01/28/2020CITY OF GRAND TERRACE
CITY COUNCIL
AGENDA ● JANUARY 28, 2020
Council Chambers Regular Meeting 6:00 PM
Grand Terrace Civic Center ● 22795 Barton Road
City of Grand Terrace Page 1
COMMENTS FROM THE PUBLIC
The public is encouraged to address the City Council on any matter posted on the agenda or on any other matter
within its jurisdiction. If you wish to address the City Council, you are invited to 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 and each person is allowed three (3) minutes speaking time.
Pursuant to the provisions of the Brown Act, no action may be taken on a matter unless it is listed on the agenda, or
unless certain emergency or special circumstances exist. The City Council may direct staff to investigate and/or
schedule certain matters for consideration at a future City Council meeting.
PLEASE NOTE: Copies of staff reports and supporting documentation pertaining to each item on this agenda are
available for public viewing and inspection at City Hall, 1st Floor Lobby Area and 2nd Floor Reception Area during
regular business hours and on the City’s website www.grandterrace-ca.gov. For further information regarding agenda
items, please contact the office of the City Clerk at (909) 824-6621 x230, or via e-mail at dthomas@grandterrace-
ca.gov.
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.grandterrace-ca.gov.
AMERICANS WITH DISABILITIES ACT
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting,
please contact the City Clerk’s Office, (909) 824-6621 x230 at least 48 hours prior to the advertised starting time of
the meeting. This will enable the City to make reasonable arrangements to ensure accessibility to this meeting. Later
requests will be accommodated to the extent feasible.
CALL TO ORDER
Convene City Council.
Invocation
Pledge of Allegiance
Roll Call
Attendee Name Present Absent Late Arrived
Mayor Darcy McNaboe
Mayor Pro Tem Doug Wilson
Council Member Sylvia Robles
Council Member Bill Hussey
Council Member Jeff Allen
Agenda Grand Terrace City Council January 28, 2020
City of Grand Terrace Page 2
A. SPECIAL PRESENTATIONS
Grand Terrace Titans Jr. All American Jr. Pee Wee Team Recognition
Omnitrans ConnectForward Proposed Services Changes
B. REORDERING OF, ADDITIONS TO, OR REMOVAL OF ITEMS FROM THE AGENDA
C. CONSENT CALENDAR
The following Consent Calendar items are expected to be routine and noncontroversial.
They will be acted upon by the City 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.
1. Waive Full Reading of Ordinances on Agenda
DEPARTMENT: CITY CLERK
2. Approval of Minutes – Regular Meeting – 01/14/2020
DEPARTMENT: CITY CLERK
3. Attachment to Minutes - 01/14/2020
DEPARTMENT: CITY CLERK
D. PUBLIC COMMENT
This is the opportunity for members of the public to comment on any items not
appearing on the regular agenda. Because of restrictions contained in California Law,
the City Council may not discuss or act on any item not on the agenda but may briefly
respond to statements made or ask a question for clarification. The Mayor may also
request a brief response from staff to questions raised during public comment or may
request a matter be agendized for a future meeting.
E. CITY COUNCIL COMMUNICATIONS
Council Member Jeff Allen
Council Member Bill Hussey
Council Member Sylvia Robles
Mayor Pro Tem Doug Wilson
Mayor Darcy McNaboe
Agenda Grand Terrace City Council January 28, 2020
City of Grand Terrace Page 3
F. PUBLIC HEARINGS - NONE
G. UNFINISHED BUSINESS
4. Second Reading of Ordinance to Amend Chapter 18.06 (Definitions) and Chapter 18.40
(M2 Industrial District) of the Zoning Code Pertaining to Contractor Offices and Storage
Yards
RECOMMENDATION:
Direct the City Attorney to Read The Title of, Waive Further Reading of, and Adopt the
Proposed Ordinance, which is entitled: AN ORDINANCE OF THE CITY COUNCIL OF
THE CITY OF GRAND TERRACE, CALIFORNIA FINDING THAT ZONING CODE
AMENDMENT 19-02 IS EXEMPT FROM REVIEW PURSUANT TO CALIFORNIA
ENVIRONMENTAL QUALITY ACT GUIDELINES SECTION 15061(b)(3) AND
AMENDING CHAPTER 18.06 (DEFINITIONS) AND CHAPTER 18.40 (M2
INDUSTRIAL DISTRICT) OF TITLE 18 (ZONING) OF THE GRAND TERRACE
MUNICIPAL CODE PERTAINING TO CONTRACTOR OFFICES AND STORAGE
YARDS
DEPARTMENT: PLANNING & DEVELOPMENT SERVICES
H. NEW BUSINESS
5. Establish an Ad Hoc Committee to Select a Local Veteran to be Honored at the Miller
Park Amphitheater Veterans Memorial in the City of Fontana
RECOMMENDATION:
SELECT TWO MEMBERS OF COUNCIL TO SERVE ON AN AD HOC COMMITTEE
TO SELECT A GRAND TERRACE RESIDENT VETERAN TO BE HONORED AT THE
MILLER PARK AMPHITHEATER VETERANS MEMORIAL UNVEILING IN THE CITY
OF FONTANA
DEPARTMENT: CITY MANAGER
6. Monthly Financial Report for November-2019
RECOMMENDATION:
Receive and file the November-2019 Monthly Financial Report.
DEPARTMENT: FINANCE
Agenda Grand Terrace City Council January 28, 2020
City of Grand Terrace Page 4
7. Treasurer's Report as of September 30, 2019 (Previously Submitted on 12/20/2019)
RECOMMENDATION:
Receive and file the Treasurer's Report for the period ending September 30, 2019
(report originally submitted on 12/19/2019).
DEPARTMENT: CITY MANAGER
8. Review and Consideration of Changes to City Policy on Fiscal Reserves (Policy No.
3.06)
RECOMMENDATION:
Discuss City’s Fiscal Reserve Policy, Consider Changes Thereto, and if Any, Direct
Staff to Make and Bring Back Proposed Changes for Approval by the City Council
DEPARTMENT: FINANCE
9. Review the City of Grand Terrace California Public Employees Retirement System
(CalPERS) Unfunded Accrued Liability
RECOMMENDATION:
Receive and file the City’s Report on California Public Employee Retirement System
(CalPERS) Unfunded Accrued Liability and/or Provide Staff Direction.
DEPARTMENT: FINANCE
10. Amend Annual Budget Guidelines Effective Immediately to Reinstate Staff Merit
Increases (Which Would Cost Up to $16,000 for the Current Fiscal Year) and Add
Language to Review and Update City Council Salary
RECOMMENDATION:
Review and Amend the Annual Budget Guidelines to Take Effect Immediately to:
1. Reinstate staff merit increases (where for fiscal year 2019-20 the merit increases
are approximately $16,000 total and will be absorbed within the current budget
without additional appropriations); and
2. Add language to review and possibly update the City Council salary, as permitted
by state law, as part of the annual budget process.
DEPARTMENT: CITY MANAGER
I. REQUESTS FOR FUTURE AGENDA ITEMS BY CITY COUNCIL
Pursuant to City Council policy set forth in the 2030 Vision and 2014 ‐2020 Strategic
Plan, if a City Council Member is interested in a task or project that will require more
than one hour of staff time to complete, the item will be agendized to ask the City
Council if time should be spent on preparing a report on the proposed item. In
Agenda Grand Terrace City Council January 28, 2020
City of Grand Terrace Page 5
accordance with this policy, this is the opportunity for City Council Members to request
that an item be placed on a future agenda and authorize staff to prepare an agenda
report. To ensure compliance with the Brown Act, the request shall be submitted to the
City Manager at least one week in advance of the meeting so that the topic can be
included on the agenda under this section. In order for any listed item to be placed on a
future agenda, the City Council must act by formal motion (i.e., requires a motion and a
second) to direct the City Manager to place the item on a future agenda. Pursuant to the
requirements of the Brown Act, no other items may be considered other than those
listed below.
1. Request for Discussion on Need for Greater Speed Reduction and Control in the
City
Requested by: Mayor Pro Tem Doug Wilson
2. Request to Discuss Planning Commission Need to Review the City's General Plan
and Direct Staff to Prepare Schedule
Requested by: Mayor Pro Tem Doug Wilson
3. Request to Revise the City’s Municipal Code to Authorize the City Council to Appoint
the Planning Commission Chair
Requested by: Mayor Pro Tem Doug Wilson
J. CITY MANAGER COMMUNICATIONS
K. CLOSED SESSION - NONE
L. ADJOURN
The Next Regular City Council Meeting will be held on Tuesday, February 11, 2020 at
6:00 PM. Any request to have an item placed on a future agenda must be made in
writing and submitted to the City Clerk’s office and the request will be processed in
accordance with Council Procedures.
CITY OF GRAND TERRACE
CITY COUNCIL
MINUTES ● JANUARY 14, 2020
Council Chambers Regular Meeting 6:00 PM
Grand Terrace Civic Center ● 22795 Barton Road
City of Grand Terrace Page 1
CALL TO ORDER
Mayor Darcy McNaboe convened the Regular Meeting of the City Council for Tuesday,
January 14, 2020.
INVOCATION
The Invocation was given by Pastor Daniel Lee of Grand View Baptist Church.
PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Grand Terrace Resident, Jeremy Rivera.
Attendee Name Title Status Arrived
Darcy McNaboe Mayor Present
Doug Wilson Mayor Pro Tem Present
Sylvia Robles Council Member Absent
Bill Hussey Council Member Present
Jeff Allen Council Member Present
G. Harold Duffey City Manager Present
Adrian Guerra City Attorney Present
Debra Thomas City Clerk Present
Alan French Public Works Director Present
Steven Weiss Planning & Development Services Director Present
Cynthia A. Fortune Assistant City Manager Present
A. SPECIAL PRESENTATIONS
Proclamation Proclaiming January 2020 as National Mentoring Month
The City Council presented a Proclamation for National Mentoring Month to Jerome
Poland, Social Service Practitioner on behalf of San Bernardino County Children and
Family Services.
B. REORDERING OF, ADDITIONS TO, OR REMOVAL OF ITEMS FROM THE AGENDA
None.
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Minutes Grand Terrace City Council January 14, 2020
City of Grand Terrace Page 2
C. CONSENT CALENDAR
Council Member Jeff Allen asked that Agenda Item No. 5 be pulled for discussion.
RESULT: APPROVED [UNANIMOUS]
MOVER: Doug Wilson, Mayor Pro Tem
SECONDER: Jeff Allen, Council Member
AYES: Darcy McNaboe, Doug Wilson, Bill Hussey, Jeff Allen
ABSENT: Sylvia Robles
1. Waive Full Reading of Ordinances on Agenda
2. Approval of Minutes – Regular Meeting – 11/12/2019
3. Approval of Minutes – Regular Meeting – 12/10/2019
4. Attachment to Minutes - 12/10/2019
PULLED FOR DISCUSSION – AGENDA ITEM NO. 6
5. Check Register No. 12312019 in the Amount of $366,496.79 for Period Ending
December 31, 2019
Council Member Allen asked if funding for the Electric Vehicle Charging Stations came
from the General Fund.
G. Harold Duffey, City Manager explained that the entire program came from grant
funding.
APPROVE CHECK REGISTER NO. 12312019 IN THE AMOUNT $366,496.79 AS
SUBMITTED, WHICH INCLUDES THE CHECK REGISTER ACCOUNT INDEX FOR
FISCAL YEAR 2019-20.
RESULT: APPROVED [UNANIMOUS]
MOVER: Jeff Allen, Council Member
SECONDER: Doug Wilson, Mayor Pro Tem
AYES: Darcy McNaboe, Doug Wilson, Bill Hussey, Jeff Allen
ABSENT: Sylvia Robles
D. PUBLIC COMMENT
Isaac Suchil, Colton, CA expressed his concern regarding the disrepair of the roadways
of La Cadena and Rosedale which is the responsibility of the City of Grand Terrace.
Mr. Suchil has given notice of the defective conditions of these two streets and it is his
hope that no one will be injured. Additionally, he hopes that the City will use its SB 1
money to repave these two sections of roadway and repairs its streets.
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Minutes Grand Terrace City Council January 14, 2020
City of Grand Terrace Page 3
Jeremy Rivera, Grand Terrace apologized to the City Council for his outburst at the last
City Council meeting. He believed that residents who sent in emails supporting Jeremy
Briggs and Jeffrey McConnell had their First Amendment Rights, Freedom of Speech,
violated by not reading those emails into the record of the City Council meeting. He also
expressed his concern regarding the riot that evolved at Cal Skate and requests that
more security be secured at that location. He stated the City streets are in bad shape
and need to be addressed. He would also like to see a weekly update on the City’s
website announcing things going on in the City.
Jeffrey McConnell, Grand Terrace would like the policy requesting resident addresses
be changed immediately due to the world we live in as there are many break ins and
announcing your address on live TV would let people know you are not at home. He
also requested at the previous City Council meeting that an appeal to his CUP be
heard. He has heard nothing since his request and would like to know the status. He
spoke with Steven Weiss, Planning & Development Services Director who shared with
him that he needs to request a reconsideration; although he is not familiar with this
procedure.
Adrian Guerra, City Attorney explained that the City’s Municipal Code requires that an
Applicant has the opportunity to appeal a Planning Condition decision within ten (10)
calendar days. In this case, the Planning Commission approved the Conditional Use
Permit on October 24, 2019, therefore the appeal process expired in early November
2019. At this time there is nothing for the City Council to consider. If Mr. McConnell
wants to pursue amending the CUP, he is welcome to file a request to amend the CUP
with the City’s Planning staff, pay the fee and the item would go before the Planning
Commission for consideration.
City Attorney Guerra also addressed Mr. Rivera’s concern regarding the First
Amendment. City Attorney Guerra assured Mr. Rivera, the City Council and the public
that there had been no First Amendment violation. The City Council has the right to
control the time, place and manner of its meetings. The emails had a consistent
message, that message was conveyed to the City Council and in an effort to avoid
repetition and to save time, the emails were summarized.
E. CITY COUNCIL COMMUNICATIONS
Council Member Jeff Allen
Council Member Jeff Allen first wanted to wish everyone a Happy New Year and
welcome back.
Council Member Allen attended the following:
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Minutes Grand Terrace City Council January 14, 2020
City of Grand Terrace Page 4
· Southern California Association of Governments (SCAG) Plan Briefing where
discussion was held on Connect SoCal, the Regional Transportation Plan for
2020-2045 for Transportation and Sustainable Community Strategies.
Council Member Allen is focused on the Stop the Bleed Program and requested dates
be set for training and staff to find grant money for kits to be installed at City Hall and
expand out from there.
He is also excited about students in Government Day or Week and would like that to
start early so the students and teachers can be prepared.
Residents have expressed their concern to Council Member Allen regarding the
upcoming ballot measure for Prop 13. Council Member Allen wanted to assure the
residents that the ballot measure does not affect residential properties, only commercial
and industrial properties which will bring them up to market rate taxes. Council Member
Allen asked the City Manager to have an analysis prepared on what the increase in
revenues to the City will be if the ballot measure passes.
Council Member Allen encourages residents to join the Citizens on Patrol Volunteer
Program. It is a great opportunity for the residents to be a part of their community.
Council Member Bill Hussey
Council Member Bill Hussey wished everyone a Happy New Year, extended his
blessing for the City and the men and women in the military for the New Year. He also
wanted to thank the San Bernardino County Sheriff’s department for their quick reaction
to the incident at Cal Skate and was thankful no one was hurt.
Council Member Hussey thanked staff for everything that was completed in 2019 and
their continued hard work for the upcoming year of 2020.
Mayor Pro Tem Doug Wilson
Mayor Pro Tem Doug Wilson thanked staff for their great work. He stated that often
times it is a thankless opportunity, and some may think money and benefits can make
up the difference. When you go the extra mile, it is only in the spirit of the person, that’s
where it comes from. He is afraid of seeing people get beat down for doing good work
therefore he wants to be the first to say thank you. Staff is incredible and he wishes
them continued success in the coming year.
