2014 unless action is taken to increase revenues or reduce expenditures The Plan identified three options for revenue generation a local add -on sales tax, parcel tax, and utility users' tax Following review of the Plan, the City Council appointed a community -based Budget Advisory Committee to review the Plan, along with overall City finances, and make recommendations to the City Council regarding budget stabilization After holding a series of meetings, the Committee submitted its recommendations to the City Council which included the following elements (1) unanimously declare a fiscal emergency, (2) place a utility users' tax (UUT) initiative on the November 2013 ballot, and (3) set the UUT rate such that it would generate an additional $1 5 million in annual General Fund revenue After receiving the Committee's recommendations, the City Council contracted with an election advisor to conduct a community opinion survey and advise regarding the UUT rate and timing of a special election The election advisor recommended a 5% UUT rate with the special election -to be held November 2013 The City Council approved these recommendations and adopted the necessary resolutions to proceed with a November 2013 special election At a rate of 5%, the proposed UUT will generate an estimated $1 1 million in annual General Fund revenue While falling short of the Budget Advisory Committee's recommended revenue target of $1 5 million, the estimated $1 1 million in additional revenue will be adequate to continue providing the current level of municipal services with the existing staffing The special municipal election will be held November 5, 2013 If the tax measure is not approved by the voters, expenditure reductions have been approved as part of the FY 2013-2014 Adopted Budget which will take effect following the election to reduce expenditures within budgeted revenues, thus preserving the current level of General Fund reserves w c as E s a 58 x Packet Pg 98 , Required Supplementary Information City of Grand Terrace Budgetary Comparison Schedule General Fund For the year ended June 30, 2012 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget REVENUES Taxes $ 2,308,159 $ 2,400,159 $ 2,379,612 $ (20,547) Licenses and permits 572,410 572,410 638,036 65,626 Intergovernmental 93,175 84,000 96,494 12,494 Charges for services 1,178,700 1,178,700 1,103,323 (75,377) Fine and forfeitures 12,500 12,500 20,355 7,855 Use of money and property 53,130 53,130 40,941 (12,189) Other 301,000 301,000 307,847 6,847 Total revenues 4,519,074 4,601,899 4,586,608 (15,291) EXPENDITURES Current General government Public safety Public works Cultural and recreation Debt service Principal Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Proceeds from sale of assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balance 1,290,582 1,336,842 1,126,440 210,402 1,902,317 1,808,086 1,770,817 37,269 729,887 714,887 606,454 108,433 1,131,259 1,112,083 1,117,024 (4,941) - - 26,507 (26,507) - - 2,312 (2,312) 5,054,045 4,971,898 4,649,554 322,344 (534,971) (369,999) (62,946) 307,053 - 365,897 358,374 (7,523) 519,497 519,497 363,587 (155,910) (59,660) (61,160) (74,084) (12,924) 459,837 824,234 647,877 (176,357) (75,134) 454,235 584,931 130,696 Fund balance - beginning of year, as restated 202,029 202,029 202,029 - Fund balance - end of year $ 126,895 $ 656,264 $ 786,960 $ 130,696 59 Q Packet Pg 100 , ,31,a,— Required Supplementary Information City of Grand Terrace Budgetary Comparison Schedule Redevelopment Agency Low and Moderate Income Housing Fund For the year ended June 30, 2012 REVENUES Use of money and property Total revenues EXPENDITURES Economic development Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) EXTRAORDINARY AND SPECIAL ITEMS Loss on dissolution of redevelopment agency Net change in fund balance Fund balance - beginning of year Fund balance - end of year Budgeted Amounts Actual Variance with c Original Final Amounts Final Budget C', $ - $ - $ 1,077 $ 1,077 w L- 1,077 1,077 co 1: 0 CL 509,822 509,825 386,280 (123,545) Sr 509,822 509,825 386,280 (123,545) �a c LL (509,822) (509,825) (385,203) (122,468) c c a N T 91,228 91,228 co (620,563) (620,563) (6,026) 614,537 (bI 0 a (620,563) (620,563) 85,202 705,765 M c �a �c u_ ea 0 c - - (2,154,479) (2,154,479) Q� Q (1,130,385) (1,130,388) (2,454,480) (1,571,182) 3 s 2,454,480 2,454,480 2,454,480 - - W c $ 1,324,095 $ 1,324,092 $ - $ (1,571,182) E s Q J 61 PacketFPg 102 ASSETS Cash and investments Interest receivable Accrued revenue Due from other funds Due from other governments Total assets LIABILITIES AND FUND BALANCES City of Grand Terrace Combining Balance Sheet Nonmajor Governmental Funds June 30, 2012 Special Revenue Funds Storm Drain Park AB 3229 Air Quality Improvement Development COPS Fund Improvement $ 72,273 $ 234,861 $ - $ 60,911 18 56 - 14 - - - 3,749 $ 72,291 $ 234,917 $ - $ 64,674 Liabilities Accounts payable $ - $ - $ - $ - Accrued liabilities - - - - Due to other funds - - 433 - �J Deferred revenue - - - - Total liabilities - - 433 - Fund balances Restricted for Public works - - (433) 64,674 Community development - 234,917 - - Unassigned 72,291 - - - Total fund balances (deficit) 72,291 234,917 5433) 64,674 Total liabilities and fund balances $ 72,291 $ 234,917 $ - $ 64,674 62 Packet Pg 104 Attachment Exhibit A Annual Financial Report6-30-12 (Annual Financial Report - Year Ended 6/30/12) 31a City of Grand Terrace Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the year ended June 30, 2012 N Special Revenue Funds M 1 J Storm Drain Park AB 3229 Air Quality V 0 m V Improvement Development COPS Fund Improvement c w REVENUES Intergovernmental $ - $ - $ 1Q0,067 $ 15,189 m } Fines and forfeitures - - - - Use of money and property 158 535 - 123 0 Developer fees 5,231 756 - - m Other - 50 - - M Total revenues 5,389 1,341 100,067 15,312 C c EXPENDITURES LL Current eo c Public safety - - 100,000 - c Q Public works - - - 5,775 - Capital outlay Project improvement costs - - - - C�., 0 I � Total expenditures - - 100,000 5,775 0 a d Excess (deficiency) of revenues over (under) expenditures 5,389 1,341 67 9,537 `9 c OTHER FINANCING 0 c SOURCES (USES) °' Transfers in - - - - Transfers out - (2,716) (500) 927 Q t Total other financing Q sources (uses) - (2,716) (500) 927 2: X Net change in fund balances 5,389 (1,375) (433) 10,464 W }, c m Fund balances (deficit) - E s beginning 66,902 236,292 - 54,210 Q Fund balances (deficit) - ending $ 72,291 $ 234,917 $ (433) $ 64,674 65 Packet Pg 108 T 31a City of Grand Terrace Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the year ended June 30, 2012 Capital Projects Funds Total Barton / Capital Capital Total Capital Nonmator ' Street Colton Projects Projects/Bonds Projects Governmental Improvement Bridge Fund Proceeds Funds Funds REVENUES Intergovernmental $ $ $ 671 094 $ - $ 671 094 $ 1 429 620 Fines and forfeitures - - - - - 54 553 Use of money and property - 63 11 74 1 995 Developer fees - - - 9 069 Other - - - 188 504 188 504 188 554 Total revenues - - 671 157 188 515 859 672 1 683 791 EXPENDITURES Current Public safety - - - - - 138 240 Public works 210 702 3 719 707 978 - 922 399 1 283 493 Capital outlay Project improvement costs - - 188 504 188 504 188 504 Total expenditures 210 702 3 719 707 978 188 504 1 110 903 1 610 237 IExcess (deficiency) of revenues over (under) expenditures (210 702) 3 719 36 821 11 (251 231) 73 554 OTHER FINANCING SOURCES (USES) Transfers in 210 702 3 572 - 214 274 288 358 Transfers out - - - (278 923) Total other financing sources (uses) 210 702 3 572 - - 214 274 9 435 Net change in fund balances - (147) (36 821) 11 (36 957) 82 989 Fund balances (deficit) - begmning 31 826 31 116 - - 710 782 890 Fund balances (deficit) - ending $ 31 826 $ (3 263) $ (36 8211 $ 11 $ (36 247) $ 865 879 67 Packet Pg 110 31�ti _ The Honorable City Council October 1, 2013 City of Grand Terrace Page 2 r DRIculi<ies,E0 ounteCed to Performing the Audit We encountered no significant difficulties in dealing with management 'in performing and 11 cornptetmg our'dudit Corrected and Uncorrected Misstatements Professional standards requir_e,ys to accumulate all known'and likely misstatements identified during 'the audit, other than those that are clearly trivial, .and comnlunicate -them to the appropriate level of rrianagement Management has corrected all such rrtsstatements, In addition, none of the misstatements detected4as a result of audit4pibced`ures and corrected by Management Were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole Disagreements -with Management F F&purposgs of this letter', pr&essional,statidards def fib- allisagreementwith jmanagementas a financial accounting, -reporting, or auditiing matter, whether,orjrtat reeolve to our satisfaction, that could tie signifcant'to the, indncial statements or the auditor's�repoit We are -pleased to report that nQ'suci ciisagfeemerits'arpse during the ,course of our,udii tUlanagen}ent Representations We have requested -certain repr"esentabdkis from management that are included in the management representation letter dated bdober 1, 20,13 Management Consultatidns-with Ofherind6Pi&hdent Acco#ntants lii'sdme cases, management may decide -to consult with other accountants .about,auditing and accounting matters„ stmilaf to obtaining a second ropinion" on certain situations If a consultation'involves application of an accounting `pnnciple to,_the'=governmental units financial statements or a determination of thektype of auditor's opinib>i,that maybe expressed on those sta`tem'ents, our professional stdhdafds require the` consulting accountant to `check with us to determine thafqhe consultant has all'the releuaRt,facts To our knowledde, there were no such cdnEUtations with otheraccounfants Other Aq,dit Ftndin_ gs or issues We generally dis&QWa variety of matters, including the application of accpunting pnnciples and aud4ing ,standards, With mahageinent each year pnof46 retention as the goveFnmental UnM9 ,auditors However, the"se discussions occurred in the 'noimat course of our professional relationship and our responses were not a condition to -our retention d s a ROGERS ANDE�RSON, MALODY & SCOTT-, LLP CERTIFIED PUBLIC ACCOUNTANTS SINCE 1948 '735 E Carnrgre Dr Suite 100 Site Bermrdino CA 92408 r 909 B89 0871 T 909 889 5361 F nmscpa net LTNERS _ Blend t L Odle CPA MST REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Te+ry P Sim CPA AND QN COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT h( Fr inks CPA Miltht,v,1 B Wilton CPA MSA CGMA M-tt OF FINANCIAL STATEMENTS PERF6'RMED IN ACCORDANCE WITH Scott M<inno CPA COMA GOVERNMENTAUDITING STANDARDS LLerm ShiZilvg CPA MST CGMA J +y l l Z[ r dlor CPA f Nrtn#r Ln+euwS) Phillip H Waller CPA (Pinner �ms nuts) The Honorable City Council MANAGERS 1 STAFF City of Grand Terrace, California Nincy Q R-iM, y CPA 118A 1i pdfCrd A WdJ b❑ CPA hl(,A Ian ty Yu CPA, MS1 Pap-i Mat it Tb+,w CPA MBA We have audited the financial statements of the gol/ernmental abbVities, Mv, $ lv,nrrv7 (-PA M0A the business -type activities, each major fund, and the aggregate Poror E Hurny CI A remaining fund information of the City of Grand Terrace, California (City), Seon, liye' Lix CPA MRA as bf and for the ear ended, June 30, 2012, Which collecfivel Co ` nse year Y nip Chat les Dt $m,onr CPA }'Tu z , r issued r� prt rwith d teal October sWe [ruc T nu CPA. MSA -Derek] coneo- `1 n 2013 tluctedou audit accoour pdance Brows CPA MST auditing standards generally accepted in the