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04/12/2022CITY OF GRAND TERRACE CITY COUNCIL AGENDA ● APRIL 12, 2022 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, please complete a Request to Speak card located at the front entrance and provide 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. If you would like to participate telephonically and speak on an agenda item, you can access the meeting by dialing the following telephone number and you will be placed in the waiting room, muted until it is your turn to speak: *67 1-669-900-9128 Enter Meeting ID: 883 9524 4222 Password: 313849 The City wants you to know that you can also submit your comments by email to ccpubliccomment@grandterrace-ca.gov. To give the City Clerk adequate time to print out your comments for consideration at the meeting, please submit your written comments prior to 5:00 p.m.; or if you are unable to email, please call the City Clerk’s Office at (909) 824-6621 x230 by 5:00 p.m. If you wish to have your comments read to the City Council during the appropriate Public Comment period, please indicate in the Subject Line “FOR PUBLIC COMMENT” and list the item number you wish to comment on. Comments that you want read to the City Council will be subject to the three (3) minute time limitation (approximately 350 words). 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. Agenda Grand Terrace City Council April 12, 2022 City of Grand Terrace Page 2 CALL TO ORDER Convene City Council Invocation Pledge of Allegiance Roll Call Attendee Name Present Absent Late Arrived Mayor Darcy McNaboe    Mayor Pro Tem Bill Hussey    Council Member Sylvia Robles    Council Member Doug Wilson    Council Member Jeff Allen    A. REORDERING OF, ADDITIONS TO, OR REMOVAL OF ITEMS FROM THE AGENDA B. SPECIAL PRESENTATIONS - NONE 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. Approval of Minutes – Regular Meeting – 03/22/2022 DEPARTMENT: CITY CLERK 2. December 2, 2021 & February 3, 2022, Planning Commission, January 13, 2022 & February 10, 2022, Parks & Recreation Advisory Committee and January 10, 2022, February 7, 2022 & March 7, 2022, Historical & Cultural Activities Committee Meeting Minutes Update RECOMMENDATION: Receive and file. DEPARTMENT: CITY CLERK Agenda Grand Terrace City Council April 12, 2022 City of Grand Terrace Page 3 3. Measure I Fund Annual Financial & Compliance Report for the Year Ended June 30, 2021 RECOMMENDATION: Receive and file the Auditor's Annual Financial & Compliance Report and related document for the City's Measure I Fund. DEPARTMENT: FINANCE 4. Auditor's Annual Financial Report and Related Documents for the Fiscal Year Ended June 30, 2021 RECOMMENDATION: Receive and File the Auditor's Annual Financial Report and related documents for the Fiscal Year ended June 30, 2021. DEPARTMENT: FINANCE 5. Planning Commission Notice of Vacancy Advertisement Extension RECOMMENDATION: Direct the City Clerk to advertise for appointment to the Planning Commission, accept applications, extend appointment of vacancy left by former Planning Commissioner Jeremy Briggs and schedule interviews. DEPARTMENT: CITY CLERK 6. Housing Element Annual Progress Report for the 2021 Calendar Year RECOMMENDATION: Adopt A RESOLUTION OF THE CITY COUNCIL OF GRAND TERRACE, CALIFORNIA, RECEIVING AND ACCEPTING THE CITY OF GRAND TERRACE GENERAL PLAN AND HOUSING ELEMENT ANNUAL PROGRESS REPORT FOR THE 2021 CALENDAR YEAR DEPARTMENT: PLANNING & DEVELOPMENT SERVICES 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. PUBLIC HEARINGS - NONE Agenda Grand Terrace City Council April 12, 2022 City of Grand Terrace Page 4 F. UNFINISHED BUSINESS 7. Award and Approve of an Agreement Between the City of Grand Terrace and Sweeping Corporation of America LLC for Street Sweeping Services RECOMMENDATION: 1. Award to and Approve the Street Sweeping Agreement with Sweeping Corporation of America, LLC, (SCA) for a term of 1 year for routine street sweeping services and, On-Call/Special Event/Emergency street sweeping callouts in the amount of $54,405.00; and 2. Authorize the City Manager to execute the Agreement with SCA, subject to the City Attorney’s approval as to form. DEPARTMENT: CITY MANAGER G. NEW BUSINESS 8. Direct Staff to Continue to Engage in Cooperative Actions with Neighboring Communities and Stakeholders and to Not Form an Ad Hoc Committee to Address Wild Burro Relocation RECOMMENDATION: It is recommended that Staff continue their efforts working with other communities in managing the wild burro incursions into the City. DEPARTMENT: CITY MANAGER H. REQUESTS FOR FUTURE AGENDA ITEMS BY CITY COUNCIL - NONE I. CITY COUNCIL COMMUNICATIONS Council Member Jeff Allen Council Member Doug Wilson Council Member Sylvia Robles Mayor Pro Tem Bill Hussey Mayor Darcy McNaboe J. CITY MANAGER COMMUNICATIONS Agenda Grand Terrace City Council April 12, 2022 City of Grand Terrace Page 5 K. CLOSED SESSION - NONE L. ADJOURN The Next Regular City Council Meeting will be held on Tuesday, April 26, 2022, 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 ● MARCH 22, 2022 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, March 22, 2022, at 6:00 p.m. INVOCATION The Invocation was given by Pastor Manuel Hinojosa of Living Word Inland Empire Church. PLEDGE OF ALLEGIANCE Council Member Sylvia Robles led the Pledge of Allegiance Attendee Name Title Status Arrived Darcy McNaboe Mayor Present Bill Hussey Mayor Pro Tem Present Sylvia Robles Council Member Present Doug Wilson Council Member Present Jeff Allen Council Member Present Konrad Bolowich City Manager Present Adrian Guerra City Attorney Present Debra Thomas City Clerk Present Terry Shea Interim Finance Director Absent A. REORDERING OF, ADDITIONS TO, OR REMOVAL OF ITEMS FROM THE AGENDA Agenda Item No. C.7 “Direct City Manager to Assign Proxy Votes for Riverside Highland Water Company Annual Meeting” was pulled from the agenda. B. SPECIAL PRESENTATIONS - NONE C.1 Packet Pg. 6 Mi n u t e s A c c e p t a n c e : M i n u t e s o f M a r 2 2 , 2 0 2 2 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council March 22, 2022 City of Grand Terrace Page 2 C. CONSENT CALENDAR Agenda Item No. C.7 was pulled from the agenda and not discussed. RESULT: APPROVED [UNANIMOUS] MOVER: Jeff Allen, Council Member SECONDER: Bill Hussey, Mayor Pro Tem AYES: McNaboe, Hussey, Robles, Wilson, Allen 1. Waive Full Reading of Ordinances on Agenda 2. Approval of Minutes – Regular Meeting – 03/08/2022 APPROVE THE REGULAR MEETING MINUTES OF MARCH 8, 2022. 3. Approval of the January-2022 Check Register in the Amount of $638,144.83 APPROVE THE CHECK REGISTER NO. 01312022 IN THE AMOUNT OF $638,144.83 AS SUBMITTED, FOR THE MONTH ENDING JANUARY 31, 2022. 4. Approval of the February-2022 Check Register in the Amount of $502,669.57 APPROVE THE CHECK REGISTER NO. 02282022 IN THE AMOUNT OF $502,669.57 AS SUBMITTED, FOR THE MONTH ENDING FEBRUARY 28, 2022. 5. City Department Monthly Activity Report - January 2022 RECEIVE AND FILE. 6. Historical & Cultural Activities Committee Member Mary Beth Correra Resignation, Prepare & Send Letter of Appreciation on Behalf of the City Council and Direct the City Clerk to Post Notice of Vacancy ACCEPT THE RESIGNATION OF HISTORICAL & CULTURAL ACTIVITIES COMMITTEE MEMBER MARY BETH CORRERA, DIRECT THE CITY CLERK TO PREPARE AND SEND A LETTER OF APPRECIATION ON BEHALF OF THE CITY COUNCIL AND DIRECT THE CITY CLERK TO POST NOTICE OF VACANCY 7. Direct City Manager to Assign Proxy Votes for Riverside Highland Water Company Annual Meeting DIRECT CITY MANAGER TO ASSIGN PROXY VOTES AT THE ANNUAL MEETING OF THE RIVERSIDE HIGHLAND WATER COMPANY IN A MANNER THAT THE CITY MANAGER FEELS IS IN THE BEST INTEREST OF THE CITY. 8. Adoption of Resolution of Approving Application for Per Capita Grant Funds ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE APPROVING APPLICATION(S) FOR PER CAPITA GRANT FUNDS C.1 Packet Pg. 7 Mi n u t e s A c c e p t a n c e : M i n u t e s o f M a r 2 2 , 2 0 2 2 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council March 22, 2022 City of Grand Terrace Page 3 9. Revision to Fiscal Year 2021-22 of Capital Improvement Program for Fiscal Years 2021- 2026 ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE OF THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, ADOPTING THE REVISION TO FISCAL YEAR 2021-22 OF FIVE-YEAR MEASURE I CAPITAL IMPROVEMENT PLAN FOR FISCAL YEARS 2021/22 THROUGH 2025/26 10. Approve Amendment No. 4 to the Agreement with St. Francis Electric, LLC, Which Extends the Term to June 30, 2022, and Provides $5,000 as Maximum Compensation for the Period March 29, 2022, to June 30, 2022 1. APPROVE AMENDMENT NO. 4 TO THE AGREEMENT WITH ST. FRANCIS ELECTRIC, LLC, WHICH EXTENDS THE TERM OF THE AGREEMENT TO JUNE 30, 2022, AND PROVIDES $5,000 AS MAXIMUM COMPENSATION FOR THE PERIOD MARCH 29, 2022, TO JUNE 30, 2022, AND 2. AUTHORIZE CITY MANAGER TO EXECUTE AMENDMENT NO. 4 SUBJECT TO CITY ATTORNEY APPROVAL AS TO FORM. D. PUBLIC COMMENT None. E. PUBLIC HEARINGS 11. Ordinances of the City Council of the City of Grand Terrace, California, Establishing Objective Standards for Implementation of Senate Bill No. 9 Pertaining to Urban Lot Splits and Two-Unit Developments and Updating the City's Regulations for Accessory Dwelling Units and Junior Accessory Dwelling Units Haide Aguirre, Associate Planner gave the staff report and PowerPoint presentation for this item. Mayor McNaboe opened the public hearing at 6:40 p.m. PUBLIC COMMENT Bobbie Forbes, Grand Terrace had questions regarding the distance of notification, ADUs impact on the rental program, secondary mailing addresses, offsite parking, Grand Terrace’s minimum lot split, and two story homes. Mayor McNaboe closed the public hearing at 6:43 p.m. Discussion ensued regarding concerns members of Council shared regarding the item and its impact on the City. C.1 Packet Pg. 8 Mi n u t e s A c c e p t a n c e : M i n u t e s o f M a r 2 2 , 2 0 2 2 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council March 22, 2022 City of Grand Terrace Page 4 Council Member Wilson moved, with a second from Council Member Allen to continue the item to a date uncertain and staff will re-notice the item when it comes back before the City Council. RESULT: APPROVED [UNANIMOUS] MOVER: Doug Wilson, Council Member SECONDER: Jeff Allen, Council Member AYES: McNaboe, Hussey, Robles, Wilson, Allen F. UNFINISHED BUSINESS - NONE G. NEW BUSINESS 12. Consider a Request by the Historical & Cultural Activities Committee to Sell Wine as Part of a "Paint and Sip" Class at Its Art Show on May 7, 2022 Debra Thomas, City Clerk gave the staff report for this agenda item. PUBLIC COMMENT Becky Giroux, Chairman of the Historical & Cultural Activities Committee spoke in support of this item. CONSIDER ADOPTING A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE AUTHORIZING THE CONSUMPTION, POSSESSION, THE OFFERING, GIVING OR FURNISHING OR CAUSING THE OFFERING, GIVING OR FURNISHING, OF ALCOHOLIC OR INTOXICATING BEVERAGES IN THE GRAND TERRACE CITY HALL LOBBY AS PART OF THE “PAINT AND SIP” CLASS AT THE 38TH ANNUAL ART SHOW HELD BY THE HISTORICAL & CULTURAL ACTIVITIES COMMITTEE PURSUANT TO GRAND TERRACE MUNICIPAL CODE SECTION 9.04.050 RESULT: APPROVED [UNANIMOUS] MOVER: Jeff Allen, Council Member SECONDER: Darcy McNaboe, Mayor AYES: McNaboe, Hussey, Robles, Wilson, Allen 13. City Council Compensation, Health Benefits, and Auto Allowance Noel Carpenter, Senior Management Analyst gave the staff report and PowerPoint presentation for this item. C.1 Packet Pg. 9 Mi n u t e s A c c e p t a n c e : M i n u t e s o f M a r 2 2 , 2 0 2 2 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council March 22, 2022 City of Grand Terrace Page 5 REVIEW THE CITY COUNCIL COMPENSATION, HEALTH BENEFITS, AUTO ALLOWANCE, AND PROVIDE DIRECTION, IF ANY RESULT: APPROVED [UNANIMOUS] MOVER: Sylvia Robles, Council Member SECONDER: Doug Wilson, Council Member AYES: McNaboe, Hussey, Robles, Wilson, Allen 14. Adopt Revised Special Events Ordinance Konrad Bolowich, City Manager gave the staff report and PowerPoint presentation for this item. DIRECT STAFF TO PROVIDE ORDINANCE LANGUAGE REVISING GRAND TERRACE MUNICIPAL CODE (GTMC) CHAPTER 8.50 RESULT: APPROVED [UNANIMOUS] MOVER: Jeff Allen, Council Member SECONDER: Doug Wilson, Council Member AYES: McNaboe, Hussey, Robles, Wilson, Allen H. REQUESTS FOR FUTURE AGENDA ITEMS BY CITY COUNCIL - NONE I. CITY COUNCIL COMMUNICATIONS Council Member Jeff Allen Nothing to report. Council Member Doug Wilson Nothing to report. Council Member Sylvia Robles Council Member Robles commented on the passing of Dr. Tom Rivera and reminded the residents that the National Orange Show will be hosting an event on March 25-26 and requested that residents report their complaints. Mayor Pro Tem Bill Hussey Mayor Pro Tem Hussey requested that residents call the complaint line to lodge their complaint for the upcoming National Orange Show event. Mayor Darcy McNaboe Nothing to report. C.1 Packet Pg. 10 Mi n u t e s A c c e p t a n c e : M i n u t e s o f M a r 2 2 , 2 0 2 2 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council March 22, 2022 City of Grand Terrace Page 6 J. CITY MANAGER COMMUNICATIONS City Manager Bolowich announced that the National Orange Show will be hosting a concert event on March 25-26, 2022, 5:00pm-2:00am. For complaints, please call (323) 739-4342 and the RAVE promoter will ask for the location and send a mobile sound measuring crew who will take the readings. K. CLOSED SESSION None. L. ADJOURN Mayor McNaboe adjourned the Regular Meeting of the City Council for Tuesday, March 22, 2022, in memory of Dr. Tom Rivera at 8:05 p.m. The Next Regular Meeting of the City Council will be held on Tuesday, April 12, 2022, at 6:00 p.m. _________________________________ Darcy McNaboe, Mayor _________________________________ Debra L. Thomas, City Clerk C.1 Packet Pg. 11 Mi n u t e s A c c e p t a n c e : M i n u t e s o f M a r 2 2 , 2 0 2 2 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) AGENDA REPORT MEETING DATE: April 12, 2022 Council Item TITLE: December 2, 2021 & February 3, 2022 Planning Commission, January 13, 2022 & February 10, 2022 Parks & Recreation Advisory Committee and January 10, 2022, February 7, 2022 & March 7, 2022 Historical & Cultural Activities Committee Meeting Minutes Update PRESENTED BY: Debra Thomas, City Clerk RECOMMENDATION: Receive and file. 2030 VISION STATEMENT: This staff report supports Goal #5, Engage in Proactive Communication. BACKGROUND: Beginning with the November 14, 2017, City Council meeting, the City Clerk was directed by the City Manager to provide Council with a copy of the Planning Commission, Historical & Cultural Activities Committee and Volunteer Emergency Operations Committee minutes to keep Council up-to-date on those Commission/Committee activities and on January 16, 2018, the City Manager requested that the Parks & Recreation Advisory minutes be included in the Committee/Commission Report. DISCUSSION: On February 3, 2022, and March 3, 2022, the Planning Commission held its Regular Meetings and approved its December 2, 2021 and February 3, 2022, Regular Meeting minutes. The minutes for these meetings are included as attachments to this report. The Commission’s next Regular Meeting is scheduled for April 7, 2022. On February 10, 2022, and March 10, 2022, the Parks & Recreation Advisory Committee held its Regular Meetings and approved its January 13, 2022, and February 10, 2022, Regular Meeting minutes. The minutes for these meetings are included as attachment to this report. The Committee’s next Regular Meeting is scheduled for April 14, 2022. On February 7, 2022, March 7, 2022, and April 4, 2022 the Historical & Cultural Activities Committee held its Special Meeting and Regular Meetings approving its January 10, 2022, February 7, 2022 and March 7, 2022, Special and Regular Meeting minutes. The minutes for these meetings are included as attachments to this report. The C.2 Packet Pg. 12 Committee’s next Regular Meeting is scheduled for May 2, 2022. FISCAL IMPACT: None. ATTACHMENTS: • 12-02-2021 PC Minutes (PDF) • 02-03-2022 PC Minutes (PDF) • 01-13-2022 P&R Minutes (PDF) • 02-10-2022 P&R Minutes (PDF) • 01-10-2022 H&C Minutes (PDF) • 02-07-2022 H&C Minutes (PDF) • 03-07-2022 H&C Minutes (PDF) APPROVALS: Debra Thomas Completed 04/05/2022 4:49 PM City Manager Completed 04/06/2022 9:15 AM City Council Pending 04/12/2022 6:00 PM C.2 Packet Pg. 13 Cr 1 4. , ,CITY OF GRAND TERRACE WRIFIEFFFIRM PLANNING COMMISSION/SITE AND ARCHITECTURAL REVIEW BOARD MINUTES • DECEMBER 2, 2021 Council Chambers Regular Meeting 6:30 PM Grand Terrace Civic Center • 22795 Barton Road CALL TO ORDER Chairman Edward Giroux convened the Regular Meeting of the Planning Commission/Site and Architectural Review Board for Thursday, December 2, 2021, at 6:30 p.m. Chairman Giroux requested a moment of silence in remembrance of the 6'h Anniversary of the Inland Regional Center shooting and to honor those victims who lost their lives. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by Commissioner David Alaniz. Attendee Name Title Status Arrived Edward A. Giroux Chairman Present Jeremy Briggs Vice-Chairman Present Tara Cesena Commissioner Present Jeffrey McConnell Commissioner Present David Alaniz Commissioner Present Steven Weiss Planning & Development Services Director Present Robert Khuu Assistant City Attorney Present Haide Aguirre Associate Planner Present Debra Thomas City Clerk Present APPROVAL OF AGENDA RESULT: ADOPTED [UNANIMOUS] MOVER: Tara Cesena, Commissioner SECONDER: David Alaniz, Commissioner AYES: Giroux, Briggs, Cesena, McConnell,Alaniz PRESENTATIONS None. City of Grand Terrace Page 1 C.2.a Packet Pg. 14 At t a c h m e n t : 1 2 - 0 2 - 2 0 2 1 P C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Minutes Grand Terrace Planning Commission/Site and Architectural Review Board December 2, 2021 PUBLIC ADDRESS None. A. CONSENT CALENDAR 1. Approval of Minutes— Regular Meeting — 09/16/2021 RESULT: ACCEPTED [UNANIMOUS] MOVER: Jeffrey McConnell, Commissioner SECONDER: Jeremy Briggs, Vice-Chairman AYES: Giroux, Briggs, Cesena, McConnell, Alaniz 2. Approval of Minutes— Regular Meeting — 10/21/2021 RESULT: ACCEPTED [UNANIMOUS] MOVER: Jeffrey McConnell, Commissioner SECONDER: Jeremy Briggs, Vice-Chairman AYES: Giroux, Briggs, Cesena, McConnell, Alaniz B. ACTION ITEMS None. C. PUBLIC HEARINGS 1. Conditional Use Permit 20-03, Variance 21-01, Site and Architectural Review 20-09, and Environmental 20-09; a Proposal to Establish a 200-Megawatt Battery Energy Storage System (BESS) Facility, Generally Located Near the Corner of Main Street and Taylor Street (APN: 1167-151-77-0000) Haide Aguirre, Assistant Planner gave the PowerPoint presentation for this item. Chairman Giroux opened the Public Hearing at 7:18 p.m. Keith Latham, Applicant gave a PowerPoint presentation for the item. PUBLIC COMMENT None. Chairman Giroux closed the Public Hearing at 8:20 p.m. Commissioner Jeffrey McConnell approved, with a second from Vice-Chair Jeremy City of Grand Terrace Page 2 C.2.a Packet Pg. 15 At t a c h m e n t : 1 2 - 0 2 - 2 0 2 1 P C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Minutes Grand Terrace Planning Commission/Site and Architectural Review Board December 2, 2021 Briggs to amend the resolution modifying Condition No. 21 to allow the Planning Director to find an alternative plant to replace the Mexican Palm and substitute the resolution as provided in the memorandum that staff provided to the Planning Commission, as well as substitute the revised Public Works conditions. 1) CONDUCT A PUBLIC HEARING; AND 2) CONSIDER ADOPTION OF A RESOLUTION OF THE PLANNING COMMISSION/SITE AND ARCHITECTURAL REVIEW BOARD OF THE CITY OF GRAND TERRACE, CALIFORNIA, ADOPTING A MITIGATED NEGATIVE DECLARATION (ENVIRONMENTAL 20-09) PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) AND APPROVING VARIANCE 21-01, CONDITIONAL USE PERMIT 20-03, AND SITE AND ARCHITECTURAL REVIEW 20-09 TO DEVELOP A 200-MEGAWATT BATTERY ENERGY STORAGE SYSTEM (BESS) FACILITY ON AN APPROXIMATE 10-ACRE SITE (ASSESSOR'S PARCEL NUMBER [APN]: 1167-151-77-0000) WHICH IS PRIMARILY UNDEVELOPED AND GENERALLY LOCATED NEAR THE CORNER OF MAIN STREET AND TAYLOR STREET, ABOUT 0.35 MILES FROM INTERSTATE 215 AND SOUTH CITY BORDERLINE WITH RIVERSIDE COUNTY RESULT: APPROVED [UNANIMOUS] MOVER: Jeffrey McConnell, Commissioner SECONDER: Jeremy Briggs, Vice-Chairman AYES: Giroux, Briggs, Ceseha, McConnell, Alaniz D. INFORMATION TO COMMISSIONERS Steve Weiss, Planning & Development Director announced: Barton Road Specific Plan Update is out for 30 Day Review and is anticipated to be brought back to the Planning Commission in the first quarter of 2022. Housing Element to be brought back to the Planning Commission in the first quarter of 2022. E. INFORMATION FROM COMMISSIONERS Chairman Giroux announced the Grand Terrace Cars & Coffee Christmas Cruise scheduled for Friday, December 10, 2021 , between 7:00pm - 9:00pm. City of Grand Terrace Fr s>r C.2.a Packet Pg. 16 At t a c h m e n t : 1 2 - 0 2 - 2 0 2 1 P C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Minutes Grand Terrace Planning Commission/Site and Architectural Review Board December 2, 2021 ADJOURN Chairman Giroux adjourned the regular meeting at 8:30 p.m. The Next scheduled meeting of the Planning Commission/Site and Architectural Review Board to be held on December 16, 2021, at 6:30 p.m. 4 4 Ll a QZJ za Edward Giroux, Chairman era L. Thomas, City Clerk City of Grand Terrace Page 4 C.2.a Packet Pg. 17 At t a c h m e n t : 1 2 - 0 2 - 2 0 2 1 P C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) C.2.b Packet Pg. 18 At t a c h m e n t : 0 2 - 0 3 - 2 0 2 2 P C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) C.2.b Packet Pg. 19 At t a c h m e n t : 0 2 - 0 3 - 2 0 2 2 P C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) C.2.b Packet Pg. 20 At t a c h m e n t : 0 2 - 0 3 - 2 0 2 2 P C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) CITY OFGRAND TERRACE PARKS & RECREATION ADVISORY COMMITTEE REGULAR MEETING January 13, 2022 – 4:15 p.m. City Hall Community Room – North 22795 Barton Road, Grand Terrace, CA 92313 MINUTES Chairman Brian Phelps convened the Regular Meeting of the Parks & Recreation Advisory Committee at 4:15 p.m. PLEDGE OF ALLEGIANCE: Committee Member Mike Hogue led the Pledge of Allegiance ROLL CALL: Present: Committee Members Freund, Reagan, Hogue; Vice-Chair Firnkoess and; Chairman Phelps Staff: Debra Thomas, City Clerk 1. Approve January 13, 2022, Regular Meeting Minutes Committee Member Freund, moved, with a second from Vice-Chair Firnkoess to approve the January 13, 2022, Regular Meeting Minutes. Ayes: Committee Members Freund, Reagan, Hoge; Vice-Chair Firnkoess; Chairman Phelps 2. Public Comments None. 3. Discussion: a. FY 2021-2022 Project Requests and Recommendations Update i. Poured-in-Place Rubberized Playground – TJ Austin Park ii. Additional Fencing installed at Veteran’s Freedom Park iii. Pilot Program – Water Bottle Filling Station Installed at Richard Rollins Park iv. Bicycle Racks installed at all City Parks C.2.c Packet Pg. 21 At t a c h m e n t : 0 1 - 1 3 - 2 0 2 2 P & R M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Minutes Parks & Recreation Advisory Committee October 14, 2021 Debra Thomas, City Clerk provided a status of the above listed items and reviewed. Will bring back a timeline at the next Committee meeting. City Clerk Thomas will bring another status update to the Committee at its next scheduled meeting. b. Kyle Bacon Field – New Signage Photos of sample signs were provided to the Committee for their input on the style of sign to be installed at the t-ball field at Veteran’s Freedom Park in honor of Kyle Bacon. c. Committee Youth Member The recruitment letter and packet will be sent to the Activities Director at Grand Terrace High School to assist with recruitment of a youth committee member. 4. Committee Member Comments None. 5. Staff Comments None. 6. Adjournment Chairman Phelps adjourned the Regular Meeting of the Parks & Recreation Advisory Committee at 5:15 p.m. ___________________________ ________________________________ Brian Phelps, Chairman Debra L. Thomas, Committee Secretary . C.2.c Packet Pg. 22 At t a c h m e n t : 0 1 - 1 3 - 2 0 2 2 P & R M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Minutes Parks & Recreation Advisory Committee October 14, 2021 Next Meeting Date: December 9, 2021 @ 4:15 p.m. C.2.c Packet Pg. 23 At t a c h m e n t : 0 1 - 1 3 - 2 0 2 2 P & R M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) CITY OFGRAND TERRACE PARKS & RECREATION ADVISORY COMMITTEE REGULAR MEETING February 10, 2022 – 4:15 p.m. City Hall Community Room – North 22795 Barton Road, Grand Terrace, CA 92313 MINUTES CALL MEETING TO ORDER: Vice-Chair Julia Cook-Firnkoess convened the Regular Meeting of the Parks & Recreation Advisory Committee at 4:20 p.m. PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was led by Debra Thomas, City Clerk. ROLL CALL: Present: Committee Members Freund, Reagan, Hogue; Vice-Chair Firnkoess Absent: Chairman Phelps Staff: Debra Thomas, City Clerk 1. Approve January 13, 2022, Regular Meeting Minutes Committee Member Reagan moved, with a second from Committee Member Freund to approve the January 13, 2022, Regular Meeting minutes. Ayes: Committee Members Freund, Reagan, Hoge; Vice-Chair Firnkoess Absent: Chairman Phelps 2. Public Comments None. C.2.d Packet Pg. 24 At t a c h m e n t : 0 2 - 1 0 - 2 0 2 2 P & R M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Minutes Parks & Recreation Advisory Committee February 8, 2022 3. Discussion: a. FY 2021-2022 Project Requests and Recommendations Update i. Poured-in-Place Rubberized Playground – TJ Austin Park ii. Additional Fencing installed at Veteran’s Freedom Park iii. Pilot Program – Water Bottle Filling Station Installed at Richard Rollins Park iv. Bicycle Racks installed at all City Parks City Clerk Thomas provided the Committee with a status on the above-listed projects. The additional fencing project is complete at Veteran’s Freedom Park. The remaining listed items will be complete within the next six (6) months. Staff will bring that update to the Committee at a future meeting. b. Kyle Bacon Field – New Signage City Clerk Thomas showed the Committee a mock-up of the new sign commissioned by the City Council for the t-ball field at Veteran’s Freedom Park commemorating Kyle Bacon. This sign is to be unveiled by the City Council on Saturday, March 5, 2022. c. Committee Youth Member City Clerk Thomas notified the Committee that the Notice of Vacancy for the youth member has been officially published and noticed. Upon receipt of applications from interested youth, applications will be submitted to the City Council for review and selection. d. 15th Annual Walk on Blue Mountain City Clerk Thomas informed the Committee that on Sunday, March 6, 2022, the 15th Annual Walk on Blue Mountain is scheduled to begin at 8:00 a.m. A request for members of the Committee to volunteer to help with the event was announced and Vice-Chair Firnkoess and Committee Member Hogue volunteered. 