Mayor Darcy McNaboe
Mayor Darcy McNaboe attended the January 8, 2020 Omnitrans Board of Directors
meeting and discussed the following:
· Receive and File Redlands Passenger Rail Project - Propose Change of Arrow
Operator to Southern California Regional Rail Authority
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Minutes Grand Terrace City Council January 14, 2020
City of Grand Terrace Page 5
· Receive and File ConnectForward Public Outreach Update
o Omnitrans will be changing the service that is provided through the City of
Grand Terrace on Route 325. They are proposing to eliminate Route 325
as it exists now. Service will be provided through Route 305. If there are
any interested parties, there is more information on the Omnitrans
website. There are contact phone numbers and there will be a community
meeting held on Monday, January 27, 2020 from 3:00 pm to 5:00 p.m. in
the City Hall Community Room.
· Provide Direction Regarding Transit District Legislation
· Closed Session
o Conference with Labor Negotiator Concerning Labor Negotiations with
Amalgamated Transit Union
Mayor McNaboe attended the January 8, 2020 San Bernardino Transit Authority Board
of Directors meeting and discussed the following:
· Closed Session
o Quarterly Litigation Update with General Counsel
o Public Employee Performance Evaluation: General Counsel
· Removed an item to Open Session regarding the Interstate 10 and University
Street Improvement Project.
· Direct Staff on Funding Strategies for the West Valley Connector Phase I project
· Approve an Amendment to Professional Services Contract with AECOM
Technical Services, Inc. for design services on State Route 60 Central
Interchange project.
· Authorize the Board President to execute Construction and Maintenance
Agreement with BNSF Railway and the City of San Bernardino for the demolition,
construction and maintenance of the Mt. Vernon Viaduct.
· Approve a Master Agreement with Western Riverside Council of Governments
for cost sharing and provide an accounting mechanism related to collaborative
work and grants.
· Receive information and provide direction on comments to be potentially
submitted by San Bernardino County Transportation Authority on the Draft
Connect SoCal Plan.
· Presentation of the Comprehensive Annual Financial Report for Fiscal Year
2018/2019.
Mayor McNaboe echoed her colleagues sentiments and wanted to wish everyone a
Happy New Year; the new year gives the City a lot of opportunity for things that can be
done. The City needs to focus on street maintenance; however, the project will be
starting up again this year. She also wanted to thank the Sheriff’s Department and the
overwhelming response that they gave with the issues at Cal Skate.
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Minutes Grand Terrace City Council January 14, 2020
City of Grand Terrace Page 6
F. PUBLIC HEARINGS
6. Zoning Code Amendment 19-02 to Amend Chapter 18.06 (Definitions) and Chapter
18.40 (M2 Industrial District) of the Zoning Code Pertaining to Contractor Offices and
Storage Yards
Steven Weiss, Director of Planning & Development Services gave the Power Point
presentation for this item.
Mayor McNaboe opened the public hearing at 6:47 p.m.
PUBLIC COMMENTS
None.
Mayor McNaboe closed the public hearing at 6:47 p.m.
Mayor McNaboe directed City Attorney Guerra to read the ordinance into the record by
title only.
1) CONDUCT A PUBLIC HEARING, AND
2) DIRECT THE CITY ATTORNEY TO READ BY TITLE ONLY, WAIVE FURTHER
READING AND INTRODUCE AN ORDINANCE OF THE CITY COUNCIL OF
THE CITY OF GRAND TERRACE, CALIFORNIA FINDING THAT ZONING
CODE AMENDMENT 19-02 IS EXEMPT FROM REVIEW PURSUANT TO
CALIFORNIA ENVIRONMENTAL QUALITY ACT GUIDELINES SECTION
15061(B)(3) AND AMENDING CHAPTER 18.06 (DEFINITIONS) AND
CHAPTER 18.40 (M2 INDUSTRIAL DISTRICT) OF TITLE 18 (ZONING) OF
THE GRAND TERRACE MUNICIPAL CODE PERTAINING TO CONTRACTOR
OFFICES AND STORAGE YARDS
RESULT: APPROVED [UNANIMOUS]
MOVER: Jeff Allen, Council Member
SECONDER: Doug Wilson, Mayor Pro Tem
AYES: Darcy McNaboe, Doug Wilson, Bill Hussey, Jeff Allen
ABSENT: Sylvia Robles
G. UNFINISHED BUSINESS - NONE
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Minutes Grand Terrace City Council January 14, 2020
City of Grand Terrace Page 7
H. NEW BUSINESS
7. Provide Direction on an Undergrounding Master Plan Study
Alan French, Director of Public Works gave the Power Point presentation for this item.
Mayor Pro Tem Wilson asked if the Undergrounding Master Plan Study could be
prepared in two phases and prepare one phase in a schematic design as a cost saving
measure?
Director French indicated that a schematic could be prepared.
Council Member Allen asked if Rule 20A funds would cover the cost for the
Undergrounding Master Plan Study.
Director French stated that the plan study would not qualify for use of Rule 20A funds.
City Manager Duffey informed the City Council that there are a number of funds that are
earmarked for certain areas in the City. After receipt of responses to the City’s Request
for Qualifications, staff would come back to City Council and share what staff believes is
the best use of those funds as there are multiple revenue sources to pull from.
Council Member Hussey asked how much undergrounding can be accomplished with
$1.5 million Rule 20A money.
City Manager Duffey stated if developers throughout the City perform undergrounding at
their locations, the City can choose other areas to perform undergrounding which would
cover more areas.
DIRECT STAFF TO ISSUE RFP FOR SCOPE OF SERVICES TO DEVELOP A CITY
OF GRAND TERRACE UNDERGROUNDING MASTER PLAN
RESULT: APPROVED [UNANIMOUS]
MOVER: Jeff Allen, Council Member
SECONDER: Doug Wilson, Mayor Pro Tem
AYES: Darcy McNaboe, Doug Wilson, Bill Hussey, Jeff Allen
ABSENT: Sylvia Robles
8. Adoption of Resolution Approving Application to the California Volkswagen Mitigation
Trust's Zero-Emission Transit, School, and Shuttle Bus Grant Program for the Senior
Transportation Program for the Purchase of an Electric Bus
Cynthia Fortune, Assistant City Manager gave the Power Point presentation for this
item.
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Minutes Grand Terrace City Council January 14, 2020
City of Grand Terrace Page 8
ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE, CALIFORNIA, APPROVING APPLICATION FOR GRANT FUNDING
FROM THE CALIFORNIA AIR RESOURCES BOARD VOLKSWAGEN
ENVIRONMENTAL MITIGATION TRUST FOR THE PURCHASE OF AN ELECTRIC
BUS FOR THE SENIOR TRANSPORTATION PROGRAM
RESULT: APPROVED [UNANIMOUS]
MOVER: Jeff Allen, Council Member
SECONDER: Bill Hussey, Council Member
AYES: Darcy McNaboe, Doug Wilson, Bill Hussey, Jeff Allen
ABSENT: Sylvia Robles
9. City of Grand Terrace Special Events List for Calendar Year 2020
G. Harold Duffey, City Manager gave the Power Point presentation for this item.
RECEIVE AND FILE.
RESULT: APPROVED [UNANIMOUS]
MOVER: Darcy McNaboe, Mayor
SECONDER: Jeff Allen, Council Member
AYES: Darcy McNaboe, Doug Wilson, Bill Hussey, Jeff Allen
ABSENT: Sylvia Robles
I. REQUESTS FOR FUTURE AGENDA ITEMS BY CITY COUNCIL - NONE
J. CITY MANAGER COMMUNICATIONS
G. Harold Duffey, City Manager announced the following events:
Dog Park closure from January 26, 2020 through March 4, 2020 for reseeding
The City 2020 Activity Guide will be mailed to all residents during the month of January
and February 2020. This guide lists all of the events and activities throughout the City of
Grand Terrace.
K. RECESS TO CLOSED SESSION - NONE
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Minutes Grand Terrace City Council January 14, 2020
City of Grand Terrace Page 9
L. ADJOURN
Mayor McNaboe adjourned the Regular Meeting of the City Council at 7:25 p.m. The
Next Regular City Council Meeting will be held on Tuesday, January 28, 2020 at 6:00
p.m.
_________________________________
Darcy McNaboe, Mayor
_________________________________
Debra L. Thomas, City Clerk
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CITY OF GRAND TERRACE
CITY COUNCIL
MINUTES ● JANUARY 14, 2020
Council Chamber Regular Meeting 6:00 PM
Grand Terrace Civic Center ● 22795 Barton Road
City of Grand Terrace
ATTACHMENTS TO
January 14, 2020
City Council Minutes
PowerPoint Presentations
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Zoning Code Amendment 19-02
Public Hearing, First Reading
CITY COUNCIL MEETING
JANUARY 14, 2020
General Plan and Zoning
M2-Industrial Zoning Designation permits
uses that can be made compatible
with other surrounding uses within the
City regarding noise, dust, odors,
vibration, glare, air quality, traffic,
aesthetics, and hazardous materials.
Typical uses may include
manufacturing and assembly,
warehouse and distribution, research
and development, administrative and
service land uses.
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Background
Uses with outdoor storage activities are subject to a Conditional Use Permit (CUP)
“Contractor Office and Storage Yard, Outdoor” was inadvertently omitted from the M2-Industrial Zone as a Conditional Permitted Use and street side building setback of 15 feet with 5 feet of landscape got also unintentionally omitted.
Uses with indoor storage do not require a Conditional Use Permit (CUP)
A “Contractor Office and Storage Yard, Indoor” is a permitted use in the M2-industrial Zone
Ordinance No. 319 The City Council approved Zoning Code Amendment (ZCA 17-04) adopting Ordinance No.319 on April 24, 2018
Proposal
On December 12,
2019, the Planning
Commission, held a
public hearing and
recommended City
Council approval of
ZCA 19-02, proposing
to revise M2-Industrial
Zoning and amend
the following:
Amend Section 18.06.182 Contractor StorageYard, definition:
“Contractor storage yard operated by, or on behalf of, a state licensed contractor for the storage of large equipment, vehicles, or other materials commonly used in the individual contractor’s type of business. The facility may also include storage of scrap materials used to repair and maintenance of contractor’s own equipment and buildings or structures for uses such as offices and repair facilities.”
Amend Chapter 18.40 – Industrial District, Section18.40.030 -Conditionally Permitted Uses to add
‘D. Contractor’s office and storage yard, outdoor.”
Amend Section 18.40.050 - Site DevelopmentStandards, to add:
Street side yard setback of 15 feet with 5 feet of landscaping requirement.
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M2-Industrial Zoning Designation
High intensity uses permitted by right, do not require a CUP topark their business vehicles.
M2-Industrial zoning permits uses where day to day activitiesinclude business vehicles and frequent truck traffic.
“Contractor’s Offices and Contractor’s Storage Yards” areuses consistent with the Industrial zoning designation and theuse is similar to other uses permitted by right.
Omitting the word “vehicle” for the “Contractor Storage Yard”definition allows a State License Contractor to have aContractor’s Office or a Contractor’s Office with IndoorStorage in the M2-Industrial zone as a permitted use.
M2-Industrial Designation
Uses permitted by right
“AUTOMOTIVE RELATED SERVICES” PARTS AND SUPPLIES, RENTALS AND REPAIR”
“COMMUNICATION AND BUILDING MAINTENANCE SERVICES”
“AGRICULTURAL AND NURSERY SUPPLY SERVICES”
“WHOLESALE STORAGE
AND DISTRIBUTION
FACILITIES”
“MEDIUM MANUFACTURING”
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“Contractor’s Office and Contractor’s Storage Yard, Indoor”
By requiring a Contractor’s Office a CUP to restrict the number of business
vehicles, the City would be singling out a use comparable and less intensive than
other uses permitted by right in the M2-Industrial District.
M2-Industrial Designation
Uses permitted by right
M2-Industrial Zoning Designation“Contractor’s Office and Contractor’s Storage Yards”
Contractor’s
Office
Permitted by right
No indoor or outdoor storage
Contractor’s Yards with
Indoor Storage
Permitted by right
Interior Storage Only
Contractor’s Yard with
Outdoor Storage
Permitted with a CUP
Outdoor Storage Review for Proper screening
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Conclusion
The ZCA 19-02 is exempt from the California Environmental
Quality Act (CEQA) pursuant to the Section 15061(b)(3),
“General Rule,” of Title 14 the California Code of Regulations
because the revisions to this ordinance will not significantly
impact traffic, noise, aesthetics, or any other environmental
condition
This concludes the Public Hearing and first reading to the M2-
Industrial Zoning Code Amendment
Ordinance
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE,
CALIFORNIA FINDING THAT ZONING CODE AMENDMENT 19-02 IS EXEMPT
FROM REVIEW PURSUANT TO CALIFORNIA ENVIRONMENTAL QUALITY ACT
GUIDELINES SECTION 15061(b)(3) AND AMENDING CHAPTER 18.06
(DEFINITIONS) AND CHAPTER 18.40 (M2 INDUSTRIAL DISTRICT) OF TITLE 18
(ZONING) OF THE GRAND TERRACE MUNICIPAL CODE
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“Contractor Storage Yard” Definition
The proposed revision to the definitionwould still trigger a CUP review process fora Contractor’s Outdoor Storage Yard oflarge equipment and scrap material.
Site and Architectural Review is mandatory for most projects
submitted in the M2 (Heavy Industrial) zoning
Uses Permitted by Right – Chapter 18.40.020
Uses are typically within a building – Public access not generally permitted
Standard DAB and Environmental Review
Project is considered by the Planning Commission based on project scope as the Final Approval Body
After the appeal period has ended the applicant may submit for Building permits
Uses Permitted that require a CUP – Chapter 18.40.030
Uses can be outdoor with public access
DAB Review with comprehensive Environmental Review
Project is considered by the Planning Commission as the final Approval Body
After the appeal period has ended the applicant may submit for Building permits
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Rule 20A Undergrounding Master Plan
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Staff Recommendation
Undergrounding Master Plan
• April 23, 2019 Council expressed desire to have a Master
Plan
• January 14, 2020 Provide findings on research
• March 27, 2020 Prepare RFQ for study and advertise
• May 29, 2020 Award Contract for Undergrounding Study
• October 27, 2020 Present Study to Council for adoption
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Conclusion
Questions?
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California Volkswagen Mitigation Trust's Zero-
Emission Transit, School, Shuttle Bus Grant Program
January 14, 2020
CITY OF GRAND TERRACE
2020 MISSION
This project supports the City’s mission to
preserve and protect our community and its
exceptional quality of life through thoughtful
planning, within the constraints of a fiscally
responsible government.
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Background
The City’s Senior Transportation Program has
provided bus services to and from the Senior Centersince May 2016.
The City has seen a steady rise in the participation of
Seniors in the bus program.
In recent months, the Senior Bus has experiencedseveral mechanical failures and increased repairs
(such as failure of the air-conditioning unit) resulting inadjusted/varied bus pick-up and drop-off schedules.
California Volkswagen Mitigation Trust's
Zero-Emission Transit, School, and
Shuttle Bus Grant Program
The program is currently accepting applications forgrant funding to replace existing gas Shuttle Buses
with new Electric Shuttle buses.
Of the $423m in the trust, $130m in grant funds is setaside for zero-emission transit, school and shuttle
buses to help mitigate excess nitrogen oxide (NOx)released by these vehicles.
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California Volkswagen Mitigation Trust's
Zero-Emission Transit, School, and
Shuttle Bus Grant Program
The grant program requires City Council approval
(adoption of a Resolution) to apply for the grant.
The City is eligible to receive a grant award up toa maximum of $160,000.
Applications will be reviewed and selected on a
first come, first served basis.
Applications will be accepted until funds havebeen exhausted.
What Features Will the New Senior Bus Have?
New air conditioning system
New wheelchair lift system
AM/FM/CD Stereo system
Roof Vent
2-way radio
PA system
Seats 12 comfortably plus two
wheelchairs in rear
Vinyl seats for easy cleaning and
maintenance
100% ELECTRIC!