United S,tate"s of America Dlvlrl D i Uywood CPA r 1 r f- ,^ q,e , and the standards applicable to financial audits contained in Government Audding Standards, issued by the Comptroller General of the United States Internal Confrol Over Financial Reparfirrg , In planning and performing out audit, we considered the City's internal control over financial reporting as a basis for cie$igning our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting MEMBERS Am( rictfit d ifili n[Lc A,deliciency in intemal .control exists when the design or operation of a Cpr[ifl+ d Putihc Account ttus control does not allow management or employees, in the normal course PCPs T lni t fl)hanc` of perforfning their assigned functions to prevent, or detect and correct Jnr CP�t FunrS -� + misstatements on a timely basis A matehal weakness is a deficiency, or Gmenunutral Mid,r Qualify Ct.11W a combination -of deficiencies, In internal control such that thei re s a C,irfornr t Spt+nty rtl reasonable possibility that a material misstatement of the entity's financial Ctrtr% d Public Accountants statements will not,be prevented, or detected and Corrected on a timely basis STABILITY ACCURACY TRUST Packet Pg 114 31d 73$ E Carnegie Dr Sulte 10,0 San Bernardino CA 92408 909 689 0871'a T 909 889 5361 F nmscpa nt.tt OARTNFPS Brt nd1 L Odle CPA MST I Lrry P Shen CPA K11kA Frtetbs CPA M itiN w B WdSon CPA MSA.CGMA Scott W M-tnno CPA CGMA Loeiri Sli tnblt-ig CPA MST CGMA J,y H ZCrCi7Lr CPA(Pirtnu Eipunus) Pht%g1 H W ili(.r CPA(PyTnc.r Emeritus) MANAGERS/STAFF Ninry b R-tllerty CI A. MRA t» td(Ct (1 A We 1t bu CPA r lRA Jcn 1y Lin CPA KS1 P'tr i'M rt tt Titr tw, CPA MBA hltft$ lV7r1nV1 CPA MBA Pt to E Mutny CF A S4itng Hyt;'t Lie CPA MBA C11-11 Its, Dc'Smioni CPA jjtlrt F tn(, CPA libel T 1 urner, CPA, MSA Derek J Br own CPA MST David D Hutwood CPA MEMBr RS Ante rt4'tu In4tquto of Ct t txh6d Public Actoiiewin s PCPs ,Tht AWPA AlhasKe for CPA F/rtfls Govet rims vital Atidr t Qualrlr C011tr `Ca11(01 W 1 Society of (Dertrfrcd Public Accoonnnts ROGERS ANDERSON MALODY & SCQTT, LLP CERTIFIED PUBLIC ACCOUNTANTS SII'JCE 1948 October 1, 2013 To the Governing Body of the City of Grand Terrace, California Thank you for the cooperation given us during our recent engagement with the City of Grand Terrace In connection with our examination of the financial statements for the year ended June 30, 2012, we considered the internal accounting control, reviewed significant accounting policies and procedures rand ,certainbusiness, financial and administrative practices for the purpose of determining the scope of our examination. Since our review of the system of internal accounting control was made to enable us to express an opinion on the ,financial statements; it'would not riecessarilly disclose all We' dknesses in the system, whluh may exist During our audit we became aware o'f same areas that present opportunities f6r strengthening internal control, improving operating efficiency and reducing expenses The following points summarJze our comments and recommendations regarding these matters As in prior years, management has been proactive in addressing areas, identtfed during the+ audit and Vhas 61ready implemen#ed soope of recommended changes Policy We noted the City's formal employee manual has not been updated since c August iO, 2000 The City also has not developed formal fraud n`sk d assessment or anti fraud programs, but instead uses =an informal ,process Format, wn#en fraud risk assessment and anti -fraud programs are x essential parts of internal control over financial reporting We ,continue to W recommend that the City perform a detailed feview of the contents of its c current manual and make any{changes as,necessary to address the above concerns STABILITY ACCURACY TRUS`f Packet Pg 116 ROGERS ANDERSON, MALODY'& SCOTT, LLP CERTIFIED PUBLIC ACCOUNTANTS SINCE 1948 735 E Carnegie Dr Suite 100 Sirt Bernudlno CA 92408 909 889 0871 T 909 889_$361 F r*imscpa net The Honorable City Council City of Grand Terrace, California � V',TNERS z rend t L k)(11(. GPA MST Tt rry P 51101 CPA Kirk tt Fr ,nN GPA INDEPENDENT ACCOUNTANT'S REPORT ON I"Fi(thgw 6 Wilson CPA NSA, CGMA AGREED -UPON PIitOCEDURES APPLIED TO Scott W M,nno CPA COMA APPROPRIATIONS LIMIT WORKSHEETS Leta, S(tanbnig CPA MST CGMA Jill H Zercltcr CPA fNrtw r Ln,t.rrttn} P1u1Lp H Willer CPA (Pirnsr Enunnis) We have performed the procedures enumerated below to the MA14AceRs STArr accom in ' A ro nations Limit worksheet of the CI of Grand I I tncy o Piffei ry CPA. MBA p y 9 PP P City �,f ir11'RrCI A Wilthu CPA I IRA Terrace, California, for the,year ended,,lune 30, 2a12 These,otocedures, irn ill Up CPA MST which were agreed to by the Gtty of Grand Terrace, California and the 1'tpa Mt[�r Thnw CPA MF3/t League of California Cities (as presented in the publication entitled I 1 rrt 5 (v�nryV7 LF'P, MIiA N to E Atli t,y ck Agreed -upon Procedures Applied to the ApproprratronsLimitation Sect% Hye i Len CPA 1-16A Prescribed by Article Xlll,B'of the California Constrtu(on), were performed Ch trles De Sln,oni CPA solely to assist the City in meeting the requirements of Section 19 of F Yhinn Frotg CPA Article XIII-u B of the California Constitution The City of, Grand Te-race,'s m¢ I T Tun,CF'A MSA r4k� Brown CrA Fltii management Is responsible for the Approprations L°imitwofksheet This ~a,vd o Hznwood CPA agreed -upon ,procedures engagempnt was conducted Iin accordance with attestation standards established by the 'American Institute of Certified Public Accoupa ants, The sufficiency of these procedures is solely the resporti l?ility of those parties specified in this report Consequently, we make no representation regarding the sufficiency of the procedures described below, either for the purpose for which this report,has been requested or for any other purpose The procedures performed and our findirigs were as follows 1 We obtained ,the completed worksheets and compared the limit I nd ar6wif adjustment factors included ih those worksheets to the limit and annual adjustment factors that ;were pdopted by resolution of the City° Council We also compared the population MEMBERS and Inflation options included in the aforementioned documents`to Amer ic,n Ins(rtnte of ,those that were selected by a recorded vote of the City.Council Ceriihr d Pubbe Accountants PCPS Trr, Ale PA Alliance Finding No exceptions were noted as a result of our procedures w (0i CPA hUus cn.,trrinrr ntat Addrt 2 For the accompanying Appropriations Limit worksheet, we added 91n,rrry Crntcr last year's 'limit to total adjustments and agreed the resulting Cllllnrnl t Snr:u ry of amount to this year's limit Certified Public P('CQUp[anr5 a Finding No exceptions Were noted as a result of our procedures STABILITY ACCURACY TRUST _ Packet Pg 118 6I1rY OF GRAND TERRACE APPROPRIATIONS UI'MIT-CPUTA710N 2011 — 2012 m 1 per Capita Personal Income Change I Population Change City Population Growth CPI Change Converted -to a Ratio Population Change Converted to a Ratio Calculation of=Growth Factor 2010 — 2011 Limit 2011— 2012 Appropnations Limit (9,835,216 X 1,0251 X 1 0105) $ 9,835,216 ;$ 10,187,W 2011 - 2012 ,-2,51 % 1 05% 10251 10105 10359 Packet Pg 120 31f CITY OF GRAND TERRACE, CALIFORNIA San Bernardino Associated Governments Measure'I Fund For the Year Ended Jghe 30, 2012 TABLE OF CONTENTS Page Independent Auditors' Report 1 Financial Statements Balance Sheet 3 Statement of Revenues, Expenditures and Changes in Fund Balances 4 Notes to the Financial Statements Required Supplementary Information 5 Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual 9 Note to Required Supplementary Information ) Other Information 10 Program Status Comparison of 5-Year Capital Plan Project Budget to Current Year Expenditures 11 Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an ,Audit of Financial Statements Performed in Accordance with Government Auditing Standards and Measure I Coitiphance Requirements 12 Packet,Pg 122 Management has omitted the Management's Disctlrston and Analysts for the Measure I Fund that accounting principles generally accepted in the United States of America requires to be presented td supplement the basic financial statements Such missing information, although not apart of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting and for placing the basic financial statements in an appropriate operational, economic, or historical context Our opinion on the basic financial statements is not affected by this missing information Accounting principles generally accepted in the United States of America require that the budgetary comparison information on page 9 be presented to supplement the basis financial statements Such information, although not a part of the basic financial statements, is required by the 'Governmental Accounting Standards Board who considers it to be- an essential part of financial reporting for placing the basic financial statements in an ' appropriate operational, economic, or historical context We have applied Certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance Our audit was conducted for the purpose of forming an opinion on the financial statements of the Measure I Fund of the City The other information, as listed in the table of contents, is presented for purposes of additional analysts and is not a required part of the financial statements The other information has not subjected to the auditing procedures applied in the audit of the financial statements, and accordingly, mve do not express an opinion or provide any assurance on it Rancho Cucamonga, California October 30, 2013 101 a Packet Pg 124 31f' CITY OF GRAND TERRACE, CALWORNIA MEASURE I FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2012 2012 N REVENUES Cq Measure I Sales Tax Fund $ 166,997 Interest Income 415 10 Total Revenues 167,472 = w EXPENDITURES L Capital Construction 81,633 0 Total Expenditures 81,633 REVENUES OVER((UNDER) EXPENDITURES 85,839 OTHER FINANCING SOURCES (USES) _ Transfers Out (9,796) Net Change in Fund Balance 76,043 = ¢ Fund Balance Beginning of Year 154,571 0 M Prior Period Adjustment 11,152 c Fund Balance Beginning of Year, as Restated 165,723 d d Fund Balance End of Year $ 241,766 0 c. d The accompanying notes are an integral part of these financial statements 4 LL _ _ Q� LL !9 -2 s x w w d E 0 w Q Packet Pg 126 31f CITY OF GRAND TERRACE, CALIFORNIA MEASURE I FUNDS MOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 2—SUADMRYOF SIGNIFICANT ACCOUNTING POLICIES, (COX777VUED) B Use ofEstrrnates The preparation of financial statements In conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures at the date of the financial statements and the reported amounts of revenues and expenditures during the xeportmg period Actual results could differ from those estimates C Fund Balances In accordance with GASB Statement No 54, fund balance is reported according to the following classifications nonspendable, restricted, comnutted, assigned, and unassigned based on the relative strength of the constraints that control how specific amounts can be spent Restricted fund balance represents amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally unposed by creditors, grantors, contributors, or the laws or regulations of other governments When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first D Cash and Invesonents Cash and investments are pooled to facilitate cash management and maximize investment opportunities and yields Investment income resulting