4. Committee Member Comments Committee Member Reagan requested that how to report a problem with the park signs be placed in the parks. He and other members of the committee also requested that the City’s maintenance crew inspect the parks on a regular basis to identify problems. C.2.d Packet Pg. 25 At t a c h m e n t : 0 2 - 1 0 - 2 0 2 2 P & R M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Minutes Parks & Recreation Advisory Committee February 8, 2022 Vice-Chair Firnkoess reported that the ladies bathroom sink at Veterans Freedom Park is broken. Committee Member Freund and Vice-Chair Firnkoess reported parking problems on Brentwood and in the school parking lot of Terrace View Elementary. 5. Staff Comments City Clerk Thomas informed the Committee that Veteran’s Day yard signs will be created, and the sign ordinance updated well in advance of the Veteran’s Day holiday. Once completed, this item will come back to the Committee for discussion. 6. Adjournment Vice-Chair Firnkoess adjourned the Regular Meeting of the Parks & Recreation Advisory Committee at 4:52 p.m. ___________________________ ________________________________ Julia Cook-Firnkoess, Vice-Chair Debra L. Thomas, Committee Secretary . C.2.d Packet Pg. 26 At t a c h m e n t : 0 2 - 1 0 - 2 0 2 2 P & R M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Historical and Cultural Activities Committee Minutes for month of – January 10, 2022 Location – 2nd Floor conference Room Members present – Christina Valdivia-Phelps, Renae Walker, Frank’e Byma, Becky Giroux, Michelle Greer and Debra Thomas - City Clerk Members Absent – Mary Beth Correra, Louise Lunstrum Guests – None. Called to order – 6:00 pm Secretary’s Report: December minutes read Frank’e motioned to accept, Christina 2nd 3 yes 0 no 2 abstain Treasurers Report: Frank’e read the treasurers report Renae motioned to accept, Christina 2nd 5 yes 0 no 0 abstain Historical Report: Becky would like to get the invitations to the Anniversary on the website because they looked good. Discussion on moving the Anniversary celebration date to Dec 7th which requires Council approval. Old Business: Committee shirts. Green color shirts, Frank’e is going to work on the logo New Business: Art Show – Next month Redlands Art Show Christal Bussand will be guest to discuss options we may have. Redlands Festival of Arts and Arts Connections are two places Becky has looked at to model. Possibly sell wine and snacks Possibly offer classes for different ages Possible Paint and Sip Timeline for art drop off 2-8 pm Renae is making the flyer for schools and public Michelle is getting prices for Paint and Sip Meeting adjourned – 7:18 pm C.2.e Packet Pg. 27 At t a c h m e n t : 0 1 - 1 0 - 2 0 2 2 H & C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Historical and Cultural Activities Committee Minutes for month of – February 7th, 2022 Location – 2nd Floor conference Room Members present – Christina Valdivia-Phelps, Renae Walker, Frank’e Byma, Becky Giroux, Louise Lunstrum, Michelle Greer, Mary Beth Correra and Debra Thomas - City Clerk Members Absent – Guests – Called to order – 6:06 pm Secretary’s Report: January minutes read Frank’e motioned to accept, Michelle 2nd 4 yes 0 no 2 abstain Treasurers Report: Frank’e read the treasurers report Renae motioned to accept, Christina 2nd 6 yes 0 no 0 abstain Historical Report: Old Business: Debra let us know she is working on getting us out $600 for 2021-2022 by the next meeting. May have to make a check to Treasurer to cash to put in cash box. Frank’e made a great logo. Collectively decide to forgo lanyards and Frank’e is going to price them. Art Show – Community room is booked. Paint and sip is going to be in the lobby – Community room and vestibule will have the art show – Council chamber will have the kids paint We can have wine w/licensed bartender, need to apply for a special permit, needs wrist bands, need a designated area. Becky is setting up a appointment with Eric and Priscilla at Grocery Outlet. Press release will be completed after the Press release for Blue Mountain Hike. New Business: Meeting adjourned – 7:10 pm C.2.f Packet Pg. 28 At t a c h m e n t : 0 2 - 0 7 - 2 0 2 2 H & C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) Historical and Cultural Activities Committee Minutes for month of – March 7, 2022 Location – 2nd Floor conference Room Members present – Christina Valdivia-Phelps, Renae Walker, Frank’e Byma, Becky Giroux, Louise Lunstrum and Debra Thomas - City Clerk Members Absent – Michelle Greer and Mary Beth Correra Guests – Cathy Paint and Sip Called to order – 6:04 pm Secretary’s Report: February minutes read Frank’e motioned to accept, Christina 2nd 5 yes 0 no 0 abstain – Renae needs to amend to include Louise being present at February Meeting Treasurers Report: Frank’e read the treasurers report Louise motioned to accept, Christina 2nd 5 yes 0 no 0 abstain Historical Report: Old Business: Frank’e gave us the name badges with lanyards. They came out really good. Art Show – Debra informed us about the potential issue with alcohol. She asked us to tell her whether she should bring to staff report for City Council approve on March 22nd. Becky will be our rep but we will also be there to speak in public comments. Lisa (old New to You owner) will be donating to us some are she has received. Christina presented flyers and we chose the Orange and Blue. Cathy for the “Paint and Sip” showed us to paintings, one geared for adults and one for kids and we asked if she could add blue mountain in the background. 30 people max she is thinking. Price point she is charging us is $10 a head we are thinking of $30 pre-pay and $40 day of cash only, 1st come 1st served. Christina is going to check with Starbucks for coffee donation. Louise is going to check with Sweet life for sweet donations. Becky is going to check with Woody’s about Meat and Crackers and Fruits and Veggies. New Business: Mary Beth submitted her resignation to Debra. Once Debra submits in staff report it can be advertised. Meeting adjourned – 7:10 pm C.2.g Packet Pg. 29 At t a c h m e n t : 0 3 - 0 7 - 2 0 2 2 H & C M i n u t e s ( C o m m i t t e e a n d C o m m i s s i o n M i n u t e s ) AGENDA REPORT MEETING DATE: April 12, 2022 Council Item TITLE: Measure I Fund Annual Financial & Compliance Report for the Year Ended June 30, 2021 PRESENTED BY: Terry Shea, Interim Finance Director RECOMMENDATION: Receive and file the Auditor's Annual Financial & Compliance Report and related document for the City's Measure I Fund. 2030 VISION STATEMENT: This staff report supports Goal #1, Ensuring Our Fiscal Viability” through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations. BACKGROUND: Each year, the City has an independent audit conducted of its financial statements and related internal control procedures, included in this is the Audit of the City’s Measure I Fund. Measure I is the half-cent sales tax collected throughout San Bernardino County for transportation improvements. The audit for the Measure I Fund for the fiscal year ended June 30, 2021 has been completed and the Annual Financial Report issued by the Measure I Fund Auditor, Eide Bailly, LLP. DISCUSSION: One of the key aspects of any annual financial audit is the Independent Auditor’s Report, which is provided on page 1 of the Annual Audit Report (Exhibit A). The Independent Auditor’s Report provides its opinion on whether or not the financial statements fairly present, in all material respects, the respective financial position of the governmental activities, and the major fund, as of the end of the fiscal year, and the respective changes in financial position and cash flows, where applicable, in conformance with Generally Accepted Accounting Principles (GAAP). The resulting “opinion letter” is either unmodified or modified. The “opinion letter” received by the City for its Measure I Fund financial statements for the period ended June 30, 2021 is unmodified, indicating that the financial statements fairly represent the City’s financial position in accordance with GAAP. In addition to the Annual Financial Report, the independent auditor issued the related document, which is included in the Report and is summarized below: • Internal Control & Compliance Report C.3 Packet Pg. 30 The Internal Control & Compliance Report identifies any material internal control deficiencies that impact the financial statements. The results of the tests performed by the City auditors did not identify any deficiencies in internal control that are required to be reported under Government Auditing Standards. In addition, the results of the Auditor’s tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. FISCAL IMPACT: There is no fiscal impact associated with the receipt of the Annual Financial Report and related documents for the Measure I Fund for the year ended June 30, 2021. ATTACHMENTS: • Annual Audit Report Measure I Fund (PDF) APPROVALS: Terry Shea Completed 04/05/2022 11:05 AM City Manager Completed 04/05/2022 3:53 PM City Council Pending 04/12/2022 6:00 PM C.3 Packet Pg. 31 eidebailly.com Financial Statements June 30, 2021 City of Grand Terrace, California Measure I Fund C.3.a Packet Pg. 32 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) City of Grand Terrace, California Measure I Fund Table of Contents June 30, 2021 Independent Auditor’s Report ............................................................................................................................. 1 Financial Statements Balance Sheet .................................................................................................................................................. 4 Statement of Revenues, Expenditures and Change in Fund Balance ................................................................. 5 Notes to Financial Statements ......................................................................................................................... 6 Required Supplementary Information Schedule of Revenues, Expenditures and Change in Fund Balance – Budget and Actual ..................................10 Note to Required Supplementary Information ................................................................................................11 Other Information Program Status: Comparison of 5 Year Plan Project Budget to Current Year Expenditures ..............................12 Maintenance of Effort: Comparison of Base Level Amount to Annual Expenditures ........................................13 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and Measure I Compliance Requirements ...........................................................................................14 C.3.a Packet Pg. 33 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) What inspires you, inspires us. | eidebailly.com 10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE 1 Independent Auditor’s Report To the Board of Directors San Bernardino County Transportation Authority San Bernardino, California Report on the Financial Statements We have audited the accompanying financial statements of the Measure I Fund of the City of Grand Terrace, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. C.3.a Packet Pg. 34 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Measure I Fund of the City as of June 30, 2021, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the financial statements present only the Measure I Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2021, and the changes in its financial position, or where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has omitted the management’s discussion and analysis for the Measure I Fund that accounting principles generally accepted in the United States of America requires to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting and for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements of the Measure I Fund of the City. The program status and maintenance of effort schedules (other information) as listed in the table of contents, respectively, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The other information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. C.3.a Packet Pg. 35 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 14, 2022, on our consideration of the City’s internal control over financial reporting of the Measure I Fund and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance, as it relates to the Measure I Fund. Rancho Cucamonga, California February 14, 2022 C.3.a Packet Pg. 36 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) See Notes to Financial Statements 4 City of Grand Terrace, California Measure I Fund Balance Sheet June 30, 2021 Assets Cash and investments 203,565$ Taxes receivable 57,832 Total assets 261,397$ Liabilities and Fund Balance Liabilities Accounts payable 8,464$ Fund Balance Restricted 252,933 Total liabilities and fund balance 261,397$ C.3.a Packet Pg. 37 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) See Notes to Financial Statements 5 City of Grand Terrace, California Measure I Fund Statement of Revenues, Expenditures and Change in Fund Balance Year Ended June 30, 2021 Revenues Measure I sales tax 281,332$ Interest income 386 Total revenues 281,718 Expenditures Capital Construction and maintenance 19,514 Revenues Over/(Under) Expenditures 262,204 Other Financing Sources (Uses) Transfers to City of Grand Terrace (274,137) Net Change in Fund Balance (11,933) Fund Balance, Beginning of Year 264,866 Fund Balance, End of Year 252,933$ C.3.a Packet Pg. 38 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 6 City of Grand Terrace, California Measure I Fund Notes to Financial Statements June 30, 2021 Note 1 - General Information Reporting Entity The financial statements are intended to reflect the financial position and changes in financial position of the Measure I Fund of the City of Grand Terrace, California (City) only. Accordingly, the financial statements do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2021, and the changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Measure I Measure I is the half-cent sales tax collected throughout San Bernardino County for transportation improvements. In 2004, San Bernardino County voters approved the extension of the Measure I sales tax through 2040. See Note 4 for a detailed description of the Measure. Note 2 - Summary of Significant Accounting Policies The accounting policies of the Measure I Fund of the City conform to accounting policies generally accepted in the United States of America. The following is a summary of significant accounting policies. A. Basis of Accounting Governmental Fund Financial Statements Fund Accounting The accounts of the City are organized on the basis of funds. A fund is defined as an independent fiscal and accounting entity wherein operations of each fund are accounted for in a separate set of self-balancing accounts that record resources, related benefits, and equity, segregated for the purpose of carrying out specific activities. The City accounts for the Measure I activities in separate general ledger accounts within its Measure I special revenue fund. Special revenue funds are used to account for the proceeds of revenue sources that are restricted or committed, to expenditure for specified purposes. C.3.a Packet Pg. 39 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 7 City of Grand Terrace, California Measure I Fund Notes to Financial Statements June 30, 2021 Measurement Focus and Basis of Accounting The special revenue funds of the City are accounted for using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, revenues are available if they are collected within 60 days of the end of the fiscal period. Expenditures generally are recorded when a liability is incurred. Operating statements of governmental funds present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current resources. B. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates. C. Fund Balances Fund balance is reported according to the following classifications: nonspendable, restricted, committed, assigned, and unassigned based on the relative strength of the constraints that control how specific amounts can be spent. Restricted fund balance represents amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. D. Cash and Investments Cash and investments are pooled by the City to facilitate cash management and maximize investment opportunities and yields. Investment income resulting from this pooling is allocated to the respective funds including the Measure I Fund based upon the average cash balance. The investment policies applicable to the Measure I Fund, are those of the City and are disclosed in the City’s basic financial statements. The City’s basic financial statements can be obtained at City Hall. C.3.a Packet Pg. 40 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 8 City of Grand Terrace, California Measure I Fund Notes to Financial Statements June 30, 2021 The Measure I Fund’s cash and investments are reported at fair value. The fair value measurements are based on the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Measure I Fund’s deposits and withdrawals in the City investment pool are made on the basis of $1 and not fair value. Accordingly, the measurement of fair value of the Measure I Fund’s investment in the City investment pool is based on inputs that are uncategorized and not defined as a Level 1, Level 2, or Level 3 input. E. Maintenance of Effort In accordance with California Public Utilities Code 190300 and Ordinance No. 04-01 of the San Bernardino County Transportation Authority (SBCTA), Local Street Program funds shall not be used to supplant existing local discretionary funds being used for street and highway purposes. The maintenance of effort (MOE) base year level was determined based upon the discretionary General Fund expenditures for transportation-related construction and maintenance activities in fiscal year 2008/2009. The MOE base year level as approved by the SBCTA Board of Directors shall remain in effect until the expiration of Measure I 2010-2040. General Fund expenditures in excess of the MOE base year level will carry over to subsequent fiscal years and can be applied in a future year to offset the amount the local agency may need to meet the MOE requirement. The City’s determined MOE base level is $115,156. Note 3 - Taxes Receivable Taxes receivable represent the Measure I sales tax receipts received from SBCTA after June 30, 2021. Note 4 - Measure I Fund The California State Legislature authorized county transportation authorities to enact local option sales tax measures for transportation improvements in the late 1980s, under provisions of Division 19 (commencing with Section 180000) of the Public Utilities Code. In November 1989, San Bernardino County voters approved passage of Measure I, authorizing the SBCTA to impose a half cent retail transactions and use tax applicable in the incorporated and unincorporated areas of the County of San Bernardino for the 20-year period between April 1, 1990 and March 31, 2010. SBCTA is authorized to administer the programs described in the Measure. Early in the second decade of Measure I, it became apparent that continuation of the half cent sales tax would be critical to maintaining funding for transportation in San Bernardino County. SBCTA member jurisdictions and transportation stakeholders worked to identify transportation needs, and an expenditure plan was developed to serve as a basis for the renewal of Measure I. Ordinance No. 04-01 was placed before voters in November 2004, and Measure I was renewed. The new Measure I extends the half cent sales tax for 30 years, from April 1, 2010 through March 31, 2040. The new Measure is referred to as Measure I 2010-2040 to distinguish it from the first Measure I. C.3.a Packet Pg. 41 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 9 City of Grand Terrace, California Measure I Fund Notes to Financial Statements June 30, 2021 Revenue from the tax can only be used for transportation improvement and traffic management programs authorized in the Expenditure Plan. Measure I 2010-2040 has a return-to-source provision that states that funds shall be allocated to subareas in accordance with the actual revenue collected in each subarea. After deduction of required Board of Equalization fees and authorized administrative costs, revenues generated in each subarea are to be expended on projects of direct benefit to that subarea. Revenues are accounted for separately for each subarea and then allocated to specified project categories in each subarea. These project categories are termed “programs” in the Strategic Plan. Decisions on how revenues are expended within the subareas are made by the SBCTA Board of Directors based upon recommendations of local subarea representatives. Other than the projects identified in the Cajon Pass Expenditure Plan, revenues generated within a subarea can be expended outside of that subarea only upon approval of two-thirds (2/3) of the jurisdictions within the affected subarea. A proportional share of projected state and federal transportation funds is to be reserved for use solely within the Valley subarea and individual Mountain/Desert (Colorado River, Morongo Basin, Mountains, North Desert and Victor Valley) subareas. In the San Bernardino Valley subarea, Measure I 2010-2040 contains the following programs: • Freeway Program • Freeway Interchange Program • Major Street Program • Local Street Program • Metrolink/Rail Program • Express Bus/Bus Rapid Transit Program • Senior and Disabled Transit Program • Traffic Management Systems Program In each of the Mountain/Desert subareas, Measure I 2010-2040 contains the following programs: • Local Street Program • Major Local Highway Program • Senior and Disabled Transit Program Note 5 - Transfers to the City of Grand Terrace During the year ended June 30, 2021, the Funds transferred $274,137 to the City which represents activity related to the Measure I general street maintenance activities and the pavement management program in accordance with the City’s Measure I Five Year Capital Improvement Plan. C.3.a Packet Pg. 42 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) eidebailly.com Required Supplementary Information June 30, 2021 City of Grand Terrace, California Measure I Fund C.3.a Packet Pg. 43 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) See Note to Required Supplementary Information 10 City of Grand Terrace, California Measure I Fund Schedule of Revenues, Expenditures and Change in Fund Balance – Budget and Actual Year Ended June 30, 2021 Variance From Final Budget Positive Original Final Actual (Negative ) Revenues Measure I sales tax 200,000$ 200,000$ 281,332$ 81,332$ Interest income - - 386 386 Total revenues 200,000 200,000 281,718 81,718 Expenditures Capital Construction and maintenance 120,000 120,000 19,514 100,486 Revenues Over/(Under) Expenditures 80,000 80,000 262,204 182,204 Other Financing Sources (Uses) Transfers to City of Grand Terrace (130,000) (354,669) (274,137) 80,532 Net Change in Fund Balance (50,000) (274,669) (11,933) 262,736 Fund Balance, Beginning of Year 264,866 264,866 264,866 - Fund Balance, End of Year 214,866$ (9,803)$ 252,933$ 262,736$ Budget C.3.a Packet Pg. 44 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) See Note to Required Supplementary Information 11 City of Grand Terrace, California Measure I Fund Note to Required Supplementary Information Year Ended June 30, 2021 Note 1 - Budgetary Data The City adopts an annual budget on a basis consistent with accounting principles generally accepted in the United States of America. C.3.a Packet Pg. 45 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) eidebailly.com Other Information June 30, 2021 City of Grand Terrace, California Measure I Fund C.3.a Packet Pg. 46 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 12 City of Grand Terrace, California Measure I Fund Program Status: Comparison of 5 Year Plan Project Budget to Current Year Expenditures Year Ended June 30, 2021 The Measure I Five Year Capital Improvement Plan for local streets was adopted by Council Resolution No. 2020-13. Of the funds allocated under the Measure I Five Year Capital Improvement Plan, the following programs were affected during the current fiscal year: 5-Year Plan Current Project Fiscal Year Under/(Over) Budget Expenditures Estimate 5-Year Tree Trimming Program 192,802$ 52,514$ 140,288$ FY 2020-21 Pavement Management Program 903,250 241,137 662,113 Total 293,651$ Measure I Fund expenditures 19,514$ Measure I Fund transfers to City of Grand Terrace 274,137 Total 293,651$ Local Projects C.3.a Packet Pg. 47 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 13 City of Grand Terrace, California Measure I Fund Maintenance of Effort: Comparison of Base Level Amount to Annual Expenditures Year Ended June 30, 2021 The maintenance of effort base level amount was determined based upon fiscal year 2008/09 spending levels. Excess/(deficient) amounts are carried forward in accordance with the Measure I Strategic Plan. Actual amounts expended in relation to the base level amount in each year subsequent to the base year are as follows: General Fund Cummulative Street and Highway Base Level Excess/Excess/ Funds Utilized Amount (Deficiency)(Deficiency) 2010 40,142$ (115,156)$ (75,014)$ (75,014)$ 2011 160,298 (115,156) 45,142 (29,872) 2012 72,664 (115,156) (42,492) (72,364) 2013 89,957 (115,156) (25,199) (97,563) 2014 99,332 (115,156) (15,824) (113,387) 2015 91,999 (115,156) (23,157) (136,544) 2016 116,749 (115,156) 1,593 (134,951) 2017 148,773 (115,156) 33,617 (101,334) 2018 206,192 (115,156) 91,036 (10,298) 2019 208,718 (115,156) 93,562 83,264 2020 151,991 (115,156) 36,835 120,099 Fiscal Year Ending June 30, C.3.a Packet Pg. 48 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) What inspires you, inspires us. | eidebailly.com 10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE 14 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and Measure I Compliance Requirements To the Board of Directors San Bernardino County Transportation Authority San Bernardino, California We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Measure I Fund of the City of Grand Terrace, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements and have issued our report thereon dated February 14, 2022. Our report included an emphasis of matter stating that the financial statements of the Measure I Funds do not purport to, and do not, present fairly the financial position of the City as of June 30, 2021. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting of the Measure I Fund (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. C.3.a Packet Pg. 49 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 15 Compliance and Other Matters As part of obtaining reasonable assurance about whether the financial statements of the Measure I Fund of the City are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including requirements of Measure I as specified in the agreement between the City and San Bernardino County Transportation Authority (SBCTA), noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards, including the requirements of Measure I as specified in the agreement between the City and SBCTA. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Rancho Cucamonga, California February 14, 2022 C.3.a Packet Pg. 50 At t a c h m e n t : A n n u a l A u d i t R e p o r t M e a s u r e I F u n d ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) AGENDA REPORT MEETING DATE: April 12, 2022 Council Item TITLE: Auditor's Annual Financial Report and Related Documents for the Fiscal Year Ended June 30, 2021 PRESENTED BY: Terry Shea, Interim Finance Director RECOMMENDATION: Receive and File the Auditor's Annual Financial Report and related documents for the Fiscal Year ended June 30, 2021. 2030 VISION STATEMENT: This staff report supports City Council Goal #1, “Ensuring Our Fiscal Viability” through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations. BACKGROUND: Each year, the City has an independent audit conducted of its financial statements and related internal control procedures. The audit for the fiscal year ended June 30, 2021, has been completed and the Annual Financial Report issued by the City’s auditor, Lance, Soll & Lunghard, LLP. DISCUSSION: One of the key aspects of any annual financial audit is the Independent Auditor’s Report, which is provided on page 1 of the Annual Audit Report (Exhibit A). The Independent Auditor’s Report provides its opinion on whether or not the financial statements fairly present, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information as of the end of the fiscal year, and the respective changes in financial position and cash flows, where applicable, in conformance with Generally Accepted Accounting Principles (GAAP). The resulting “opinion letter” is either Unmodified or modified. The “opinion letter” received by the City for its financial statements for the period ended June 30, 2021, is unmodified, indicating that the financial statements fairly represent the City’s financial position in accordance with GAAP. In addition to the Annual Financial Report, the independent auditor issues other related documents, which are summarized below: • Audit Communication Letter (Exhibit B) C.4 Packet Pg. 51 The audit communications letter discusses the auditor’s responsibilities under Government Auditing Standards and any significant issues encountered during the audit that warrant disclosure. None of the misstatements detected as a result of the audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. The Auditor’s indicated there were no significant difficulties dealing with management in performing and completing their audit. There were no disagreements with management in regard to financial accounting, reporting or auditing that could be material to the financial statements taken as a whole. • Internal Control & Compliance Report (Exhibit C) The Internal Control & Compliance Report identifies any material internal control deficiencies that impact the financial statements. The results of the tests performed by the City auditors did not identify any deficiencies in internal control that are required to be reported under Government Auditing Standards. In addition, the results of the Auditor’s tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. FISCAL IMPACT: There is no fiscal impact associated with the receipt of the Annual Financial Report and related documents for the year ended June 30, 2021. ATTACHMENTS: • Annual Audit Report FY2020-21 (PDF) • Audit Communication Letter (PDF) • Report on Internal Control & Compliance (PDF) APPROVALS: Terry Shea Completed 04/05/2022 10:19 AM City Manager Completed 04/06/2022 9:15 AM City Council Pending 04/12/2022 6:00 PM C.4 Packet Pg. 52 &,7<2)*5$1'7(55$&(&$/,)251,$ )257+(),6&$/<($5(1'('-81($118$/),1$1&,$/5(3257 C.4.a Packet Pg. 53 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&(&$/,)251,$ $118$/),1$1&,$/5(3257 )257+(),6&$/<($5(1'('-81( C.4.a Packet Pg. 54 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( $118$/),1$1&,$/5(3257 )257+(),6&$/<($5(1'('-81( 7$%/(2)&217(176 3DJH 1XPEHU ,1'(3(1'(17$8',7256¶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² 0LVFHOODQHRXV&RVW6KDULQJ3ODQ 6FKHGXOHRI3ODQ&RQWULEXWLRQV²0LVFHOODQHRXV&RVW6KDULQJ3ODQ 23(%3ODQ 6FKHGXOHRI&KDQJHVLQ7RWDO23(%/LDELOLW\DQG5HODWHG5DWLRV C.4.a Packet Pg. 55 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( $118$/),1$1&,$/5(3257 )257+(),6&$/<($5(1'('-81( 7$%/(2)&217(176 3DJH 1XPEHU %XGJHWDU\&RPSDULVRQ,QIRUPDWLRQ *HQHUDO)XQG 6WUHHW,PSURYHPHQW)XQG +RXVLQJ$XWKRULW\ +LJKZD\6DIHW\,PSURYHPHQW3URJUDP 1RWHVWR5HTXLUHG6XSSOHPHQWDU\,QIRUPDWLRQ &20%,1,1*$1',1',9,'8$/)81'67$7(0(176$1'6&+('8/(6 &RPELQLQJ%DODQFH6KHHW1RQPDMRU*RYHUQPHQWDO)XQGV &RPELQLQJ6WDWHPHQWRI5HYHQXHV([SHQGLWXUHVDQG &KDQJHVLQ)XQG%DODQFHV1RQPDMRU*RYHUQPHQWDO)XQGV %XGJHWDU\&RPSDULVRQ,QIRUPDWLRQ±6SHFLDO5HYHQXH)XQGV 6WRUP'UDLQ,PSURYHPHQW 3DUN'HYHORSPHQW $%&236 $LU4XDOLW\,PSURYHPHQW 6WDWH*DV7D[ 7UDIILF6DIHW\ )DFLOLWLHV'HYHORSPHQW 0HDVXUH, &'%* 6SHFLDO'LVWULFWV/DQGVFDSHDQG/LJKWLQJ'LVWULFW 6SULQJ0RXQWDLQ5DQFK &DO5HF\FOH*UDQW 6HQLRU%XV3URJUDP 3XEOLF(GXFDWLRQDO *RYHUQPHQW$FFHVV &29,'(PHUJHQF\ 505$ %XGJHWDU\&RPSDULVRQ,QIRUPDWLRQ±&DSLWDO3URMHFW)XQGV &DSLWDO,PSURYHPHQW6WUHHWV &DSLWDO3URMHFWV3DUNV &DSLWDO,PSURYHPHQW±&RPPHUFH:D\3URMHFW C.4.a Packet Pg. 56 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Report on the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Grand Terrace, California, (the City) as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the date of the financial statements. 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 C.4.a Packet Pg. 57 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Other Reporting Responsibilities Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison schedules for the General Fund, Street Improvement Fund, Housing Authority and Highway Safety Improvement Program, the schedule of proportionate share of the net pension liability and the schedule of employer contributions for the miscellaneous cost-sharing pension plan, and the schedule of changes in total OPEB liability and related ratios to be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 C.4.a Packet Pg. 58 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 11, 2022, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Brea, California March 11, 2022 3 C.4.a Packet Pg. 59 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 7+,63$*(,17(17,21$//</()7%/$1. 4 C.4.a Packet Pg. 60 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Management's Discussion and Analysis The following discussion and analysis of the financial performance of the City of Grand Terrace provides an overview of the City's financial activities for the fiscal year ended June 30, 2021. The information presented herein should be considered in conjunction with the City’s financial statements identified in the accompanying table of contents. Financial Highlights The assets and deferred outflows of resources of the City of Grand Terrace exceeded its liabilities and deferred inflows of resources on June 30, 2021 by $20.4 million (net position). The City’s net position decreased by $250,535 from the previous fiscal year from $20.6 million to $20.4 million. As of June 30, 2021, the City of Grand Terrace’s governmental funds had reported combined ending fund balances of $9.0 million, a decrease of $559,685 from the previous fiscal year. Of this total, approximately $7.8 million, or 86.7% of the total fund balance, are either non-spendable or restricted due to the nature of the restriction. The total debt of the City showed a net increase of about $444,215 from the prior fiscal year due to the increase in both the City’s OPEB liability and net pension liability. During FY 2020-21, the OPEB obligation of the City increased by about $0.26 million from $1,700,064 to $ 1,964,307. The City’s Net Pension Liability increased by about $0.22 million from the prior year from $5,141,928 to $5,365,454 in FY 2020-21. The General Fund had a year-end fund balance of $3.7 million on June 30, 2021. This was a decrease of $2,097. Using the Accompanying Financial Statements Included in the accompanying report are fund financial statements. For governmental activities, the fund financial statements explain how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City's operations in more detail than the government-wide statements by providing information about the City's most significant funds. Overview of the Financial Statements The annual report consists of four parts - management's discussion and analysis (this section), the basic financial statements, required supplementary information and an optional section that presents combining statements for nonmajor governmental funds. The basic financial statements include two kinds of statements that present different views of the City: The first two statements are government-wide financial statements that provide both long-term and short-term information about the City's overall financial status. The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City's operations in more detail than the government-wide statements. The governmental funds statements explain how general government services like public safety were financed in the short term as well as what remains for future spending. Proprietary funds statements offer short and long-term financial information about the activities the government operates like a business. Fiduciary fund statements provide information about the fiduciary relationships - like the custodial funds of the City - in which the City acts solely as agent or trustee for the benefit of others, to whom the resources in question belong. The financial statements also include notes that provide additional explanatory information regarding the financial statements, as well as more detailed data. The statements are followed by a section of required supplementary spreadsheets that provide additional financial and budgetary information. 5 C.4.a Packet Pg. 61 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Reporting the City as a Whole The accompanying government-wide financial statements include two statements that present financial data for the City as a whole. The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities. The statement of net position includes all of the City’s assets and liabilities, as well as any deferred outflows and inflows. The statement of activities includes all current year revenues and expenses regardless of when cash is received. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. These two statements report the City's net position and changes in net position that transpired during the fiscal year. The City's net position - the difference between assets and liabilities is one way to measure the City's financial health, or financial position. Over time, increases and decreases in the City's net position are one indicator of whether its financial health is improving or deteriorating. Other nonfinancial factors, however, should also be considered such as changes in the City's property tax or sales tax base and the condition of the City's roads, to assess the overall health of the City. The Statement of Net Position and the Statement of Activities are divided into two types of activities: Governmental activities - Most of the City's basic services such as public safety, public works, community development, and general government are reported here. Sales taxes, property taxes, state subventions, and other revenues finance most of these activities. Business-type activity - The Waste Water Disposal Fund accounts for the remaining assets and liabilities of the fund that used to account for the provision of waste water disposal services to the residents and businesses within the City of Grand Terrace. The City of Colton/ Colton Utility Authority now provide wastewater disposal services for the City’s residents and businesses. Reporting the City's Most Significant Funds The fund financial statements provide detailed information about the City's most significant funds - not the City as a whole. Some funds are required to be established by State law or by bond covenants. However, the City establishes many other funds to help it control and manage financial resources for particular purposes or to demonstrate that it is meeting oversight responsibilities for using certain taxes, grants, or other money. The City's two types of funds - governmental and proprietary - use different accounting approaches. Governmental funds - Most of the City's basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances remaining at year end that are available for spending. These funds are reported using the modified accrual accounting method, which measures cash and all other current financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps to determine whether there are greater or fewer financial resources that can be spent in the near future to finance the City's programs. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Proprietary funds - When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City's enterprise fund is the same as the business-type activities reported in the government-wide statements, but provides more detail and additional information, such as cash flows, for the proprietary fund. The City does not use internal service funds (the other component of proprietary funds) to report activities that provide supplies and services for the City's other programs and activities. 6 C.4.a Packet Pg. 62 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Reporting the City's Fiduciary Responsibilities The City is an agent for certain assets held for, and under the control of, other organizations and individuals. These activities are excluded from the City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. Government-wide Financial Statements As noted earlier, net position may serve over time as a useful indicator of a government's financial position. On June 30, 2021, net position for the City of Grand Terrace was $20,400,754; compared to net position of $20,651,289 at June 30, 2020. A summary of the government-wide Statement of Net Position on June 30, 2021 and June 30, 2020 are as follows: Table 1 Net Position 2021 2020 2021 2020 2021 2020 Current and other assets 11,002,419$ 11,492,601$ 1,611,627$ 1,598,051$ 12,614,046$ 13,090,652$ Capital assets, net 11,098,772 10,875,021 4,442,558 4,531,128 15,541,330 15,406,149 Total assets 22,101,191 22,367,622 6,054,185 6,129,179 28,155,376 28,496,801 Deferred Outflows Pension & OPEB 1,340,208 1,245,392 - - 1,340,208 1,245,392 Other liabilities 1,386,145 1,668,571 6,875 6,875 1,393,020 1,675,446 Long-term liabilities 7,437,822 7,008,125 - - 7,437,822 7,008,125 Total liabilities 8,823,967 8,676,696 6,875 6,875 8,830,842 8,683,571 Deferred inflows Pension & OPEB 263,988 519,177 - - 263,988 519,177 Invested in capital assets 11,098,772 10,875,021 4,442,558 4,531,128 15,541,330 15,406,149 Restricted 6,974,709 7,990,546 - - 6,974,709 7,990,546 Unrestricted (3,720,037) (4,448,426) 1,604,752 1,591,176 (2,115,285) (2,857,250) Total net assets 14,353,444$ 14,417,141$ 6,047,310$ 6,122,304$ 20,400,754$ 20,539,445$ Governmental Activities Business-type Activities Total $15,541,330 (76.2%) of the net position reflects the City's investment in capital assets. Since these assets are used to provide services to the citizens, they are not available for future spending. An additional $6,974,709 (34.2%) represents resources that are subject to external restrictions on how they may be used. The unrestricted net position resulted in a negative amount of $2,115,285 (-10.4%). The City’s net position decreased by $250,535 from $20,651,289 in FY 2019-20 to $20,400,754 during FY 2020-21. 7 C.4.a Packet Pg. 63 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) A summary of the government-wide Statement of Activities for the year ended June 30, 2021 and 2020 are as follows: Table 2 Changes in Net Position 2021 2020 2021 2020 2021 2020 Revenues and transfers Program revenues: Charges for services 995,955$ 1,082,554$ - - 995,955$ 1,082,554$ Operating contributions - and grants 514,122 498,610 - - 514,122 498,610 Capital contributions - and grants 1,026,502 699,728 - - 1,026,502 699,728 General revenues:- Property tax 3,607,233 4,010,252 - - 3,607,233 4,010,252 Sales tax 1,064,567 833,919 - - 1,064,567 833,919 Motor vehicle in lieu 9,114 10,015 - - 9,114 10,015 Other taxes 633,032 571,439 - - 633,032 571,439 Use of money & property 375,195 481,345 13,576 38,591 388,771 519,936 Other revenues 3,121 9,937 - - 3,121 9,937 Total revenues 8,228,841 8,197,799 13,576 38,591 8,242,417 8,236,390 Expenses General government 2,311,249 1,792,326 - - 2,311,249 1,792,326 Public safety 2,557,133 2,492,142 - - 2,557,133 2,492,142 Public works 2,380,893 2,205,635 - - 2,380,893 2,205,635 Economic development 17,948 7,258 - - 17,948 7,258 Cultural and recreation 1,137,159 1,479,335 - - 1,137,159 1,479,335 Waste water disposal - - 88,570 88,570 88,570 88,570 Total Expenses 8,404,382 7,976,696 88,570 88,570 8,492,952 8,065,266 Change in net position (175,541) 221,103 (74,994) (49,979) (250,535) 171,124 Beginning net position 14,417,141 14,196,038 6,122,304 6,172,283 20,539,445 20,368,321 Restatement of Net Position 111,844 - - - 111,844 - Ending net position 14,353,444$ 14,417,141$ 6,047,310$ 6,122,304$ 20,400,754$ 20,539,445$ Governmental Activities Business-type Activities Total The increase or decrease in net position can provide an indication as to whether the overall financial position of the City improved or worsened during the year. The total net position of the City on June 30, 2021 decreased by $250,535 or 1.2% compared to the net position of the City at the end of FY 2019-2020. Taken separately, the net position of governmental activities decreased by $175,541, while the net position of business-type activities decreased by $74,994. Total expenses of $8,492,952 were offset by total revenues of $8,242,417. In the Statement of Activities, expenditures do not include the cost of assets capitalized during the year or payments made on principal of outstanding debt. Depreciation is shown for governmental funds on this table, but the expense is not recorded in each individual fund. After the deduction of capitalized assets, the next largest component in changes to net position is the actual increase or decrease in fund balances resulting from operations. For governmental funds there was a net decrease of $559,685. Of this amount, a net decrease of $135,096 is attributable to the nonmajor funds, a net decrease of $19,677 to the Housing Authority, a net increase of $3,549 to the Street Improvement Fund, a net decrease of $406,364 to the Highway Safety Improvement Program Fund with the difference being a net decrease to the General Fund of $2,097. 8 C.4.a Packet Pg. 64 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Governmental Activities The following table shows the cost of each of the City’s major programs and their net cost after subtracting fees and other direct revenue generated by the activities. The net cost reflects the financial burden that was placed on the City taxpayers by each of the programs. Net Cost of Governmental Activities Total Cost of Services Net Cost of Services Total Cost of Services Net Cost of Services General government 2,311,249$ 1,773,454$ 1,792,326$ 1,556,861$ Public safety 2,557,133 2,265,490 2,492,142 2,169,549 Public works 2,380,893 752,830 2,205,635 562,355 Economic development 17,948 17,948 7,258 49,422 Cultural and recreation 1,137,159 1,058,081 1,479,335 1,357,617 Total 8,404,382$ 5,867,803$ 7,976,696$ 5,695,804$ 2021 2020 This table shows the cost of all governmental activities this year was $ 8,404,382. General tax dollars paid for approximately 69.8 percent of this cost. Fees, grants and contributions and fund balances at the beginning of the fiscal year funded the balance of the cost of governmental activities. Revenues by Source - Governmental Activities $8,228,841 Charges for services 12% Operating contributions and grants 6% Capital contributions and grants 12% Property tax 44% Sales tax 13% Other taxes 8% Other revenues 5% 9 C.4.a Packet Pg. 65 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Expenses by Function - Governmental Activities - $8,404,382 General Government 28% Public Safety 30% Economic Development 0% Cultural & recreation 14% Public Works 28% Business-Type Activity In March 2014, the cities of Grand Terrace and Colton entered into sewer services and lease agreements for fifty (50) years. These agreements extricated Grand Terrace from the wastewater collection business. In accordance with the Sewer Services Agreement with the City of Colton/ Colton Utility Authority, the provision of sewer services for the City’s residents and businesses are no longer being directly provided by the City of Grand Terrace. Hence, the City of Grand Terrace no longer receives sewer services revenues from the City’s residents and businesses. Likewise, sewer- services related expenditures are also no longer being incurred and recorded in the City’s Waste Water Disposal Fund. The following were the only financial- related activities recorded in the City’s Waste Water Disposal Fund during FY 2020-21: x Annual depreciation amounting to $88,570 of all wastewater sewer capital assets which are still owned by the City; and x Interest income of $13,576 earned by the remaining cash in the Waste Water Disposal Fund. Expenses and Program Revenues – Business-type Activities 0 300,000 600,000 900,000 1,200,000 1,500,000 1,800,000 Waste Water Treatment Operating Expenses Non-operating Revenues 10 C.4.a Packet Pg. 66 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Major Funds As noted earlier, the City uses fund accounting to provide proper financial management of the City's resources and to demonstrate compliance with finance-related legal requirements. Major Governmental Funds: The General Fund is the main operating fund of the City. At the end of FY 2020-21, the fund balance of the General Fund decreased by $2,097 from a fund balance of $3,726,837 on June 30, 2020 to $3,724,740 at June 30, 2021. Total fund balance in all Governmental Funds was $9,045,660. The General Fund Revenues and Expenditures are shown below: Increase (Decrease) in 2020-2021 2019-2020 Fund Balance Revenues 6,307,795$ 6,395,001$ (87,206)$ Expenditures (6,124,167) (5,947,514) (176,653) Other Sources (Uses)(185,725) (60,768) (124,957) Net Change in Fund Balance (2,097) 386,719 (388,816) Beginning Fund Balance 3,614,993 3,228,274 386,719 Restatements 111,844 - 111,844 Ending Fund Balance 3,724,740$ 3,614,993$ 109,747$ The significant highlights in activities - revenues and expenditures of the City's General Fund from the prior year are as follows: General Fund revenues were exceeded by expenditures and transfers out by $2,097. Total General Fund revenues decreased by $87,206 or 1 percent from FY 2019-20. This decrease in revenues is mainly due to the decrease in RPTTP Residual Receipts of $1,354,689 compared to $1,911,319 from the prior fiscal year, a decrease of almost 29%. Property taxes received decreased by 9.0 percent from $3,963,605 to $3,552,688, a difference of about $410,917. This decrease in property tax is attributable to the decrease in RPTTF Residual Receipts by $556,630. During the fiscal year, the increase in Property Tax-VLF Swap of $56,178 and the increase in all other categories of $89,755 offset the decrease to this category. x Gross Sales tax increased by $230,648 from $833,919 to $1,064,567 compared to the previous fiscal year. x Charges for service, including licenses and permits in FY 2020-21 increased by 11.2 percent from $1,071,800 to $1,192,998. The revenues belonging to this category which include Franchise Fees, Business License Tax, Dog License, Engineering Fees, Public Works Permits, Construction Permits, Building Safety Plan Review, Environmental Assessment Reports & Sports League Fees Surcharge were consistent with the previous year, except for the Franchise Fees which increased $57,448 from $480,007 to $537,455. x Fines and forfeitures received during FY 2020-21 increased by $6,188 or 9.9 percent from $66,309 during FY 2019-20 to $72,797 during FY 2020-21. The increase in this category resulted from increases and decreases from the collections of the following General Fund revenues: Sweep Day Citations increased by $9,651, Code Enforcement fines decreased by $1,467, Parking Citations decreased by $6,215, and Tow Charges increased by $2,760. 11 C.4.a Packet Pg. 67 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) x The overall operating expenditures of the General Fund increased by about 3 percent over the prior year from $5,947,514 to $6,124,167. The increase of $176,653 between FY 2019-20 and FY 2020-21 was due to a combination of increased expenditures in some functional categories of government and decreased expenditures in other functional categories of government. x There was decreased spending in the following functions during FY 2020-21 compared to FY 2019-20 Public Works category by $234,742, the Cultural and Reconciliation category of $72,969, and the Capital Outlay category by $21,672. However, there was increased spending during FY 2020-21 in the following functions of government over the prior fiscal year– General Government increased by $449,403 and Public Safety increased by $56,633. x Of the total $6,124,167 in General Fund operating expenditures, total general government expenditures represented 29.8 percent, public works expenditures represented 18.6 percent, public safety expenditures represented 38.4 percent, cultural & recreation represented 12.0 percent and capital outlay represented 1.2 percent. Other major governmental funds include the Street Improvement Fund, the Housing Authority Fund and the Highway Safety Improvement Program. The Street Improvement Fund had a positive net change of $3,459 during the fiscal year. The fund balance of the Housing Authority Fund decreased by $19,677 during FY 2020-21. This fund accounts for the housing assets because of the dissolution of community redevelopment agency of the City. The fund balance of the Highway Safety Improvement Program Fund decreased by $406,364 due to the completion of a grant funded project during FY2020-21 and the grant revenues being unavailable at June 30, 2021. Nonmajor Funds The Nonmajor funds, as listed in the table of contents of this report, include Gas Tax, Measure I, the Capital Improvement Funds, and most of the special revenue funds. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the City. In these cases, the City has a fiduciary responsibility and is acting as trustee. The Statement of Fiduciary Net Position included in the Basic Financial Statements, separately reports all the City’s fiduciary activities. The City’s fiduciary activities are reported in separate statements of fiduciary net position and statement of changes in fiduciary net position (Private Purpose Trust Fund- Successor Agency of the Former RDA only). Fiduciary funds are not reflected in the government- wide financial statements because the resources of those funds are not available to support the City’s own programs. However, the City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. 12 C.4.a Packet Pg. 68 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Capital Assets As of June 30, 2021, the City had invested $15,541,330 in a broad range of capital assets, including buildings, parks and park improvements, computer and maintenance equipment, vehicles, sewer collection systems, streets, sidewalks and storm drains. The City is exempt by provisions of Governmental Accounting Standards Board (GASB) Statement No. 34 from including the valuation of old City infrastructure prior to the implementation of GASB Statement No. 34. Capital Assets (Net of depreciation) 2021 2020 2021 2020 2021 2020 Land 3,257,291$ 3,112,881$ -$ -$ 3,257,291$ 3,112,881$ Buildings 2,008,363 2,149,689 - - 2,008,363 2,149,689 Improvements 2,732,813 2,459,519 71,642 80,070 2,804,455 2,539,589 Equipment 489,971 344,336 - - 489,971 344,336 Vehicles 46,525 73,643 - - 46,525 73,643 Infrastructure 1,579,789 1,818,464 - - 1,579,789 1,818,464 Sewer mains - - 2,372,771 2,417,472 2,372,771 2,417,472 Sewer laterals - - 1,202,781 1,223,791 1,202,781 1,223,791 Sewer manholes - - 795,364 809,795 795,364 809,795 Construction in progress 984,020 916,489 - - 984,020 916,489 11,098,772$ 10,875,021$ 4,442,558$ 4,531,128$ 15,541,330$ 15,406,149$ Governmental Activities Business-type activities Total Long-Term Debt At the end FY 2020-21, the City had debt outstanding of $7,410,807. The City’s net pension liability increased by $223,526 from $5,141,928 in the prior fiscal year to $5,365,454 at the end of June 30, 2021. The City’s other post- employment benefits (OPEB) obligations increased by $264,243 from $1,700,064 at the end of FY 2019-20 to $1,964,307 at the end of FY 2020-21. The City’s liability for long-term compensated absences decreased by $43,554 compared to the prior fiscal year from $124,600 to $81,046 at the end of June 30, 2021. Additional information on the City’s long-term debt can be found in the notes to the accompanying financial statements. Outstanding Debt Governmental Activities 2021 2020 Increase (Decrease) Total OPEB obligation 1,964,307$ 1,700,064$ 264,243$ Net Pension Liability 5,365,454 5,141,928 223,526 Compensated Absences 81,046 124,600 (43,554) Total Outstanding Debt 7,410,807$ 6,966,592$ 444,215$ 13 C.4.a Packet Pg. 69 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Economic Factors and Outlook for Future Years The City of Grand Terrace fiscal position in 2020-21 is sustainable and city maintains funds in a reserve account that is the equivalent of two months of expenses), allowing the city to post its sixth consecutive year of economic growth based on; fiscal responsibility; development of needed infrastructure; adequate public safety and a diligent strategy for economic independence. The $105,000,000 interchange project, which started construction in 2017 and was completed in 2020. The project leads to the heart of the city, creating a magnificent entrance to the City and its current and future commercial corridor. The completed interchange was designed to increase circulation by 30%, allowing over 40,000 cars per day to easily access Barton Rd. The increased circulation capacity enhances the City’s appeal to retailers as a vibrant commercial corridor between the two main metropolises of Riverside and San Bernardino. The completion of the Barton Rd Interchange is integral to the City of Grand Terrace’s Economic strategy. The economic prosperity of the City is linked directly to infrastructure. The interchange project leads to the heart of our economy with over 50% of all sales taxes generated in the City, coming from business on or adjacent to Barton Rd adjacent to the interchange. It is estimated that build out of businesses on Barton Rd within the next five years will lead to doubling of sales tax that is currently generated. Yet, during this same period, the completion of the interchange project will solidify the submittal of the 132-acre Gateway Specific Plan project, which is a mixed-use master plan project adjacent to the freeway with the ability to deliver a minimum of over $800,000 in property taxes to the City. While the City’s core revenue sources are steady, the City will receive an additional boost in property tax because of private transactions, leading to increase tax rolls. In addition, the Successor Agency of the Community Redevelopment Agency was dissolved in March of 2022 which will lead to an increase in property tax revenues as well. The City continues to see additional revenues materialize for Restricted/Special Purpose Funds allocated to it, after approval of the City’s Last and Final ROPS. The City will use these funds to continue to advance its long- term economic strategy with funds earmarked infrastructure, economic development, and elimination of blight. A significant amount of the funds will be used for infrastructure and economic development. SB-1 (Road Repair & Rehab Program) will allow the City to accelerate the repair of the City’s aging road infrastructure. The City has a successful track record of leveraging small amounts of general fund proceeds to go after grant programs to help build infrastructure. With the completion of the Interchange project, and the $300,000 Mount Vernon Avenue safety improvement program will enhance intersections for 5 major intersections in the City, four of which lead to most of our residential developments. We believe the improvements to these intersections will contribute to the growth and increase of property values. Finally, to balance out the City’s goal of economic growth for our entire community, staff is anticipating a major role for the City’s Housing Successor Agency in the coming years, as the City moves to promote economic development and housing for all. The Housing Successor Agency has over $1,400,000 in cash, in addition to assets, which will allow it to carry out the agency’s policies. 14 C.4.a Packet Pg. 70 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Requests for Information This financial report is designed to provide a general overview of the City’s finances for all those with interest in the government’s finances. Questions concerning any of the information provided in this report, or requests for additional information, should be addressed to the City Clerk, City of Grand Terrace, 22795 Barton Road, Grand Terrace, California 92313, or call (909) 824-6621. 15 C.4.a Packet Pg. 71 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 7+,63$*(,17(17,21$//</()7%/$1. 16 C.4.a Packet Pg. 72 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE STATEMENT OF NET POSITION Governmental Business-Type Activities Activities Total Assets: Cash and investments 9,617,454$ 630,105$ 10,247,559$ Receivables: Accounts 133,650 - 133,650 Notes and loans 604,491 - 604,491 Accrued interest 2,377 - 2,377 Internal balances (981,522) 981,522 - Prepaid costs 172,847 - 172,847 Due from other governments 788,122 - 788,122 Land held for resale 665,000 - 665,000 Capital assets not being depreciated 4,241,311 - 4,241,311 Capital assets, net of depreciation 6,857,461 4,442,558 11,300,019 Total Assets 22,101,191 6,054,185 28,155,376 Deferred Outflows of Resources: Deferred pension related items 1,012,426 - 1,012,426 Deferred OPEB related items 327,782 - 327,782 Total Deferred Outflows of Resources 1,340,208 - 1,340,208 Liabilities: Accounts payable 619,205 - 619,205 Accrued liabilities 64,781 - 64,781 Deposits payable 680,994 6,875 687,869 Due to other governments 21,165 - 21,165 Noncurrent liabilities: Due within one year Compensated absences 27,015 - 27,015 Due in more than one year Compensated absences 81,046 - 81,046 Total OPEB liability 1,964,307 - 1,964,307 Net pension liability 5,365,454 - 5,365,454 Total Liabilities 8,823,967 6,875 8,830,842 Deferred Inflows of Resources: Deferred pension related items 249,917 - 249,917 Deferred OPEB related items 14,071 - 14,071 Total Deferred Inflows of Resources 263,988 - 263,988 Net Position: Invested in capital assets 11,098,772 4,442,558 15,541,330 Restricted for: Community development projects 3,139,856 - 3,139,856 Public safety 25,020 - 25,020 Public works 2,716,854 - 2,716,854 Infrastructure projects 1,092,979 - 1,092,979 Unrestricted (3,720,037) 1,604,752 (2,115,285) Total Net Position 14,353,444$ 6,047,310$ 20,400,754$ JUNE 30, 2021 Primary Government See Notes to Financial Statements.17 C.4.a Packet Pg. 73 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2021 Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government 2,311,249$ 403,945$ 133,850$ -$ Public safety 2,557,133 134,750 156,893 - Economic development 17,948 - - - Cultural and recreation 1,137,159 79,078 - - Public works 2,380,893 378,182 223,379 1,026,502 Total Governmental Activities 8,404,382 995,955 514,122 1,026,502 Business-Type Activities: Waste Water Disposal 88,570 - - - Total Business-Type Activities 88,570 - - - Total Primary Government 8,492,952$ 995,955$ 514,122$ 1,026,502$ General Revenues: Taxes: Property taxes, levied for general purpose Sales taxes Franchise taxes Business licenses taxes Motor vehicle in lieu - unrestricted Use of money and property Other Total General Revenues Change in Net Position Net Position at Beginning of Year Restatement of Net Position Net Position at Beginning of Year, as Restated Net Position at End of Year Program Revenues See Notes to Financial Statements.18 C.4.a Packet Pg. 74 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) Primary Government Governmental Business-Type Activities Activities Total (1,773,454)$ -$ (1,773,454)$ (2,265,490) - (2,265,490) (17,948) - (17,948) (1,058,081) - (1,058,081) (752,830) - (752,830) (5,867,803) - (5,867,803) - (88,570) (88,570) - (88,570) (88,570) (5,867,803) (88,570) (5,956,373) 3,607,233 - 3,607,233 1,064,567 - 1,064,567 537,455 - 537,455 95,577 - 95,577 9,114 - 9,114 375,195 13,576 388,771 3,121 - 3,121 5,692,262 13,576 5,705,838 (175,541) (74,994) (250,535) 14,417,141 6,122,304 20,539,445 111,844 - 111,844 14,528,985 6,122,304 20,651,289 14,353,444$ 6,047,310$ 20,400,754$ Net (Expenses) Revenues and Changes in Net Position See Notes to Financial Statements.19 C.4.a Packet Pg. 75 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 76 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 77 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( 67$7(0(1762)5(9(18(6 (;3(1',785(6$1'&+$1*(6,1)81'%$/$1&(6 *29(510(17$/)81'6 <($5(1'('-81( 2WKHU 7RWDO *RYHUQPHQWDO *RYHUQPHQWDO *HQHUDO)XQGV )XQGV 5HYHQXHV 7D[HV $VVHVVPHQWV ,QWHUJRYHUQPHQWDO &KDUJHVIRUVHUYLFHV 8VHRIPRQH\DQGSURSHUW\ )LQHVDQGIRUIHLWXUHV 0LVFHOODQHRXV 7RWDO5HYHQXHV ([SHQGLWXUHV &XUUHQW *HQHUDOJRYHUQPHQW 3XEOLFVDIHW\ 3XEOLFZRUNV (FRQRPLFGHYHORSPHQW &XOWXUDODQGUHFUHDWLRQ &DSLWDORXWOD\ 3URMHFWLPSURYHPHQWFRVWV 7RWDO([SHQGLWXUHV ([FHVV'HILFLHQF\RI5HYHQXHV 2YHU8QGHU([SHQGLWXUHV 2WKHU)LQDQFLQJ6RXUFHV8VHV 7UDQVIHUVLQ 7UDQVIHUVRXW 7RWDO2WKHU)LQDQFLQJ6RXUFHV 8VHV 1HW&KDQJHLQ)XQG%DODQFHV )XQG%DODQFHV%HJLQQLQJRI<HDUDV SUHYLRXVO\UHSRUWHG 5HVWDWHPHQWV )XQG%DODQFHV%HJLQQLQJRI<HDUDVUHVWDWHG )XQG%DODQFHV(QGRI<HDU 6SHFLDO5HYHQXH)XQGV 6WUHHW ,PSURYHPHQW +RXVLQJ $XWKRULW\ +LJKZD\6DIHW\ ,PSURYHPHQW 3URJUDP 6HH1RWHVWR)LQDQFLDO6WDWHPHQWV22 C.4.a Packet Pg. 78 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2021 Net change in fund balances - total governmental funds (559,685)$ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense or are allocated to the appropriate functional expense when the cost is below the capitalization threshold. The activity is reconciled as follows: Cost of assets capitalized 1,025,354$ Depreciation expense (801,603) 223,751 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Change in compensated absences payable 58,072 Governmental funds report all contributions in relation to the actuarially determined contribution for OPEB as expenditures, however in the statement of activities only the annual OPEB cost is an expense.(179,686) Pension obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.41,922 Revenues reported as unavailable revenue in the governmental funds and recognized in in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity.240,085 Change in Net Position of Governmental Activities (175,541)$ See Notes to Financial Statements.23 C.4.a Packet Pg. 79 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2021 Assets: Current: Cash and investments 630,105$ Total Current Assets 630,105 Noncurrent: Advances to other funds 981,522 Capital assets - net of accumulated depreciation 4,442,558 Total Noncurrent Assets 5,424,080 Total Assets 6,054,185 Liabilities and Net Position: Liabilities: Deposits payable 6,875 Total Liabilities 6,875 Net Position: Investment in capital assets 4,442,558 Unrestricted 1,604,752 Total Net Position 6,047,310$ Business-Type Activities Waste Water Disposal See Notes to Financial Statements.24 C.4.a Packet Pg. 80 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( 67$7(0(172)5(9(18(6(;3(16(6 $1'&+$1*(6,1)81'1(7326,7,21<($5(1'('-81( 2SHUDWLQJ([SHQVHV 'HSUHFLDWLRQH[SHQVH 7RWDO2SHUDWLQJ([SHQVHV 2SHUDWLQJ,QFRPH/RVV 1RQRSHUDWLQJ5HYHQXHV([SHQVHV ,QWHUHVWUHYHQXH 7RWDO1RQRSHUDWLQJ 5HYHQXHV([SHQVHV &KDQJHVLQ1HW3RVLWLRQ 1HW3RVLWLRQ %HJLQQLQJRI)LVFDO<HDU (QGRI)LVFDO<HDU %XVLQHVV7\SH $FWLYLWLHV :DVWH:DWHU 'LVSRVDO 6HH1RWHVWR)LQDQFLDO6WDWHPHQWV25 C.4.a Packet Pg. 81 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 82 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2021 Assets: Cash and investments 1,115,416$ Receivables: Accounts 142,683 Interest 85 Total Assets 1,258,184 Liabilities: Current: Accounts payable 1,040,810 Total Liabilities 1,040,810 Net Position: Restricted for other purposes 217,374 Total Net Position 217,374$ Private- Purpose Trust Fund Successor Agency Private Purpose Trust Fund See Notes to Financial Statements.27 C.4.a Packet Pg. 83 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2021 Additions: RPTTF distribution 283,438$ Investment earnings 75 Total Additions 283,513 Deductions: Administrative expenses 5,930 Contractual services 161,753 Debt service payments - interest 1,570 Reimbursement of prior year taxes to County 885,797 Loss on sale of land held for resale 220,450 Total Deductions 1,275,500 Changes in Net Position (991,987) Net Position - Beginning of the Year 1,209,361 Net Position - End of the Year 217,374$ Private- Purpose Trust Fund Successor Agency Private Purpose Trust Fund See Notes to Financial Statements.28 C.4.a Packet Pg. 84 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2021 I. SIGNIFICANT ACCOUNTING POLICIES Note 1: Organization and Summary of Significant Accounting Policies a. Description of Entity The City of Grand Terrace (City) was incorporated in November 1978 under the General Laws of the State of California. The City operates under a Council-Manager form of government and provides the following services: public safety (law enforcement), highways and streets, cultural and recreational activities, public improvements, planning and zoning, building and safety, low and moderate income housing programs, and general administrative services. As required by generally accepted accounting principles, the financial statements of the City of Grand Terrace include the financial activities of the City (the primary government), and the City of Grand Terrace Public Financing Authority (the Authority). This blended component unit is discussed below and is included in the reporting entity because of the significance of its operation and financial relationship with the City. The Authority is legally separate from the City. However, the City of Grand Terrace’s elected officials have a continuing full or partial accountability for fiscal matters of the Authority. The financial reporting entity consists of: 1) the City, 2) organizations for which the City is financially accountable, and 3) organizations for which the nature and significance of their relationship with the City are such that exclusions would cause the City’s financial statements to be misleading or incomplete. An organization is fiscally dependent on the primary government if it is unable to adopt a budget, levy taxes or set rates or charges, or issue bonded debt without approval by the primary government. In a blended presentation, component unit balances and transactions are reported in a manner similar to the balances and transactions of the City. Component units are presented on a blended basis when the component unit’s governing body is substantially the same as the City’s or the component unit provides services almost entirely to the City. The following component units of the City have been included in the financial reporting entity as blended component units. City of Grand Terrace Public Financing Authority The Grand Terrace Public Financing Authority (the Authority) was established on July 16, 1991, pursuant to a Joint Powers Agreement between the City of Grand Terrace and the former Community Redevelopment Agency of the City of Grand Terrace. The Authority was created to facilitate financing of public capital improvements benefiting the City and the former RDA. The City Council also acts as the governing body of the Authority. The Authority’s activities are blended with those of the City. Separate financial statements are not prepared for the Grand Terrace Public Financing Authority. There are several other governmental agencies, including the County of San Bernardino, school districts, and others, providing services within the City of Grand Terrace. Those agencies have independently elected governing boards other than the City Council of the City of Grand Terrace and no financial accountability to the City of Grand Terrace. Consequently, financial information for these agencies is not included within this financial report. 29 C.4.a Packet Pg. 85 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 1: Organization and Summary of Significant Accounting Policies (Continued) b. Government-Wide and Fund Financial Statements The government-wide financial statements include a statement of net position and a statement of activities. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. Certain eliminations have been made as prescribed by GASB Statement No. 34 in regard to interfund activities, payables, and receivables. All internal balances in the statement of net position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions, including special assessments, that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenue are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the cash flows. Accordingly, all of the City's assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying statement of net position. The statement of activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The types of transactions reported as program revenues for the City are reported in three categories: 1) charges for services, 2) operating grants and contributions, and 3) capital grants and contributions. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified-accrual basis of accounting. Under the modified-accrual basis of accounting, revenues are recognized in these funds when susceptible to accrual (i.e., when they are both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers property taxes collected after year-end as available, if they are collected within 60 days of the end of the current fiscal period. Other revenue susceptible to accrual includes sales tax, state gasoline taxes, investment income, 30 C.4.a Packet Pg. 86 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 1: Organization and Summary of Significant Accounting Policies (Continued) and certain other intergovernmental revenues. Expenditures in the governmental funds are generally recognized in the accounting period in which the related fund liability is incurred, if measurable, except for unmatured principal and interest on general long-term debt, as well as compensated absences and claims and judgments, which are recognized when due. The City reports the following major governmental funds: x The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. x The Street Improvement Fund accounts for all revenues collected for street capital improvement fees under the Municipal Code. Funds are expended in accordance with the latest adopted fiscal impact study and capital needs assessment. x The Housing Authority Fund accounts for the housing assets transferred from the former redevelopment agency and Low and Moderate housing activities of the City. The fund activities are restricted for the same purposes as the former Low and Moderate Income Housing Fund of the Agency. x The Highway Safety Improvement Program accounts for activity of federal funding under Highway Safety Improvement Program which is used to achieve a reduction in traffic fatalities and serious injuries on all public roads. The City reports the following major proprietary fund: x The Waste Water Disposal Fund is used to account for the remaining assets and liabilities of the fund that used to account for the provision of waste water disposal services to the residences and businesses of the City. Currently, a Sewer Services Agreement is in place between the City of Colton/Colton Utility Authority and the City of Grand Terrace for the provision of waste-water disposal services by the City of Colton to residents and businesses of the City of Grand Terrace. Additionally, the City reports the following fund types: x Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes. x Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by the proprietary funds). x Permanent Fund accounts for resources that are legally restricted, to the extent that only earnings, and not principal, may be used for purposes that support the City’s program. x The Private Purpose Trust Fund is used to account for the resources, obligations, and activities of the Successor Agency of the Redevelopment Agency of the City of Grand Terrace as directed by the Oversight Board to settle the affairs of the dissolved agency (see Note 12). 31 C.4.a Packet Pg. 87 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 1: Organization and Summary of Significant Accounting Policies (Continued) As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the government's proprietary funds functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. d. Other Accounting Policies 1. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." 2. Cash and Cash Equivalents For the purpose of the statement of cash flows, the City considers cash and cash equivalents as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City follows the practice of pooling cash and investments of all funds. Since cash and investments are pooled, the City utilizes the assumption that the cash and investments in the Enterprise Fund are cash and cash equivalents. 3. Investments The City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. 4. Property Held for Resale Property held for resale is recorded at the lower of cost or net realizable value. 32 C.4.a Packet Pg. 88 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 1: Organization and Summary of Significant Accounting Policies (Continued) 5. Compensated Absences The short-term portion is determined to be the amount due to employees for future absences which is attributable to services already rendered and which is expected to be paid during the next fiscal year. The total amount of liability for compensated absences is segregated between short-term and long-term as indicated above and both portions are reflected in the government-wide statements. Vacation pay is payable to employees at the time a vacation is taken or upon termination of employment. Normally, an employee cannot accrue more than two times his regular annual entitlement. Sick leave is payable when an employee is unable to work because of illness. Upon termination, regular employees with 5 years continuous service will be paid 40% for any unused sick leave. 6. Capital Assets Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than or equal to $5,000 (amount not rounded) and an estimated useful life of at least two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated Capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value at the time of acquisition by the City. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated useful lives. Assets Years Buildings 50 Machinery & Equipment 5-15 Vehicles 6-15 Improvements other than buildings 15-20 Infrastructure 20-30 Sewer Lines 90 33 C.4.a Packet Pg. 89 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 1: Organization and Summary of Significant Accounting Policies (Continued) 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenditures. 8. Net Pension Liability For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pension, and pension expense, information about the fiduciary net position and additions to/deletions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS website under Forms and Publications. GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date (VD) June 30, 2019 Measurement date (MD) June 30, 2020 Measurement Period (MP) July 1, 2019 to June 30, 2020 9. Other Post-Employment Benefits (OPEB) Liability For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB and OPEB expense have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2019 Measurement Date June 30, 2021 Measurement Period July 1, 2020 to June 30, 2021 34 C.4.a Packet Pg. 90 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 1: Organization and Summary of Significant Accounting Policies (Continued) 10. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position and the governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City only has one item that qualifies for reporting in this category. Deferred outflows relating to the net pension obligation reported in the government-wide statement of net position. These outflows are the results of contributions made after the measurement period, which are expensed in the following year, and of adjustments due to difference in proportions, change in assumptions, and the difference between actual contributions made and the proportionate share of the risk pool’s total contributions. These amounts are deferred and amortized over the expected average remaining service lifetime. In addition to liabilities, the Statement of Net Position and the Governmental Balance Sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has three items, one of which, arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenue from intergovernmental revenues. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The other items are deferred pension related items and deferred OPEB related items. Gains and losses related to changes in total pension or OPEB liability and their related fiduciary net position are recognized in pension or OPEB expense, respectively, systematically over time. Amounts are first recognized in pension or OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pension or OPEB and are recognized in future pension and OPEB expense, respectively. The recognition period differs depending on the source of the gain or loss: Net difference between projected and actual earning on pension or OPEB plan investments 5 years All plans All other amounts are amortized over the expected average remaining service lifetime (EARSL) of the respective plan. At June 30, 2021, EARLS were: 5.7 years 3.8 years OPEB plan Pension Miscellaneous – Cost Sharing Plan 35 C.4.a Packet Pg. 91 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 1: Organization and Summary of Significant Accounting Policies (Continued) 11. Net Position Flow Assumption Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. 12. Fund Balance Flow Assumptions Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 13. Fund Balance Policies The City implemented GASB Statement No. 54, “Fund Balance Reporting and Governmental Fund Type Definitions”. This statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government’s fund balance more transparent. The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used: • Non-spendable – amounts that are not in a spendable form (such as inventory) or are required to be maintained intact. • Restricted – amounts constrained to specific purposes by their providers (such as grantors, bondholders and higher levels of government), through constitutional provisions or by enabling legislation. • Committed – amounts constrained to specific purposes determined by a formal action of the City Council, the government's highest level of decision-making authority. • Assigned – amounts the City intends to use for a specific purpose; intent can be expressed by City Council or by an official or body to which the City Council delegates the authority. By resolution, the Council has authorized the City Manager and/or Finance Director to assign fund balance. • Unassigned – amounts that are for any purpose; positive amounts are reported only in the general fund. 36 C.4.a Packet Pg. 92 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The City Council, as the City'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. 14. Property Tax Property tax revenue is recognized on the modified accrual basis, that is, in the fiscal year for which the taxes have been levied provided they become available. Available means when due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The County of San Bernardino collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January proceeding the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent, if unpaid, on August 31. 15. Use of Estimates The financial statements have been prepared in accordance with generally accepted accounting principles accepted in the United States of America and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. 16. Change in Accounting Principle and Effect of New Accounting Standards The City implemented Government Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities during fiscal year 2020-21. The requirements of this Statement will enhance consistency and comparability by (1) establishing specific criteria for identifying activities that should be reported as fiduciary activities and (2) clarifying whether and how business-type activities should report their fiduciary activities. Greater consistency and comparability enhance the value provided by the information reported in financial statements for assessing government accountability and stewardship. The change in accounting principle resulted in a prior period adjustment of $111,844 in the General Fund. 37 C.4.a Packet Pg. 93 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 II. STEWARDSHIP Note 2: Stewardship, Compliance and Accountability Deficit Fund Balances As of June 30, 2021, the following funds have deficit fund balances: Amount Highway Safety Improvement Program 428,049$ Enhanced Infrastructure Financing District 46,368 CDBG 15,314 Barton/Colton Bridge 21,273 Gas Tax 49,806 These deficits will be funded by future revenues or transfers from other funds. Budget The Enhanced Infrastructure Financing District Fund and Barton/Colton Bridge, did not adopt a budget for fiscal year 2020-21 and therefore budgetary comparison information is not presented: III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments Cash and investments as of June 30, 2021, are classified in the accompanying financial statements as follows: Statement of Net Position: Cash and Investments 10,247,559$ Statement of Fiduciary Net Position: Cash and Investments 1,115,416 Total Cash and Investments 11,362,975$ Cash and investments as of June 30, 2021, consist of the following: Cash on Hand 1,750$ Deposits with Financial Institutions 4,183,153 Investments 7,178,072 Total Cash and Investments 11,362,975$ 38 C.4.a Packet Pg. 94 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 3: Cash and Investments (Continued) Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy. Authorized Investment Type Maximum Maturity Maximum Percentage of Portfolio Maximum Investment in One Issuer U.S. Treasury Obligations 5 years None None Repurchase Agreements 6 years None None Certificates of Deposit 7 years None None Passbook Savings Accounts 8 years 30%None Securities Issued by Federal Agencies N/A None None Local Agency Investment Fund (LAIF) N/A None 50,000,000$ Mutual Funds N/A 20%None Pools and other Investment Structures N/A None None Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations are presented below. Remaining Investment Maturity Authorized Investment Type 12 Months or Less Local Agency Investment Fund (LAIF)3,016,861$ Local Gov. Invest. Pool (CAMP)4,160,026 First American Treasury 1,185 Total 7,178,072$ 39 C.4.a Packet Pg. 95 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 3: Cash and Investments (Continued) Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Information about the minimum rating required by the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each type of investment held by the City can be found below. Authorized Investment Type Amount Minimum Legal Rating Actual Rating Local Agency Investment Fund (LAIF)3,016,861$ N/A N/A Local Gov. Invest. Pool (CAMP)4,160,026 N/A N/A First American Treasury 1,185 N/A N/A Total 7,178,072$ Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. During the fiscal year ended June 30, 2021, the City did not hold any investments in any one issuer (other than Mutual Funds and External Investment Pools) that represent 5% or more of total City’s investments. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure deposits by pledging first deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2021, the City had deposits with financial institutions in excess of federal depository insurance limits of $3,933,153. 40 C.4.a Packet Pg. 96 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 3: Cash and Investments (Continued) Investments in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF has reported to its participating agencies that, as of June 30, 2021, the carrying amount (at amortized cost) of the Pool was $193,304,977,285 and the estimated fair value of the Pool was $193,321,015,759. The City’s proportionate share of the Pool’s market value (as determined by LAIF) as of June 30, 2021, was $3,016,861. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities. Local Government Investment Pool The City is a voluntary participant in the Local Government Investment Pool, “CAMP” (California Asset Management Program). CAMP is a California Joint Powers Authority, established to provide public agencies with professional investment services, and is directed by a Board of Trustees, which is made up of experienced local government finance directors and treasurers. The CAMP Pool is a permitted investment for all local agencies under California Government Code Section 53601(p). The City reports its share in the investment pool at the estimated fair market value. As of June 30, 2021, the City’s share of the Pool (as determined by CAMP) is $4,160,026. Included in the CAMP’s investment portfolio are U.S. treasury notes, bonds, bills or certificates of indebtedness or other obligations of the United States, federal agency or U.S. government-sponsored enterprise obligations, participations or other instruments, repurchase agreements, bills of exchange or time drafts, negotiable certificates of deposits, commercial paper of prime quality of the highest ranking or of the highest letter and number rating. Pooled Cash The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by outside fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated to the various funds based on the cash balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund. Fair Value Measurement and Application The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. 41 C.4.a Packet Pg. 97 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 3: Cash and Investments (Continued) The City has the following recurring fair value measurements as of June 30, 2021: Total 1 2 3 Uncategorized Investments: Local Government Investment Pool 4,160,026$ -$ -$ -$ 4,160,026$ First American Treasury 1,185 - 1,185 - - Local Agency Investment Fund 3,016,861 - - - 3,016,861 Total Cash Investments 7,178,072$ -$ 1,185$ -$ 7,176,887$ Investment Type Level Note 4: Interfund Receivable, Payable and Transfers The composition of interfund balances at June 30, 2021, is as follows: Due to/from other funds: Receivable Fund Payable Fund Amount General Fund Nonmajor Governmental Funds (1) 82,483$ General Fund Highway Safety Improvement Fund (1) 399,557 Street Improvement Fund Nonmajor Governmental Funds (2) 9,000 Nonmajor Governmental Funds Nonmajor Governmental Funds (2) 27,000 518,040$ (1) The General Fund advanced funds to the Highway Safety Improvement Program Fund, Enhanced Infrastructure Financing District, COVID-19 Emergency Fund, and the Barton/Colton Bridge Fund to cover deficit cash balances. (2) The Storm Drain Improvement Fund, Park Development Fund, Street Improvement Fund and Facilities Development Fund advanced funds of $9,000 each to the Enhanced Infrastructure Financing District Fund to cover expenditures. Advances from/to other funds: Receivable Fund Payable Fund Amount Housing Authority Fund General Fund 168,205$ Waste Water Disposal General Fund 981,522 1,149,727$ In April 1980, the Community Redevelopment Agency (CRA) entered into a pass-through agreement with the City, which was found to be in noncompliance with State statutes. The misallocated tax increment was being treated as an advance payable to the former Community Redevelopment Agency from the General Fund. Upon the dissolution of the Redevelopment Agency, the advance receivable was transferred to the Housing Authority and the Successor Agency and is shown as an advance to other funds in the Housing authority in the amount of $168,205. The advance is to be repaid as funds are available. 42 C.4.a Packet Pg. 98 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 4: Interfund Receivable, Payable and Transfers (Continued) On June 30, 2018, the Waste Water Disposal Fund formalized in a promissory note its advance to the General Fund in the amount of $875,000 for the acquisition of property located at 22273 Barton Road. Effective September 13, 2016, interest on the advance accrues at a rate equal to the Local Agency Investment Fund yield. Beginning July 1, 2022, the General Fund will make annual payments in the amount of $87,500. Thereafter payments will be made on the 1st day of each fiscal year. All outstanding principal and accrued interest under the note will be due and payable on July 1, 2030. At June 30, 2021, the advance to the General Fund amounts to $981,522 and includes accrued interest of $106,522. Interfund Transfers: Fund Receiving Transfers Fund Making Transfers Amount Nonmajor Governmental Funds General Fund (1) 185,725$ Nonmajor Governmental Funds Nonmajor Governmental Funds (2) 522,318 708,043$ (1) Transfers in the amount of $90,800 were made from the General Fund to the State Gas Tax Fund for franchise sweep fees and pavement impact fees. Transfers in the amount of $15,000 were made to the Senior Bus Program Fund for additional funding. Transfers in the amounts of $79,925 were made from the General Fund to the COVID-19 Emergency Fund to cover COVID costs. (2) Transfers in the amount of $456,893 were made to the Capital Improvement – Streets Fund for the Traffic Signal Modification Project on Barton Road and Preston Street. Transfers in the amount of $5,000 were made to the Senior Bus Program Fund for additional funding. Transfers in the amounts of $60,425 were made from the Facilities Development Fund to the COVID-19 Emergency Fund to cover COVID costs. 43 C.4.a Packet Pg. 99 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 5: Capital Assets Capital assets activity for the year ended June 30, 2021, was as follows: Beginning Ending Balance Transfers Additions Deletions Balance Governmental Activities: Capital assets, not being depreciated: Land 3,112,881$ -$ 144,410$ -$ 3,257,291$ Construction-in-progress 916,489 (467,351) 534,882 - 984,020 Total Capital Assets, Not Being Depreciated 4,029,370 (467,351) 679,292 - 4,241,311 Capital assets, being depreciated: Buildings 5,614,595 - - - 5,614,595 Machinery and Equipment 1,104,646 - 274,200 - 1,378,846 Vehicles 582,109 - - - 582,109 Improvements other than buildings 6,337,945 467,351 71,862 - 6,877,158 Infrastructure 4,495,682 - - - 4,495,682 Total Capital Assets, Being Depreciated 18,134,977 467,351 346,062 - 18,948,390 Less accumulated depreciation: Buildings 3,464,906 - 141,326 - 3,606,232 Machinery and Equipment 760,310 - 128,565 - 888,875 Vehicles 508,466 - 27,118 - 535,584 Improvements other than buildings 3,878,426 - 265,919 - 4,144,345 Infrastructure 2,677,218 - 238,675 - 2,915,893 Total Accumulated Depreciation 11,289,326 - 801,603 - 12,090,929 Total Capital Assets, Being Depreciated, Net 6,845,651 467,351 (455,541) - 6,857,461 Governmental Activities Capital Assets, Net 10,875,021$ -$ 223,751$ -$ 11,098,772$ Depreciation expense was charged to functions of the primary government as follows: Governmental Activities: General Government 142,020$ Public Safety 48,744 Public Works 280,793 Cultural and recreation 330,046 Total Depreciation expense - Governmental Activities 801,603$ 44 C.4.a Packet Pg. 100 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 5: Capital Assets (Continued) Beginning Ending Balance Additions Deletions Balance Business-type Activities: Capital assets, being depreciated: Sewer mains 4,023,128$ -$ -$ 4,023,128$ Laterals 1,890,944 - - 1,890,944 Manholes 1,298,760 - - 1,298,760 Improvements 202,274 - - 202,274 Total Capital Assets, Being Depreciated 7,415,106 - - 7,415,106 Less accumulated depreciation: Sewer mains 1,605,656 44,701 - 1,650,357 Laterals 667,153 21,010 - 688,163 Manholes 488,965 14,431 - 503,396 Improvements 122,204 8,428 - 130,632 Total Accumulated Depreciation 2,883,978 88,570 - 2,972,548 Business-type Activities Capital Assets, Net 4,531,128$ (88,570)$ -$ 4,442,558$ Note 6: Compensated Absences Compensated absences activity for the year ended June 30, 2021, was as follows: Beginning Ending Due Within Balance Additions Deletions Balance One Year Compensated Absences 166,133$ 78,554$ 136,626$ 108,061$ 27,015$ The City’s policies relating to compensated absences are described in Note 1 of the Notes to Financial Statements. The liability will be paid in future years as it becomes due from the General Fund. Note 7: Pension Plan Plan Description The City contributes to the California Public Employees Retirement System (PERS), a cost sharing multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of PERS’ annual financial report may be obtained from their executive office: 400 “P” Street, Sacramento, California 95814. 45 C.4.a Packet Pg. 101 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 7: Pension Plan (Continued) Benefits Provided CalPERS provides service retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. Below is the summary of the plans’ provisions and benefits in effect at June 30, 2021, for which the City of Grand Terrace has contracted: Tier 1 *Tier 2 PEPRA Hire date Prior to December 13, 2012 December 13, 2012 but prior to January 1, 2013 January 1, 2013 and after Benefit formula 2.7% @ 55 2% @ 60 2% @ 62 Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age minimum 50 yrs minimum 50 yrs minimum 52 yrs Monthly benefits, as a % of eligible compensation 2% - 2.7%, 50 yrs - 63+ yrs, respectively 1.092% - 2.418%, 50 yrs - 63+ yrs, respectively 1.000% - 2.500%, 52 yrs - 67+ yrs, respectively Required employee contribution rates 7.956%6.918%6.750% Required employer contribution rates 14.194%8.794%7.732% *Closed to new entrants Miscellaneous Cost-Sharing Plans Contribution Description Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS’ annual actuarial valuation process. The actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2021, the employer contributions recognized as a reduction to the net pension liability was $383,360. 46 C.4.a Packet Pg. 102 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 7: Pension Plan (Continued) Pension Liabilities, Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions As of June 30, 2021, the City reported net pension liabilities for its proportionate shares of the net pension liability of $5,365,454. The City’s net pension liability is measured as the proportionate share of the net pension liability. The net pension liability is measured as of June 30, 2020, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability as of June 30, 2019 and 2020 was as follows: Proportions as a percentage of the CalPERS risk pool: Proportion - June 30, 2019 0.05018% Proportion - June 30, 2020 0.04931% Change - Increase (Decrease)-0.00087% For the year ended June 30, 2021, the City recognized a total pension expense of $677,268. At June 30, 2021, the City reported deferred outflows and deferred inflows of resources related to pensions as follows: Deferred Outflows of Resources Deferred Inflows of Resources City contribution subsequent to the measurement date 576,539$ -$ Difference between Expected and Actual Experience 276,498 - Change in Assumptions - 38,269 Net Difference between Projected and Actual Earnings on Pension Plan Investments 159,389 - Adjustment due to Difference in Proportions - 122,803 Differences in proportionate share - 88,845 Total 1,012,426$ 249,917$ $576,539 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows: 47 C.4.a Packet Pg. 103 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 7: Pension Plan (Continued) Fiscal Year Ended June 30: Deferred Outflows/(Inflows) of Resources 2022 (79,794)$ 2023 90,398 2024 98,918 2025 76,448 185,970$ Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ended June 30, 2020, the total pension liability was determined by rolling forward the June 30, 2019 total pension liability. The June 30, 2020 total pension liability was based on the following actuarial methods and assumptions: Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions: Discount Rate Inflation Payroll Growth Investment Rate of Return Mortality Post Retirement Benefit Increase Miscellaneous Plan (1) 7.15% (2) Varies by Entry Age and Service 2.50% 7.15% June 30, 2020 Entry-Age Normal Cost Method June 30, 2019 Contract cost of living adjustment (COLA) up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies (2) Net of pension plan investment expenses, including inflation (1) Actuarial assumptions are the same for all benefit tiers (Classic Tier I, Classic Tier II, and PEPRA) (3)The mortality table used was developed based on the CalPERS' specific data. The table includes 15 years of projected mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on the table, please refer to the CalPERS December 2017 experience study report (based on CalPERS demographic data from 1997-2015) available on CalPERS' website. Derived using CalPERS Membership Data for all Funds (3) Subsequent Event On November 15, 2021, the CalPERS Board of Administration selected a new asset allocation mix that will guide the fund’s investment portfolio for the next for years, while at the same time retaining the current target rate of return. The Board also approved adding 5 percent leverage to increase investment diversification. The new asset allocation takes effect July 1, 2022 and is expected to decrease employer contribution rates from less than 1 percent to a decrease of more than 2 percent depending on the plan type. Employees in the PEPRA plans will likely see increases in their contribution rates. Contribution changes will take effect in fiscal year 2023-24. 48 C.4.a Packet Pg. 104 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 7: Pension Plan (Continued) Discount Rate The discount rate used to measure the total pension liability for PERF C was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical and forecasted information for all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short - term and long - term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated and adjusted to account for assumed administrative expenses. The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. Asset Class1 New Strategic Allocation Real Return Years 1 - 102 Real Return Years 11+3 Global Equity 50.00% 4.80%5.98% Fixed Income 28.00% 1.00%2.62% Inflation Assets 0.00% 0.77%1.81% Private Equity 8.00% 6.30%7.23% Real Assets 13.00% 3.75%4.93% Liquidity 1.00% 0.00%-0.92% 100.00% (1) In the System’s ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-Term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (2) An expected inflation of 2% used for this period. (3) An expected inflation of 2.92% used for this period. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. 49 C.4.a Packet Pg. 105 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 7: Pension Plan (Continued) The following presents the City’s proportionate share of the net pension liability, calculated using the discount rate of 7.15%, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage- point lower (6.15%) or 1-percentage-point higher (8.15%) than the current rate: Discount Rate - 1% Current Discount Discount Rate +1% 6.15%7.15%8.15% Miscellaneous 7,756,403$ 5,365,454$ 3,389,888$ Plans' Net Pension Liability/(Asset) Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS’ website for additional information. Note 8: Other Post-Employment Benefits Plan Description The City provides a medical plan coverage for retirees. This coverage is available for employees who satisfy the requirements for retirement under the California Public Employees Retirement System (PERS), which is age 50 or older with at least five years of State or public agency service. Medical plan benefits are provided through PERS, as permitted by the Public Employees’ Medical and Hospital and Care Act (PEMHCA). As a PEMHCA employer, the City has elected the unequal contribution method, where the contribution will be increased annually over twenty years until it reaches the same employer contribution as active employee medical plan coverage. Contributions The contribution requirements of plan members and the City are established and may be amended by the City Council. Currently, contributions are not required from plan members. The City is funding the Other-Post Employment Benefits plan on a pay-as-you-go basis. For fiscal year ended June 30, 2021, the City paid $62,881 in retiree health benefits. Employees Covered At June 30, 2021, the measurement date, the following numbers of participants were covered by the benefit terms: Number of Covered Participants Inactives currently receiving benefits 8 Inactives entitled to but not yet receiving benefits 18 Active employees 18 Total 44 50 C.4.a Packet Pg. 106 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 8: Other Post-Employment Benefits (Continued) Covered participant counts were available to the actuary for the June 30, 2019 actuarial valuation but not as of June 30, 2021 measurement date. Total OPEB Liability The City's total OPEB liability was measured as of June 30, 2021 for the measurement period July 1, 2020 through June 30, 2021. The total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation dated June 30, 2020, based on the following actuarial assumptions: Discount Rate 1.92% Inflation 2.25% Investment Rate of Return N/A Mortality Rate Healthcare Trend Rate Actuarial Assumptions Based on assumpriond for Public Agency Miscellaneous members published in the December 2017 CalPERS Experience Study. These tables include 15 years of static mortality improvement using 90% of scale MP-2016. 6.4% for FY2020, gradually decreasing over several decades to an ultimate rate of 3.8% in FY 2076 and later years. Change of Assumptions For the measurement date June 30, 2021, the discount rate decreased from 2.45% to 1.92%. Discount Rate The discount rate used to measure the total OPEB liability was 1.92%. Changes in the Total OPEB Liability. The changes in the total OPEB liability for the plan are as follows: Total OPEB Liability Measurememt Period 2020-21 Total OPEB Liability - June 30, 2020 1,700,064$ Changes in Total OPEB Liability Service Cost 147,070 Interest 44,484 Actual vs. expected experience (601) Assumption changes 136,171 Benefit payments (62,881) Net Changes 264,243 Total OPEB Liability - June 30, 2021 1,964,307$ 51 C.4.a Packet Pg. 107 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 8: Other Post-Employment Benefits (Continued) Sensitivity of the Total OPEB Liability to Changes in the discount rate The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is one percentage point higher or one percentage point lower than the current discount rate, for the measurement period June 30, 2021: 1% Decrease (0.92%) Current Rate (1.92%) 1% Increase (2.92%) Total OPEB Liability 2,264,992$ 1,964,307$ 1,718,749$ Discount Rate Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point higher or one percentage point lower than the current healthcare cost trend rates: 1% Decrease Current Rate 1% Increase Total OPEB Liability 1,845,254$ 1,964,307$ 2,123,351$ Healthcare Trend Rate OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2021, the City recognized OPEB expense of $179,686. At June 30, 2021, the City's deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Difference between Expected and Actual Experience 88,963$ 524$ Change in Assumptions 238,819 13,547 Total 327,782$ 14,071$ 52 C.4.a Packet Pg. 108 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 8: Other Post-Employment Benefits (Continued) Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Year Ended June 30 Deferred Outflows/(Inflows) of Resources 2022 51,013$ 2023 53,406 2024 55,687 2025 47,997 2026 47,997 Thereafter 57,611 313,711$ Note 9: Risk Management The City is a member of the California Joint Powers Insurance Authority (the "Authority"). The following joint venture disclosures are made in compliance with GASB Code Section J50.103: a. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City of Grand Terrace is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 123 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee. b. Primary Self-Insurance Programs of the Authority Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool. Primary Liability Program Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. 53 C.4.a Packet Pg. 109 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 9: Risk Management (Continued) (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses have a sub-limit of $40 million per occurrence. The coverage structure includes retained risk that is pooled among members, reinsurance, and excess insurance. More detailed information about the various layers of coverage is available on the following website: https://cjpia.org/protection/coverage-programs. Primary Workers’ Compensation Programs Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2020-21 the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased as part of a reinsurance policy, and Employer’s Liability losses from $5 million to $10 million are pooled among members. c. Purchased Insurance Pollution Liability Insurance The City of Grand Terrace participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Grand Terrace. Coverage is on a claim’s made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million. Property Insurance The City of Grand Terrace participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Grand Terrace property is currently insured according to a schedule of covered property submitted by the City of Grand Terrace to the Authority. City of Grand Terrace property currently has all-risk property insurance protection in the amount of $16,369,799. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible. 54 C.4.a Packet Pg. 110 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 9: Risk Management (Continued) Crime Insurance The City of Grand Terrace purchases crime insurance coverage in the amount of “Non Participant” with a “Non Participant” deductible. The fidelity coverage is provided through the Authority. d. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2020-21. Note 10: Commitments and Contingencies As of June 30, 2021, in the opinion of the City Administration and its legal counsel, there are no outstanding matters, which would have a material effect on the financial position of the City. The following material construction commitments existed at June 30, 2021: Project Name Contract Amount Expenditures to date as of June 30, 2021 Remaining Commitments Barton/Colton Bridge Project 26,547$ $ 18,623 7,924$ Michigan Walkable Street Plan 27,942 10,918 17,024 Blue Mountain Trail 89,592 37,495 52,097 HSIP Cycle 9 - Mt Vernon 19,789 8,900 10,889 2021-1 Road Maintenance and Rehabilitation 514,000 456,893 57,107 Note 11: Proposition 218 Proposition 218, which was approved by the voters in November 1996, will regulate the City's ability to impose, increase and extend taxes, assessments and fees. Any new, increased, or extended taxes, assessments, and fees subject to the provisions of Proposition 218 require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments, and fees are subject to the voter initiative process and may be rescinded in the future by the voters. Note 12: Successor Agency Private-Purpose Trust Fund to the Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Grand Terrace that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay 55 C.4.a Packet Pg. 111 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) CITY OF GRAND TERRACE NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED JUNE 30, 2021 Note 12: Successor Agency Private-Purpose Trust Fund to the Former Redevelopment Agency (Continued) enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private purpose trust fund) in the financial statements of the City. Cash and Investments As of June 30, 2021, cash and investments were reported in the accompanying financial statements as follows: Cash and Investments 1,115,416$ Total Cash and Investments 1,115,416$ Closing of Successor Agency The City is planning on closing the Successor Agency pending confirmation from the County of San Bernardino on March 7, 2022. Note 13: Subsequent Event ARPA Funds The City has received $1.15 million in Federal Aid under the American Recovery Plan Act (ARPA). The City will develop programs to assist local businesses and support eligible infrastructure. The City plans to spend the funds in FY21/22 and FY22/23. Note 14: Net Position and Fund Balances Restatement For the year ended June 30, 2021, the City restated beginning fund balance in the General Fund and beginning net position of Governmental Activities in the amount of $111,844 as part of the change in accounting principle related to the implementation of GASB Statement No. 84. This moved activities previously reported in fiduciary funds, but which no longer met the criteria of a fiduciary activity to the General Fund. 56 C.4.a Packet Pg. 112 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 7+,63$*(,17(17,21$//</()7%/$1. 57 C.4.a Packet Pg. 113 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( 0,6&(//$1(286&2676+$5,1*3/$1 6&+('8/(2)3523257,21$7(6+$5(2)7+(1(73(16,21/,$%,/,7< $62)-81()257+(/$677(1),6&$/<($56 )LVFDO<HDU 0HDVXUHPHQW'DWH 0LVFHOODQHRXV3ODQ 3URSRUWLRQRIWKH1HW3HQVLRQ/LDELOLW\ 3URSRUWLRQDWH6KDUHRIWKH1HW3HQVLRQ/LDELOLW\ &RYHUHG3D\UROO 3URSRUWLRQDWH6KDUHRIWKH1HW3HQVLRQ/LDELOLW\DV 3HUFHQWDJHRI&RYHUHG3D\UROO 3ODQ)LGXFLDU\1HW3RVLWLRQDVD3HUFHQWDJHRIWKH7RWDO 3HQVLRQ/LDELOLW\ 1RWHVWR6FKHGXOH %HQHILW&KDQJHV1RFKDQJHVLQEHQHILWV +LVWRULFDO LQIRUPDWLRQ LV UHTXLUHG RQO\ IRU PHDVXUHPHQW IRU ZKLFK *$6% 6WDWHPHQW 1R LV DSSOLFDEOH )LVFDO <HDU ZDV WKH ILUVW \HDU RI LPSOHPHQWDWLRQWKHUHIRUHRQO\VHYHQ\HDUVDUHVKRZQ &KDQJHVRI$VVXPSWLRQV,QWKHDFFRXQWGLVFRXQWUDWHZDVUHGXFHGIURPSHUFHQWWRSHUFHQW,QGHPRJUDSKLF DVVXPSWLRQVDQGLQIODWLRQUDWHZHUHFKDQJHGLQDFFRUDQFHWRWKH&DO3(56([SHULHQFHVWXG\DQG5HYLHZRI$FWXDULDO$VVXPSWLRQV 'HFHPEHU 58 C.4.a Packet Pg. 114 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 59 C.4.a Packet Pg. 115 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 116 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) 61 C.4.a Packet Pg. 117 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 118 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( *(1(5$/)81' <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU$XQG%DODQFHDVUHVWDWHG-XO\ 5HVRXUFHV,QIORZV 7D[HV ,QWHUJRYHUQPHQWDO &KDUJHVIRUVHUYLFHV 8VHRIPRQH\DQGSURSHUW\ )LQHVDQGIRUIHLWXUHV 0LVFHOODQHRXV 7UDQVIHUVLQ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ *HQHUDOJRYHUQPHQW 3XEOLFVDIHW\ &XOWXUDODQGUHFUHDWLRQ 3XEOLFZRUNV &DSLWDORXWOD\ 7UDQVIHUVRXW 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 6HH1RWHVWR5HTXLUHG6XSSOHPHQWDU\,QIRUPDWLRQ63 C.4.a Packet Pg. 119 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 675((7,03529(0(17 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV &KDUJHVIRUVHUYLFHV 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 6HH1RWHVWR5HTXLUHG6XSSOHPHQWDU\,QIRUPDWLRQ64 C.4.a Packet Pg. 120 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( +286,1*$87+25,7< <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO 8VHRIPRQH\DQGSURSHUW\ 0LVFHOODQHRXV 7UDQVIHUVLQ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ (FRQRPLFGHYHORSPHQW 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 6HH1RWHVWR5HTXLUHG6XSSOHPHQWDU\,QIRUPDWLRQ65 C.4.a Packet Pg. 121 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( +,*+:$<6$)(7<,03529(0(17352*5$0 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQ2XWIORZ 3XEOLFZRUNV &DSLWDORXWOD\ 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 6HH1RWHVWR5HTXLUHG6XSSOHPHQWDU\,QIRUPDWLRQ66 C.4.a Packet Pg. 122 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 123 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 124 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 125 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 126 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 127 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 128 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 129 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 130 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 131 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 132 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 133 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 134 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( &20%,1,1*67$7(0(172)5(9(18(6 (;3(1',785(6$1'&+$1*(6,1)81'%$/$1&(6 1210$-25*29(510(17$/)81'6 <($5(1'('-81( 5HYHQXHV 7D[HV $VVHVVPHQWV ,QWHUJRYHUQPHQWDO &KDUJHVIRUVHUYLFHV 8VHRIPRQH\DQGSURSHUW\ )LQHVDQGIRUIHLWXUHV 0LVFHOODQHRXV 7RWDO5HYHQXHV ([SHQGLWXUHV &XUUHQW *HQHUDOJRYHUQPHQW 3XEOLFVDIHW\ &XOWXUDODQGUHFUHDWLRQ 3XEOLFZRUNV &DSLWDORXWOD\ 7RWDO([SHQGLWXUHV ([FHVV'HILFLHQF\RI5HYHQXHV 2YHU8QGHU([SHQGLWXUHV 2WKHU)LQDQFLQJ6RXUFHV8VHV 7UDQVIHUVLQ 7UDQVIHUVRXW 7RWDO2WKHU)LQDQFLQJ6RXUFHV 8VHV 1HW&KDQJHLQ)XQG%DODQFHV )XQG%DODQFHV%HJLQQLQJRI<HDU )XQG%DODQFHV(QGRI<HDU &DSLWDO 3URMHFWV)XQG 3HUPDQHQW )XQGV &DSLWDO 3URMHFWV &RPPHUFH :D\3URMHFW 7RWDO *RYHUQPHQWDO )XQGV 'RJ3DUN (QGRZPHQW IXQG 79 C.4.a Packet Pg. 135 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 67250'5$,1,03529(0(17 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV &KDUJHVIRUVHUYLFHV 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 80 C.4.a Packet Pg. 136 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 3$5.'(9(/230(17 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 81 C.4.a Packet Pg. 137 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( $%&236)81' <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ 3XEOLFVDIHW\ 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 82 C.4.a Packet Pg. 138 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( $,548$/,7<,03529(0(17 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ 7UDQVIHUVRXW 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 83 C.4.a Packet Pg. 139 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 67$7(*$67$; <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO 8VHRIPRQH\DQGSURSHUW\ 7UDQVIHUVLQ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ 3XEOLFZRUNV 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 84 C.4.a Packet Pg. 140 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 75$)),&6$)(7< <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV 8VHRIPRQH\DQGSURSHUW\ )LQHVDQGIRUIHLWXUHV $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ 3XEOLFVDIHW\ 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 85 C.4.a Packet Pg. 141 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( )$&,/,7,(6'(9(/230(17 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV &KDUJHVIRUVHUYLFHV 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQ2XWIORZ &DSLWDORXWOD\ 7UDQVIHUVRXW 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 86 C.4.a Packet Pg. 142 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 0($685(, <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ 3XEOLFZRUNV &DSLWDORXWOD\ 7UDQVIHUVRXW 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 87 C.4.a Packet Pg. 143 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( &'%* <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ 3DUNVDQGUHFUHDWLRQ 3XEOLFZRUNV 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 88 C.4.a Packet Pg. 144 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 63(&,$/',675,&76/$1'6&$3( /,*+7,1* <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV 7D[HV 8VHRIPRQH\DQGSURSHUW\ )LQHVDQGIRUIHLWXUHV $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ 3XEOLFZRUNV 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 89 C.4.a Packet Pg. 145 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 635,1*02817$,15$1&+ <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV /LFHQVHVDQGSHUPLWV 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQ2XWIORZ 3XEOLFZRUNV 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 90 C.4.a Packet Pg. 146 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( &$/5(&<&/(*5$17 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQ2XWIORZ &DSLWDORXWOD\ 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 91 C.4.a Packet Pg. 147 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 6(1,25%86352*5$0)81' <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO &KDUJHVIRUVHUYLFHV 8VHRIPRQH\DQGSURSHUW\ 7UDQVIHUVLQ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQ2XWIORZ &XOWXUDODQGUHFUHDWLRQ 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 92 C.4.a Packet Pg. 148 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 38%/,&('8&$7,21$/ *29(510(17$&&(66 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV 8VHRIPRQH\DQGSURSHUW\ 0LVFHOODQHRXV $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQ2XWIORZ &DSLWDORXWOD\ 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 93 C.4.a Packet Pg. 149 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( &29,'(0(5*(1&<)81' <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO ,QWHUJRYHUQPHQWDO 8VHRIPRQH\DQGSURSHUW\ 7UDQVIHUVLQ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQ &KDUJHVWR$SSURSULDWLRQ2XWIORZ *HQHUDOJRYHUQPHQW 3DUNVDQGUHFUHDWLRQ 3XEOLFZRUNV &DSLWDORXWOD\ 7UDQVIHUVRXW 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 94 C.4.a Packet Pg. 150 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( 505$)81' <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV ,QWHUJRYHUQPHQWDO 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQ &KDUJHVWR$SSURSULDWLRQ2XWIORZ 7UDQVIHUVRXW 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 95 C.4.a Packet Pg. 151 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( &$3,7$/,03529(0(17675((76 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV 8VHRIPRQH\DQGSURSHUW\ 7UDQVIHUVLQ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQV2XWIORZ 3XEOLFZRUNV 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 96 C.4.a Packet Pg. 152 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( &$3,7$/352-(&73$5.6 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQ2XWIORZ &DSLWDORXWOD\ 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 97 C.4.a Packet Pg. 153 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) &,7<2)*5$1'7(55$&( %8'*(7$5<&203$5,6216&+('8/( &$3,7$/352-(&76&200(5&(:$<352-(&7 <($5(1'('-81( 9DULDQFHZLWK )LQDO%XGJHW %XGJHW$PRXQWV $FWXDO 3RVLWLYH 2ULJLQDO )LQDO $PRXQWV 1HJDWLYH %XGJHWDU\)XQG%DODQFH-XO\ 5HVRXUFHV,QIORZV 8VHRIPRQH\DQGSURSHUW\ $PRXQWV$YDLODEOHIRU$SSURSULDWLRQV &KDUJHVWR$SSURSULDWLRQ2XWIORZ &DSLWDORXWOD\ 7RWDO&KDUJHVWR$SSURSULDWLRQV %XGJHWDU\)XQG%DODQFH-XQH 98 C.4.a Packet Pg. 154 At t a c h m e n t : A n n u a l A u d i t R e p o r t F Y 2 0 2 0 - 2 1 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) March 11, 2022 To the Honorable Mayor and Members of the City Council City of Grand Terrace, California We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Grand Terrace, California (the City) for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated June 14, 2021. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings and Other Issues Qualitative Aspects of Significant Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. All significant transactions have been recognized in the financial statements in the proper period. As described in Note 1 to the financial statements, the City changed accounting policies related to Fiduciary Activities by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 84, Fiduciary Activities, in fiscal year 2020-2021 Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Statement of Changes in Fiduciary Net Position. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were: Management’s estimates of its net pension liability and net other post-employment benefits liability are based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the net pension liability, total other post-employment benefits liability in determining that they are reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. Significant Unusual Transactions Management is responsible for the policies and practices used to account for significant unusual transactions. No significant unusual transactions have occurred during fiscal year 2020-2021. 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 C.4.b Packet Pg. 155 At t a c h m e n t : A u d i t C o m m u n i c a t i o n L e t t e r ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. These differences are described below. In addition, none of the misstatements detected as a result of our audit procedures were material, either individually or in the aggregate, to the financial statements taken as a whole. Unadjusted Audit Differences Uncollectible receivable - CDBG 8,669$ Cumulative effect (before effect of prior year differences)8,669 Effect of unadjusted audit difference - prior year - Cumulative effect (after effect of prior year differences)8,669$ Current Year Over (Under) Revenues and Expenditures/Expenses and Changes in Fund Balance/Equity Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Circumstances that Affect the Form and Content of the Auditor’s Report New auditing standards were implemented in fiscal year 2020-2021 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, through Statement of Auditing Standards 140, Supplementary Information in Relation to the Financial Statements as a Whole. These standards updated the form and content of the financial statement auditor’s report. The purpose of the change was to present an easier format for users to understand the results of the audit and management’s responsibilities. Management Representations We have requested certain representations from management that are included in the management representation letter dated March 11, 2022. C.4.b Packet Pg. 156 At t a c h m e n t : A u d i t C o m m u n i c a t i o n L e t t e r ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues Discussed with Management We generally discuss a variety of matters, including the significant events or transactions that occurred during the year, business conditions affecting the City and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management discussion and analysis, budgetary comparison schedule for the General Fund, Street Improvement Fund, Housing Authority, and Highway Safety Improvement Program, the schedule of proportionate share of the net pension liability and the schedule of plan contributions for the miscellaneous cost-sharing pension plan, and the schedule of changes in net OPEB liability and related ratios which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual nonmajor fund financial statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit: GASB Statement No. 84, Fiduciary Activities. GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14 and 61. GASB Statement No. 98, Annual Comprehensive Financial Report C.4.b Packet Pg. 157 At t a c h m e n t : A u d i t C o m m u n i c a t i o n L e t t e r ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California The following GASB pronouncements are effective in the following fiscal years’ audits and should be reviewed for proper implementation by management: Fiscal year 2022 GASB Statement No. 87, Leases. GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. Fiscal year 2023 GASB Statement No. 91, Conduit Debt Obligations. GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangement. GASB Statement No. 96, Subscription-Based Information Technology Arrangements. Restriction on Use This information is intended solely for the use of City Council and management of the City of Grand Terrace and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Brea, California C.4.b Packet Pg. 158 At t a c h m e n t : A u d i t C o m m u n i c a t i o n L e t t e r ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council City of Grand Terrace, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Grand Terrace, California (the City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 11, 2022. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 C.4.c Packet Pg. 159 At t a c h m e n t : R e p o r t o n I n t e r n a l C o n t r o l & C o m p l i a n c e ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Brea, California March 11, 2022 C.4.c Packet Pg. 160 At t a c h m e n t : R e p o r t o n I n t e r n a l C o n t r o l & C o m p l i a n c e ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 1 ) AGENDA REPORT MEETING DATE: April 12, 2022 Council Item TITLE: Planning Commission Notice of Vacancy Advertisement Extension PRESENTED BY: Debra Thomas, City Clerk RECOMMENDATION: Direct the City Clerk to advertise for appointment to the Planning Commission, accept applications, extend appointment of vacancy left by former Planning Commissioner Jeremy Briggs and schedule interviews. 2030 VISION STATEMENT This action supports Our Mission: To preserve and protect our community and its exceptional quality of life through thoughtful planning, within the constraints of fiscally responsible government. BACKGROUND: The Planning Commission is a five-member Board appointed by the Mayor, subject to City Council approval, and serves four-year terms at the pleasure of the City Council (Municipal Code Chapter 2.16). The terms alternate so that every two years at least two appointments are set to expire. On April 1, 2022, Planning Commissioner Jeffrey McConnell submitted his resignation (Attachment I) from the Planning Commission to the City Clerk via hand delivery. With Mr. McConnell’s resignation, this leaves two (2) current vacancies on the Planning Commission. Name Appointed Re-Appointed Term Ends Edward Giroux 06/10/2014 07/10/2018 06/30/2022 Jeremy Briggs* 02/21/2019 N/A 06/30/2022 Tara Ceseña 06/10/2014 07/10/2018 06/30/2024 Jeffrey McConnell** 07/19/2018 N/A 06/30/2022 David Alaniz 07/14/2020 N/A 06/30/2024 * Resignation effective February 3, 2022. ** Resignation effective April 1, 2022. C.5 Packet Pg. 161 Additionally, on June 30, 2022, one (1) additional Planning Commission position is set to expire, therefore three (3) positions will be available to appoint. DISCUSSION: Pursuant to Government Code section 54974(a), “[w]henever an unscheduled vacancy occurs in any board, commission, or committee for which the legislative body has the appointing power, whether due to resignation, death, termination, or other causes, a special vacancy notice shall be posted in the office of the clerk of the local agency, on either the local agency’s Internet Web site or at the library designated pursuant to Section 54973, and in other places as directed by the legislative body, not earlier than 20 days before or not later than 20 days after the vacancy occurs. Final appointment to the board, commission, or committee shall not be made by the legislative body for at least 10 working days after the posting of the notice in the clerk’s office.” In accordance with this requirement, and due to the fact that three Planning Commission positions are set to expire June 30, 2022, staff recommends that the application process approved at its February 22, 2022, City Council meeting be extended through May 27, 2022. The vacancy notice and application information would be disbursed through another press release and posting on the City’s website and reader board. Upon closure of the application process, staff would schedule interviews with all candidates at a special meeting of the City Council on a date agreed upon in June 2022. At that meeting subject to the City Council’s approval, the Mayor shall appoint a three (3) Planning Commission positions. FISCAL IMPACT: There would be no fiscal impact created by this action. Planning Commissioners are paid a stipend of $50.00 a month, which would continue with the new appointment. ATTACHMENTS: • McConnell-Redacted (PDF) APPROVALS: Debra Thomas Completed 04/04/2022 2:09 PM City Manager Completed 04/06/2022 11:10 AM City Council Pending 04/12/2022 6:00 PM C.5 Packet Pg. 162 C.5.a Packet Pg. 163 At t a c h m e n t : M c C o n n e l l - R e d a c t e d ( P l a n n i n g C o m m i s s i o n - N o t i c e o f V a c a n c y A d v e r t i s e m e n t E x t e n s i o n ) AGENDA REPORT MEETING DATE: April 12, 2022 Council Item TITLE: Housing Element Annual Progress Report for the 2021 Calendar Year PRESENTED BY: Haide Aguirre, Associate Planner RECOMMENDATION: Adopt A RESOLUTION OF THE CITY COUNCIL OF GRAND TERRACE, CALIFORNIA, RECEIVING AND ACCEPTING THE CITY OF GRAND TERRACE GENERAL PLAN AND HOUSING ELEMENT ANNUAL PROGRESS REPORT FOR THE 2021 CALENDAR YEAR 2030 VISION STATEMENT: A compliant Housing Element supports Goal #1, Ensuring Fiscal Viability and Goal #3, Promote Economic Development by providing an internally consistent General Plan. BACKGROUND: Pursuant to California Government Code Section 65400, local jurisdictions are required to provide an Annual General Plan and Housing Element Progress Report (APR) to the California Department of Housing and Community Development (HCD) and to the Governor's Office of Planning and Research (OPR) annually. The APR describes the status of the Housing Element programs, housing production, and progress towards the Regional Housing Needs Allocation (RHNA) for the prior calendar year (2021). State law requires every city to update the Housing Element of their General Plan every eight years. HCD refers to each eight-year planning period as a “cycle”. The City’s Housing Element that covered the 2013-2021 planning period (RHNA Cycle 5) was adopted by the City Council on September 27, 2016 and certified by the Department of Housing and Community Development (HCD) as being in full compliance with state law in 2016. The City’s Housing Element that will cover the 2021-2029 planning period (RHNA Cycle 6) is currently in the process of being updated and is not applicable to the current APR. Attached for City Council review is the APR for calendar year 2021. The APR has been prepared in the standardized format provided by HCD for annual reporting. DISCUSSION: Housing Production The APR contains the total number of units constructed and the progress in C.6 Packet Pg. 164 implementation of the City’s Housing Programs. As shown in the APR, a total of five new residential units were issued in 2021, consisting of five accessory dwelling units (ADUs). Of the three ADUs that were issued building permits, two were completed and received Certificates of Occupancy before the end of 2021. RHNA Target Summary and APR A key component of the APR is to track progress towards meeting the assigned RHNA for each municipality in the State. As such, information on the City’s progress in meeting its RHNA target for the 2013-2021 planning period (RHNA Cycle 5) is also within the APR for the 2021 calendar year. The 5th Cycle RHNA allocated to the city 118 new housing units as its fair share of the total number of units needed to meet forecasted population growth in the Southern California Council of