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Recommendation and Next Steps
City staff recommends that City Council adopt the
Resolution approving the application for Grant Fundingfor the Purchase of an Electric Bus.
After adoption, City staff will submit the completed
grant application and await review and approval.
Upon approval of the grant, City staff will return to theCity Council for approval of the grant agreement with
the San Joaquin Valley Air Pollution Control District,the local administrator of the grant.
Questions?
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City of Grand Terrace
Special Events List for Calendar Year 2020
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City Manager’s Update
1/14/2020
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AGENDA REPORT
MEETING DATE: January 28, 2020 Council Item
TITLE: Second Reading of Ordinance to Amend Chapter 18.06
(Definitions) and Chapter 18.40 (M2 Industrial District) of the
Zoning Code Pertaining to Contractor Offices and Storage
Yards
PRESENTED BY: Steven Weiss, Planning & Development Services Director
RECOMMENDATION: Direct the City Attorney to Read The Title of, Waive Further
Reading of, and Adopt the Proposed Ordinance, which is
entitled: AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF GRAND TERRACE, CALIFORNIA FINDING
THAT ZONING CODE AMENDMENT 19-02 IS EXEMPT
FROM REVIEW PURSUANT TO CALIFORNIA
ENVIRONMENTAL QUALITY ACT GUIDELINES SECTION
15061(b)(3) AND AMENDING CHAPTER 18.06
(DEFINITIONS) AND CHAPTER 18.40 (M2 INDUSTRIAL
DISTRICT) OF TITLE 18 (ZONING) OF THE GRAND
TERRACE MUNICIPAL CODE PERTAINING TO
CONTRACTOR OFFICES AND STORAGE YARDS
2030 VISION STATEMENT:
This amendment supports the City’s 2030 Vision Plan, Goal #3 to Promote Economic
Development by preparing for future development by updating the zoning and
development codes.
BACKGROUND/DISCUSSION:
On January 14, 2020, the City Council conducted a public hearing on the attached
Ordinance and introduced it for adoption on the same date. The proposed Ordinance
amends the following sections of the Grand Terrace Municipal Code as follows:
• Amend Section 18.06.182 Contractor Storage Yard, definition, as follows (new
verbiage in underline and deletions in overstrike):
“Contractor storage yard’ means storage yards operated by, or on behalf of,
state licensed contractor for the storage of large equipment, vehicles, or other
materials commonly used in the individual contractor’s type of business. The
facility may also include storage of scrap materials used for repair and
maintenance of contractor’s own equipment; and buildings or structures for uses
such as offices and repair facilities.”
• Amend Chapter 18.40 - Industrial District, Section 18.40.030 - Conditionally
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Permitted Uses to add “D. Contractor’s office and storage yard, outdoor”; and the
remaining uses renumbered.
• Amend Chapter 18.40 - Industrial District, Section 18.40.050 - Site Developmet
Standards, to add the streetside yard building setback of 15 feet with 5 feet of
landscaping requirement.
No changes have been made to the proposed ordinance since its introduction. The
ordinance is now ready for second reading and adoption by the City Council.
The ordinance complies with state laws regarding categorical exemptions from CEQA
review pursuant to CEQA Guideline Section 15306(b)(3).
FISCAL IMPACT:
There is no fiscal impact relating to the adoption of this Ordinance.
ATTACHMENTS:
• Ordinance_ZCA 19-02 (DOC)
• Notice of Exemption (PDF)
APPROVALS:
Steven Weiss Completed 01/23/2020 11:40 AM
City Attorney Completed 01/23/2020 2:25 PM
Finance Completed 01/23/2020 5:42 PM
City Manager Completed 01/24/2020 4:41 PM
City Council Pending 01/28/2020 6:00 PM
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ORDINANCE NO. ___
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE, CALIFORNIA FINDING THAT ZONING CODE AMENDMENT
19-02 IS EXEMPT FROM REVIEW PURSUANT TO CALIFORNIA
ENVIRONMENTAL QUALITY ACT GUIDELINES SECTION 15061(b)(3)
AND AMENDING CHAPTER 18.06 (DEFINITIONS) AND CHAPTER
18.40 (M2 INDUSTRIAL DISTRICT) OF TITLE 18 (ZONING) OF THE
GRAND TERRACE MUNICIPAL CODE
WHEREAS, the City of Grand Terrace (“City”) adopted a zoning code, which has
been amended from time to time; and
WHEREAS, the City Council adopted a comprehensive General Plan on April 27,
2010, which contains a Land Use Element that includes Industrial and Floodplain
Industrial land use designations;
WHEREAS, the General Plan Industrial land use designation is intended those
uses that can be made compatible with other surrounding uses within the City regarding
noise, dust, odors, vibration, glare, air quality, traffic, aesthetics, and hazardous
materials. Typical uses may include light manufacturing and assembly, small scale
warehousing and distribution, research and development, and administrative and
service types of uses.
WHEREAS, state law requires that the City’s Zoning Code (Title 18 of the Grand
Terrace Municipal Code) conform with the General Plan’s goals and policies.
WHEREAS, pursuant to Sections 65800 and 65850 of the California
Government Code, the City may adopt ordinances to regulate the use of buildings,
structures, and land as between industry, business, residences, and open space, and
other purposes; to regulate the location, height, bulk, number of stories and size of
buildings and structures, the size and use of lots, yards, courts and other open spaces,
the percentage of a lot which may be occupied by a building or structure, and the
intensity of land use; and to establish requirements for off-street parking, in compliance
with the California Government Code.
WHEREAS, pursuant to the California Environmental Quality Act (hereinafter
“CEQA”) (California Public Resources Code Sections 21000 et seq.) and State
CEQA guidelines (Sections 15000 et seq.) the Ordinance is exempt pursuant to
Section 15061(b)(3) of Title 14 the California Code of Regulations because the
revisions to this ordinance establish regulations for uses that are consistent with the
General Plan and Zoning Code; and
WHEREAS, on December 12, 2019 the Planning Commission of the City of
Grand Terrace conducted a duly noticed public hearing at a special meeting of the
Planning Commission on Zoning Code Amendment 19-02 at the Grand Terrace City
Hall Council Chambers located 22795 Barton Road and concluded the hearing by
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adopting a Resolution recommending City Council approval of Zoning Code
Amendment 19-02.
WHEREAS, on January 14, 2020, the City Council of the City of Grand Terrace
conducted a duly noticed public hearing on Zoning Code Amendment 19-02 at the
Grand Terrace City Hall Council Chambers located 22795 Barton Road; and
WHEREAS, on January 28, 2019, the City Council of the City of Grand Terrace
adopted the proposed Ordinance; and
WHEREAS, all legal prerequisites to the adoption of this Ordinance have
occurred.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE
DOES ORDAIN AS FOLLOWS:
SECTION 1. The City Council hereby specifically finds that all facts set forth in
the above Recitals, are true and correct.
SECTION 2. The City Council hereby finds that the Project is not subject to
environmental review pursuant to Section 15061(b)(3) of Title 14 the California Code
of Regulations because the revisions are regulatory in nature and will not in
themselves create impacts to the environment.
SECTION 3. Based on substantial evidence presented to the City Council during
the public hearing, including public testimony, and written and oral staff reports, the City
Council specifically finds as follows:
1. Zoning Code Amendment 19-02 will not be detrimental to the health, safety,
morals, comfort or general welfare of the persons residing or working within
the neighborhood of the proposed amendment or within the city or injurious
to property because the amendment is consistent with Ordinance No. 319
which is intended to insure that outdoor uses and activities are properly
regulated to mitigate impacts.
2. Zoning Code Amendment 19-02 is consistent with the latest adopted
general plan, because the proposed amendments conform and promote
the Grand Terrace General Plan.
SECTION 4. Based upon the above findings and determinations, the City Council
finds the Project exempt from CEQA.
SECTION 5. The City Council hereby amends Title 18 (Zoning) of the Grand
Terrace Municipal Code, as follows:
1. “Section 18.06.182 (Contractor Storage Yard) of Chapter 18.06
(Definitions) is amended to read as follows:
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“Contractor storage yard” means storage yards operated by, or on behalf
of, a state licensed contractor for storage of large equipment, vehicles, or
other materials commonly used in the individual contractor's type of
business. The facility may also include storage of scrap materials used
for repair and maintenance of contractor's own equipment; and buildings
or structures for uses such as offices and repair facilities.
2. Section 18.40.030 (Conditionally Permitted Uses) of Chapter 18.40 (M2
Industrial District) is amended to add a new “D”, as follows, and the
remaining are renumbered:
D. Contractor’s Office and Storage yards, outdoor.
3. Section 18.40.050 (Site Development Standards) of Chapter 18.40 (M2
Industrial District) is amended to read as follows:
Site development standards in the M2 district are as follows:
Development Issue Standard
Lot Area
(Minimum square feet) 20,000
Lot Width
(Minimum linear feet) 70
Lot Depth
(Minimum linear feet) 100
Street Frontage
(Minimum linear feet) 70
Setbacks
(Minimum linear feet)
front yard
25, with 10’
landscape
setback
rear yard (except when adjacent to a lot in an R District,
then 25 feet, with 10 foot landscape setback) 0
side yard (except when adjacent to a lot in an R district,
then 25 feet, with 10-foot landscape setback) 0
street side yard
15, with 5’
landscape
setback
Height
(minimum linear feet) 35
Lot Coverage
(maximum percent, less the required parking, setbacks,
and landscaping)
100”
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SECTION 6. Inconsistencies. Any provision of the Grand Terrace Municipal
Code or appendices thereto inconsistent with the provisions of this Ordinance, to the
extent of such inconsistencies and no further, is hereby repealed or modified to that
extent necessary to affect the provisions of this Ordinance.
SECTION 7. Severability. Should any provision of this Ordinance, or its
application to any person or circumstance, be determined by a court of competent
jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall
have no effect on any other provision of this Ordinance or the application of this
Ordinance to any other person or circumstance and, to that end, the provisions hereof
are severable. The City Council of the City of Grand Terrace declares that it would have
adopted all the provisions of this ordinance that remain valid if any provisions of this
ordinance are declared invalid.
SECTION 8. Effective Date. This Ordinance shall become effective thirty (30)
days from and after its adoption.
SECTION 9 First read at a regular meeting of the City council held on the 14th day
of January 2020.
SECTION 10. Certification. The Mayor shall sign, and the City Clerk shall certify
to the passage and adoption of this Ordinance and shall cause the same to be
published and posted pursuant to the provisions of law in that regard and this Ordinance
shall take effect 30 days after its final passage.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand
Terrace at a regular meeting held on the 28th day of January 2020.
__________________________
Darcy McNaboe, Mayor
ATTEST:
Debra L. Thomas, City Clerk
APPROVED AS TO FORM:
Adrian R. Guerra City Attorney
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\\cogt-fs2\profiles.COGT$\sweiss\Desktop\5890.doc
22795 Barton Road, Grand Terrace, California, 92313-5295 909/824-6621 Fax 909/783-2600
CITY OF GRAND TERRACE
NOTICE OF EXEMPTION
TO: Clerk of the Board of Supervisors FROM: Planning and Development
County of San Bernardino Services Department
385 N. Arrowhead Avenue, 2nd Floor City of Grand Terrace
San Bernardino, CA 92415-0130 22795 Barton Road
Grand Terrace, CA 92313
Project Title: Zoning Code Amendment 19-02
Project Location – Specific: City Wide
Description of Project: Amendment to the Grand Terrace Municipal Code by Amending
Chapter 18.06 (definitions) and Chapter 18.40 (M2-Industrial) of Title 18 (Zoning).
Name of Public Agency Approving Project: Grand Terrace City Council
Name of Person or Agency Carrying out Project: City of Grand Terrace
Exempt Status: California Code of Regulations, Title 14, Section 15061(b)(3)
Reasons Why Project is Exempt: Zoning Code Amendment 19-02 is exempt from California
Environmental Quality Act (CEQA) pursuant to Section 15061 (b)(3), in that the activity is
covered by the general rule that CEQA applies only to projects, which have the potential for
causing a significant effect on the environment. The proposed amendment will not have any
effects on the environment because the proposed amendment only changes administration
procedures by expanding the minimum public hearing notification requirements.
Lead Agency or Contact Person: Area Code/Telephone
(909) 824-6621 Ext. 225
______________________________ _________________
Steven A. Weiss, AICP Date
Planning and Development Services
Director
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AGENDA REPORT
MEETING DATE: January 28, 2020 Council Item
TITLE: Establish an Ad Hoc Committee to Select a Local Veteran to
be Honored at the Miller Park Amphitheater Veterans
Memorial in the City of Fontana
PRESENTED BY: G. Harold Duffey, City Manager
RECOMMENDATION: SELECT TWO MEMBERS OF COUNCIL TO SERVE ON
AN AD HOC COMMITTEE TO SELECT A GRAND
TERRACE RESIDENT VETERAN TO BE HONORED AT
THE MILLER PARK AMPHITHEATER VETERANS
MEMORIAL UNVEILING IN THE CITY OF FONTANA
2030 VISION STATEMENT:
This Staff Report Supports Goal #4, Developing and Implementing Successful
Partnerships and Goal #5, Engage in Proactive Communication
BACKGROUND:
On January 13, 2020, the City of Grand Terrace received an invitation from the City of
Fontana to attend the unveiling of its Miller Park Amphitheater Veterans Memorial on
April 18, 2020 (Attachment I). To honor those who have served in the U.S. Armed
Forces, the City of Fontana would like to invite the City to take part in the celebration by
nominating a Veteran from the City to be recognized with an engraved brick that will lay
for years to come along the memorial.
The memorial includes eight granite walls with engraved bricks placed on the walking
path alongside the memorial. Each wall represents a conflict our Veterans have served
in, along with a representative picture, dates, number of personnel involved, number
killed in action, and the number of wounded.
DISCUSSION:
The City of Fontana has invited Mayor, Mayor Pro Tem and Members of Council to
attend this event. With that invitation, the City of Fontana has requested that the City
Council nominate a member of the Grand Terrace community to be honored with that
nomination being provided to the City of Fontana by no later than January 30, 2020 with
the following specifications:
• Name
• Branch
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• Years of Service
As time is of the essence, staff asks that the City Council select two of its members to
serve on an Ad Hoc Committee to nominate, on behalf of the City Council, a member of
the Grand Terrace community to be honored at the Miller Park Amphitheater Veterans
Memorial. Upon selection of a nominee, the Ad Hoc Committee will inform the City
Manager of its selection who will in turn notify the City Council and City of Fontana of
the nomination. Additionally, staff will coordinate the nominee’s attendance at the April
18, 2020 unveiling.
FISCAL IMPACT:
None.
ATTACHMENTS:
• Attachment I - Miller Park Amphitheater Veterans Memorial Invitation(PDF)
APPROVALS:
G. Harold Duffey Completed 01/23/2020 12:48 PM
City Attorney Completed 01/23/2020 2:53 PM
Finance Completed 01/23/2020 5:41 PM
City Manager Completed 01/24/2020 4:42 PM
City Council Pending 01/28/2020 6:00 PM
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AGENDA REPORT
MEETING DATE: January 28, 2020 Council Item
TITLE: Monthly Financial Report for November-2019
PRESENTED BY: Cynthia Fortune, Assistant City Manager
RECOMMENDATION: Receive and file the November-2019 Monthly Financial
Report.
2030 VISION STATEMENT:
This staff report supports City Council Goal #1, “Ensure Our Fiscal Viability,” through
the continuous monitoring of revenue receipts and expenditure disbursements against
approved budget appropriations.
BACKGROUND:
The attached monthly financial report is for the period ending November 30, 2019. The
purpose of the report is to identify actual revenues received and expenditures incurred
for the relevant period and compare them to the Approved Budget.
The Fiscal Year (FY) 2019-20 Approved Budget amounts are presented in the attached
November-2019 report for reference purposes. Any adjustments to the Approved
Budget that may occur during the fiscal year will also be reflected in the report. The
“expected” revenues reflect an analysis of revenue receipts that have, historically, been
received as of this month in the fiscal year. The resulting positive or negative variances
shown in the MFR are in comparison to these “expected” receipts.