from this pooling is allocated to the respective funds mcluding the Measure I Fund based upon the average cash balance The investment policies and the risks related to GASB Statement No 40, Deposits and Investment Risk Disclosures, applicable to the Funds, are those of the Crty and are disclosed in the City's basic financial statements The City's basic financial statements can be obtained at City Hall NOTE 3 — TAXES RECEIVABLES The taxes receivables represent the Measure I sales tax revenues for the fiscal year received from the San Bernardino County Transportation Authority after June 30, 2012 )VUTE 4 —MEASURE IFUNDS The California State Legislature authorized county transportation authorities to enact local option sales fax measures for transportation 'improvements in the late 1980s, under provisions of Division 19 (commencing with Section 180000) of the Public Utilities Code In November 1989, San Bernardino County voters approved passage of Measure I, authorizing the San Bernardino County Transportation Authority to impose a half cent retail transactions and use tax applicable in the incorporated and unincorporated areas of the County of San Bernardino for the 20-year period between April 1, 1990 and March 31, 2010 San Bernardino Associated Governments (SANBAG), acting as the Authority, was authorized to administer the programs described to the Measure 6 Packet Pg 128 �y1 CITY OF GRAND TERRACE, CALIFORNIA $If MEASURE I FUNDS NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 6 — DUE FROM THE CITY OF GRAND TERRACE GENERAL FUND The City adjusted the overhead allocation charged to the Measure I Fund The $14,258 is the amount owed by the General Fund to reduce the overhead allocation to $9,796 or twelve percent of expenditures NOTE 7 — FISCAL EMERGENCY On June 25, 2013, the City Council declared a fiscal emergency to allow the City to,place Utility Users Tax on the November ballot for special election after cutting all but the most essential services NOTE 8— PRIOR PERIOD ADJUSTMENTS For fiscal year 2011-12, the City recognized the unpact of sales tax accruals in accordance with GASB 33 The adjustments resulted in the restatement of beginning fund balance for the Measure I Special Revenue Fund in the governmental fund statement of revenues, expenditures, and changes in fund balance as follows Beginning of Year, as Previously Reported Fund Balance 2012 154,571 Recognition of Sales Tax Accrual 11,152 $egmning Fund Balance, as Restated $ 165,723 F-1 Pack6t P_g 130 �31 f CITY OF GRAND TERRACE, CALIFORNIA MEASURE I FUNDS NOTE TO REQUIRED SV#VLEMENTARY .INFORMATION JUNE 30, 2912 NOTE I—BUDGETARYDATA The City adopts an annual budget on a basis consistent with accounting principles generally accepted in the United States of America. 10 a Packet Pg-132 31f� CITY OF GRAND TERRACE, CALIFORNIA MEASURE I FUNDS PROGRAM STATUS- COMPARISON OF 5-YEAR CAPITAL PLAN PROJECT BUDGET TO CURRENT YEAR EXPENDITURES FOR THE YEAR ENDED JUNE 30, 2012 The Measure I Five Year Capital Improvement Plan for local streets was adopted by Council Resolution No 2011-29 Of the funds allocated under the Measure I Five Year Capital Improvement Plan, the following programs were affected during the current fiscal year. 5-Year flan Current Project Fiscal Year Unexpended Local Projects Budget _ Expenditures Budget Pico Street Pavement Overlay $ 156,000 $ 81,633 $ 74,367 Robin Way and Warbler Avenue Pavement Overlay 159,000 - 159,000 Glendora Street and Monona Street Pavement Overlay 161,000 - 161,000 DeBerry Street - Mt Vernon to Observation Pavement Overlay 161,000 - 161,000 DeBerry Street - Mt Vernon to Michigan Pavement Overlay 168,000 - 168,000 11 d E s cc a Packet Pg 134L 31f Comphance and Other Matter As part of obtaining reasonable assurance about whether the financial statements of the Measure I Fund of the City are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the requirements of Measure I matters as specified in the agreement between the City and SANBAG, noncompliance with which could have a direct and material effect on the determination of finmgal statement amounts However, providing an opinion on -compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opunon The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards, including the requirements of the Measure I requirements as specified in the agreement between the City and SANBAG We noted certain matters that we reported to management,of the City of Grand Terrace in a separate letter dated October 30, 2013 This reportis intended solely for the information and use of the City Council, management, and SANBAG, and is not intended to be and should not be used by anyone other than these specified parties Rancho Cucamonga, California October 30, 2013 13 a Packet Pg 136 1lamnek, Trine, Day & Cc , LLP Certified Public Accountants October 30, 2013 To the City Council City of Grand Terrace, Cahforma YA/ LU.E THE DIFFERE Ey We have audited the Measure 1 Fund (Fund) of the City of Grand Terrace, California (City) fox the year ended June 30, 2012 and have issued our report thereon dated October 30, 20f3 In planning and performing our audit of the Fund financial statements of the City, we considered internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the Fund financial statements An audit does not include examining the effectiveness of internal control and does not provide assurance on internal control We have not considered internal control since the date of our report During our audit we noted certain matters involving operational and compliance matters that are presented for your consideration These observations and recommendations, all of wluch have been discussed with the appropriate members of management, are intended to improve the fair presentation of the Fund financial statement or result in other operating efficiencies and are summarized as follows CURRENT YEAR MANAGEMENT LETTER COMMENTS YEAR END CLOSING OBSERVATION We noted one item relating to the year end closing process and financial reporting, as follows As the Measure I receipts are sales tax monies, Generally Accepted Accounting Principles (GAAP) require accruals for receipts received subsequent to year, end but earned as of June 30 VfD perfozmed cut-off procedures over cash receipts noting that receipts received in July of 2011 pertaining to May sales tax revenues of 2011 were not properly accrued to the appropriate fiscal year resulting in the prior period adjustment to fund balance RECOMMENDATION. The City should review certain aspects of the year end closing process The year end closing process should d include accrual of the appropriate sales tax transactions E MANAGEMENT RESPONSE - To ensure that all year-end revenues are accrued in accordance with Generally Accepted Accounting Principles, the Citywall create a year-end/audit checklist that will emphasize the detailed review of all revenue accruals 8270 Aspen street Rancho Cucamonga CA 91730 Tel 909 466 4410 Fax. 909 466 4431 wwW vtdcpa cold FRESNO • LAGUNA HILLS • PALO ALTO • PLEASANTON . RANCHO CUCAMONGA . RIVERSIDE S - - Pa - -- cket Pg 13F1 The City Council The City of Grand Terrace, California October 30, 2013 Our audit procedures are designed primarily to enable us to form our opinion on the financial statements, and therefore may not bring to .light all weaknesses in policies or procedures that may e4st We ami ,however, to use our knowledge of the Fund gamed during our work to make comments and suggestions that we hope will be useful to you , ' We would be pleased to chscuss these comments and recommendations with you at any time This report is intended solely for the information and use of the City Council, the City's management, the SANBAG Board of Directors, and others and should not be used by anyone other than these specified parties vcw� C - r',� I "'�, f" L Rancho Cucamonga, California October 30, 2013 3 31g Packet Pg 140 _3 J TITLE AGENDA REPORT January 14, 2014 Council Item Approval of Professional Services Agreement for Finance Department Services ' PRESENTED BY Betsy Adams, City Manager RECOMMENDATION Approve the attached Agreement for Professional Services between the City and Willdan Financial Services to provide Finance Department Services for the period January 14, 2014 through January 13, 2015 BACKGROUND Wdldan Financial Services (WFS) has provided Finance Department Services to the City since January 14, 2013 The staffing has consisted of a Project Manager (part- time), Finance Manager (full-time) and Accountant (part-time) In addition, the WFS Finance Manager has overseen 'the work of the City's Accounting Technician (City employee) With the expiration of the current Agreement on January' 13, 2014, the City Council appointed an ad, hoc Council Committee to meet with representatives from WFS and negotiate terms and conditions for a new Agreement covering the period January _- 14, 2014 through January 13, 2015 The ad hoc Committee met twice for this purpose and has endorsed the terms and conditions in the attached Agreement DISCUSSION The Finance Department staffing provided by WFS under the Agreement that expired January 13, 2014, included 76 hours of billable time per week, and a not -to -exceed annual fee of $244,000 The actual hours worked by WFS during the past year significantly exceeded the billable hours In an effort to address this issue while maintaining high performance standards, the staffing allocation in the proposed Agreement has been revised to increase total weekly billable hours from 76 to 80, in conjunction with reducing the weekly hours of the Project Manager from 16 to 10, adjusting position classifications/compensation as appropriate, and adding a part-time Senior Accounting Technician at 10 hours per week (plus any additional hours, up to 36 per week, that may be needed to perform the ,job duties of the City's Accounting Technician when absent from work) The annual compensation under the proposed Agreement will increase to a not -to -,exceed amount of $273,000, plus any additional compensation earned when providing back-up coverage for the City's Accounting Technician The following table summarizes the staffing allocation and compensation in the expired Agreement (period 1/14/13 - 1/13/14) and the proposed Agreement (period 1/14/14-1/13715) PacketPg 141 r3Ja AGREEMENT FOR PROFESSIONAL SERVICES Finance Department Services THIS AGREEMENT ("Agreement") is made as of this 14th day of January, 2014 by and between the CITY OF GRAND TERRACE ("City") and WILLDAN FINANCIAL SERVICES ("Wdldan") 1 WILLDAN'S SERVICES Wdldan agrees to perform during the term of this ' Agreement, the tasks, obligations, and services set forth in the "Scope of Services" attached to and incorporated into this Agreement as Exhibit "A" (the "Services") 2 TERM OF AGREEMENT The term of this Agreement shall be from January 14, 2014, the effective date pursuant to Paragraph "38" of this Agreement and shall end on January 13, 2015 unless extended by a supplemental agreement 3 FAMILIARITY WITH WORK By execution of this Agreement, Wdldan warrants that (1) It has thoroughly investigated and considered the work to be performed, based on all available information (2) It carefully considered how the work should be performed, and (3) it fully understands the difficulties and restrictions attending the performance of the work under this Agreement (4) It has the professional and technical competency to perform the work and the production capacity to complete the work