Governments (SCAG) region. The allocation of units was distributed across five income level categories, as follows: Income Level RHNA Allocation by Income Level Very Low 28 Low 19 Moderate 22 Above Moderate 49 Total RHNA 118 Source: SCAG 5th Cycle RHNA Final Allocation Plan In total for the 2013-2021 planning period (RHNA Cycle 5), the City reported one very- low income unit, one low-income unit, 17 moderate-income units, and 59 above- moderate income units. As required by HCD, the APR form is standardized and includes reports on various housing and affordability targets. The following is a summary of the City’s completed APR for the 2021 calendar year. • Table A includes new housing units by income level for which a discretionary application has been submitted and deemed complete during calendar year 2021. o A total of five units are reported in this category, consisting of five above- moderate units • Table A2 includes net new housing units by income level category that have received an entitlement (meaning approved by the City), a building permit, or a certificate of occupancy during the calendar year. o During calendar year 2021, the City issued building permits three new housing units, consisting of three ADUs. C.6 Packet Pg. 165 o During calendar year 2021, the City issued a Certificate of Occupancy for two new housing units, consisting of two ADUs. • Table B summarizes RHNA progress by affordability level for the 2013-2021 planning period. o 78 units reported in this category, consisting of one very-low income unit, one low-income unit, 17 moderate-income units, and 59 above-moderate income units. • Table C includes sites identified or rezoned to accommodate shortfall of housing sites from the previous planning period, to meet a shortfall of sites noted in the Housing Element, or to provide additional sites required by no net loss law under Government Section 65863. If applicable, this data would serve as an addendum to the sites inventory in the adopted Housing Element. o The City did not report any additional sites. • Table D contains the Housing Programs Progress Report and describes the progress of all housing programs contained in the Housing Element of the General Plan for the 2021 calendar year. • Table E includes commercial development bonuses approved by the City during the 2021 calendar year. o No units reported. • Table F includes units rehabilitated, preserved, and acquired for alternative adequate site during the 2021 calendar year. o No units reported. • Table G includes locally-owned lands included in the Housing Element sites inventory that have been sold, leased or otherwise disposed of during the 2021 calendar year. o No sites reported. • Table H includes all locally owned or controlled lands declared Surplus pursuant to Government Code section 54221 or identified as Excess pursuant to Government Code section 50569. o No sites reported. • LEAP Reporting o This table requires jurisdictions that have received the Local Early Action C.6 Packet Pg. 166 Planning (LEAP) grant from the HCD to provide progress update on planning efforts for housing production. On June 9, 2020, the City applied for LEAP grant funding in the amount of $65,000 and executed an agreement with the California Department of Housing and Community Development for the preparation and adoption of the city’s Housing Element Update for the 2021-2029 6th cycle period. The APR is attached for City Council review and consideration. Staff recommends that the City Council adopt the proposed resolution to receive and accept the APR for calendar year 2021. As part of the resolution, the City Council will also direct staff to forward the report the California Department of Housing and Community Development (HCD) and to the Governor's Office of Planning and Research (OPR) as required by California Government Code Section 65400. FISCAL IMPACT: There is no fiscal impact to the General Fund. ATTACHMENTS: • FINAL HCD Reso 3.21.22 (DOCX) • GrandTerrace Housing Annual Progress Report (PDF) APPROVALS: Haide Aguirre Completed 04/06/2022 11:57 AM City Attorney Completed 04/06/2022 1:23 PM City Manager Completed 04/06/2022 1:25 PM City Council Pending 04/12/2022 6:00 PM C.6 Packet Pg. 167 RESOLUTION NO. 2021- A RESOLUTION OF THE CITY COUNCIL OF GRAND TERRACE, CALIFORNIA, RECEIVING AND ACCEPTING THE CITY OF GRAND TERRACE GENERAL PLAN AND HOUSING ELEMENT ANNUAL PROGRESS REPORT FOR THE 2021 CALENDAR YEAR Recitals WHEREAS, California Government Code Section 65400(a)(2) requires each of planning agency to provide an annual progress report to the City Council, the State Office of Planning and Research, and the California Department of Housing and Community Development (HCD) regarding progress toward implementation of the housing element of the general plan; and WHEREAS, an annual progress report for the 2021 calendar year has been prepared by the City of Grand Terrace, utilizing prescribed forms and instructions provided by HCD; and WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred. NOW THEREFORE, it is hereby found, determined, and resolved by the City Council of the City of Grand Terrace, as follows: 1. The City Council hereby specifically finds that the facts set forth in the above Recitals are true and correct. 2. The City Council hereby receives and accepts the 2021 Annual Progress Report on the General Plan and Housing Element (Housing Element Annual Progress Report Form 2021) (“Report”) prepared by the City as set forth in the corresponding staff report and which is attached hereto as Exhibit “A”. 3. The City Council hereby directs that the Report be forwarded to the State Office of Planning Research and HCD pursuant to California Government Code Section 65400(a)(2). PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace at a regular meeting held on the 12th day of April 2022. _____________________________ Darcy McNaboe Mayor C.6.a Packet Pg. 168 At t a c h m e n t : F I N A L H C D R e s o 3 . 2 1 . 2 2 ( 2 0 2 1 H o u s i n g A n n u a l P r o g r e s s R e p o r t ) ATTEST: _____________________________ Debra Thomas City Clerk APPROVED AS TO FORM: _____________________________ Adrian R. Guerra City Attorney C.6.a Packet Pg. 169 At t a c h m e n t : F I N A L H C D R e s o 3 . 2 1 . 2 2 ( 2 0 2 1 H o u s i n g A n n u a l P r o g r e s s R e p o r t ) AGENDA REPORT MEETING DATE: April 12, 2022 TITLE: Award and Approve of an Agreement Between the City of Grand Terrace and Sweeping Corporation of America LLC for Street Sweeping Services PRESENTED BY: Konrad Bolowich, City Manager RECOMMENDATION: 1. Award to and Approve the Street Sweeping Agreement with Sweeping Corporation of America, LLC, (SCA) for a term of 1 year for routine street sweeping services and, On-Call/Special Event/Emergency street sweeping callouts in the amount of $54,405.00; and 2. Authorize the City Manager to execute the Agreement with SCA, subject to the City Attorney’s approval as to form. 2030 VISION STATEMENT: This staff report supports Goal #2 "Maintain Public Safety" by investing in critical improvements to infrastructure. BACKGROUND: In February of 2019, the City entered into an agreement with CleanStreet, LLC which expired February 12, 2022. As a result of the expiration of the current agreement, an Informal Request for Proposal for street sweeping services was issued on November 16, 2021, pursuant to Chapter 3.26 of the Grand Terrace Municipal Code. This included an alternative allowing for prospective bidders to submit an alternative bid which would allow alternative methods of single side street sweeping. This was distributed to fourteen (14) companies; however, only one bid was received. Staff, therefore, sent a second Informal Request for Proposal (seeking the same services as the original Informal Request for Proposal) on November 30, 2021, with a deadline of December 14, 2021, to fourteen (14) companies. Only one bid was received for street sweeping services. For both informal requests for proposal, the City also advertised through the City website. As a result of this process, a proposed agreement with CleanStreet was presented to the City Council at its January 25, 2022, meeting. City Council ultimately decided to not enter into an agreement with CleanStreet. DISCUSSION: In the first week of February, the City Manager personally contacted eight (8) sweeping companies who provide sweeping services to other cities in the region, as well as the three (3) largest trash haulers, seeking additional quotes/proposals for street sweeping services. The results of this intense search yielded information that the street sweeping industry F.7 Packet Pg. 170 has undergone a rapid consolidation in this region with all of the identified independent sweeping companies having been acquired by Sweeping Corporation Of America, LLC during the last two (2) years. All eight of the sweeping companies contacted have been merged or acquired by Sweeping Corporation of America, LLC. As such, other local cities contract with either a subsidiary of Sweeping Corporation Of America, LLC or Sweeping Corporation Of America, LLC directly. Burrtec and CR&R provide their own services, but do not have enough capacity in their organizations to take on additional clients. Waste Management did not respond. Subsequently, there was extensive discussion with Sweeping Corporation Of America, LLC corporate offices regarding the quality of the sweeping services. In these discussions, it was determined that the CleanStreet entity was wholly absorbed into their other operations and Sweeping Corporation of America, LLC is willing to honor the pricing provided in the original CleanStreet proposal (attached). Sweeping Corporation Of America, LLC will be providing new drivers with corporate required training, vehicles in Sweeping Corporation Of America, LLC livery with GPS devices to allow for real time quality assurance and management to work directly with City staff to resolve issues as they arise. Sweeping Corporation Of America, LLC has committed to providing the same high quality of services neighboring communities are receiving under the new Sweeping Corporation Of America, LLC brand. During this transition phase, Sweeping Corporation Of America, LLC has continued to provide service to the City, and complaints have dramatically declined. Recommendation It is recommended that the City Council award to and approve a one-year contract with Sweeping Corporation Of America, LLC for street sweeping services in the amount of $54,405.00 and authorize the City Manager to execute the agreement subject to City Attorney’s approval as to form. The City has the right to terminate the agreement at any time upon delivery of a 60-day notice. SWEEPING CORPORATION OF AMERICA, LLL IMPACT: Awarding the agreement to Sweeping Corporation Of America, LLC, will result in maintaining the existing street sweeping schedule with an annual cost of $54,505.00 ATTACHMENTS: • Street Sweeping Agreement (DOCX) • Exhibit A-1 (JPG) • Clean Street Bid-Full (PDF) • Notice of Inviting Informal Bids 11-30-21 (PDF) APPROVALS: Konrad Bolowich Completed 04/05/2022 4:32 PM City Attorney Completed 04/06/2022 4:20 PM Finance Completed 04/06/2022 4:35 PM F.7 Packet Pg. 171 City Manager Completed 04/05/2022 4:48 PM City Council Pending 04/12/2022 6:00 PM F.7 Packet Pg. 172 AGREEMENT FOR CONTRACT SERVICES By and Between CITY OF GRAND TERRACE and SWEEPING CORPORATION OF AMERICA, LLC 01247.0006/760563.3 F.7.a Packet Pg. 173 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -2- AGREEMENT FOR CONTRACT SERVICES BY AND BETWEEN THE CITY OF GRAND TERRACE AND SWEEPING CORPORATION OF AMERICA, LLC This “AGREEMENT FOR CONTRACT SERVICES BY AND BETWEEN THE CITY OF GRAND TERRACE AND SWEEPING CORPORATION OF AMERICA, LLC” (herein “Agreement”) is made and entered into this __ day of ______, 2022, by and between the City of Grand Terrace, a California municipal corporation (“City”) and SWEEPING CORPORATION OF AMERICA, LLC, a California limited liability company (“Consultant”). City and Consultant are sometimes hereinafter individually referred to as “Party” and hereinafter collectively referred to as the “Parties.” RECITALS A. City has sought, by issuance of a Request for Proposals or Invitation for Bids, the performance of the services defined and described particularly in Article 1 of this Agreement. B. Consultant, following submission of a proposal or bid for the performance of the services defined and described particularly in Article 1 of this Agreement, was selected by the City to perform those services. C. Pursuant to the City of Grand Terrace Municipal Code, City has authority to enter into and execute this Agreement. D. The Parties desire to formalize the selection of Consultant for performance of those services defined and described particularly in Article 1 of this Agreement and desire that the terms of that performance be as particularly defined and described herein. OPERATIVE PROVISIONS NOW, THEREFORE, in consideration of the mutual promises and covenants made by the Parties and contained herein and other consideration, the value and adequacy of which are hereby acknowledged, the parties agree as follows: ARTICLE 1. SERVICES OF CONSULTANT 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, the Consultant shall provide those services specified in the “Scope of Services” attached hereto as Exhibit “A” and incorporated herein by this reference, which may be referred to herein as the “services” or “work” hereunder. As a material inducement to the City entering into this Agreement, Consultant represents and warrants that it has the qualifications, experience, and facilities necessary to properly perform the services required under this Agreement in a thorough, competent, and professional manner, and is experienced in performing the work and services contemplated herein. Consultant shall at all times faithfully, competently and to the best of its ability, experience and talent, perform all services described herein. Consultant covenants that it shall follow the highest professional standards in performing the work and services required hereunder and that all materials will be both of good F.7.a Packet Pg. 174 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -3- quality as well as fit for the purpose intended. For purposes of this Agreement, the phrase “highest professional standards” shall mean those standards of practice recognized by one or more first- class firms performing similar work under similar circumstances. 1.2 Contract Documents. The Scope of Services shall include the “General Provisions” contained in Exhibit “A-2” as provided in this Agreement, all of which are incorporated herein by this reference. In the event of any inconsistency between the provisions of Exhibit “A-2” and any other provisions of this Agreement, the provisions of this Agreement shall govern. The Scope of Services shall include the Consultant’s scope of work or bid which shall be incorporated herein by this reference as though fully set forth herein. In the event of any inconsistency between the terms of the bid documents and this Agreement, the terms of this Agreement shall govern. 1.3 Compliance with Law. Consultant shall keep itself informed concerning, and shall render all services hereunder in accordance with, all ordinances, resolutions, statutes, rules, and regulations of the City and any Federal, State or local governmental entity having jurisdiction in effect at the time service is rendered. 1.4 Compliance with California Labor Law. (a) Public Work. The Parties acknowledge that the work to be performed under this Agreement is a "public work" as defined in Labor Code Section 1720 and that this Agreement is therefore subject to the requirements of Division 2, Part 7, Chapter 1 (commencing with Section 1720) of the California Labor Code relating to public works contracts and the rules and regulations established by the Department of Industrial Relations ("DIR") implementing such statutes. The work performed under this Agreement is subject to compliance monitoring and enforcement by the DIR. Contractor shall post job site notices, as prescribed by regulation. (b) Prevailing Wages. Contractor shall pay prevailing wages to the extent required by Labor Code Section 1771. Pursuant to Labor Code Section 1773.2, copies of the prevailing rate of per diem wages are on file at City Hall and will be made available to any interested party on request. By initiating any work under this Agreement, Contractor acknowledges receipt of a copy of the Department of Industrial Relations (DIR) determination of the prevailing rate of per diem wages, and Contractor shall post a copy of the same at each job site where work is performed under this Agreement. (c) Penalty for Failure to Pay Prevailing Wages. Contractor shall comply with and be bound by the provisions of Labor Code Sections 1774 and 1775 concerning the payment of prevailing rates of wages to workers and the penalties for failure to pay prevailing wages. The Contractor shall, as a penalty to the City, forfeit two hundred dollars ($200) for each calendar day, or portion thereof, for each worker paid less than the prevailing rates as determined by the DIR for the work or craft in which the worker is employed for any public work done pursuant to this Agreement by Contractor or by any subcontractor. F.7.a Packet Pg. 175 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -4- (d) Payroll Records. Contractor shall comply with and be bound by the provisions of Labor Code Section 1776, which requires Contractor and each subcontractor to: keep accurate payroll records and verify such records in writing under penalty of perjury, as specified in Section 1776; certify and make such payroll records available for inspection as provided by Section 1776; and inform the City of the location of the records. (e) Apprentices. Contractor shall comply with and be bound by the provisions of Labor Code Sections 1777.5, 1777.6, and 1777.7 and California Code of Regulations Title 8, Section 200 et seq. concerning the employment of apprentices on public works projects. Contractor shall be responsible for compliance with these aforementioned Sections for all apprenticeable occupations. Prior to commencing work under this Agreement, Contractor shall provide City with a copy of the information submitted to any applicable apprenticeship program. Within sixty (60) days after concluding work pursuant to this Agreement, Contractor and each of its subcontractors shall submit to the City a verified statement of the journeyman and apprentice hours performed under this Agreement. (f) Eight-Hour Work Day. Contractor acknowledges that eight (8) hours labor constitutes a legal day's work. Contractor shall comply with and be bound by Labor Code Section 1810. (g) Penalties for Excess Hours. Contractor shall comply with and be bound by the provisions of Labor Code Section 1813 concerning penalties for workers who work excess hours. The Contractor shall, as a penalty to the City, forfeit twenty-five dollars ($25) for each worker employed in the performance of this Agreement by the Contractor or by any subcontractor for each calendar day during which such worker is required or permitted to work more than eight (8) hours in any one calendar day and forty (40) hours in any one calendar week in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the Labor Code. Pursuant to Labor Code section 1815, work performed by employees of Contractor in excess of eight (8) hours per day, and forty (40) hours during any one week shall be permitted upon public work upon compensation for all hours worked in excess of 8 hours per day at not less than one and one-half (1½) times the basic rate of pay. (h) Workers' Compensation. California Labor Code Sections 1860 and 3700 provide that every employer will be required to secure the payment of compensation to its employees if it has employees. In accordance with the provisions of California Labor Code Section 1861, Contractor certifies as follows: "I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract." Contractor's Authorized Initials (i) Contractor's Responsibility for Subcontractors. For every subcontractor who will perform work under this Agreement, Contractor shall be responsible for such F.7.a Packet Pg. 176 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -5- subcontractor's compliance with Division 2, Part 7, Chapter 1 (commencing with Section 1720) of the California Labor Code, and shall make such compliance a requirement in any contract with any subcontractor for work under this Agreement. Contractor shall take all actions necessary to enforce such contractual provisions and ensure subcontractor's compliance, including without limitation, conducting a review of the certified payroll records of the subcontractor on a periodic basis or upon becoming aware of the failure of the subcontractor to pay his or her workers the specified prevailing rate of wages. Contractor shall diligently take corrective action to halt or rectify any such failure by any subcontractor. 1.5 Licenses, Permits, Fees and Assessments. Consultant shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. Consultant shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the Consultant’s performance of the services required by this Agreement, and shall indemnify, defend and hold harmless City, its officers, employees or agents of City, against any such fees, assessments, taxes, penalties or interest levied, assessed or imposed against City hereunder. 1.6 Familiarity with Work. By executing this Agreement, Consultant warrants that Consultant (i) has thoroughly investigated and considered the scope of services to be performed, (ii) has carefully considered how the services should be performed, and (iii) fully understands the facilities, difficulties and restrictions attending performance of the services under this Agreement. If the services involve work upon any site, Consultant warrants that Consultant has or will investigate the site and is or will be fully acquainted with the conditions there existing, prior to commencement of services hereunder. Should the Consultant discover any latent or unknown conditions, which will materially affect the performance of the services hereunder, Consultant shall immediately inform the City of such fact and shall not proceed except at Consultant’s risk until written instructions are received from the Contract Officer. 1.7 Care of Work. The Consultant shall adopt reasonable methods during the life of the Agreement to furnish continuous protection to the work, and the equipment, materials, papers, documents, plans, studies and/or other components thereof to prevent losses or damages, and shall be responsible for all such damages, to persons or property, until acceptance of the work by City, except such losses or damages as may be caused by City’s own negligence. 1.8 Further Responsibilities of Parties. Both parties agree to use reasonable care and diligence to perform their respective obligations under this Agreement. Both parties agree to act in good faith to execute all instruments, prepare all documents and take all actions as may be reasonably necessary to carry out the purposes of this Agreement. Unless hereafter specified, neither party shall be responsible for the service of the other. F.7.a Packet Pg. 177 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -6- 1.9 Additional Services. City shall have the right at any time during the performance of the services, without invalidating this Agreement, to order extra work beyond that specified in the Scope of Services or make changes by altering, adding to or deducting from said work. No such extra work may be undertaken unless a written order is first given by the Contract Officer to the Consultant, incorporating therein any adjustment in (i) the Contract Sum for the actual costs of the extra work, and/or (ii) the time to perform this Agreement, which said adjustments are subject to the written approval of the Consultant. Any increase in compensation of up to ten percent (10%) of the Contract Sum or $25,000, whichever is less; or, in the time to perform of up to one hundred eighty (180) days, may be approved by the Contract Officer. Any greater increases, taken either separately or cumulatively, must be approved by the City Council. It is expressly understood by Consultant that the provisions of this Section shall not apply to services specifically set forth in the Scope of Services. Consultant hereby acknowledges that it accepts the risk that the services to be provided pursuant to the Scope of Services may be more costly or time consuming than Consultant anticipates and that Consultant shall not be entitled to additional compensation therefor. City may in its sole and absolute discretion have similar work done by other consultants. No claims for an increase in the Contract Sum or time for performance shall be valid unless the procedures established in this Section are followed. 1.10 Special Requirements. Additional terms and conditions of this Agreement, if any, which are made a part hereof are set forth in the “Special Requirements” attached hereto as Exhibit “B” and incorporated herein by this reference. In the event of a conflict between the provisions of Exhibit “B” and any other provisions of this Agreement, the provisions of Exhibit “B” shall govern. ARTICLE 2. COMPENSATION AND METHOD OF PAYMENT. 2.1 Contract Sum. Subject to any limitations set forth in this Agreement, City agrees to pay Consultant the amounts specified in the “Schedule of Compensation” attached hereto as Exhibit “C” and incorporated herein by this reference. The total compensation, including reimbursement for actual expenses, shall not exceed Fifty Four Thousand Five Hundred Five Dollars ($54,505.00) (the “Contract Sum”), unless additional compensation is approved pursuant to Section 1.8. 2.2 Method of Compensation. The method of compensation may include: (i) a lump sum payment upon completion; (ii) payment in accordance with specified tasks or the percentage of completion of the services, less contract retention; (iii) payment for time and materials based upon the Consultant’s rates as specified in the Schedule of Compensation, provided that (a) time estimates are provided for the performance of sub tasks, (b) contract retention is maintained, and (c) the Contract Sum is not exceeded; or (iv) such other methods as may be specified in the Schedule of Compensation. F.7.a Packet Pg. 178 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -7- 2.3 Reimbursable Expenses. Compensation may include reimbursement for actual and necessary expenditures for reproduction costs, telephone expenses, and travel expenses approved by the Contract Officer in advance, or actual subcontractor expenses of an approved subcontractor pursuant to Section 4.5, and only if specified in the Schedule of Compensation. The Contract Sum shall include the attendance of Consultant at all project meetings reasonably deemed necessary by the City. Coordination of the performance of the work with City is a critical component of the services. If Consultant is required to attend additional meetings to facilitate such coordination, Consultant shall not be entitled to any additional compensation for attending said meetings. 