REVENUE RECEIPTS
Some revenues are received consistently within the fiscal year, however, not
necessarily on a monthly basis. The largest sources of revenue are shown below with
their revenue cycles:
1. Property Tax (encompasses 33% of the General Fund’s revenue sources at
$1.9m), the bulk of which is received twice a year: December/January and
May/June of each fiscal year.
2. Residual Receipts from the Redevelopment Property Tax Trust Fund (RPTTF),
encompasses 24% of the General Fund’s revenue at $1.4m, is also received in
December/January and May/June each fiscal year.
3. Sales Tax (encompasses about 13% of the General Fund revenue sources at
$785k), although is received monthly, the first month’s (July) allocation is not
received until September of the fiscal year; however, by the end of the fiscal year
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(June) the remaining months’ allocation, which would be April, May and June,
although are received within sixty days of the end of the fiscal year, they are still
recorded by June 30th of the said fiscal year.
4. Franchise Fees (encompasses 9% of the General Fund’s revenue sources) are
received from the following companies:
Payee
Revenue
Receipt
Cycle
Burrtec Waste Industries Monthly
AT & T Quarterly
Charter Communications/Spectrum Quarterly
Riverside Highland Water Co Annually
Southern California Edison Annually
Southern California Gas Co Annually
EXPENDITURES
When reviewing the charts that provide the current monthly status of both revenues and
expenditures, it is helpful to bear in mind that some of the fluctuations from month to
month may be due to the following:
1. Invoices were not submitted to the City in a timely manner; and
2. Invoices may have required further review by the authorizing department.
The analysis and reporting provided is intended to keep the City Council informed
regarding the City’s financial position relative to the budget, and to identify any financial
issues or concerns that arise during the fiscal year so appropriate and timely action can
be taken in response to these developments.
In addition, the report contains charts that compare actual receipts and expenditures
against expected and approved budgets. Each category has 2 charts:
1. the 1st chart shows the actual receipts or expenditures incurred for the current
fiscal year (FY2019-20) and is compared to the prior year (2018-19) actuals; and
2. the 2nd chart shows the total annual amounts incurred, for the current year, the
prior year and is compared to the “expected” amounts for the current year.
DISCUSSION:
In order to provide a more meaningful monthly report in relation to year-end projections,
the monthly financial report below has been revised and provides the following
information by column:
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1. Approved Budget (the General Fund Adopted Budget with any additional
appropriations approved by City Council throughout the year);
2. Expected Receipts/Allocations based on Approved Budget (with five months into
the Fiscal Year, receipts and expenditures are expected at 15.5 and 37.4%
respectively);
3. Monthly Actuals (cumulative actuals as of November 30, 2019) – highlighted in
light blue; and
4. Variance (cumulative actuals vs. expected receipts/allocations).
Operating Revenues
As of November 30, 2019, General Fund operating revenues received are $923,227, or
15.5% of the approved budget of $5,957,067; since revenues expected by this time
should be at 15.5% of the approved budget, actual revenues received are in line with
expected receipts for the five-month period.
Operating Expenditures
General Fund operating expenditures through November 30, 2019 are $2,246,810,
which represents 37.7% of the approved expenditures of $5,961,004. With 41.7% of
the fiscal year elapsed through November, the report that expenditures are over budget
by almost $20k. The bulk of the overage was due to leave payouts issued to a long-term
employee who left City service. The vacancy was filled by the end of December
The table below summarizes the General Fund’s revenue and expenditure report as of
November 30, 2019.
Table 1
City of Grand Terrace
FY2019-2020 Monthly Financial Report
For the Period ending November 30, 2019
Budget Expected
Exp
%
Year-
End
Proj
Year-to-
Date Actuals
Actuals
%
Appr
Bdgt
Variance
(actuals
from
expected)
REVENUES
Property Tax $1,971,250 $54,050 2.7% $57,808 2.9% $3,758
Residual Receipts -
RPTTF $1,442,400 $0 0.0% $0 0.0% $0
Residual Receipts -
Housing $0 $0 $0 $0
Franchise Fees $534,790 $93,050 17.4% $97,919 18.3% $4,869
Licenses, Fees &
Permits $436,380 $131,000 30.0% $128,782 29.5% ($2,218)
Sales Tax $785,400 $212,330 27.0% $211,175 26.9% ($1,155)
Intergovernmental
Revenue/Grants $26,500 $8,660 32.7% $8,708 32.9% $48
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City of Grand Terrace
FY2019-2020 Monthly Financial Report
For the Period ending November 30, 2019
Budget Expected
Exp
%
Year-
End
Proj
Year-to-
Date Actuals
Actuals
%
Appr
Bdgt
Variance
(actuals
from
expected)
Charges for Services $207,900 $33,670 16.2% $33,395 16.1% ($275)
Fines & Forfeitures $72,500 $31,320 43.2% $34,895 48.1% $3,575
Miscellaneous $15,148 $148 1.0% $461 3.0% $313
Use of Money &
Property $62,000 $23,480 37.9% $31,736 51.2% $8,256
Transfers In $84,450 $20,000 23.7% $0 0.0% ($20,000)
WasteWater Receipts $318,349 $318,349 100.0% $318,349 100.0% $0
TOTAL REVENUES $5,957,067 $926,057 15.5% $923,227 15.5% ($2,830)
EXPENDITURES
Salaries $1,246,881 $468,670 37.6% $502,528 40.3% ($33,858)
Benefits $842,690 $308,760 36.6% $313,781 37.2% ($5,021)
Professional/Contractual
Services $3,443,866 $1,291,300 37.5% $1,280,092 37.2% $11,208
Materials & Supplies $236,217 $85,120 36.0% $79,783 33.8% $5,337
Lease of
Facility/Equipment $8,000 $8,000 100.0% $10,333 129.2% ($2,333)
Utilities $145,000 $55,530 38.3% $50,706 35.0% $4,824
Overhead Cost
Allocation ($87,450) ($21,868) 25.0% ($21,863) 25.0% ($5)
Transfers Out $125,800 $31,690 25.2% $31,450 25.0% $240
TOTAL
EXPENDITURES $5,961,004 $2,227,202 37.4% $2,246,810 37.7% ($19,608)
REVENUE & EXPENDITURE SUMMARY
REVENUES $5,957,067 $926,057 15.5% $923,227 15.5% ($2,830)
EXPENDITURES ($5,961,004) ($2,227,202) 37.4% ($2,246,810) 37.7% ($19,608)
NET - USE OF FUND
BALANCE ($3,937) ($1,301,145) ($1,323,583) ($22,438)
FISCAL IMPACT:
As the above table and attached report show the first five months of the fiscal year, staff
believes that the City’s General Fund actuals will be in line with its approved budget, for
both revenues and expenditures.
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There is no fiscal impact to receiving and filing this report.
ATTACHMENTS:
• November-2019 Monthly Financial Report (PDF)
APPROVALS:
Cynthia A. Fortune Completed 01/16/2020 12:33 PM
Finance Completed 01/16/2020 12:33 PM
City Attorney Completed 01/22/2020 1:47 AM
City Manager Completed 01/23/2020 1:07 PM
City Council Pending 01/28/2020 6:00 PM
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City of Grand Terrace
Monthly Financial Report
For the Period Ending
November 30, 2019
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Table of Contents
GENERAL FUND
Revenue Summaries
Revenue Assumptions ........................................................................................... 4
Revenue Monthly Financial Detail ......................................................................... 5
Revenue Monthly History Charts:
Property Tax ................................................................................................... 6
Sales Tax ........................................................................................................ 7
Licenses, Permits & Fees ............................................................................... 8
Franchise Fees ............................................................................................... 9
Expenditure Summaries
Expenditure Assumptions ...................................................................................... 12
Expenditure Monthly Financial Detail by Category ................................................ 13
Expenditure Monthly History Charts:
Salaries ........................................................................................................... 14
Benefits ........................................................................................................... 15
Professional/Contractual Services .................................................................. 16
Materials & Supplies ....................................................................................... 17
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GENERAL FUND REVENUE
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REVENUE ASSUMPTIONS:
1. Property Tax receipts are usually received twice a year: in December and
May.
2. Residual Receipts – Redevelopment Property Tax Trust Fund (RPTTF)
receipts are received twice a year: June for the July - December period
and January for the January - June period.
3. Franchise Fee receipts are received monthly and quarterly; usually 30 -
45 days after the month or quarter end.
4. Sales Tax receipts are received monthly; the State distributes (advances)
sales tax revenues usually 60 days after the close of the month; then has
a quarterly “true-up.”
5. Waste Water receipts are received annually, usually at the first month of
the fiscal year.
6. All other receipts are based on historical receipt pattern.
7. Sections/Cost Centers are rolled into each Category as follows:
a. Property Tax
b. Residual Receipts
c. Franchise Fees
d. Licenses, Fees and Permits
e. Sales Tax
f. Sales Tax – Economic Development Agreement
g. Proceeds from the Sale of Property
h. Intergovernmental Revenues and/or Grants
i. Charges for Services
j. Miscellaneous Revenues
k. Use of Money and/or Property
l. Wastewater Receipts
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Budget Expected
Exp
%
Year-
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Proj
Year-to-Date
Actuals
Actuals
%
Appr
Bdgt
Variance
(actuals from
expected)
REVENUES
Property Tax $1,971,250 $54,050 2.7%$57,808 2.9%$3,758
Residual Receipts - RPTTF $1,442,400 $0 0.0%$0 0.0%$0
Residual Receipts - Housing $0 $0 $0 $0
Franchise Fees $534,790 $93,050 17.4%$97,919 18.3%$4,869
Licenses, Fees & Permits $436,380 $131,000 30.0%$128,782 29.5%($2,218)
Sales Tax $785,400 $212,330 27.0%$211,175 26.9%($1,155)
Proceeds from Sale of Property $0 $0 $0 $0
Intergovernmental Revenue/Grants $26,500 $8,660 32.7%$8,708 32.9%$48
Charges for Services $207,900 $33,670 16.2%$33,395 16.1%($275)
Fines & Forfeitures $72,500 $31,320 43.2%$34,895 48.1%$3,575
Miscellaneous $15,148 $148 1.0%$461 3.0%$313
Use of Money & Property $62,000 $23,480 37.9%$31,736 51.2%$8,256
Transfers In $84,450 $20,000 23.7%$0 0.0%($20,000)
Waste Water Receipts $318,349 $318,349 100.0%$318,349 100.0%$0
TOTAL REVENUES $5,957,067 $926,057 15.5%$923,227 15.5%($2,830)
Budget Expected
Exp
%
Year-
End
Proj
Year-to-Date
Actuals
Actuals
%
Appr
Bdgt
Variance
(actuals from
expected)
EXPENDITURES
Salaries $1,246,881 $468,670 37.6%$502,528 40.3%($33,858)
Benefits $842,690 $308,760 36.6%$313,781 37.2%($5,021)
Professional/Contractual Services $3,443,866 $1,291,300 37.5%$1,280,092 37.2%$11,208
Materials & Supplies $236,217 $85,120 36.0%$79,783 33.8%$5,337
Lease of Facility/Equipment $8,000 $8,000 100.0%$10,333 129.2%($2,333)
Utilities $145,000 $55,530 38.3%$50,706 35.0%$4,824
Overhead Cost Allocation ($87,450)($21,868)25.0%($21,863)25.0%($5)
Transfers Out $125,800 $31,690 25.2%$31,450 25.0%$240
TOTAL EXPENDITURES $5,961,004 $2,227,202 37.4%$2,246,810 37.7%($19,608)
Budget Expected
Exp
%
Year-
End
Proj
Year-to-Date
Actuals
Actuals
%
Appr
Bdgt
Variance
(actuals from
expected)
REVENUES $5,957,067 $926,057 15.5%$923,227 15.5%($2,830)
EXPENDITURES ($5,961,004)($2,227,202)37.4%($2,246,810)37.7%($19,608)
NET ($3,937)($1,301,145)($1,323,583)($22,438)
City of Grand Terrace
FY2019-2020 Monthly Financial Report
For the Period ending November 30, 2019
REVENUE & EXPENDITURE SUMMARY
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MONTHLY REVENUE - Property Tax (2019-20 vs. 2018-19)
$0
$2,851
$1,740
$2,461
$51,397
$123,417
$724,339
$51,626
$7,521
$126,555
$772,432
$15,430
$0
$1,703
$3,096
$3,087
$49,922
$0
$0
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2019-20 Actuals 2018-19 Actuals
58,449
57,808
54,050
- 20,000 40,000 60,000 80,000 100,000
FY2018-19 Actuals
FY2019-20 Actuals
FY2019-20 Expected
FY2018-19 Actuals FY2019-20 Actuals FY2019-20 Expected
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MONTHLY REVENUE - Sales Tax (2019-20 vs. 2018-19)
$0
$0
$69,387
$106,874
$60,330
$59,187
$59,729
$86,805
$34,823
$49,745
$81,563
$222,878
$0
$0
$60,225
$68,463
$82,487
$0
$0
$0
$0
$0
$0
$0
- 50,000 100,000 150,000 200,000 250,000
JUL
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SEP
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DEC
JAN
FEB
MAR
APR
MAY
JUN
2019-20 Actuals 2018-19 Actuals
$236,591
$211,175
$212,330
- 50,000 100,000 150,000 200,000 250,000 300,000
FY2018-19 Actuals
FY2019-20 Actuals
FY2019-20 Expected
FY2018-19 Actuals FY2019-20 Actuals FY2019-20 Expected
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MONTHLY REVENUE - Licenses, Permits & Fees (2019-20 vs. 2018-19)
$12,406
$52,117
$20,886
$25,542
$13,228
$18,052
$71,601
$42,008
$27,054
$30,079
$45,243
$64,212
$32,893
$15,470
$20,694
$24,786
$34,939
$0
$0
$0
$0
$0
$0
$0
- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
JUL
AUG
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DEC
JAN
FEB
MAR
APR
MAY
JUN
2019-20 Actuals 2018-19 Actuals
$124,178
$128,782
$131,000
- 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000
FY2018-19 Actuals
FY2019-20 Actuals
FY2019-20 Expected
FY2018-19 Actuals FY2019-20 Actuals FY2019-20 Expected
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MONTHLY REVENUE - Franchise Fees (2019-20 vs. 2018-19)
$0
$3,833
$28,619
$44,314
$4,512
$38,255
$49,143
$22,976
$52,722
$131,899
$27,792
$116,708
$0
$0
$29,925
$18,777
$49,216
$0
$0
$0
$0
$0
$0
$0
- 20,000 40,000 60,000 80,000 100,000 120,000 140,000
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
2019-20 Actuals 2018-19 Actuals
$81,278
$97,919
$93,050
- 20,000 40,000 60,000 80,000 100,000 120,000
FY2018-19 Actuals
FY2019-20 Actuals
FY2019-20 Expected
FY2018-19 Actuals FY2019-20 Actuals FY2019-20 Expected
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GENERAL FUND EXPENDITURE
BY CATEGORY
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EXPENDITURE ASSUMPTIONS:
8. Expenditure appropriations are divided into 12 monthly allocations, with
adjustments made for payroll periods, the timing of debt service
payments, and certain quarterly allocations.