in a timely manner with respect to the schedule included in the scope of services 4 PAYMENT FOR SERVICES City shall pay for the services performed by Wdldan pursuant to the terms of this Agreement, the compensation set forth in the "Schedule of Compensation" attached to and incorporated into this Agreement as Exhibit "B" The fees for services shall not exceed the authorized amount of $273,000 for the four (4) positions provided under this Agreement, plus any additional cost incurred by Wdldan to provide coverage during penods of absence by the City employee supervised under this Agreement, as set forth in Exhibits "A" and "B" 5 TIME FOR PERFORMANCE Wdldan shall not perform any work under this Agreement until (a) Wdldan furnishes proof of insurance as required under Paragraph "8" of this Agreement All services required by Willdan under this Agreement shall be completed on or before the end of the term of the Agreement Page 1 of 11 Packet'Pg 143 3�J a , Agreement without written approval of City is prohibited and shall be null and void, except that Willdan may assign payments due under this Agreement to a financial institution 12 STANDARD Willdan agrees that the services, to be rendered pursuant to this Agreement shall be performed in accordance with the standards customarily provided by an experienced and competent professional organization rendering the same or similar services Willdan shall re -perform any of said services, which are not in conformity with standards as determined by the City 13 CONFIDENTIALITY Employees of Willdan in the course of their duties may have access to financial, accounting, statistical, and personnel data of private individuals and employees of City Willdan covenants that all data, documents, discussion, or other information developed or received by Willdan or provided for performance of this Agreement are deemed confidential and shall not be disclosed by Willdan without written authonzation by City City shall grant such authorization if disclosure is required by law All City data shall be returned to City upon the termination of this Agreement Wdldan's covenant under this Section shall survive the termination of this Agreement 14 RECORDS AND INSPECTIONS Willdan shall maintain full and accurate records with respect to all services and matters covered under this Agreement City shall have free access at all reasonable times to such records, and the right to examine and audit the same and to make transcripts therefrom, and to inspect J all program data, documents, proceedings and activities Willdan shall maintain an up-to-date list of key personnel and telephone numbers for emergency contact after normal business hours 15 OWNERSHIP OF WILLDAN'S WORK PRODUCT All reports, documents, all analysis, computations, plans, correspondence, data, information, computer media, including disks or other written material developed and/or gathered by Willdan in the performance of this Agreement shall be and remain the property of City without restriction or limitation upon its use or dissemination by City Such Material shall not be the subject of a copyright application by Willdan Any re- use by City of any such materials on any project other than the project for which they were prepared shall be at the sole risk of City unless City compensates Willdan for such use Such work product shall be transmitted to City within ten (10) days after a written request therefore Willdan may retain copies of such products 16 NOTICES All notices given or required to be given pursuant to this Agreement shall be in writing and may be given by personal delivery or by mad Notice sent by mail shall be addressed as follows Page 3 of 11 L r Packet�P7771 FZ y`^^ 3'J a z _ _ eligibility to enroll in PERS as an employee of City and entitlement to any contribution to be paid by City for employer contribution and/or employee contributions for PERS benefits 22 TRAVEL/EXPENSES Any reimbursement expenses must be pre -authorized by the City Manager and shall be based upon the approved policies and rates of the City 23 CONFLICT OF INTEREST Willdan agrees that any conflict or potential conflict of interest shall be fully disclosed prior to execution of contract and Willdan shall comply with all applicable federal, state and county laws and regulations governing conflict of interest 24 ECONOMIC INTEREST STATEMENT Willdan hereby acknowledges that pursuant to Government Code Section 87300 and the Conflict of Interest Code adopted by City hereunder, Willdan is designated in said Conflict of Interest Code and is therefore required to file an Economic Interest Statement (Form 700) with the City Clerk, for each employee providing advise under this Agreement, prior to the commencement of work 25 POLITICAL ACTIVITY/LOBBYING CERTIFICATION Willdan may not conduct any activity, including any payment to any person, officer, or employee of any governmental agency or body or member of Congress in connection with the awarding of any federal contract, grant, loan, intended to influence legislation, administrative rulemaking or the election of, candidates for public office during time compensated under the representation that such activity is,.being performed as a part of this Agreement 26 NON-DISCRIMINATION In the performance of this Agreement, Wdtdan shall not discriminate against any employee, subcontractor, or applicant for employment because of race, color, creed, `religion, sex, marital status, national origin, ancestry, age physical or mental handicap, medical condition, or sexual orientation Willdan will take affirmative action to ensure that subcontractors and applicants are employed, and that employees are treated during employment, without regard to their race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition, or sexual orientation 27 AUDIT OR EXAMINATION Willdan shall keep all records of funds received from City and make them accessible for audit or examination for a period of three years after final payments are issued and other pending matters U. 28 MODIFICATION OF AGREEMENT - This Agreement may not be modified, nor y may any of the terms, provisions or conditions be modified or waived or a otherwise affected, except by a written amendment signed by all parties E .s Page 5 of 11 Packet Pi-, iiT "mil prevented or impeded by strikes, disturbances, nots, fire, severe weather, government action, war acts, acts of God, or any other cause similar or dissimilar to the foregoing which are beyond the control of the party from whom the affected performance was due 37 INTEGRATED AGREEMENT This Agreement, together with Exhibits "A," "B" and "C" supersede any and all other agreement's; either oral or in writing, between the parties with respect to the subject matter herein Each party to this Agreement acknowledges that no representation by any party, which is not embodied herein, nor any other agreement, statement or promise not contained in this Agreement shall be valid and binding Any modification of the Agreement shall be effective only if it is in writing and signed by all parties. 38 EFFECTIVE DATE The effective date of this Agreement is January 14, 2014 and shall remain in full force and effect until amended or terminated Dated "CITY" Dated 11 %3 1q APPROVED AS TO FORM Richard L Adams II , City Attorney By Betsy M Adams, City Manager "W ILLDAN" h By. Mark r isco, President/CEO Page 7 of 11 a 'Packet Pg ' %R-1 EXHIBIT "B" SCHEDULE OF COMPENSATION I AMOUNT OF COMPENSATION For performing and completing all services pursuant to Exhibit "A° Scope of Services, the annual fee shall not exceed $273,000, plus any additional cost incurred by Willdan to compensate the Senior ' Accounting Technician for additional hours worked due to absences of the City employee assigned to the Finance Department The City agrees to compensate Willdan at a rate of $36 00 per hour for these additional hours worked by the Senior Accounting Technician, plus any premium pay earned for overtime hours worked as required by the Fair Labor Standards Act (FLSA) In addition to the regularly scheduled hours worked by the Senior Accounting Technician, additional billable hours to cover absences of the City employee assigned to the Finance Department may not exceed 36 per week Should the City employee assigned to the Finance Department be off work for a scheduled extended absence (covering, 16 consecutive work days or more), the Senior Accounting Technician's total billable hours will be limited to 36 peg week II BILLING At the end of each calendar month in which services are performed or expenses are incurred under this Agreement, Willdan shall submit an invoice to the City at the following address City Manager City of Grand Terrace 22795 Barton Road Grand Terrace, CA 92313 The invoice submitted pursuant to this paragraph shall show the 1) Purchase order number, 2) Name and hours worked by each person who performed services during the billing period, 3) The title/classification under which they were balled, 4) The hourly rate of pay, 5) Actual out-of-pocket expenses incurred in the performance of services, and, 6) Other such information as the City may reasonably require III METHOD OF PAYMENT Payment to Willdan for the compensation specified in Section I, above, shall be made after the City Manager or designee determines that the billing submitted pursuant to Section Il, above, accurately reflects work satisfactorily performed City shall pay Willdan within thirty (30) days therefrom Page 9 of 11 C d E s cc Packet Pg _Wl EXHIBIT "C" INSURANCE (continued) If proof of insurance required under this Agreement is not delivered as required or if such insurance is canceled and not adequately replaced, City shall have the right but not the duty to obtain replacement insurance and to charge Wdl`dan for any premium due for such coverage City has the option to deduct any such premium from the sums due to Wdldan Insurance is to be placed with insurers authorized and admitted to write insurance in California and with a current AM Bests rating of A- VII or better Acceptance of insurance from a carrier with a rating lower than A- VII is subject to approval by City 's Risk Manager Willdan shall immediately advise City of any litigation that may affect these insurance policies Page 11 of 11 d E s eo Q Packet,Pg -153� TITLE PRESENTED BY AGENDA REPORT January 14, 2014 Second Amendment to Wastewater Special Counsel Agreement Betsy Adams, City Manager l RECOMMENDATION Approved the second amendment to the agreement with Lagerlof, Senecal, Gosney & Kruse, LLP for wastewater special counsel services and appropriate $17,500 from wastewater fund balance for these services BACKGROUND On December 20, 2012, the City sought competitive proposals for a comprehensive legal review of its wastewater treatment and disposal agreement from legal firms with significant water and wastewater expertise In Closed Session, direction was provided to enter into an agreement with Lagerlof, Senecal, Gosney & ,Kruse, LLP, for these services This was reported out fof Closed Session on February 12, 2013 and an agrepment with the firm for $15,000 was executed On July 23, 2013, approval of a first amendment to the agreement for $20,000 was reported out of Closed, Session The first amendment covered Phase II work which included settlement negotiations and a tolling agreement DISCUSSION Considerable progress has been made toward resolving multiple issues with the City of Colton with regard to the wastewater treatment and disposal agreement