9. Sections/Cost Centers are rolled into each Category as follows:
m. Salaries
n. Benefits
o. Professional/Contractual Services
p. Materials and Supplies
q. Lease of Facilities and/or Equipment
r. Equipment s. Capital Projects
t. Utilities
u. Debt Services
v. Overhead Cost Allocation
w. Transfers Out
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Budget Expected
Exp
%
Year-
End
Proj
Year-to-Date
Actuals
Actuals
%
Appr
Bdgt
Variance
(actuals from
expected)
REVENUES
Property Tax $1,971,250 $54,050 2.7%$57,808 2.9%$3,758
Residual Receipts - RPTTF $1,442,400 $0 0.0%$0 0.0%$0
Residual Receipts - Housing $0 $0 $0 $0
Franchise Fees $534,790 $93,050 17.4%$97,919 18.3%$4,869
Licenses, Fees & Permits $436,380 $131,000 30.0%$128,782 29.5%($2,218)
Sales Tax $785,400 $212,330 27.0%$211,175 26.9%($1,155)
Proceeds from Sale of Property $0 $0 $0 $0
Intergovernmental Revenue/Grants $26,500 $8,660 32.7%$8,708 32.9%$48
Charges for Services $207,900 $33,670 16.2%$33,395 16.1%($275)
Fines & Forfeitures $72,500 $31,320 43.2%$34,895 48.1%$3,575
Miscellaneous $15,148 $148 1.0%$461 3.0%$313
Use of Money & Property $62,000 $23,480 37.9%$31,736 51.2%$8,256
Transfers In $84,450 $20,000 23.7%$0 0.0%($20,000)
Waste Water Receipts $318,349 $318,349 100.0%$318,349 100.0%$0
TOTAL REVENUES $5,957,067 $926,057 15.5%$923,227 15.5%($2,830)
Budget Expected
Exp
%
Year-
End
Proj
Year-to-Date
Actuals
Actuals
%
Appr
Bdgt
Variance
(actuals from
expected)
EXPENDITURES
Salaries $1,246,881 $468,670 37.6%$502,528 40.3%($33,858)
Benefits $842,690 $308,760 36.6%$313,781 37.2%($5,021)
Professional/Contractual Services $3,443,866 $1,291,300 37.5%$1,280,092 37.2%$11,208
Materials & Supplies $236,217 $85,120 36.0%$79,783 33.8%$5,337
Lease of Facility/Equipment $8,000 $8,000 100.0%$10,333 129.2%($2,333)
Utilities $145,000 $55,530 38.3%$50,706 35.0%$4,824
Overhead Cost Allocation ($87,450)($21,868)25.0%($21,863)25.0%($5)
Transfers Out $125,800 $31,690 25.2%$31,450 25.0%$240
TOTAL EXPENDITURES $5,961,004 $2,227,202 37.4%$2,246,810 37.7%($19,608)
Budget Expected
Exp
%
Year-
End
Proj
Year-to-Date
Actuals
Actuals
%
Appr
Bdgt
Variance
(actuals from
expected)
REVENUES $5,957,067 $926,057 15.5%$923,227 15.5%($2,830)
EXPENDITURES ($5,961,004)($2,227,202)37.4%($2,246,810)37.7%($19,608)
NET ($3,937)($1,301,145)($1,323,583)($22,438)
City of Grand Terrace
FY2019-2020 Monthly Financial Report
For the Period ending November 30, 2019
REVENUE & EXPENDITURE SUMMARY
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MONTHLY EXPENDITURE - Salaries (2019-20 vs. 2018-19)
$38,969
$127,439
$86,038
$88,542
$88,975
$85,148
$122,833
$83,997
$84,504
$80,973
$154,651
$183,653
46,047
141,631
97,895
96,527
120,428
-
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-
- 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
2019-20 Actuals 2018-19 Actuals
$429,963
$502,528
$468,670
- 100,000 200,000 300,000 400,000 500,000 600,000
FY2018-19 Actuals
FY2019-20 Actuals
FY2019-20 Expected
FY2018-19 Actuals FY2019-20 Actuals FY2019-20 Expected
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MONTHLY EXPENDITURE - Benefits (2019-20 vs. 2018-19)
$37,786
$53,468
$63,643
$50,681
$51,633
$62,054
$83,582
$51,082
$62,437
$51,064
$66,417
$72,230
49,166
65,217
77,704
61,506
60,187
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JUL
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NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
2019-20 Actuals 2018-19 Actuals
$257,211
$313,781
$308,760
- 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000
FY2018-19 Actuals
FY2019-20 Actuals
FY2019-20 Expected
FY2018-19 Actuals FY2019-20 Actuals FY2019-20 Expected
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MONTHLY EXPENDITURE - Professional Services (2019-20 vs. 2018-19)
$8,266
$409,005
$290,013
$277,905
$297,564
$135,532
$391,274
$226,441
$227,818
$325,294
$258,561
$494,078
37,169
377,404
258,793
277,473
329,254
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JUL
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DEC
JAN
FEB
MAR
APR
MAY
JUN
2019-20 Actuals 2018-19 Actuals
1,282,753
1,280,092
1,291,300
- 250,000 500,000 750,000 1,000,000 1,250,000 1,500,000 1,750,000
FY2018-19 Actuals
FY2019-20 Actuals
FY2019-20 Expected
FY2018-19 Actuals FY2019-20 Actuals FY2019-20 Expected
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MONTHLY EXPENDITURE - Materials & Supplies (2019-20 vs. 2018-19)
$1,749
$9,385
$15,416
$19,601
$25,406
$23,655
$7,808
$24,278
$10,431
$8,778
$37,004
$36,130
2,678
23,607
13,286
19,198
21,015
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JUL
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SEP
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NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
2019-20 Actuals 2018-19 Actuals
$71,557
$79,783
$85,120
- 20,000 40,000 60,000 80,000 100,000
FY2018-19 Actuals
FY2019-20 Actuals
FY2019-20 Expected
FY2018-19 Actuals FY2019-20 Actuals FY2019-20 Expected
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AGENDA REPORT
MEETING DATE: January 28, 2020 Council Item
TITLE: Treasurer's Report as of September 30, 2019 (Previously
Submitted on 12/20/2019)
PRESENTED BY: Cynthia Fortune, Assistant City Manager
RECOMMENDATION: Receive and file the Treasurer's Report for the period ending
September 30, 2019 (report originally submitted on
12/19/2019).
2030 VISION STATEMENT:
This staff report supports Goal #1, “Ensuring Our Fiscal Viability”, through the
continuous monitoring of expenditure budgets, allocations and operational costs.
BACKGROUND:
The Treasurer’s Report of funds held as cash or invested by the City and the Successor
Agency to the Community Redevelopment Agency should be presented to the
governing body periodically.
DISCUSSION:
The purpose of the Treasurer’s Report is to provide the governing body with the
following information:
• Current cash position of the City and Successor Agency.
• Identify where all cash is held and, if invested, provide information regarding the
Book Value, PAR Value, Market Value, yield, and maturity:
▪ Book Value is the value of an asset as it is listed in the City’s balance
sheet or statement of financial position. The book value of the City’s cash
is the amount listed in the City’s bank statement as of September 30, 2019
and recorded in the City’s financial system.
▪ PAR value or face value is the value listed on an invested stock or bond.
Had the City invested the cash in stocks or bonds, the PAR value would
be the current value of the stocks or bonds.
▪ Market value of an investment is the amount that someone will pay for it
now, or the sale price. The investment value calculates what the
investment will earn and likely will be worth in the future. Had the City
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invested the cash in stocks or bonds, the investment would have both a
PAR value and a Market value.
▪ Yield describes the amount in cash (in percentage terms) in the form of
interest or dividends received from an investment in stocks or bonds.
▪ Maturity or maturity date refers to the payment date of a financial
instrument (stock, bond, certificate of deposit (CD) at which point
the principal (and all remaining interest) is due to be paid.
▪ The attached Treasurer’s Report as of September 30th indicates book,
PAR and market value of total cash and investments.
• Show that there are sufficient cash resources to make economic commitments for
the next six months. One way the governing body can monitor the fiscal condition
of the City and the Successor Agency is to review the cash position. The
common benchmarks to do this, is to compare the current quarter to the prior
quarter and the current quarter to the same quarter in the prior fiscal year. For the
Treasurer’s Report of September 30, 2019, the quarter summary would be
compared to June 30, 2019 and the annual summary would be compared to
September 30, 2018. Information on the benefits of these two cash reporting
comparison periods is provided below:
Quarterly Change in Cash Position:
This compares the cash position at the end of a quarter to the end of the prior
quarter. The cyclical nature of revenues to the City and the Successor Agency
versus the relatively constant nature of expenditures is shown in a quarterly
comparison. An example of this would be property tax revenue of which the majority
is received in December and May versus monthly labor and utility costs. Generally,
the cash position tends to decrease in the first and second quarter of a fiscal year
and to increase in the third and fourth quarters. One-time revenues such as bond
proceeds may also be easier to highlight first in a quarterly change report.
CHANGE IN TREASURY POSITION
Fiscal Year-to-Date Compared to Previous Quarter
Table 1
Description June 30 2019 Sept 30 2019 $Change % Chg
Total Cash and
Investments $ 26,910,599 $ 25,194,582 $ (1,716,017) -6.4%
Funds with Fiscal
Agent 1,764,350 1,765,628 1,278 0.1%
Total $ 28,674,949 $ 26,960,210 $ (1,714,739) -6.0%
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• As shown in the Table 1 above, the Cash & Investments Report indicates total cash
and investments of $26,960,210 including funds with fiscal agent at September 30,
2019. This represents a decrease of $1,714,739 in cash and investments over the
previous quarter. The decrease in cash was mainly due to the following:
➢ The payment made to US Bank Trust N.A. in the amount of $1,226,520
for interest payment on the 2011 Tax Allocation Bonds – Series A and
B; and
➢ The payment made to CALPERs for Unfunded accrued liability in the
amount of $417,075.
CHANGE IN TREASURY POSITION
Fiscal Year-to-Date Compared to Previous Year (Same Quarter)
Table 2
Description Sept 30 2018 Sept 30 2019 $Change % Chg
Total Cash and
Investments $ 23,968,315 $ 25,194,582 $ 1,226,267 5.1%
Funds with Fiscal
Agent 1,764,183 1,765,628 1,445 0.1%
Total $ 25,732,498 $ 26,960,210 $ 1,227,712 4.8%
• As shown in Table 2, the current cash position compared to a year ago on
September 30, 2018 increased by $1,227,712. The increase in cash between
the quarters ending September 2018 and September 2019 was mainly
attributable to the following reason:
➢ The combined total of property tax receipts and sales tax receipts from
October 2018 thru September 2019 exceeded the combined property
tax receipts and sales tax receipts for the period October 2017 thru
November 2018 by $1,029,000.
Cash Balance by Fund
The attached Treasurer’s Report at September 30, 2019 shows that 64.27% of the total
cash and investments ($17,327,120) are Successor Agency funds, while the remaining
35.73% or $ 9,633,090 are City funds. City funds include the General Fund, Child Care
Fund and other Special Revenue funds such as the Gas Tax Fund and the Measure “I”
Fund.
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Below is the list of cash balances by Fund:
CASH BALANCES BY FUND
9/30/2019
TABLE 3
FUND NO FUND DESCRIPTION CASH BALANCES
09 CHILD CARE CENTER FUND 93,390
10 GENERAL FUND 3,607,786
11 STREET FUND 654,283
12 STORM DRAIN FUND 266,313
13 PARK FUND 153,325
14 SLESF (AB3229 COPS) 7,723
15 AIR QUALITY IMPROVEMENT FUND 33,402
16 GAS TAX FUND 117,412
17 TRAFFIC SAFETY FUND 11,111
19 FACILITIES FUND 367,216
20 MEASURE "I" FUND 49,283
21 WASTE WATER DISPOSAL FUND 622,327
22 CDBG (33,299)
23 REFUNDABLE DEPOSITS TRUST FUND 711,681
25 SPRING MOUNTAIN RANCH 797,877
26 LNDSCP & LGTG ASSESSMENT DIST 7,303
45 COMMERCE WAY PROJECT 851,877
46 CAPITAL IMPROVEMENTS - STREETS 31,124
48 CAPITAL PROJECTS FUND 1,018
49 CAPITAL PROJECTS FUND- PARKS 184,240
52 HOUSING AUTHORITY 928,739
61 COMMUNITY BENEFITS FUND 26,336
62 LIGHT UP GRAND TERRACE 1,256
63 GT ILLEGAL FIREWORKS ENFORCEMENT 456
64 PUBLIC SAFETY FUND 21,825
65 SENIOR BUS PROGRAM FUND 30,403
66 CAL RECYCLE GRANT 9,146
67 PUBLIC, EDUCATIONAL & GOVT ACCESS 69,875
69 COMMUNITY DAY FUND 970
70 EQUIPMENT REPLACEMENT RESERVE FUND 1,011
74 HIGHWAY SFTY IMPROV PRGRM GRANT (2,465)
76 ENHANCED INFRA FIN DIST (EIFD) FUND (9,523)
77 SCIP (SO. CA INCENTIVE PROJ) GRANT (1,030)
95 DOG PARK ENDOWMENT FUND 20,701
TOTAL - CITY 9,633,090
31 S/A RDA OBLIGATION RETIREMENT FUND 32,346
36 2011 TABS A & B BOND PROCEEDS
15,529,146
SUB- TOTAL 15,561,492
CASH WITH FISCAL AGENT 1,765,628
TOTAL - SUCCESSOR AGENCY 17,327,120
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CASH BALANCES BY FUND
9/30/2019
TABLE 3
FUND NO FUND DESCRIPTION CASH BALANCES
09 CHILD CARE CENTER FUND 93,390
TOTAL CASH, INVESTMENTS & CASH WITH FISCAL
AGENT
26,960,210
The table below and the attached Treasurer’s Report also shows that the City of Grand
Terrace (less Successor Agency funds) can meet its expenditure requirements for the
next six months and that sufficient funds are available to meet its operating needs.
CITY OF GRAND TERRACE
CASH AND INVESTMENT REPORT
As of September 30, 2019
Table 4
Description Amount
Total Cash and Investments, City $ 9,633,090
FY2018-19 Adopted Budget $12,902,928
Less: Successor Agency Budget $ 4,130,400
Net, City budget $ 8,772,528
Cash required for six (6) months:
($8,772,728 / 2) $4,386,264
The City has sufficient cash to cover operating expenditures for a
six-month period.
As stated earlier in the report, the cash balances shown above are as of a certain date
in time, specifically, September 30, 2019.
FISCAL IMPACT:
The purpose of the Treasurer’s Report is to provide information regarding the current
cash and investment position of the City and the Successor Agency to the Community
Redevelopment Agency. There is no fiscal impact to receiving and filing the report.
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ATTACHMENTS:
• Treasurer's Report - Sept-2019 (XLSX)
APPROVALS:
Alan French Completed 01/24/2020 4:57 PM
Finance Completed 01/24/2020 4:57 PM
City Attorney Completed 01/24/2020 4:58 PM
City Manager Completed 01/24/2020 4:58 PM
City Council Pending 01/28/2020 6:00 PM
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City of Grand Terrace &
Successor Agency to the CRA of Grand Terrace
Cash & Investment Report
September 30, 2019
City Successor Agency Total PAR Market Yield Maturity
California Asset Management Program 4,109,127 4,109,127 4,109,127 4,200,349 2.220%N/A
State Treasurer- LAIF: City Account 4,327,939 4,327,939 4,327,939 4,426,616 2.280%N/A
State Treasurer- LAIF: Successor Agency 15,532,322 15,532,322 15,532,322 15,886,458 2.280%N/A
TOTAL FUNDS IN INVESTMENT POOLS 8,437,066 15,532,322 23,969,388 23,969,388 24,513,424
US BANK - Safekeeping- First American Treasury Fund 1,178 1,178 1,178 1,199 1.79%N/A
Bank of America - Savings Acct. - Insured 50,294 50,294 50,294 50,309 0.03%N/A
TOTAL FUNDS OTHER INVESTMENTS 51,472 0 51,472 51,472 51,509
TOTAL INVESTMENTS 8,488,538 15,532,322 24,020,860 24,020,860 24,564,933
Bank of America - Gen. Operating Acct. - Collateralized 1,131,863 28,629 1,160,492 1,160,492 1,160,492 0.000%N/A
CitiEscrow Client Checking Acct. (Data Ticket)12,688 12,688 12,688 12,688 0.000%N/A
Bank of America - Successor Agency Acct. - Insured 542 542 542 542 0.000%N/A
TOTAL CASH 1,144,551 29,171 1,173,722 1,173,722 1,173,722
INVESTMENTS 8,488,538 15,532,322 24,020,860 24,020,860 24,564,933
CASH 1,144,551 29,171 1,173,722 1,173,722 1,173,722
TOTAL CASH & INVESTMENTS 9,633,090 15,561,492 25,194,582 25,194,582 25,738,655
CASH WITH FISCAL AGENT (RESERVE FUNDS)
U.S. Bank - First American Treasury Obligations 2011A TABS 0 1,288,694 1,288,694 1,288,694 1,290,627 0.15%N/A
U. S. Bank - First American Treasury Obligations 2011B TABS 0 476,934 476,934 476,934 477,650 0.15%N/A
TOTAL FUNDS WITH FISCAL AGENT 0 1,765,628 1,765,628 1,765,628 1,768,277
TOTAL CASH, INVESTMENTS & CASH WITH FISCAL AGENT 9,633,090 17,327,120 26,960,210 26,960,210 27,506,931
35.73%64.27%100.00%
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AGENDA REPORT
MEETING DATE: January 28, 2020 Successor Agency Item
TITLE: Review and Consideration of Changes to City Policy on
Fiscal Reserves (Policy No. 3.06)
PRESENTED BY: Cynthia Fortune, Assistant City Manager
RECOMMENDATION: Discuss City’s Fiscal Reserve Policy, Consider Changes
Thereto, and if Any, Direct Staff to Make and Bring Back
Proposed Changes for Approval by the City Council
2030 VISION STATEMENT:
This staff report supports City Council Goal #1, “Ensure Our Fiscal Viability,” through
the continuous monitoring of revenue receipts and expenditure disbursements against
approved budget appropriations.
BACKGROUND:
On February 12, 2019 the City approved a process, which adds Section H to Council
Agendas entitled Future Agenda Items Request by Council Members. The process
provides members of the Council an opportunity to recommend a topic be heard at a
future Council meeting (Exhibit A). Once the item is placed on the Future Agenda Item
section of the agenda and approved by Council, the item is placed on a future agenda
under new business, where Council will deliberate and provide staff direction. If staff
receives direction, the item will return with recommendations based on Council’s
directions and consistency with City Council’s priorities.
On November 12, 2019, Council Member Robles requested that City Council be
provided with more detailed information regarding the City’s current Fiscal Reserve
Policy and asked for a brief Council discussion.
DISCUSSION:
A fiscal policy on Fiscal Reserves is recommended as a guideline for establishing and
maintaining cash reserves at an appropriate level for prudent financial management of
the City. The City’s approved Fiscal Reserves policy (Exhibit B) provides these
guidelines as follows:
1. The City will maintain cash balances to preserve the City’s credit worthiness.
2. A contingency account will be budgeted each year in the Non-Departmental cost
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center to provide for unanticipated expenditures during the fiscal year. For
FY2019-20 the contingency of $15,000 (10-290-280 Non-Departmental
Contingency) was reallocated to purchase Microsoft Surfaces for City Council.
3. A General Fund reserve will be established and maintained at the level
recommended by the Government Finance Officers Association (GFOA) which is
a minimum of two months of regular General Fund operating revenues or
expenditures (whichever is considered most predictable), to serve as a buffer
against unexpected local disasters or catastrophic events, and other financial
hardships or downturns in the local or national economy. The City will use
General Fund operating revenues as the basis for establishing the two month
reserve target.
4. The City shall report fund balances in accordance with the Governmental
Accounting Standards Board (GASB) Statement 54 and be classified in one of
the five categories:
a. Non-spendable;
b. Restricted;
c. Committed;
d. Assigned; and
e. Unassigned.
5. The City shall maintain a committed General Fund contingency reserve equal to
two months of operating revenues. Should the reserve level fall below the
established minimum, the City will seek to replenish fund balance within a
reasonable time frame.
As stated above, for Fiscal Year 2019-20, the current General Fund reserve is as
follows:
FY2019-20
Adopted
Budget
Approved
Fiscal Policy on
Reserves
Percentage
of Budget Amount
$5,886,967
Two months of Operating
Expenditures as recommended by
GFOA
16.7% $981,161
Should City Council desire to increase the General Fund Reserve, each additional
increase equates to, as shown in the examples below:
FY2019-20
Adopted
Budget
Potential increase
to Reserves
% of
Budget
Increase
Amount
Revised
Reserve
Amount
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1 $5,886,967 Increase of 1% 17.7% $60,832 $1,041,993
2 $5,886,967 Increase of 1.3% 18.0% $78,493 $1,059,654
3 $5,886,967 Increase of 2.3% 19.0% $137,363 $1,118,524
4 $5,886,967 Increase of 3.3 20.0% $196,232 $1,177,393
The purpose of this agenda item is for City Council to discuss and provide staff direction
as to whether the City Council desires to revise and/or amend the General Fund
Reserve levels from the two-month established contingency reserve. Should City
Council provide direction to revise and/or amend the existing Fiscal Reserve Policy,
staff will come back to City Council with a proposed Fiscal Policy for their approval
reflecting the approved revisions and/or adjustments.
FISCAL IMPACT:
As stated in Section II.E of the attached Fiscal Reserves policy, the policy establishes
reserve targets but does not authorize appropriation of funds. Specific appropriation of
funds into the various reserve accounts will be subject to the annual budget adoption
process or other City Council budgetary action.
Therefore, the City Council’s revision or adjustment of the Fiscal Reserves policy will
only establish the policy framework and target reserve levels; whereas appropriation of
funds to the reserve accounts will be subject to action in an agenda item and
subsequent annual budget adoption and appropriation processes. As such, there is no
fiscal impact associated with providing direction to staff to revise and/or adjust the Fiscal
Reserves policy.
ATTACHMENTS:
• Future Agenda Item Process Flow Chart (PDF)
• Reserve Policy 3.06 approved 11-16-2016 (PDF)
APPROVALS:
Cynthia A. Fortune Completed 01/22/2020 4:15 PM
Finance Completed 01/22/2020 4:15 PM
City Attorney Completed 01/23/2020 11:07 AM
City Manager Completed 01/24/2020 4:42 PM
City Council Pending 01/28/2020 6:00 PM
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Process for Council Members to Request
Items be Placed on Future Agendas
(1) Request Future Agenda Item
Contacting City Manager add
item to Section H (Requests for
Future Agenda Items by City
Council)
(2) Requested Item Added to
Section H
Topic introduced and voted on
By Council to Add to New
Business for discussion
Approved
Yes or No
(3) New Business
Item Scheduled Under New
Business for Council Discussion
and Direction to Staff
Direction
Provided
(4) New Business
Item Returns Under New Business for
Council Action
No Further Action
Neccessary
No Further Action
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City of Grand Terrace
Fiscal Policy Policy No. 3.06
Subject: Reserves Revision Date: 9/27/16
Page 1 of 4
I. PURPOSE AND SCOPE
To define the policy for establishing and maintaining cash reserves needed for prudent
financial management of the City.
II. POLICY
A. Introduction
The City will maintain cash balances to preserve the City’s credit worthiness and to adequately provide for:
1. Economic uncertainties, local disasters or catastrophic events, and other financial hardships or downturns in the local or national economy.
2. Contingencies for unforeseen operating needs.
3. Future debt service requirements.
4. Fixed asset replacements.
5. Cash flow requirements.
6. Legal requirements.
B. Budgetary Reserves
1. A contingency account will be budgeted each fiscal year in the Non-
Departmental cost center to provide for unanticipated expenditures of a
nonrecurring nature. Authorization to expend funds from this account will require approval of the City Manager.
2. A General Fund Contingency Reserve account will be established and maintained at the level recommended by the Government Finance Officers
Association of the United States & Canada (GFOA), which is a minimum of two months of regular General Fund operating revenues or expenditures (whichever is considered most predictable), to serve as a buffer against
unexpected local disasters or catastrophic events, and other financial hardships or downturns in the local or national economy. The City will use
General Fund operating revenues as the basis for establishing the two-
month reserve target.
C. Fund Balance Reserves
The City shall report fund balances in accordance with the Governmental Accounting Standards Board (GASB) Statement 54, which requires fund
balance to be classified in one of five categories as follows:
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Fiscal Policy Policy No. 3.06
Subject: Reserves Revision Date: 9/27/16
Page 2 of 4
· Non-spendable fund balance includes amounts that are not in a spendable form (inventory, for example) or are required to be
maintained intact (the principal of an endowment fund, for example).
· Restricted fund balance includes amounts constrained to specific
purposes by their providers (such as grant providers, bondholders, and higher levels of government) through constitutional provisions or
enabling legislation.
· Committed fund balance includes amounts that can be used only for the specific purposes determined by a formal action of the City
Council, the government's highest level of decision-making
authority. These funds include:
§ Fixed Asset Fund - funds may only be used for
equipment replacement of for the purchase of new equipment;
§ Community Benefits Fund - funds may only be used
for City Council approved grants to benefit the community;
§ Public Safety Services Fund - funds may only be used for
additional public safety services as determined by the City Manager and approved by City Council.
« Commitments may be changed or lifted only by City Council, the government taking the same formal action that imposed the
constraint originally.
· Assigned fund balance comprises amounts intended to be used by the government for specific purposes. Intent can be expressed by the governing body or by an official or body to which the
governing body delegates the authority. In governmental funds other than the general fund, assigned fund balance represents
the amount that is not restricted or committed. This indicates that
resources in other governmental funds are, at a minimum, intended to be used for the purpose of that fund.
· Unassigned fund balance is the residual classification for the
general fund and includes all amounts not contained in the other
classifications. Unassigned amounts are technically available for any purpose. If another governmental fund has a fund balance
deficit, then it will be reported as a negative amount in the
unassigned classification in that fund. Positive unassigned amounts will be reported only in the general fund.
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City of Grand Terrace
Fiscal Policy Policy No. 3.06
Subject: Reserves Revision Date: 9/27/16
Page 3 of 4
General Fund Contingency
The City shall maintain a committed General Fund contingency reserve equal
to two months of operating revenues. If the reserve level falls below the
minimum level, the City will seek to replenish fund balance within a reasonable timeframe.
The reserves will be used to provide for temporary financing of unanticipated extraordinary needs of an emergency nature, such as economic
uncertainties or a local disaster. Intended to act as a short-term solution to fiscal needs, the contingency reserve will be drawn down as the funding
source of last resort.
Authorization and Action to Commit Fund Balance
The City Council, as the government's highest level of decision-making authority, may commit fund balance for specific purposes pursuant to
constraints imposed by formal actions taken such as an ordinance or
resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use
through the same type of formal action taken to establish the
commitment. City Council action to commit fund balance needs to occur within the fiscal reporting period; however the amount can be determined
subsequently.
Authorization and Action to Assign Fund Balance
The City Council may assign fund balance to a specific purpose in relation to this fund balance policy. By resolution, the Council has also authorized
the City Manager and/or Finance Director to assign fund balance. Assignments by the City Manager or Finance Director do not require formal
action by the City Council; however, each assignment must be approved by
either of the authorized officials before the item can be presented in the financial statements.
D. Use of and Replenishment of General Fund Contingency Reserve
1. The General Fund Contingency Reserve is intended to act as a buffer to
protect service levels during difficult economic times or as a result of catastrophic events that require significant unanticipated expenditures.
2. During such times, or as a result of such events, the General Fund Contingency Reserve may decline below the target level (two months of
operating revenues) with City Council authorization. Once the difficult fiscal times pass, the General Fund Contingency Reserve will be replenished to its target level as soon as funding permits, as determined
by the City Council through the annual budget process.
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City of Grand Terrace
Fiscal Policy Policy No. 3.06
Subject: Reserves Revision Date: 9/27/16
Page 4 of 4
3. Appropriate sources for replenishment of the General Fund Contingency
Reserve include one-time revenues and other sources not necessary to support ongoing services.
E. Policy Versus Appropriation of Reserves
This policy establishes target reserve levels for the prudent financial management of the City. However, specific appropriation of funds into the various reserve accounts will be subject to the annual budget adoption process
or other City Council budgetary action.
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AGENDA REPORT
MEETING DATE: January 28, 2020 Council Item
TITLE: Review the City of Grand Terrace California Public
Employees Retirement System (CalPERS) Unfunded
Accrued Liability
PRESENTED BY: Cynthia Fortune, Assistant City Manager
RECOMMENDATION: Receive and file the City’s Report on California Public
Employee Retirement System (CalPERS) Unfunded Accrued
Liability and/or Provide Staff Direction.
2030 VISION STATEMENT:
This staff report supports City Council Goal #1, “Ensure Our Fiscal Viability,” through
the continuous monitoring of revenue receipts and expenditure disbursements against
approved budget appropriations.
BACKGROUND:
On February 12, 2019 the City approved a process, which adds Section H to Council
Agendas entitled Future Agenda Items Request by Council Members. The process
provides members of the Council an opportunity to recommend a topic be heard at a
future Council meeting (Exhibit A). Once the item is placed on the Future Agenda Item
section of the agenda and approved by Council, the item is placed on a future agenda
under new business, where Council will deliberate and provide staff direction. If staff
receives direction, the item will return with recommendations based on Council’s
directions and consistency with City Council’s priorities.
On November 12, 2019, Council Member Robles requested that the City Council be
provided with more detailed information regarding the City’s Unfunded Accrued Liability.
DISCUSSION:
The City contracts with the California Public Employees’ Retirement System (CalPERS)
to provide employee retirement benefits. The City has three (3) retirement tiers with
CalPERS:
Table 1
Hire Date Category Retirement Parameters Retirement
Benefit
1 Prior to 01/01/2013 Tier I Single highest year
compensation 2.7% at age 55
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2 On or after 01/01/2013 and are
existing CalPERS members Tier II Three highest years
average compensation 2.0% at age 60
3 On or after 01/01/2013 and are
NOT CalPERS members PEPRA Three highest years
average compensation 2.0% at age 62
Every year, CalPERS reviews the amounts received from the City. If the contribution
amounts or interest earned do not meet the expected projections, the difference is
considered the unfunded liability. The liability is then amortized over a 30-year period.
On April 26, 2016, the City Council was provided with an overview of the City’s
Unfunded Accrued Liability (UAL) (Exhibit A). The report was intended to provide the
City Council with an overview of the City’s pension/retirement plan for its employees,
including the unfunded liability. Specifically, it detailed the following:
1. Existing retirement tiers and their parameters;
2. Retirement benefits of each tier;
3. Detailed breakdown of unfunded accrued liability amounts paid to CalPERS
annually;
4. Funding formula for retirement plans;
5. Benefit calculation; and
6. Value of retirement plans.
The purpose of this agenda item is to provide the City Council with updated information
regarding the City’s UAL. Table 2 summarizes the City’s annual contribution for the
current fiscal year and projections for the next two (2) fiscal years based on the
Actuarial Valuation Reports provided by CalPERS:
Table 2
Fiscal Year Tier I Tier II PEPRA Total
by Year
1 2019-20 $431,929 $5,442 $7,771 $445,142
2 2020-21 $471,067 $5,918 $8,304 $485,289
3 2021-22 $518,000 $6,500 $8,900 $533,400
3-year Total by Tier $1,420,996 $17,860 $24,975 $1,463,831
Normal Accrued Liability $15,939,705 $362,765 $278,226 $16,580,696
Plan’s Value of Assets ($10,755,685) ($337,204) ($247,100) ($11,339,989)
UAL Balance $5,184,020 $25,561 $31,126 $5,240,707
Funded Ratio 67.5% 92.9% 88.8% 68.4%
The City has met, and continues to meet, its annual retirement obligation payments,
both for normal retirement contribution amounts and the annual required unfunded
liability amounts. These amounts are incorporated into the City’s operating budget
expenditures and are approved by the City Council during the budget process each
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year.
FISCAL IMPACT:
There is no fiscal impact associated with reviewing the City’s Unfunded Accrued
Liabilities.