A second amendment to the agreement in the amount of $17,500 is now needed for Phase rlll work winch' includes drafting a settlement agreement and new agreement for future wastewater treatment and disposal services FISCAL IMPACT The City's Wastewater Disposal Fund (Fund 21) is an enterprise fund which is separate from the City's General Fund The adopted budget for Fiscal Year 2013-14 projects the ending fund balance for Fund 21 to be $1,252,748 so funds are available for the $17,500 budget appropriation needed for the second amendment to the agreement with Lagerlof, Senecal, Gosney & Kruse, LLP ATTACHMENTS • Second Amend to LSGK Agreement • SCOPE OF SERVICES Phase III APPROVALS Betsy Adams Finance Completed Completed 01 /09/2014 9 37 AM 01/09/2014 3 35 PM Packet Pg 154 N�3Ka SECOND AMENDMENT TO AGREEMENT FOR LEGAL SERVICES THIS AMENDMENT (hereinafter referred to as "AMENDMENT") to the Agreement for Legal Services (hereinafter referred to as "AGREEMENT") by and between the CITY OF GRAND TERRACE, hereinafter referred to as the "CITY," and LAGERLOF, SENECAL, GOSNEY & KRUSE, LLP, a law firm, hereinafter referred to as "ATTORNEY", is entered into the 14`h day of January, 2014 RECITALS WHEREAS, on February 12, 2013 CITY retained the services of ATTORNEY with the AGREEMENT to provide a specific scope of services as special counsel for the CITY, WHEREAS, on July 23, 2013, CITY and ATTORNEY entered into a First Amendment to Agreement for Legal Services to continue the project with an additional Scope of Services referred to as Phase II, and WHEREAS, ATTORNEY has completed the aforementioned two scopes of services and the CITY desires ATTORNEY to continue with this project under an additional scope of services, referred to as Phase III ` NOW, THEREFORE, the parties agree as follows 1 SCOPE OF SERVICES Section "3" of the AGREEMENT is hereby amended to include the scope of services as set forth in the attached "Phase III - Scope of Services" which is made Exhibit "A" to this AMENDMENT 2 COMPENSATION Section "4" of the AGREEMENT is hereby amended to provide an additional not to exceed amount of $17,500 to cover the additional scope of services set forth in Section "l" and Exhibit "A" of this AMENDMENT 3 PROVISIONS OF AGREEMENT All other terms, conditions, and provisions of the AGREEMENT, to the extent not modified with this AMENDMENT, shall remain in full force and effect IN WITNESS WHEREOF this AMENDMENT is signed by the parties hereto N on the date first above written d "CITY OF GRAND TERRACE" e� Date Walt Stanckiewrtz, Mayor a Packet Pg 156 r 3Kb Exhibit "A" SCOPE OF SERVICES PHASE III 1 Finalize drafts of Settlement Agreement, Sewer Services Agreement and Lease [15 hours (5-10 of which has already been incurred)] 2 Prepare for and attend City Council meetings for approval of agreements Assume 3 meetings ' [12 hours] 3 Participate in Proposition 218 process [15 hours] a Review and analyze rate study b Attend City Council meeting to adopt study and set hearing c Participate as needed in public outreach process d Attend hearing on rate increase 4 Miscellaneous services related to implementation of agreements [5-10 hours] Packet Pg158 TITLE PRESENTED BY AGENDA REPORT January 14, 2014 Council Item Approval of Check Registers No 12-24-2013 and 01-14- 2014 Cynthia Fortune, Finance Manager RECOMMENDATION Approve Attached Check Registers for December 24, 2013 and January 14, 2014, as submitted, which includes the Check Register Account Index and Voucher Listings for Fiscal Year 2013-14 BACKGROUND The Check Registers for December 24, 2013 and January 14, 2014 are presented in accordance with Government Code §37202 and is hereby submitted for the City Council's approval The attached index to the Check Register is a guideline account list only and is not intended to replace the comprehensive chart of accounts used by the City and CRA Successor Agency Expenditure account number formats are XX-XXX-XXX [Fund - Department -Account] 'Expenditures may be made from trustlagency accounts (Fund 23-XXX-) or temporary clearing accounts which do not have a budgetary impact A total of $827,193 36 in accounts payable checks was issued during these periods for services, reimbursements, supplies and contracts and are detailed in the attached check register New vendors Check No payee Description Amount No'New Vendors Payments larger than $10,000 Check No payee Description Amount 69920 Southern CA Edison Co Energy Usage for November $11,410 98 69925 Albert A Webb Grand Terrace Fitness Park Professional $39,975 76 Associates Services for September and November ' ' Wastewater Treatment Advances4or 69929 City of Colton September, October, November, and $394,000 00 December $98,500 00 per month Packet Pg_ 159 City of Grand Terrace Check Register Index I No Fund Name 09 CHILD CARE FUND 10 GENERALFUND 11 STREET FUND 12 STORM DRAIN FUND 13 PARK FUND 14 AB 3229 COPS FUND 15 AIR QUALITY IMPROVEMENT FUND 16 GAS TAX FUND 17 TRAFFIC SAFETY FUND/ TDA FUND 19 FACILITIES DEVELOPMENT FUND 20 MEASUREIFUND 21 WASTE WATER DISPOSAL FUND 22 COMMUNITY DEV BLOCK GRANT 26 LSCPG/ LGHTG ASSESSMENT DIST 44 BIKE LANE CAPITAL FUND 46 STREET IMPROVEMENT PROJECTS 47 BARTON RD BRIDGE PROJECT 48 CAPITAL PROJECTS FUND 32 CRA-CAPITAL PROJECTS FUND 33 CRA-DEBT SERVICE FUND 34 CRA-LOW & MOD HOUSING Dept No Department Name/Cost Center 110 CITY COUNCIL 120 CITY MANAGER 125 CITY CLERK 140 FINANCE 160 CITY ATTORNEY 172 BUILDING & SAFETY 175 PUBLIC WORKS 180 COMMUNITY EVENTS 185 RENTAL INSPECTION PROGRAM 187 ENFORCEMENT PROGRAM 190 GENERAL GOVERNMENT (NON-DEPT) 195 FACILITIES MAINTENANCE 370 COMMUNITY & ECONOMIC DEV 380 MGT INFORMATION SYSTEMS 410 LAW ENFORCEMENT 430 RECREATION SERVICES 440 CHILD CARE 450 PARKS MAINTENANCE 510 STREET & SIGNAL LIGHTING 600 WEST SIDE PARK 601 TRACT 14471 PICO & ORIOLE 602 FORREST CITY PHASE II 631 STORM DRAIN MAINTENANCE 801 PLANNING COMMISSION 802- CRIME PREVENTION UNIT 804 HISTORICAL & CULTURAL COMM 805 SENIOR CITIZENS PROGRAM 807 PARKS & REC COMMITTEE 808 EMERGENCY OPERATIONS PROG ►cct No General Account Numbers 110 SALARIES/WAGES 139 EMPLOYEES' BENEFIT PLAN 140 RETIREMENT 142 HEALTH/LIFE INSURANCE 143 WORKERS' COMPENSATION 138/141 MEDICARE / SUI 210 OFFICE EXPENSE 218-219 NON -CAPITAL FURN/SMALL TOOLS 220 SPECIAL DEPARTMENTAL EXP 230 ADVERTISING 235 COMMUNICATIONS 238-239 UTILITIES 240-242 RENTS & LEASES 245-246 MAINT BLDG GRNDS EQUIPMNT 250-251 PROFESSIONAL SERVICES 255-256 CONTRACTUAL SERVICES 260 INSURANCE & SURETY BONDS 265 MEMBERSHIPS & DUES 268 TRAINING 270 TRAVEUCONFERENCES/MTGS 272 FUEL & VEHICLE MAINTENANCE 570 WASTEWATER TREATMENT 33-300 DEBT SERVICE 7XX FACILITIES IMPRV (NO CIP) 700 COMPUTER -RELATED 701 VEHICLES & EQUIPMENT Attachment Check Register Account Index (Check Register No 01-14-2014) 3�Lsb ,-Now 14111111F vchlist Voucher List Page 2 12/20/2013 2 55 26PM CITY OF GRAND TERRACE Bank code bofa Voucher Date Vendor 69918 12/11/2013 011199 PRUDENTIAL MUNICIPAL POOL 69919 12/11/2013 011199 PRUDENTIAL MUNICIPAL POOL Invoice Description/Account (Continued) 10-022-66-00 09-440-142-000-000 10-120-142-000-000 10-125-142-000-000 10-140-142-000-000 10-172-142-000-000 10-175-142-000-000 10-185-142-000-000 16-175-142-000-000 10-380-142-000-000 21-625-142-000-000 10-370-142-000-000 21-175-142-000-000 10-450-142-000-000 10-625-142-000-000 32-200-142-000-000 Oct2013 Oct EAP, Life, AD&D DepCare STD & LTD 09-440-142-000-000 10-022-66-00 10-120-142-000-000 10-125-142-000-000 10-140-142-000-000 10-172-142-000-000 10-175-142-000-000 10-185-142-000-000 10-370-142-000-000 10-380-142-000-000 10-450-142-000-000 10-625-142-000-000 16-175-142-000-000 21-175-142-000-000 21-625-142-000-000 32-200-142-000-000 Total Amount q 80039 c 11164 N 1960 753 e 514 c 1008 Z 1078 1233 N 1164 goo 220 1360 W 682 V 338 514 27 18 N 1,056 45 N N T" 111 64 d 80039 N 1960 753 514 1008 1078 V 1233 = 1360 900 s 3 38 cc 514 Q 1164 682 220 2718 Page 2 'Packet Pg 463 ' vchiist 12/20/2013 2 55 26PM Bank code bofa Voucher Date Vendor 69925 12/20/2013 011143 ALBERT A WEBB ASSOCIATES 69926 12/20/2013 010293 AVAYA, INC 69927 12/20/2013 010070 BEARDSLEY, KEVIN HOWARD 69928 12/20/2013 011031 CINTAS CORPORATION #150 69929 12/20/2013 001840 CITY OF COLTON 69930 12/20/2013 006435 CITY OF SAN BERNARDINO 69931 12/20/2013 010866 CIVIC PLUS Voucher List CITY OF GRAND TERRACE 3Lb Page 4 Invoice Description/Account Amount (Continued) 48-600-325-003-000 32,194 28 Cl 134562 NOVEMBER GT FITNESS PARK PROF SRVS N 48-600-325-003-000 7 781 4A Total 39,975 76 0 2732839564 NOV/DEC PHONE SYSTEM & VOICEMAIL MAINT O Z 10-190-246-000-000 18346 L, 2732877446 DEC/JAN PHONE SYSTEM AND VOICEMAIL MAINT N 10-190-246-000-000 183 46 Total 36692 w 12162013 July -Dec Council Video Services m 10-125-250-000-000 70000 V Total 70000 " M 150192040 C CARE RESTROOM SUPPLIES N 09-440-228-000-000 6369 150199110 C CARE RESTROOM SUPPLIES N 09-440-228-000-000 19619 _ Total 25988 a`) w N Dec Advance Dec Wastewater Treatment Advance 21-570-802-000-000 98 500 00 Nov Advance Nov Wastewater Treatment Advance Y 21-570-802-000-000 98,500 00 Oct 2013 Oct Wastewater Treatment Advance V 21-570-802-000-000 98 500 00 Sept Advance Sept Wastewater Treatment Advance E 21-570-802-000-000 98,500 00 Total 394,000 00 w a 2014-10000024 DECEMBER ANIMAL CONTROL SERVICES 10-187-256-000-000 10,135 75 Total 10,135 75 142731 3RD QTR WEBSITE HOSTING & MAINTENANCE Page 4 Packet Pg 1165) 3Lb vchlist Voucher List Page 6 12/20/2013 2 55 26PM CITY OF GRAND TERRACE Bank code bofa Voucher Date Vendor Invoice Description/Account Amount 69939 12/20/2013 011235 IQM2INC (Continued) 10-125-250-000-000 55000 c Total 55000 N 69940 12/20/2013 011297 JJL DEVELOPMENT CORP 12042013 Waste Mqmt Plan 13-01 Refundable Dep e� r 23-500-03-00 1,50000 Total 1,50000 Z 69941 12/20/2013 011216 JONES & MAYER 65407 Sept Leqal Councel Srvs Retainer a 10-160-250-000-000 5 167 00 y 65408 Sept Suc Aqency Legal Councel Srvs aa) 32-200-251-000-000 1 57398 Y 65780 Oct Leqal Councel Srvs Retainer 10-160-250-000-000 m 5 167 00 V 65781 Oct Suc Aqency Leqal Counsel Srvs .