ATTACHMENTS:
• CalPERS Unfunded Accrued Liability Staff Report 04-26-2016 with attachments
(PDF)
APPROVALS:
Cynthia A. Fortune Completed 01/23/2020 6:34 PM
Finance Completed 01/23/2020 6:34 PM
City Attorney Completed 01/24/2020 9:26 AM
City Manager Completed 01/24/2020 4:42 PM
City Council Pending 01/28/2020 6:00 PM
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AGENDA REPORT
MEETING DATE: April 26, 2016 Council Item
TITLE: Overview of the City of Grand Terrace California Public Employees Retirement System (CalPERS) Unfunded
Accrued Liability
PRESENTED BY: Cynthia Fortune, Finance Director
RECOMMENDATION: Receive and file the Overview of the City’s California Public Employee Retirement System (CalPERS) Unfunded Accrued Liability report.
2030 VISION STATEMENT:
This staff report supports City Council Goal #1, “Ensure Our Fiscal Viability,” through
the continuous monitoring of revenue receipts and expenditure disbursements against
approved budget appropriations. This report is intended to provide City Council with an overview of the City’s pension /
retirement plan for its employees, including the unfunded liability. The City has met and
continues to meet its annual retirement obligation payments, both for normal retirement
contribution amounts and the annual required unfunded liability amounts. These
amounts are incorporated into the City’s operating budget expenditures and are approved by City Council during the budget process.
Underfunding does not mean the plan is unable to meet its current obligations. A
pension plan requires contributions to fund benefits currently being accrued (normal
cost) and to eliminate any shortfall between plan assets and accrued liabilities (called unfunded accrued liability).
As long as a plan meets the funding needs of the system over the long term, the
unfunded actuarial liability will not negatively impact the long term funding progress of
the retirement system.
BACKGROUND:
The City entered into a contract with the California Public Employees’ Retirement System (CalPERS) on January 20, 1990 to provide employee retirement benefits.
Since then, this contract has been amended several times and currently provides
several retirement benefits:
1. Existing City employees who were hired prior to January 1, 2013: a) A retirement benefit of 2.7% at age 55; based on
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b) A single highest year compensation period;
c) Referred to as Classic Members – Tier I.
2. Employees hired on or after to January 1, 2013 who are already members of
CalPERS (e.g. hired from another public agency which contracts with CalPERS
for retirement benefits):
a) A retirement benefit of 2.0% at age 60; based on b) A three-year average compensation period;
c) Referred to as Classic Members – Tier II.
3. Employees hired on or after to January 1, 2013 who are not prior members of
CalPERS: a) A retirement benefit of 2.0% at age 62; based on
b) A three-year average compensation period;
c) Referred to as PEPRA (Public Employees’ Pension Reform Act) Members.
Table 1 summarizes the retirement benefits and contribution rates paid to CalPERS based on the Actuarial Valuation Report provided by CalPERS for FY2015-16.
CalPERS Valuation Reports are based on financial data for the fiscal year ending two
years ago. For pension information including the employer required contribution rate for
FY2015-16, the financial data used was for the period ending June 30, 2013. There is a
two-year lag between the Valuation Report and the Contribution Fiscal Year. The two-year lag is necessary due to the amount of time needed by CalPERS to extract and
review the membership and financial data and provide public agencies with their
employer contribution rates prior to the start of the fiscal year.
Table 1
Benefit
Level
Retirement
Benefit
Compensation
Period
Effective
Date
Employer
Rate
Employer Paid
(employee rate)
Employee
Rate
Tier I 2.7% @ 55 Single Highest
Year 01/20/1990 29.359% 1.418% 6.582%
Tier II 2.0% @ 60 Three-Year
Average 01/01/2013 6.709% 0.000% 7.000%
PEPRA 2.0% @ 62 Three-Year
Average 01/01/2013 6.237% 0.000% 6.250%
The highlighted employer rate paid by the City to CalPERS for FY2015-16 consisted of
the following in Table 2:
Description Rate Employer Rate Amount
Tier I (2.7% @ 55)
• Employer Normal Contribution cost 10.298% $154,447
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• Plan Payment on Amortization
bases (Unfunded Accrued Liability)
Amortization of Side Fund (inclusion into the
CalPERS Risk Pool)
9.245% $138,653
Share of Pool Unfunded Accrued Liability prior to 2013 (Plan changes,
assumption changes, membership changes, plan projected benefits for its
members)
8.020% 120,284
Gain or Loss (for financial year) 1.136% 17,031
Total Unfunded Liability 18.401% 275,968
• Surcharge for Class 1 Benefits (e.g. One-Year Final
Compensation)
0.660% 9,899
TOTAL TIER I 29.359% $440,314
Tier II (2.0% @ 60)
• Employer Normal Contribution cost 6.709% $0*
• Plan Payment on an Amortization basis 0% 0
TOTAL TIER II 6.709% $0
PEPRA (2.0% @ 62)
• Employer Normal Contribution cost 6.237% $2,576**
• Plan Payment on an Amortization basis 0% 0
TOTAL PEPRA 6.237% $2,576
Note:
*Table 2 above for FY2015-16 does not show any liability for Tier II since the financial data used was FY2012-13, the City did not hire any classic members from January 1, 2013 to June 30, 2013.
**PEPRA shows the employer costs based on new hires between January 1, 2013 and June 30, 2013.
Financial data for that time period showed the City hiring one Child Care employee.
DISCUSSION:
PLAN FUNDING
Funding for local retirement plans is based on the formula below:
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Contributions + Investment
Income = Benefits Paid + Expenses
(employer and
employee
contributions: 10.298% +
1.418% +
6.582% +
0.660% =
18.298%)
(CalPERS
Projected rate
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(Retirement
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(CalPERS
administrative expenditures
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C + I = B + E
The left side (plan income) must balance with the right side (plan benefits and
expenses). On the left side, for example, when the “I” (investment income) decreases
because of a downturn in the stock market (as experienced in 2008 and 2009), the “C”
(contributions) increases, thus requiring more in contributions from either the employer, employee or both.
If the employees’ contribution rate is fixed (at this time, the City employee rate is fixed at
6.582%), then the increase is borne completely by the City. Likewise, on the right side, if
the promised benefits are increased (enhanced) or a pay raise is approved, the “B” (benefits) increases and the formula is out of balance. This scenario will also require
additional contributions on the left side to balance the formula.
The CalPERS Actuarial Office (actuary) issues an Annual Valuation Report to all public
agencies that have contracts with CalPERS. This report analyzes:
• the financial consequences of risk of all the plans;
• estimates the true cost of the plan; and
• determines the systematic contributions needed to meet that cost.
With the current defined benefit plan, the costs are prefunded, thus the calculations are
more complicated than the simple formula would indicate.
BENEFIT CALCULATION
When future benefits of an employee are estimated, the actuary estimates the
individual’s pension benefit, taking into consideration several factors which include the
following:
1. life expectancy,
2. wage increases,
3. investment returns of the plan,
4. years of life after retirement, and 5. inflation.
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Using these data (based on plan experience studies), the actuary calculates the present value of future benefits the plan will be required to pay to its current participants: those
still working who will retire in the future, retirees, and those who have terminated
employment but have not yet begun drawing benefits. The actuarial present value is
today’s cost of tomorrow’s retirement payout.
After determining the present value of future benefits for all plan participants, the
actuary allocates it to determine the actuarial cost of the retirement plan. This actuarial
cost is the difference between the sum of all benefits, refunds, and expenses paid out
[right side of the formula], and the assets of the plan [left side of the formula]. The
contribution allocation is broken into two categories: normal cost and accrued liability.
Normal Cost – benefits and expenses that have accrued during the given year
and are expected to be accrued annually in the future with no changes to
promised benefits.
Accrued Liability – amount of money needed to pay for benefits (earned so far
plus benefits not yet earned) based on a member’s service. This amount is
amortized to build the necessary assets over time to cover the liabilities.
CalPERS, like most local plans, use the entry-age normal cost method to determine normal costs. Each employee has his/her present value of future benefits allocated on a
level basis over the service of the individual between entry age and assumed exit age.
An illustration will be provided later in this report.
PLAN VALUE
Once the actuarial cost of the plan is determined, the market value of the plan’s assets
is calculated. Market value is the price at which all securities can be sold as of a certain
date. It is smoothed over several years (usually five years) to address steep fluctuations in gains or losses, and only a portion of unrealized gains or losses is recognized in a
single year.
Now that the plan’s assets have been determined and measured, they can be
compared with the plan’s accrued liability.
• If the assets equal or exceed the liabilities, the plan is considered to be fully
funded.
• If the assets are less than the accrued liabilities, then the plan has what is called
an unfunded accrued liability.
Underfunding does not mean the plan is unable to meet its current obligations. It is similar to having a house mortgage and the payments are affordable and paid on schedule.
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A plan which is 100% funded still is required to contribute to the normal cost. Future contributions and investment earnings are needed to fund benefit obligations as they
build in future years. A pension plan requires contributions both to fund benefits
currently being accrued (normal cost) and to eliminate any shortfall between plan assets
and accrued liabilities (called unfunded accrued liability).
UNFUNDED ACCRUED LIABILITY
The unfunded accrued liability (UAL) comes about because past assumptions have not
been met. Each year the plan members and employees contribute to the normal cost
component of the retirement plan (“C” of the formula).
The employer is also responsible for paying down the unfunded actuarial liability, which
is amortized usually over a 30-year period. It’s like having 30-mini mortgages – each
year one is paid off and another is added. These mini-mortgages are based on the
plan’s gains/losses during the year, actuarial assumption changes based on experience studies, and plan amendments (changes in benefits).
The plan’s actuarial report each year describes the calculation for the plan contribution
costs. The City pays down the unfunded liability each year – over the 30-years that
these costs are amortized. If all assumptions are realized, the amortization payment will cease to exist in 30 years and the minimum required contribution will be just the normal
cost.
Most retirement systems saw deterioration in funding levels due to the market downturn
experienced from 2000-2003 and 2008-2009. This market downturn resulted in increases in contributions by the employer and a decline in the funding assets of the
plan. As the market rebounds, the increased value of the assets will positively affect the
total assets and reduce the unfunded liability.
The recent upturn in the stock market will also help the plan to recover the losses experienced in 2000-2003 and 2008-2009. For example, most likely, the plan’s market
value of assets declined in 2009, however, in the last couple of years, the market value
gained. These fluctuations are smoothed over 30 years – so that no one year causes
wild swings in the City’s contribution.
As long as a plan meets the funding needs of the system over the long term, the
unfunded actuarial liability will not negatively impact the long term funding progress of
the retirement system.
In order to provide City Council with a better understanding of pension costs and contributions, definitions or each category listed in Table 2 above are described in detail
below:
1. Employer Normal Contribution Cost ($154,447):
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This is the employers’ annual contribution requirement based on a defined benefit
plan. The goal is to have enough funds to pay for an employee’s future benefit payments by the time they retire. For Tier I, the defined benefit plan of 2.7% at 55
has a normal contribution rate of 18%. The City’s (employer) annual normal cost
contribution is approximately 10% of payroll with the employee paying the remaining
8%. In the City’s case, the employee only pays 6.582% with the City paying the
1.418% of the employee share (often referred to as employer paid member contribution – EPMC).
Table 3 below provides the detail of the annual normal contribution rate of 18.958%.
Benefit Level Employer
Rate
Employer Normal Contribution Cost 10.298%
Employer Paid Member Contribution 1.418%
Employee Rate 6.582%
Surcharge (Class 1 Benefit) 0.660%
TOTAL 18.958%
2. Amortization of Side Fund ($138,653):
In June 2003, risk pooling was implemented for public agencies which had less than
100 members in CalPERS. Risk pooling is the process of combining assets and
liabilities across employers to produce large, risk sharing pools. Risk sharing pools dramatically reduce or eliminate large fluctuations in an employer's retirement contribution rate caused by unexpected demographic events.
Sections 20840, 20841, and 20842 of the California Government Code allow the
CalPERS Board to create risk pools and mandate public agency participation in the pools. Risk pooling for public agencies went into effect with the June 30, 2003, first-
pooled valuations. The first-pooled contribution rates became effective July 1, 2005.
Pools were created according to their benefit formula and employee classification
(miscellaneous or safety).
When the City joined the risk pool, a side fund was created to account for the
difference between the funded status of the pool and the funded status of the City’s
plan. At that time, the City’s funded status was lower than that of the pool.
For example, when the City joined the Risk Pool in 2003, the pool may have been 95% funded; however, the City at the time may have been at the 75% level, which
was the level where most public agencies were at the time. The Side Fund (loan)
was created to get the City to the 95% funding level to make sure the City pays for
its liabilities. The additional 20% would be paid/amortized over a period of time
through an annual required payment.
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The large investment loss in 2008-2009 has caused the funded status of all risk pools to fall from their initial 95% - 100% funded levels to levels now ranging
between 70% and 80%. Employers in the risk pools are required to pay toward the
unfunded liability that resulted from the large investment loss.
Remaining Outstanding Balance of the City’s Side Fund, FY2015-16: $925,545 Remaining amortization period: 8 years
3. Share of the Pool’s Unfunded Accrued Liability prior to 2013 ($120,284):
The Accrued Liability is the value of benefits earned by members currently in the
plan, for their past service and their future benefits.
The amount of unfunded liability calculated for the City’s share takes into
consideration many parameters:
a) Any changes to the defined benefit plan, for example: in September 2006,
the City revised its plan for Tier I members from 2.0% at 55 to 2.7% at 55; b) Changes in assumptions, such as decreasing the mortality rate since most
members are living longer;
c) The large investment loss in 2008-2009 has caused the funded status of all
risk pools to fall from their initial 95% - 100% funded levels to levels now
ranging between 70% and 80%. Employers in the risk pools are required to pay toward the unfunded liability that resulted from the large investment loss
even if they contracted with CalPERS following this event.
Remaining Balance of the Unfunded Accrued Liability, FY2015-16: $1,642,376
Remaining amortization period: 21 years
4. Gain or Loss (financial year) ($17,031):
CalPERS assumes a discount rate/rate of return on investments of 7.5% annually.
There have been times when the rates of return have been higher and lower (as
experienced in 2008-2009. Employers in the risk pools are required to pay toward the unfunded liability that results from the investment losses.
Remaining Balance of the Gain/Loss, FY2015-16: $1,210,878
Remaining amortization period: 30 years
5. Surcharge for Class 1 Benefits ($9,899): These are optional benefit provisions
upon establishment of the risk pools. Class 1 benefits have been identified as the
more expensive ancillary benefits. Below is a sample list of benefits provided by the
City:
a) One-year final compensation; b) Employer paid member contribution (1.418%); and
c) Cost-of-living adjustment based on the Consumer Price Index (CPI) for all
United States cities. The standard cost-of-living adjustment (COLA) is a
maximum of 2% per year. If the CPI registers a lower rate of inflation,
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retirees will receive a lower percentage.
ILLUSTRATION
To illustrate how the rates, benefits and liabilities are calculated, assume the following
for a 25-year old person who just got employed with the City and the following assumptions are established to calculate for retirement benefits:
1. Employee is expected to work for 30 years with the City;
2. Will retire at age 55 with 30 years of service;
3. Employee’s starting salary is $45,000; 4. Employee received a 5% increase in Year 10 of service & another 5% increase in
Year 20 of service;
5. Employee’s last year of service salary is $49,141.13;
6. The total Normal Cost Contribution rate (both employer and employee
contribution) is 18.958%; 7. The defined benefit plan is 2.7% at 55 which includes the following:
• Highest year of compensation = $49,141.13 (based on two 5% increases);
• COLA is provided for retirement at 2% annually;
• Employee’s expected life is 30 years of retirement.
Based on the factors above, the following exhibits provide detailed information on the
rates and benefits CalPERS calculates for the retirement plan.
1. Exhibit A = calculates total retirement benefits to be paid out to the employee
over a 30-year period of $1,614,784.59.
2. Exhibit B = calculates the normal contribution amount (18.958%) over the 30 years the employee works for the City and the corresponding discount
rate/interest rate of 7.5% as projected by CalPERS. Contribution amounts and
interest rate received total $574,566.75.
3. Exhibit C = calculates the total contribution received from the City, assumes an investment return of 7.5%, so that the starting amount of $574,566.75 at the start
of retirement will earn enough interest sufficient to pay the employee the annual
retirement amounts as shown in Exhibit A.
Every year, CalPERS reviews the amounts received and if the contribution amounts do not earn a 7.5% interest, the difference is considered the unfunded liability. The liability
is then amortized over a 30-year period.
RECOMMENDATION:
Staff recommends that City Council receive and file the report on the Overview of the
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City of Grand Terrace California Public Employees Retirement System (CalPERS)
Pension.
FISCAL IMPACT:
There is no fiscal impact associated with receiving and filing the report.
Below reflects the City’s Normal Contribution Costs and Unfunded Accrued Liability
(UAL) allocation by fund. As mentioned earlier in the report, the total retirement
payments, the City has met and continues to meet all its annual retirement obligation
payments. As long as a plan meets the funding needs of the system over the long term, the unfunded actuarial liability will not negatively impact the long term funding progress
of the retirement system.
Table 4 – TIER I Normal Contribution Costs
FUND June 30, 2015
Payment
June 30, 2016
Payment
June 30, 2017
Payment
Fund: 09 – Child Care Fund $83,609 $69,861 $54,474
Fund: 10 – General Fund 86,534 72,305 56,380
Fund: 16 – Gas Tax Fund 5,301 4,430 3,454
Fund: 32 – Successor Agency 9,397 7,851 6,122
TOTAL $184,841 $154,447 $120,430
Table 5 – TIER I Unfunded Accrued Liability
FUND June 30, 2015 Payment June 30, 2016 Payment June 30, 2017 Payment
Fund: 09 – Child Care Fund $120,395 $131,383 $146,421
Fund: 10 – General Fund 124,607 135,980 151,544
Fund: 16 – Gas Tax Fund 7,634 8,331 9,284
Fund: 32 – Successor Agency 13,531 14,766 16,456
TOTAL (One-Time Payment) $266,167 $290,460 $323,705
TOTAL (in 12 monthly Payments) $275,968 $301,156 $335,625
ATTACHMENTS:
• Exhibit-A: Retirement Benefits (PDF)
• Exhibit-B: Normal Contribution Amounts (PDF)
• Exhibit-C: Annual Retirement Payouts (PDF)
APPROVALS:
Cynthia A. Fortune Completed 04/21/2016 10:04 AM
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Finance Completed 04/21/2016 10:04 AM
City Attorney Completed 04/21/2016 1:59 PM
City Manager Completed 04/21/2016 4:32 PM
City Council Completed 04/26/2016 6:00 PM
RESULT: APPROVED [4 TO 0]
MOVER: Darcy McNaboe, Mayor
AYES: Darcy McNaboe, Sylvia Robles, Jackie Mitchell, Bill Hussey ABSTAIN: Doug Wilson
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City of Grand Terrace
Defined Benefit Plan - 2.7% at 55
Highest Annual Salary at $49,141.13
Annual COLA of 2%
Formula: 2.7% X 30 X $49,141.13 = $39,804.32
Annual Amount
Year 1 $39,804.32
Year 2 40,600.41
Year 3 41,412.42
Year 4 42,240.67
Year 5 43,085.48
Year 6 43,947.19
Year 7 44,826.13
Year 8 45,722.65
Year 9 46,637.10
Year 10 47,569.84
Year 11 48,521.24
Year 12 49,491.66
Year 13 50,481.49
Year 14 51,491.12
Year 15 52,520.94
Year 16 53,571.36
Year 17 54,642.79
Year 18 55,735.65
Year 19 56,850.36
Year 20 57,987.37
Year 21 59,147.12
Year 22 60,330.06
Year 23 61,536.66
Year 24 62,767.39
Year 25 64,022.74
Year 26 65,303.19
Year 27 66,609.25
Year 28 67,941.44
Year 29 69,300.27
Year 30 70,686.28
TOTAL $1,614,784.59
EXHIBIT A
Retirement Year
REQUIRED RETIREMENT PAYOUTS
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City of Grand Terrace
Starting Salary : $45,000
Increase #1: 4.5% in Year 10
Increase #2: 4.5% in Year 20
City Normal Contribution Rate: 18.958%
Discount/Interest Rate: 7.5%
105%
Annual Salary
Normal
Contribution
Amount
Accumulated
Amount
Interest Earned
on Accumulated
Balance
Year 1 45,000.00 8,531.10 8,531.10 639.83
Year 2 45,000.00 8,531.10 17,062.20 1,279.67
Year 3 45,000.00 8,531.10 25,593.30 1,919.50
Year 4 45,000.00 8,531.10 34,124.40 2,559.33
Year 5 45,000.00 8,531.10 42,655.50 3,199.16
Year 6 45,000.00 8,531.10 51,186.60 3,839.00
Year 7 45,000.00 8,531.10 59,717.70 4,478.83
Year 8 45,000.00 8,531.10 68,248.80 5,118.66
Year 9 45,000.00 8,531.10 76,779.90 5,758.49
Year 10 47,025.00 8,915.00 85,694.90 6,427.12
Year 11 47,025.00 8,915.00 94,609.90 7,095.74
Year 12 47,025.00 8,915.00 103,524.90 7,764.37
Year 13 47,025.00 8,915.00 112,439.90 8,432.99
Year 14 47,025.00 8,915.00 121,354.90 9,101.62
Year 15 47,025.00 8,915.00 130,269.90 9,770.24
Year 16 47,025.00 8,915.00 139,184.90 10,438.87
Year 17 47,025.00 8,915.00 148,099.90 11,107.49
Year 18 47,025.00 8,915.00 157,014.90 11,776.12
Year 19 47,025.00 8,915.00 165,929.90 12,444.74
Year 20 49,141.13 9,316.18 175,246.08 13,143.46
Year 21 49,141.13 9,316.18 184,562.26 13,842.17
Year 22 49,141.13 9,316.18 193,878.44 14,540.88
Year 23 49,141.13 9,316.18 203,194.62 15,239.60
Year 24 49,141.13 9,316.18 212,510.80 15,938.31
Year 25 49,141.13 9,316.18 221,826.98 16,637.02
Year 26 49,141.13 9,316.18 231,143.16 17,335.74
Year 27 49,141.13 9,316.18 240,459.34 18,034.45
Year 28 49,141.13 9,316.18 249,775.52 18,733.16
Year 29 49,141.13 9,316.18 259,091.70 19,431.88
Year 30 49,141.13 9,316.18 268,407.88 20,130.59
TOTAL $268,407.88 $306,159.03
Total Amount contributed $268,407.88
Total Interest Earned $306,159.03
$574,566.91
Service Year
EXHIBIT B
NORMAL CONTRIBUTION AMOUNTS AND INTEREST EARNED
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City of Grand Terrace
Annual Payout: $39,804.32
Annual COLA: 2%
Total Contribution Amount with Interest Earned: $574,566.91
105%
Contribution
Amount
Interest
Earned on
Balance Sub-Total
Retirement
Payout to
Employee Balance
Year 1 $574,566.91 $43,092.52 $617,659.43 ($39,804.32)$577,855.11
Year 2 577,855.11 43,339.13 621,194.24 ($40,600.41)580,593.83
Year 3 580,593.83 43,544.54 624,138.37 ($41,412.42)582,725.95
Year 4 582,725.95 43,704.45 626,430.40 ($42,240.67)584,189.73
Year 5 584,189.73 43,814.23 628,003.96 ($43,085.48)584,918.48
Year 6 584,918.48 43,868.89 628,787.37 ($43,947.19)584,840.18
Year 7 584,840.18 43,863.01 628,703.19 ($44,826.13)583,877.06
Year 8 583,877.06 43,790.78 627,667.84 ($45,722.65)581,945.19
Year 9 581,945.19 43,645.89 625,591.08 ($46,637.10)578,953.98
Year 10 578,953.98 43,421.55 622,375.53 ($47,569.84)574,805.69
Year 11 574,805.69 43,110.43 617,916.12 ($48,521.24)569,394.88
Year 12 569,394.88 42,704.62 612,099.50 ($49,491.66)562,607.84
Year 13 562,607.84 42,195.59 604,803.43 ($50,481.49)554,321.94
Year 14 554,321.94 41,574.15 595,896.09 ($51,491.12)544,404.97
Year 15 544,404.97 40,830.37 585,235.34 ($52,520.94)532,714.40
Year 16 532,714.40 39,953.58 572,667.98 ($53,571.36)519,096.62
Year 17 519,096.62 38,932.25 558,028.87 ($54,642.79)503,386.08
Year 18 503,386.08 37,753.96 541,140.04 ($55,735.65)485,404.39
Year 19 485,404.39 36,405.33 521,809.72 ($56,850.36)464,959.36
Year 20 464,959.36 34,871.95 499,831.31 ($57,987.37)441,843.94
Year 21 441,843.94 33,138.30 474,982.24 ($59,147.12)415,835.12
Year 22 415,835.12 31,187.63 447,022.75 ($60,330.06)386,692.69
Year 23 386,692.69 29,001.95 415,694.64 ($61,536.66)354,157.98
Year 24 354,157.98 26,561.85 380,719.83 ($62,767.39)317,952.44
Year 25 317,952.44 23,846.43 341,798.87 ($64,022.74)277,776.13
Year 26 277,776.13 20,833.21 298,609.34 ($65,303.19)233,306.15
Year 27 233,306.15 17,497.96 250,804.11 ($66,609.25)184,194.86
Year 28 184,194.86 13,814.61 198,009.47 ($67,941.44)130,068.03
Year 29 130,068.03 9,755.10 139,823.13 ($69,300.27)70,522.86
Year 30 70,522.86 5,289.21 75,812.07 ($70,686.28)5,125.79
TOTAL PAYOUT ($1,614,784.59)
EXHIBIT C
ANNUAL RETIREMENT PAYOUTS
Retirement
Year
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AGENDA REPORT
MEETING DATE: January 28, 2020 Council Item
TITLE: Amend Annual Budget Guidelines Effective Immediately to
Reinstate Staff Merit Increases (Which Would Cost Up to
$16,000 for the Current Fiscal Year) and Add Language to
Review and Update City Council Salary
PRESENTED BY: G. Harold Duffey, City Manager
RECOMMENDATION: Review and Amend the Annual Budget Guidelines to Take
Effect Immediately to:
1. Reinstate staff merit increases (where for fiscal year
2019-20 the merit increases are approximately $16,000 total
and will be absorbed within the current budget without
additional appropriations); and
2. Add language to review and possibly update the City
Council salary, as permitted by state law, as part of the
annual budget process.
2030 VISION STATEMENT
This staff report supports our core values Honest and Integrity, Mutual Respect and
Positive and Productive Work Environment.
2019-2020 PRIORITY PROJECTS
This report supports the City Council’s June 12, 2019 approval of identified Priority
Projects for Fiscal Year 2019-2020 (Attachment I). The City Manager’s Office was
tasked with a review of Benefits and Compensation (High Priority) and the
reinstatement of Merit Increases (Top Priority).
BACKGROUND:
In preparation for the City’s annual budget, staff provides Council with a memo outlining
the process and budget guidelines they would like the Council to approve. The Budget
Guidelines sets the schedule of the budget and informs the Council of the approach
staff will use in the development of the Budget.
• From 2012 thru 2016 the Budget Guidelines included a 36-hour work week,
which amounted to a 10% reduction in pay and no merit or cost of living
adjustments (cola) (Attachment II).
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• In 2017-18 the Budget Guidelines included the adoption of a 40-hour work week
and a one-time merit increase for qualifying employees and no cola increases
(Attachment III).
• In 2018-19 was the year the City adopted a 2-year budget and the Budget
Guidelines included the adoption of a 40-hour work week and a one-time merit
increase for qualifying employees and no COLA increases. During the second
year of the budget (2019-20), the City Council increased the benefit plan by
$50.00 per month and no merit increase or COLA adjustments were allowed
(Attachment IV).
DISCUSSION:
Staff proposes two amendments to the budget guidelines which would become effective
immediately: 1) removal of the language that no merit increases are allowed; and 2)
addition of language that the City Council review City Council salary as part of the
annual budget process.
With respect to the first issue, the City experienced significant employee turnover at the
end of last fiscal year. The City conducted exit interviews and a consistent theme
emerged. City employees felt over worked and under paid. While most of the
employees enjoyed working for the City, they were able to gain new employment in
other organizations for higher wages with less responsibility (more than one employee
responsible for tasks, working with team members in larger organizations).
In order to try and retain existing employees, staff recommends the City Council remove
language from the budget guidelines that no merit increases are allowed; thereby
reinstating merit increases as part of the budget guidelines.
Merit increases are a standard practice employer’s use to move employees though their
salary range when they receive a satisfactory evaluation. There are six employees
currently eligible to receive a merit increase. The City Manager, or his designee, would
implement the merit increase program. For the 2019-20 fiscal year, the total cost for the
merit increases for the six employees will be approximately $16,000 and would be
absorbed within this year’s budget without additional appropriations.
With respect to the second item, staff is recommending that the City Council review the
City Council salary, and consider changes thereto, during the annual budget process.
The current compensation for the Council has not changed since the incorporation of
the City 41 years ago.
Salary for a city council in a general law city is governed by California Government
Code Section 36516 (Attachment V). As set forth therein, the salary may be amended
and is based on the population of the jurisdiction.
The inclusion of Council Compensation in the Budget Guidelines has no fiscal impact on
this year’s budget because any change in salary could not take effect until after the next
municipal election (Attachment VI).
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FISCAL IMPACT:
The Budget Guidelines are discussed annually, and any fiscal impact associated with
ongoing fiscal impacts associated from actions taken in this staff report will be evaluated
during the annual budget process.
ATTACHMENTS:
• Attachment I - Priority Projects for FY 2019-2020 (PDF)
• Attachment II - 2012-2016 Budget Guidelines (PDF)
• Attachment III - 2017-18 Budget Guidellines (PDF)
• Attachment IV - 2018-2020 Budget Guidelines (PDF)
• Attachment V - Gov Code Section 36516 (PDF)
• Attachment VI - LOCC Council Salaries and Benefits (PDF)
APPROVALS:
G. Harold Duffey Completed 01/24/2020 1:25 PM
City Attorney Completed 01/24/2020 5:12 PM
Finance Completed 01/24/2020 5:15 PM
City Manager Completed 01/24/2020 5:15 PM
City Council Pending 01/28/2020 6:00 PM
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H.10.a
Packet Pg. 103
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H.10.a
Packet Pg. 104
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H.10.a
Packet Pg. 105
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H.10.b
Packet Pg. 106
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H.10.b
Packet Pg. 107
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H.10.b
Packet Pg. 108
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H.10.b
Packet Pg. 109
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H.10.c
Packet Pg. 110
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H.10.d
Packet Pg. 111
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H.10.d
Packet Pg. 112
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H.10.d
Packet Pg. 113
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H.10.d
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H.10.d
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H.10.d
Packet Pg. 116
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H.10.d
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H.10.d
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H.10.d
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H.10.d
Packet Pg. 120
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H.10.d
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H.10.d
Packet Pg. 122
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H.10.e
Packet Pg. 123
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H.10.f
Packet Pg. 124
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H.10.f
Packet Pg. 125
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H.10.f
Packet Pg. 126
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H.10.f
Packet Pg. 127
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H.10.f
Packet Pg. 128
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H.10.f
Packet Pg. 129
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H.10.f
Packet Pg. 130
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H.10.f
Packet Pg. 131
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H.10.f
Packet Pg. 134
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H.10.f
Packet Pg. 135
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H.10.f
Packet Pg. 136
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Packet Pg. 137
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Packet Pg. 138
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Packet Pg. 139
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Packet Pg. 140
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Packet Pg. 141
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Packet Pg. 142
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Packet Pg. 143
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Packet Pg. 144
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Packet Pg. 145
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Packet Pg. 146
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Packet Pg. 147
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Packet Pg. 148
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Packet Pg. 149
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