� 32-200-251-000-000 1 81050 66157 Nov Legal Counsel Srvs Retainer c N 10-160-250-000-000 4 953 00 N 21-572-251-000-000 - 21400 N 66158 Nov Suc Aqency Admin Legal Counsel Srvs L 32-200-251-000-000 1850 42 66159 Nov Suc Aqency Legal Counsel Srvs N 32-200-251-000-000 3 792 50 Total 22,696 48 69942 12/20/2013 010773 KELLAR SWEEPING INC 8331 November Street Sweepinq 16-900-254-000-000 4 200 00 V Total 4,200 00 69943 12/20/2013 004352 LEAGUE OF CALIFORNIA CITIES 136334 2014 Membership Dues .c 10-190-265-000�000 5 507 00 ca Total 5,50700 Q 69944 12/20/2013 011261 MITCHELL JACQUELINE 12092013 November Health Insurance Reim -Mitchell 10-110-142-000-000 21300 Total 21300 Page 6 Packet,Pg 1167 vchlist 12/20/2013 2 55 26PM Bank code bofa Voucher Date Vendor 69951 12/20/2013 005586 PETTY CASH 69952 12/20/2013 006310 ROADRUNNER SELF STORAGE INC 69953 12/20/2013 011175 ROBLES, SYLVIA 69954 12/20/2013 011277 SANTA EE BUILDING MAINTENANCE 69955 12/20/2013 011071 STANCKIEWITZ W 69956 12/20/2013 011275 SYSCO RIVERSIDE INC Voucher List CITY OF GRAND TERRACE Invoice Description/Account (Continued) 09-440-220-000-000 09-440-221-000-000 09-440-223-000-000 09-440-228-000-000 16738 DECEMBER STORAGE RENTAL 10-140-241-000-000 12092013 November Health Insurance Reim -Robles 10-110-142-000-000 12551 NOVEMBER JANITORIAL SERVICES 10-195-245-000-000 10-450-245-000-000 12552 OCTOBER C CARE CUSTODIAL SERVICES 09-440-244-000-000 12553 NOVEMBER C CARE CUSTODIAL SRVS 09-440-244-000-000 12562 DECEMBER C CARE CUSTODIAL SRVS 09-440-244-000-000 12092013 December Health Ins Reim-Stanckiewitz 10-110-142-000-000 3112609676 C CARE LUNCHES & SNACKS 09-440-220-000-000 3112609684 C CARE LUNCHES & SNACKS 09-440-220-000-000 3120309889 C CARE LUNCHES & SNACKS 09-440-220-000-000 Total Total Total Total Total 3Lb Page 8 Amount 1144 c 251 N 11139 12772 25306 O Z L 12400 12400 m x 45335 45335 V co 508 33 0 451000 v CV 18228 C4 m 987 50 n a� 98750 3,11561 U 45335 c 45335 E t co 271 75 Q 12841 45443 Page 8 PacketiP9 1,69 ; AW 3Lb vchlist Voucher List Page 10 12/20/2013 2 55 26PM CITY OF GRAND TERRACE Bank code bofa Voucher Date Vendor Invoice Description/Account Amount 69962 12/20/2013 011251 TYCO INTEGRATED SECURITY LLC (Continued) Total 37500 69963 12/20/2013 002239 TYLER TECHNOLOGIES INC 045-100325 2014 EDEN ACCOUNTING MODULE MAINT N 10-140-246-000-000 22 863 59 Total T 22,863 59 L 0 69964 12/20/2013 007220 UNDERGROUND SERVICE ALERT 1120130292 November Diq Alert Tickets o 16-900-220-000-000 4800 Z Total 4800 a q! 69965 12/20/2013 007399 US BANK TRUST NAT'L ASSOC 3497703 Custody Account Fee -Escrow Accounts o as 33-300-210-000-000 1 00000 Total 1,00000 v m 54 Vouchers for bank code bofa Bank total t 544,682 07 U 54 Vouchers inthis report Total vouchers 544,682 07 c N RT N N T L d V) tsi Q1 Jv 0 d 0 F+ C cd G V Q Page 10 Packet Pg, 171 i 3Lc vchlist Voucher List Page 2 01/07/2014 1 38 35PM CITY OF GRAND TERRACE Bank code bofa Voucher Date Vendor Invoice Description/Account Amount 69974 12/26/2013 011199 PRUDENTIAL MUNICIPAL POOL (Continued) 10-022-66-00 80039 09-440-142-000-000 111 64 N 10-120-142-000-000 1960 IT 69975 12/26/2013 005702 PUBLIC EMPLOYEES' RETIREMENT 69976 12/26/2013 006310 ROADRUNNER SELF STORAGE INC 69977 12/26/2013 006335 ROQUET PAVING INC 69978 12/26/2013 006335 ROQUET PAVING INC 69979 12/26/2013 006531 S B COUNTY SHERIFF 10-125-142-000-000 7 53 10-140-142-000-000 514 10-172-142-000-000 1008 0 10-175-142-000-000 1078 ? 10-185-142-000-000 1233 ;r 10-370-142-000-000 1360 w 10-380-142-000-000 900 0) 10-450-142-000-000 338 10-625-142-000-000 514 16-175-142-000-000 11 64 .c 21-175-142-000-000 682 U 32-200-142-000-000 2718 et 21-625-142-000-000 220 c Total 1,05645 04 PR End 12/6/13 Contributions for PR End 12/6/13 10-022-62-00 14,240 25 Total 14,240 25 N tM 16782 JANUARY STORAGE RENTAL 0 w 10-140-241-000-000 12400 v Total 12400 t V 1113-13 STREET MAINTENANCE AT VARIOUS LOCATIONS = 16-900-257-000-000 5,44000 Total 5,44000 .c v 1114-13 Emergency Work-Sanburq & Pico 0 w 10-631-255-000-000 2 881 75 Total 2,88175 13275 DECEMBER LAW ENFORCEMENT SERVICES Page 2 'Packet P,g 173 3Lc vchlist Voucher List Page 4 01/07/2014 1 38 35PM CITY OF GRAND TERRACE Bank code bofa Voucher Date Vendor 69985 1/2/2014 006285 RIVERSIDE HIGHLAND WATER CO 69986 1/2/2014 001206 ARROWHEAD CREDIT UNION 69987 1/3/2014 001213 AT & T Invoice (Continued) Nov/Dec 2013 Description/Account Amount 10-190-238-000-000 10-450-238-000-000 10-805-238-000-000 09-440-238-000-000 26-600-239-000-000 26-601-239-000-000 32-600-214-000-000 32-600-216-000-000 32-600-301-000-000 32-600-307-000-000 32-600-326-000-000 52-700-710-000-000 52-700-767-000-000 48-600-330-010-000 Nov/Dec Visa Charqes 10-110-220-000-000 23-200-14-00 09-440-220-000-000 09-440-221-000-000 09-440-223-000-000 09-440-228-000-000 10-175-218-000-000 10-175-272-000-000 10-450-245-000-000 10-175-235-000-000 10-190-220-000-000 Nov/Dec 2013 Nov/Dec Phone & Internet Usaqe 10-190-235-000-000 09-440-235-000-000 10-450-235-000-000 10-805-235-000-000 Total Total 62777 r 4 429 89 N 1 500 34 et r 25206 r 351 56 0 12480 z 3972 ` 1146 1146 y 2292 2292 1146 1146 6940 V 7,48722 0 N 5420 4733 L 10080 ,2) 3595 4283 d 2590 Y 16074 45454 t 30780 V 22690 c 8212 E 1,53911 0 to w a 1,07297 68323 6482 31306 Page 4 iPtacket!Pg 175 3Lc vchlist Voucher List Page 6 01/07/2014 1 38 35PM CITY OF GRAND TERRACE Bank code bofa Voucher Date Vendor Invoice Description/Account Amount 69992 1/14/2014 002301 FEDEX (Continued) Total 11430 69993 1/14/2014 002875 GOUT FINANCE OFFICERS ASSOC 0133001 2014 Membership Renewal N 10-140-265-000-000 19000 d Total 19000 0 69994 1/14/2014 011261 MITCHELL JACQUELINE Dec 2013 Dec Health Insurance Reim -Mitchell p 10-110-142-000-000 21300 Z Total 21300 d N 69995 1/14/2014 006285 RIVERSIDE HIGHLAND WATER CO 2323 DEC/JAN SEWER BILLING a> 21-572-255-000-000 16094 le Total 16094 v a) 69996 1/14/2014 006430 SAN BERNARDINO ASSOC GOV'T GA DUES 14-09 FY 2013-14 General Membership Dues 0 10-190-265-000-000 528 96 .r Total 52896 e�- 0 N. 69997 1/14/2014 006685 SOFTERWARE INC 14-W8088 EZ- CARE SOFTWARE SUPPORT PROGRAM v 09-440-228-000-000 36000 vt Total 36000 L d 69998 1/14/2014 011275 SYSCO RIVERSIDE INC 3122607744 FOOD ITEMS FOR LUNCHES & SNACKS Ln of 09-440-220-000-000 72786 3122607751 FOOD ITEMS FOR LUNCHES & SNACKS 09-440-220-000-000 5813 aa) Total 78599 V 33 Vouchers for bank code bofa Bank total .r 282,511 29 S 33 Vouchers in this report Total vouchers 282,511 29 v m Q Page 6 1Padket,'Pg 1, 77 ' TITLE r PRESENTED BY AGENDA REPORT January 14, 2014 Council Item Adoption of Resolution Amending Scheduled Expenditure Reductions for Fiscal Year 2013-14 Steve Elam, Finance Department RECOMMENDATION Adopt Resolution Amending Resolution No 2013-26 and Deferring Expenditure Reductions Scheduled to Take Effect on or after December 1, 2013 BACKGROUND The City Council approved the Fiscal Year (FY) 2013-14 Budget on June 25, 2013, by adopting Resolution No 2013-26 This Resolution included a number of expenditure reductions that would take effect on or after December 1, 20b, should the utility users' tax (Measure C) not be approved by the voters in the November 5, 2013 special election Such expenditure reductions were intended to maintain a balanced General Fund budget for FY 2013-14 and preserve General Fund reserves afor slightly above the FY 2013-14 beginning balance of $300,152 DISCUSSION The utility users' tax measure was not approved by the voters in the November 5, 2013 special election Therefore, the expenditure reduction measures identified -in Resolution No 2013-26 were scheduled to take effect on or after December 1, 2013 However, during a special City Council meeting/budget workshop held December 3, 2013, the City Council received new information regarding unexpected property tax revenues that will be received by the City through the Redevelopment dissolution process, namely, the distribution of residual funds through the Redevelopment Property Tax Trust Fund (RPTTF) Previously, it was believed there would be few if any residual RPTTF funds, as projected by a RPTTF model provided by the City's property tax consultant On November 20, 2013, staff learned there were errors in the consultant's RPTTF model and that the City will be receiving a significant amount of RPTTF residual revenues on an ongoing basis The RPTTF residual revenues associated with FY 2013-14 will be sufficient to offset the expenditure reductions for FY 2013-14 scheduled to take effect on or after December 1, 2013 After receiving the information regarding the unexpected RPTTF revenues at the budget workshop on December 3, 2013 and further discussing this information at its regular meeting of December 10, 2013, the City Council made the decision to defer the scheduled rexpenditure reductions for the balance of FY 2013-14, while re-evaluating the City's budget and overall fiscal condition during the Mid -Year Budget Review, scheduled for February 25, 2014, and again during the upcoming FY 2014-15 budget deliberations Qac_6t Pg 178 7Aa RESOLUTION NO 2014- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE, CALIFORNIA, AMENDING RESOLUTION NO 2013-26 AND DEFERRING EXPENDITURE REDUCTIONS SCHEDULED TO TAKE EFFECT ON OR AFTER DECEMBER 1, 2013 WHEREAS, on June 25, 2013, the City Council approved the Annual Budget for the City of Grand Terrace for Fiscal Year (FY) 2013-14 by adopting Resolution No 2013-26, and WHEREAS, the Adopted FY 2013-14 Budget included a series of expenditure reductions (shown below) to be implemented on or after December 1, 2013, if the utility users' tax measure (Measure C) was not approved by the voters on November 5, 2013, and Budgetary Category / Action Item Effective Date FY 2013-14 Budgetary Impact Fund Balance Beginning Fund Balance 7/1/13 -- $300,152 Projected Budgetary Deficit 7/1/13 $674,713 374,561 Approved Expenditure Increases 7/1/13 85,800 460,361 Reduce law enforcement contract by one 1 deputy 7/1/13 257,500 202,861 Additional overtime required due to above staffing reduction 7/1/13 10,000 212,861 'Additional Bud eta Reductions Shpuld T-' -, Measure- ` .Not P_ ass Reduce lawienforcement c_ontfact b one additional de lute �R ^''_12h1/13 _�_1r5©,20Q 62,661 Eliminate Senior Cent"e_r fundin _ _ 1/1_/14� _ 13,500 49,161 Reduce_ EOC%CERT Co_mmittee.fundm b 50% ����� 1/1/14 46,311 _�'2,850_ 60,000 13,689 Re aired we_e_dabatement,on close$13,000 annual) t _ 111%1.4 T 6,$06)- 7,189 i Re_duce contract services fog Ci , Attorne r and Finance __ ,2_6,0_00 , 33,189 _1/r1=/14_ Reduce City Admin stration pe�sonnelrrelated expensethrough some combination of outsourcing, wage/benefit reductions, work schedule reductioh$, and/or wo�,kforce reductions (lay=offs,), sub ect to the meet -and -confer rocess 1/1/14 i 266,000 299,189 Reduce Cultural &Historical Committee fundCr - b 50% �- 1/1/14=_ _ 300 299,489 Reduce C&Council and Oversi ht B_oard meetm slto month) 1/T/14 _ _� y 250 299,739 EliminateaPlanrnn" Commission; Ci_ Council to assume duties~_� =1/1/,14 1,100 300,839 WHEREAS, Measure C was not approved by the voters on November 5, 2013, and WHEREAS, subsequent to the November 5, 2013 special election, the City Council received information that the City of Grand Terrace will be receiving unexpected property tax revenues related to the City's residual distribution from the Redevelopment Property Tax Trust Fund (RPTTF), and WHEREAS, such unexpected revenues are sufficient to offset the expenditure reductions scheduled to take effect on or after December 1, 2013, so that the General Fund budget will remain in balance and General Fund reserves will not be depleted Packet 04, 180 7Aa ' I , CITY CLERK of the City of Grand Terrace, California, do hereby certify that the foregoing Resolution was adopted at a regular meeting of the City Council of the City of Grand Terrace held on the 14th day of January, 2014, by the following vote AYES NOES ABSENT -W_lnl City Clerk APPROVED AS TO FORM City Attorney Packet Pa 182 0� G DT K MEETING DATE TITLE PRESENTED BY AGENDA REPORT January 14, 2014 Council & Successor Agency Item Review and Approval of Fiscal Policies Related to Unclaimed Money and Fraud Prevention & Detection Steve Elam, Finance Department RECOMMENDATION Review and approve the attached fiscal policies related to Unclaimed Money and Fraud Prevention & Detection BACKGROUND The Finance Department is in the process of developing a series of fiscal policies to improve the City's internal controls, accountability and overall fiscal management Following is a listing of the policies currently under development Policies Related to Safeguarding of Assets • Cash Handling & Control • Petty Cash Funds & Change Boxes • Accounts Receivable • Investments • Fixed Assets • Disposition of Surplus Property • Fraud Prevention & Detection Policies Related to Liability • Accounts Payable • Payment Card Security • Identity Theft Prevention Policies Related to General Fiscal Management • Procurement (Already issued, may need to update) • Budget Appropriation Adjustments • Travel & Related Business Expenses • Grants • Donations • Reserves • Unclaimed Money DISCUSSION Each year, as part of the annual financial audit, independent auditors make recommendations to the audited organization concerning internal control improvements Packet Pg 183 W 1A fExhibit A CITY OF GRAND TERRACE FISCAL POLICY UNCLAIMED MONEY PURPOSE AND SCOPE To establish a policy and related procedures for escheatment and accounting of unclaimed money in accordance with California Government Code Sections 50050 through 50056 DEFINITIONS A Escheatment - The reversion of property to a government entity in the absence of legal claimants or heirs B Unclaimed Monet/ - Money which is not the property of the City but that remains in the City's treasury, including funds related to uncashed checks POLICY A Unclaimed Money that remains unclaimed for at least three (3) years will become the property of the City if after proper notification the money remains unclaimed Unclaimed Money becoming the property of the City, which is in a special fund, will be transferred to the City's General Fund, unless otherwise restricted B Unclaimed Money items less than fifteen dollars ($15), or any amount if the owner is unknown, which remain unclaimed for one (1) year will become the property of the City without notification and will be transferred to the City's General Fund, unless otherwise restricted C All escheated money originating from the Successor Agency to the Community Redevelopment Agency of the City of Grand Terrace (Agency) will revert to the appropriate fund AUTHORITY This policy is established in California Government Code Sections 50050 through 50056 PROCEDURES A Individual checks/deposits equal to or greater than fifteen dollars ($15) On July 1st, the Finance Department will compile a list of outstanding checks and/or deposits which are equal to or greater than fifteen dollars ($15) and at least three years old, such checks will be deemed stale dated The Finance Department will proceed as follows a A stop payment shall be placed with the bank on all stale -dated checks Unclaimed Money Policy Pag _ _ Packet Pg 1,85 c Any escheated money related to Agency/Trust funds will revert to the appropriate originating fund and not the General Fund C Property Escheats to City 1 On the forty-fifth day after the first publication of the notice, those checks and/or deposits on which no claims were filed escheat to the City The Finance Department will follow procedures identified in the preceding section 2 On July 1st, the Finance Department will compile a list of outstanding checks and/or deposits which are less than fifteen dollars ($15), or any amount if the owner is unknown, and have remained unclaimed in the City treasury for a period of one (1) year, such checks will be deemed stale dated Money identified on the list will escheat to the City and will be transferred to the General Fund, unless otherwise restricted The Finance Department will proceed as follows a A stop payment shall be placed with the bank on all stale -dated checks b Accounts Payable will void stale -dated checks c Accounting will reclassify the voided check as a credit to Revenue d Accounting will record the transfer of escheated special fund cash to the General Fund e Any escheated money related Agency/Trust funds will revert to the appropriate originating fund and not the General Fund Unclaimed Money Policy Page 3 of 5 Packet Pg 187 8Aa EXHIBIT B - UNCLAIMED MONEY CLAIM FORM CITY OF GRAND TERRACE UNCLAIMED MONEY - CLAIM FORM Claimant s Name Taxpayer Identification No or Social Security No Address City/State/Zip Code eleptione Number Pursuant to California Government Code Section 50052, 1 am filing a claim for previously unclaimed money in the amount of $ , which was published in the on / / (MM/DD/YY) The grounds on which I am filing this claim are Please attach copies of all support documentation to this claim Do not attach originals as the City will retain all documents hereby certify under penalty and perjury that the information contained and attached to this claim is true and correct and is being submitted to the City of Grand Terrace to substantiate my claim to money held by the City I further certify that I have the authority and right to claim and receive payment of money and hereby release the City of Grand Terrace, its directors, employees, representatives, attorneys and agents from all liability and further obligation with respect to this claim Printed Name of Claimant Mail Completed Forms to City of Grand Terrace Finance Department 22795 Barton Road Grand Terrace, CA 92313 CITY USE ONLY Payee Name Check No Check Date Accepted Denied Finance Department Signature Signature of Claimant Account Code Check Amount Date Date Unclaimed Money Policy Page 5 of 5 Packet Pg 189 ' B Employee — In this context, employee refers to any individual or group of individuals who receive compensation, either full-time or part-time, from the City of Grand Terrace The term also includes any volunteer who provides services to the City through an official arrangement with the City or a City organization, as well as Council Members, consultants, vendors, contractors, outside agencies and/or any other parties with a business relationship with the City of Grand Terrace C Management — In this context, management refers to any administrator, manager, director, supervisor, or other individual who manages or supervises funds or other resources, including human resources D Investigator — In this context, Investigator refers to any person, persons or governmental agency assigned by the City Manager and/or the City Council to investigate any fraud or similar activity E External Auditor — In this context, External Auditor refers to independent audit professionals who perform annual audits of the City's financial statements III POLICY A The City of Grand Terrace is committed to protecting its assets against the risk of loss or misuse Accordingly, it is the policy of the City to identify and promptly investigate any possibility of fraudulent or related dishonest activities against the City and, when appropriate, to pursue legal remedies available under the law B This policy applies to any irregularity, or suspected irregularity, involving Employees, consultants, vendors, contractors, outside agencies, and/or any other parties with a business relationship with the City C Any investigative activity required will be conducted in an objective and impartial manner, without regard to the suspected wrongdoer's length of service, position, title, or relationship to the City D All Employees are responsible for the detection, reporting and prevention of fraud, misappropriations, and other irregularities E It is the City's intent to fully investigate, or cause the investigation of, any suspected act of fraud, misappropriation, impropriety or other similar irregularity An objective and impartial investigation will be conducted regardless of the position, title, length of service or relationship with the City of any party who might be or become involved in or becomes the subject of such investigation F Each department of the City is responsible for instituting and maintaining x a system of internal controls to provide reasonable assurance for the W prevention and detection of fraud, misappropriations, and other irregularities Management should be familiar with the types of E improprieties that might occur within their area(s) of responsibility and be Fraud Prevention & Detection Policy Page 2 of 6 _ Packet Pg 191 '8Ab should determine whether an error or mistake has occurred or if there may be dishonest or fraudulent activity 4 If Management determines a suspected activity may involve fraud or related dishonest activity, they should contact their next immediate supervisor not involved in the alleged misconduct — and together with that supervisor inform their Department Director (unless the Department Director is alleged to have involvement to the alleged misconduct) and City Manager 5 Management should not attempt to conduct individual investigations, interviews, or interrogations However, Management is responsible for taking appropriate corrective actions to ensure adequate controls exist to prevent reoccurrence of improper actions 6 Management should support the City's responsibilities and cooperate fully with the Investigator, other involved departments, and law enforcement agencies in the detection, reporting, and investigation of criminal acts, including the prosecution of offenders 7 Management must give full and unrestricted access to all necessary records and personnel All City furniture and contents, including desks and electronic devices, are open to inspection at any time There is no reasonable expectation of privacy 8 In dealing with suspected dishonest or fraudulent activities, great care must be taken Therefore, management should avoid the following a False accusations b Alerting suspected individuals that an investigation is underway c Treating Employees unfairly d Making statements that could lead to claims of false accusations or other offenses 9 In handling dishonest or fraudulent activities, Management has the responsibility to a Make no contact (unless requested) with the suspected individual to determine facts or demand restitution Under no circumstances should there be any reference to "what you did", "the crime", "the fraud", "the misappropriation", etc b Avoid discussing the case, facts, suspicions, or allegations with anyone outside the City, unless specifically directed to do so by the City Attorney Fraud Prevention & Detection Policy Page 4 of 6 ,f Packet Pg 193 8Ab�A location, or limiting access to the records 2) Preventing the individual suspected of committing the fraud from having access to the records 6 In consultation with the City Manager and City Attorney, and the appropriate law enforcement agency, the Investigator may disclose particulars of the investigation to potential witnesses if such disclosure would further the investigation 7 If the Investigator is contacted fraud or audit investigation, the media but will instead refer the response is made by the media regarding an alleged Investigator will not speak with the matter to the City Manager before a At the conclusion of the investigation, the Investigator will document the results in a confidential report to the City Manager If the report concludes that the allegations are founded, the report will be forwarded to the appropriate law enforcement agency and the City Council will be advised 9 Unless exceptional circumstances exist, a person under investigation for fraud is to be given notice in writing of essential particulars of the allegations following the conclusions of the audit Where notice is given, the person against whom allegations are being made may submit a written explanation to the Investigator no later than seven calendar days after notice is received 10 The Investigator will be required to make recommendations to the appropriate department for assistance in the prevention of future similar occurrences 11 Upon completion of the investigation, including all legal and personnel actions, all records documents, and other evidentiary material obtained from the department under investigation will be returned to the City Manager c d E s Fraud Prevention & Detection Policy Page 6 of 6 _ Packet Pg 195 TITLE PRESENTED BY AGENDA REPORT January 14, 2014 Council Item Appointment of Interim City Manager and Approval of Employment Contract Richard Adams, City Attorney RECOMMENDATION The City Council Ad Hoc Committee on City Manager Appointments Recommends Approving the Contract for the Interim City Manager (Henderson) BACKGROUND Government Code Section 54957 6 requires the contract of an unrepresented employee to be approved by the Council at a public meeting DISCUSSION In order to fill the City Manager position, the City Council interviewed Interim City Manager candidates during December 2013 The Council identified a top candidate with which the City Council Ad Hoc Committee on City. Manager appointments, along with the City Attorney, negotiated an employment agreement for the City Council's consideration The attached Interim City Manager Employment Agreement is for the employment of Mr Kenneth J Henderson as the interim city manager The interim city manager will act as the city manager while the City Council commences a process to hire a permanent city manager The term of the agreement is for a period of up to one year, commencing on January 15, 2014 and ending on January 14, 2015 FISCAL IMPACT The Interim City Manager is a CalPERS retiree who is able to work up to 960 hours in Fiscal Year (FY) 2013-14 and the same number of hours again in FY 2014-15 Government Code Section 21221(h) stipulates a retiree receive compensation that shall not exceed the maximum paid to other employees performing comparable duties which would be $88 94/hour The Interim City Manager will be a salaried employee and the salary will be based on the aforementioned hourly rate The Interim City Manager's salary for the FY 2013-14 will not exceed $85,382 40, a portion of which may be allocated to the Successor Agency An expenditure appropriation for the Interim City Manager position will be brought forward for Council action as part of the Mid Year Budget at the Council Meeting on February 25, 2014 ATTACHMENTS • Grand Terrace Employment Agreement 2014 (IX) - Final PacketP9 196 8Ba�-- INTERIM CITY MANAGER EMPLOYMENT AGREEMENT between the CITY OF GRAND TERRACE and KENNETH J HENDERSON dated January 15, 2014 E cc Packet Pg 198 ` 8Ba-~ INTERIM CITY MANAGER EMPLOYMENT AGREEMENT between the City of Grand Terrace and KENNETH J HENDERSON 1 Parties and Date This Agreement is entered into as of 15th day of January, 2014 by and between the City of Grand Terrace, California, a municipal corporation ("City"), and Kenneth J Henderson, an individual ("Employee") City and Employee are sometimes individually referred to as a "Party" and collectively as "Parties " A The City requires the services of an Interim City Manager, while it recruits for the next City Manager, and B Employee, is a CalPers Retiree and has the necessary education, experience, skills and expertise to serve as the City's Interim City Manager, and C The City Council of the City ("City Council") desires to employ the Employee to serve as the Interim City Manager of City D The Parties desire to execute this Agreement pursuant to the authority of and subject to the provisions of Government Code Section 53260 et seq E In consideration of these Recitals and the performance by the Parties of the promises, covenants, and conditions herein contained, the Parties agree as provided in this Agreement 2 Employment The City hereby employs the Employee as its Interim City Manager, and the Employee hereby accepts such employment 3 Commitments and Understandings A The Interim City Manner's Commitments (1) Duties & Authority (a) Employee shall be the chief executive officer of the City and be responsible to the City Council for the proper administration of all affairs of the City (b) Employee shall perform all of the duties of a City Manager as set forth the California Government Code, and City policies and procedures approved by the City Council, as may be provided from time to time 1 Packet Pg 200 8Ba�� (2) Hours of Work (a) Employee is an exempt employee as that term is used in the Fair Labor Standards Act (FLSA), but is expected to engage in those hours of work that are necessary to fulfill the obligations of the Interim City Manager's position The Employee does not have set hours of work as the Employee is expected to be available at all times (b) It is recognized that Employee must devote a great deal of time to the business of the City outside of the City's customary office hours, and to that end Employee's schedule of work each day and week shall vary in accordance with the work required to be performed Employee shall spend sufficient hours on site to perform Employee's duties, however, Employee has discretion over the Employee's work schedule and work location (c) Employee shall not spend more than 12 hours per month in teaching, consulting, speaking, or other non -City connected business for which compensation is paid without the express prior consent of the City Council (d) In accord with the Public Employee's Pension Reform Act (PEPRA) of 2013 and Government Code Section 7522 56, Employee, as a CalPers Retiree, shall not work more than nine hundred and sixty (960) hours from January 15, 2014 through June 30, 2014 In addition, Employee shall not work more than nine hundred and sixty hours from July 1, 2014 to January 14, 2015 B City Commitments (1) The City shall provide Employee with the compensation specified elsewhere in this Agreement £ a (2) The City shall provide Employee with a private office, staff, office ° ex equipment, supplies, and all other facilities and services adequate for the E performance of the Interim City Manager's duties W d V (3) The City shall pay for or provide Employee reimbursement for all actual business expenses (4) The City agrees to pay the travel and subsistence expenses of Employee i to pursue official and other functions for the City C� c (5) Given the importance of technological tools to the effective and efficient business of City government, the City shall provide computer, high-speed internet access, fax, copy machine and similar devices to Employee at the m City's expense, both at Employee's office and, with the consent of the City Q Council, at Employee's residence C City Council Commitments (1) The City Council sets policy for the governance and administration of the City, and it implements its policies through Employee 3 Packet Pg 202 ' ,8Ba Compensation & Required Employer Costs (1) Base Salary (a) Employee's compensation shall not exceed that of the previous city manager, calculated on a pro rata basis as determined by the period of service by Employee and whether such service is on a full time basis or some other basis as determined by the parties (b) The Employee shall be paid at the same intervals and manner as other City employees Compensation of Employee per payroll period will initially be based on an assumption of full time (40 hours per week) employment, irrespective of the actual number of hours worked during a payroll period If in the future the City believes that the equivalent of full time employment is no longer necessary, the parties may negotiate a modification to the amount of compensation per payroll period (c) Employee shall nonetheless keep an accurate and ongoing accounting of his actual hours worked, and make monthly reports thereon to the City Council in closed session as part of the evaluation of Employee's performance, and, to ensure that the statutory limit of 960 hours per fiscal year is anticipated sufficiently in advance for steps to be taken to ensure no overage of hours during a fiscal year (e) The parties understand and agree that in fiscal year 2014/2015 the expectations and demands upon the time committed by Employee to the performance of his duties hereunder may change Accordingly, the parties agree that this Agreement is subject to renegotiation and amendment by mutual accord within the period of May through June 2014 (2) Required Employer Costs (a) Federal Insurance Contributions Act (FICA) (if applicable) (1) Old Age Survivor and Disability Income (OASDI) (u) Medicare (b) Unemployment Compensation (c) The cost of any fidelity or other bonds required by law for the Employee (d) The cost to defend and indemnify the Employee as provided in Section 6 E below (e) Workers Compensation Packet Pg 204 8Ba~ D Conflict of Interest (1) Employee shall not engage in any business or transaction or shall have a financial or other personal interest or association, direct or indirect, which is in conflict with the proper discharge of official duties or would tend to impair independence of judgment or action in the performance of official duties Personal as distinguished from financial interest includes an interest arising from blood or marriage relationships or close business, personal, or political associations This section shall not serve to prohibit independent acts or other forms of enterprise during those hours not covered by active City employment, providing such acts do not constitute a conflict of interest as defined herein (2) Employee shall also be subject to the conflict of interest provisions of the California Government Code and any conflict of interest code applicable to Employee's City employment (3) Employee is responsible for submitting to the City Clerk the appropriate Conflict of Interest Statements at the time of appointment, annually thereafter, and at the time of separation from the position E Indemnification (1) To the full extent of the law as provided by the California Torts Claims Act (Government Code Section 810 et seq ) and the indemnity provisions of this Agreement, whichever shall provide the greatest protection to Employee, the City and the Successor Agency to the Redevelopment Agency, jointly and severally, shall defend and indemnify Employee against and for all losses sustained by Employee in direct consequences of the discharge of Employee's duties on the City's behalf for the period of Employee's employment (2) The City shall defend, save harmless and indemnify Employee against any tort, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of Employee's duties as Interim City Manager The City may compromise and settle any such claim or suit and pay the amount of any settlement or judgment rendered thereon (3) Whenever Employee shall be sued for damages arising out of the performance of Employee's duties, the City shall provide defense counsel for Employee in such suit and indemnify Employee from any judgment rendered against Employee, provided that such indemnity shall not extend to any judgment for damages arising out of any willful wrongdoing This indemnification shall extend beyond termination of employment and the otherwise expiration of this Agreement to provide protection for any such acts undertaken or committed in Employee's capacity as Interim City Manager, regardless of whether the notice of filing of a lawsuit occurs during or following employment with the City This indemnity provision shall survive the termination of the Agreement and is in addition to any other rights or remedies that Employee may have under the law 7 P,acket'Pgr 206 8Ba City Council City of Grand Terrace 22795 Barton Rd Grand Terrace, CA 92313 (2) If to the Employee Kenneth J Henderson 23000 Finch Street Grand Terrace CA 92313 7 Execution IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first above written "City" "Employee" CITY OF GRAND TERRACE KENNETH J HENDERSON A Municipal Corporation By Mayor ATTEST By City Clerk APPROVED AS TO FORM By City Attorney 9 Kenneth J Henderson a Packet Pg 208