2.4 Invoices. Each month Consultant shall furnish to City an original invoice for all work performed and expenses incurred during the preceding month in a form approved by City’s Director of Finance. By submitting an invoice for payment under this Agreement, Consultant is certifying compliance with all provisions of the Agreement. The invoice shall detail charges for all necessary and actual expenses by the following categories: labor (by sub-category), travel, materials, equipment, supplies, and sub-contractor contracts. Sub-contractor charges shall also be detailed by such categories. Consultant shall not invoice City for any duplicate services performed by more than one person. City shall independently review each invoice submitted by the Consultant to determine whether the work performed and expenses incurred are in compliance with the provisions of this Agreement. Except as to any charges for work performed or expenses incurred by Consultant which are disputed by City, or as provided in Section 7.3, City will use its best efforts to cause Consultant to be paid within forty-five (45) days of receipt of Consultant’s correct and undisputed invoice; however, Consultant acknowledges and agrees that due to City warrant run procedures, the City cannot guarantee that payment will occur within this time period. In the event any charges or expenses are disputed by City, the original invoice shall be returned by City to Consultant for correction and resubmission. Review and payment by City for any invoice provided by the Consultant shall not constitute a waiver of any rights or remedies provided herein or any applicable law. 2.5 Waiver. Payment to Consultant for work performed pursuant to this Agreement shall not be deemed to waive any defects in work performed by Consultant. ARTICLE 3. PERFORMANCE SCHEDULE 3.1 Time of Essence. Time is of the essence in the performance of this Agreement. F.7.a Packet Pg. 179 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -8- 3.2 Schedule of Performance. Consultant shall commence the services pursuant to this Agreement upon receipt of a written notice to proceed and shall perform all services within the time period(s) established in the “Schedule of Performance” attached hereto as Exhibit “D” and incorporated herein by this reference. When requested by the Consultant, extensions to the time period(s) specified in the Schedule of Performance may be approved in writing by the Contract Officer but not exceeding one hundred eighty (180) days cumulatively. 3.3 Force Majeure. The time period(s) specified in the Schedule of Performance for performance of the services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of the Consultant, including, but not restricted to, acts of God or of the public enemy, unusually severe weather, fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargoes, wars, litigation, and/or acts of any governmental agency, including the City, if the Consultant shall within ten (10) days of the commencement of such delay notify the Contract Officer in writing of the causes of the delay. The Contract Officer shall ascertain the facts and the extent of delay, and extend the time for performing the services for the period of the enforced delay when and if in the judgment of the Contract Officer such delay is justified. The Contract Officer’s determination shall be final and conclusive upon the parties to this Agreement. In no event shall Consultant be entitled to recover damages against the City for any delay in the performance of this Agreement, however caused, Consultant’s sole remedy being extension of the Agreement pursuant to this Section. 3.4 Term. Unless earlier terminated in accordance with Article 7 of this Agreement, this Agreement shall continue in full force and effect until completion of the services but not exceeding one (1) years from the date hereof, except as otherwise provided in the Schedule of Performance (Exhibit “D”) . ARTICLE 4. COORDINATION OF WORK 4.1 Representatives and Personnel of Consultant. The following principals of Consultant (“Principals”) are hereby designated as being the principals and representatives of Consultant authorized to act in its behalf with respect to the work specified herein and make all decisions in connection therewith: Rick Anderson, Director of Business Development (Name) (Title) (Name) (Title) (Name) (Title) F.7.a Packet Pg. 180 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -9- It is expressly understood that the experience, knowledge, capability and reputation of the foregoing principals were a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principals shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services hereunder. All personnel of Consultant, and any authorized agents, shall at all times be under the exclusive direction and control of the Principals. For purposes of this Agreement, the foregoing Principals may not be replaced nor may their responsibilities be substantially reduced by Consultant without the express written approval of City. Additionally, Consultant shall utilize only competent personnel to perform services pursuant to this Agreement. Consultant shall make every reasonable effort to maintain the stability and continuity of Consultant’s staff and subcontractors, if any, assigned to perform the services required under this Agreement. Consultant shall notify City of any changes in Consultant’s staff and subcontractors, if any, assigned to perform the services required under this Agreement, prior to and during any such performance. 4.2 Status of Consultant. Consultant shall have no authority to bind City in any manner, or to incur any obligation, debt or liability of any kind on behalf of or against City, whether by contract or otherwise, unless such authority is expressly conferred under this Agreement or is otherwise expressly conferred in writing by City. Consultant shall not at any time or in any manner represent that Consultant or any of Consultant’s officers, employees, or agents are in any manner officials, officers, employees or agents of City. Neither Consultant, nor any of Consultant’s officers, employees or agents, shall obtain any rights to retirement, health care or any other benefits which may otherwise accrue to City’s employees. Consultant expressly waives any claim Consultant may have to any such rights. 4.3 Contract Officer. The Contract Officer shall be the City Manager, Konrad Bolowich, or such person as may be designated by the City Manager. It shall be the Consultant’s responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the services and the Consultant shall refer any decisions which must be made by City to the Contract Officer. Unless otherwise specified herein, any approval of City required hereunder shall mean the approval of the Contract Officer. The Contract Officer shall have authority, if specified in writing by the City Manager, to sign all documents on behalf of the City required hereunder to carry out the terms of this Agreement. 4.4 Independent Contractor. Neither the City nor any of its employees shall have any control over the manner, mode or means by which Consultant, its agents or employees, perform the services required herein, except as otherwise set forth herein. City shall have no voice in the selection, discharge, supervision or control of Consultant’s employees, servants, representatives or agents, or in fixing their number, compensation or hours of service. Consultant shall perform all services required herein as an independent contractor of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. City shall not in any way or for any purpose become or be deemed to be a partner of F.7.a Packet Pg. 181 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -10- Consultant in its business or otherwise or a joint venturer or a member of any joint enterprise with Consultant. 4.5 Prohibition Against Subcontracting or Assignment. The experience, knowledge, capability and reputation of Consultant, its principals and employees were a substantial inducement for the City to enter into this Agreement. Therefore, Consultant shall not contract with any other entity to perform in whole or in part the services required hereunder without the express written approval of the City. In addition, neither this Agreement nor any interest herein may be transferred, assigned, conveyed, hypothecated or encumbered voluntarily or by operation of law, whether for the benefit of creditors or otherwise, without the prior written approval of City. Transfers restricted hereunder shall include the transfer to any person or group of persons acting in concert of more than twenty five percent (25%) of the present ownership and/or control of Consultant, taking all transfers into account on a cumulative basis. In the event of any such unapproved transfer, including any bankruptcy proceeding, this Agreement shall be void. No approved transfer shall release the Consultant or any surety of Consultant of any liability hereunder without the express consent of City. ARTICLE 5. INSURANCE AND INDEMNIFICATION 5.1 Insurance Coverages. The Consultant shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to City, during the entire term of this Agreement including any extension thereof, the following policies of insurance which shall cover all elected and appointed officers, employees and agents of City: (a) General Liability Insurance (Occurrence Form CG0001 or equivalent). A policy of comprehensive general liability insurance written on a per occurrence basis for bodily injury, personal injury and property damage. The policy of insurance shall be in an amount not less than $1,000,000.00 per occurrence or if a general aggregate limit is used, then the general aggregate limit shall be twice the occurrence limit. (b) Worker’s Compensation Insurance. A policy of worker’s compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for the Consultant against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the Consultant in the course of carrying out the work or services contemplated in this Agreement. (c) Automotive Insurance (Form CA 0001 (Ed 1/87) including “any auto” and endorsement CA 0025 or equivalent). A policy of comprehensive automobile liability insurance written on a per occurrence for bodily injury and property damage in an amount not less than $1,000,000. Said policy shall include coverage for owned, non-owned, leased, hired cars and any automobile. (d) Professional Liability. Professional liability insurance appropriate to the Consultant’s profession. This coverage may be written on a “claims made” basis, and must include F.7.a Packet Pg. 182 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -11- coverage for contractual liability. The professional liability insurance required by this Agreement must be endorsed to be applicable to claims based upon, arising out of or related to services performed under this Agreement. The insurance must be maintained for at least 5 consecutive years following the completion of Consultant’s services or the termination of this Agreement. During this additional 5-year period, Consultant shall annually and upon request of the City submit written evidence of this continuous coverage. (e) Subcontractors. Consultant shall include all subcontractors as insureds under its policies or shall furnish separate certificates and certified endorsements for each subcontractor. All coverages for subcontractors shall include all of the requirements stated herein. (f) Additional Insurance. Policies of such other insurance, as may be required in the Special Requirements in Exhibit “B”. 5.2 General Insurance Requirements. All of the above policies of insurance shall be primary insurance and shall name the City, its elected and appointed officers, employees and agents as additional insureds and any insurance maintained by City or its officers, employees or agents may apply in excess of, and not contribute with Consultant’s insurance. The insurer is deemed hereof to waive all rights of subrogation and contribution it may have against the City, its officers, employees and agents and their respective insurers. Moreover, the insurance policy must specify that where the primary insured does not satisfy the self-insured retention, any additional insured may satisfy the self-insured retention. All of said policies of insurance shall provide that said insurance may not be amended or cancelled by the insurer or any party hereto without providing thirty (30) days prior written notice by certified mail return receipt requested to the City. In the event any of said policies of insurance are cancelled, the Consultant shall, prior to the cancellation date, submit new evidence of insurance in conformance with Section 5.1 to the Contract Officer. No work or services under this Agreement shall commence until the Consultant has provided the City with Certificates of Insurance, additional insured endorsement forms or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders are approved by the City. City reserves the right to inspect complete, certified copies of and endorsements to all required insurance policies at any time. Any failure to comply with the reporting or other provisions of the policies including breaches or warranties shall not affect coverage provided to City. All certificates shall name the City as additional insured (providing the appropriate endorsement) and shall conform to the following “cancellation” notice: CANCELLATION: SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATED THEREOF, THE ISSUING COMPANY SHALL MAIL THIRTY (30)-DAY ADVANCE WRITTEN NOTICE TO CERTIFICATE HOLDER NAMED HEREIN. F.7.a Packet Pg. 183 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -12- [to be initialed] Consultant Initials City, its respective elected and appointed officers, directors, officials, employees, agents and volunteers are to be covered as additional insureds as respects: liability arising out of activities Consultant performs; products and completed operations of Consultant; premises owned, occupied or used by Consultant; or any automobiles owned, leased, hired or borrowed by Consultant. The coverage shall contain no special limitations on the scope of protection afforded to City, and their respective elected and appointed officers, officials, employees or volunteers. Consultant’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability. Any deductibles or self-insured retentions must be declared to and approved by City. At the option of City, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects City or its respective elected or appointed officers, officials, employees and volunteers or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration, defense expenses and claims. The Consultant agrees that the requirement to provide insurance shall not be construed as limiting in any way the extent to which the Consultant may be held responsible for the payment of damages to any persons or property resulting from the Consultant’s activities or the activities of any person or persons for which the Consultant is otherwise responsible nor shall it limit the Consultant’s indemnification liabilities as provided in Section 5.3. In the event the Consultant subcontracts any portion of the work in compliance with Section 4.5 of this Agreement, the contract between the Consultant and such subcontractor shall require the subcontractor to maintain the same policies of insurance that the Consultant is required to maintain pursuant to Section 5.1, and such certificates and endorsements shall be provided to City. 5.3 Indemnification. To the full extent permitted by law, Consultant agrees to indemnify, defend and hold harmless the City, its officers, employees and agents (“Indemnified Parties”) against, and will hold and save them and each of them harmless from, any and all actions, either judicial, administrative, arbitration or regulatory claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities whether actual or threatened (herein “claims or liabilities”) that may be asserted or claimed by any person, firm or entity arising out of or in connection with the negligent performance of the work, operations or activities provided herein of Consultant, its officers, employees, agents, subcontractors, or invitees, or any individual or entity for which Consultant is legally liable (“indemnitors”), or arising from Consultant’s or indemnitors’ reckless or willful misconduct, or arising from Consultant’s or indemnitors’ negligent performance of or failure to perform any term, provision, covenant or condition of this Agreement, and in connection therewith: (a) Consultant will defend any action or actions filed in connection with any of said claims or liabilities and will pay all costs and expenses, including legal costs and attorney’s fees incurred in connection therewith; F.7.a Packet Pg. 184 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -13- (b) Consultant will promptly pay any judgment rendered against the City, its officers, agents or employees for any such claims or liabilities arising out of or in connection with the negligent performance of or failure to perform such work, operations or activities of Consultant hereunder; and Consultant agrees to save and hold the City, its officers, agents, and employees harmless therefrom; (c) In the event the City, its officers, agents or employees is made a party to any action or proceeding filed or prosecuted against Consultant for such damages or other claims arising out of or in connection with the negligent performance of or failure to perform the work, operation or activities of Consultant hereunder, Consultant agrees to pay to the City, its officers, agents or employees, any and all costs and expenses incurred by the City, its officers, agents or employees in such action or proceeding, including but not limited to, legal costs and attorney’s fees. Consultant shall incorporate similar indemnity agreements with its subcontractors and if it fails to do so Consultant shall be fully responsible to indemnify City hereunder therefore, and failure of City to monitor compliance with these provisions shall not be a waiver hereof. This indemnification includes claims or liabilities arising from any negligent or wrongful act, error or omission, or reckless or willful misconduct of Consultant in the performance of professional services hereunder. The provisions of this Section do not apply to claims or liabilities occurring as a result of City’s sole negligence or willful acts or omissions, but, to the fullest extent permitted by law, shall apply to claims and liabilities resulting in part from City’s negligence, except that design professionals’ indemnity hereunder shall be limited to claims and liabilities arising out of the negligence, recklessness or willful misconduct of the design professional. The indemnity obligation shall be binding on successors and assigns of Consultant and shall survive termination of this Agreement. 5.4 Sufficiency of Insurer. Insurance required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated “A” or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better, unless such requirements are waived by the Risk Manager of the City (“Risk Manager”) due to unique circumstances. If this Agreement continues for more than 3 years duration, or in the event the risk manager determines that the work or services to be performed under this Agreement creates an increased or decreased risk of loss to the City, the Consultant agrees that the minimum limits of the insurance policies may be changed accordingly upon receipt of written notice from the Risk Manager. ARTICLE 6. RECORDS, REPORTS, AND RELEASE OF INFORMATION 6.1 Records. Consultant shall keep, and require subcontractors to keep, such ledgers, books of accounts, invoices, vouchers, canceled checks, reports, studies or other documents relating to the disbursements charged to City and services performed hereunder (the “books and records”), as shall be necessary to perform the services required by this Agreement and enable the Contract F.7.a Packet Pg. 185 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -14- Officer to evaluate the performance of such services. Any and all such documents shall be maintained in accordance with generally accepted accounting principles and shall be complete and detailed. The Contract Officer shall have full and free access to such books and records at all times during normal business hours of City, including the right to inspect, copy, audit and make records and transcripts from such records. Such records shall be maintained for a period of three (3) years following completion of the services hereunder, and the City shall have access to such records in the event any audit is required. In the event of dissolution of Consultant’s business, custody of the books and records may be given to City, and access shall be provided by Consultant’s successor in interest. Notwithstanding the above, the Consultant shall fully cooperate with the City in providing access to the books and records if a public records request is made and disclosure is required by law including but not limited to the California Public Records Act. 6.2 Reports. Consultant shall periodically prepare and submit to the Contract Officer such reports concerning the performance of the services required by this Agreement as the Contract Officer shall require. Consultant hereby acknowledges that the City is greatly concerned about the cost of work and services to be performed pursuant to this Agreement. For this reason, Consultant agrees that if Consultant becomes aware of any facts, circumstances, techniques, or events that may or will materially increase or decrease the cost of the work or services contemplated herein or, if Consultant is providing design services, the cost of the project being designed, Consultant shall promptly notify the Contract Officer of said fact, circumstance, technique or event and the estimated increased or decreased cost related thereto and, if Consultant is providing design services, the estimated increased or decreased cost estimate for the project being designed. 6.3 Ownership of Documents. All drawings, specifications, maps, designs, photographs, studies, surveys, data, notes, computer files, reports, records, documents and other materials (the “documents and materials”), including any electronic documents and materials, prepared by Consultant, its employees, subcontractors and agents in the performance of this Agreement shall be the property of City and shall be delivered to City in a format of the City’s choice upon request of the Contract Officer or upon the termination of this Agreement, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights of ownership use, reuse, or assignment of the documents and materials hereunder. Any use, reuse or assignment of such completed documents for other projects and/or use of uncompleted documents without specific written authorization by the Consultant will be at the City’s sole risk and without liability to Consultant, and Consultant’s guarantee and warranties shall not extend to such use, reuse or assignment. Consultant may retain copies of such documents for its own use. Consultant shall have the right to use the concepts embodied therein. All subcontractors shall provide for assignment to City of any documents or materials prepared by them, and in the event Consultant fails to secure such assignment, Consultant shall indemnify City for all damages resulting therefrom. Moreover, Consultant with respect to any documents and materials that may qualify as “works made for hire” as defined in 17 U.S.C. § 101, such documents and materials are hereby deemed “works made for hire” for the City. F.7.a Packet Pg. 186 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -15- 6.4 Confidentiality and Release of Information. (a) All information gained or work product produced by Consultant in performance of this Agreement shall be considered confidential, unless such information is in the public domain or already known to Consultant. Consultant shall not release or disclose any such information or work product to persons or entities other than City without prior written authorization from the Contract Officer. (b) Consultant, its officers, employees, agents or subcontractors, shall not, without prior written authorization from the Contract Officer or unless requested by the City Attorney, voluntarily provide documents, declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this Agreement. Response to a subpoena or court order shall not be considered “voluntary” provided Consultant gives City notice of such court order or subpoena. (c) If Consultant, or any officer, employee, agent or subcontractor of Consultant, provides any information or work product in violation of this Agreement, then City shall have the right to reimbursement and indemnity from Consultant for any damages, costs and fees, including attorney’s fees, caused by or incurred as a result of Consultant’s conduct. (d) Consultant shall promptly notify City should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed there under. City retains the right, but has no obligation, to represent Consultant or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant. However, this right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response. ARTICLE 7. ENFORCEMENT OF AGREEMENT AND TERMINATION 7.1 California Law. This Agreement shall be interpreted, construed and governed both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of San Bernardino, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. In the event of litigation in a U.S. District Court, venue shall lie exclusively in the Central District of California, in the County of San Bernardino, State of California. 7.2 Disputes; Default. In the event that Consultant is in default under the terms of this Agreement, the City shall not have any obligation or duty to continue compensating Consultant for any work performed after the date of default. Instead, the City may give notice to Consultant of the default and the reasons F.7.a Packet Pg. 187 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -16- for the default. The notice shall include the timeframe in which Consultant may cure the default. This timeframe is presumptively thirty (30) days, but may be extended, though not reduced, if circumstances warrant. During the period of time that Consultant is in default, the City shall hold all invoices and shall, when the default is cured, proceed with payment on the invoices. In the alternative, the City may, in its sole discretion, elect to pay some or all of the outstanding invoices during the period of default. If Consultant does not cure the default, the City may take necessary steps to terminate this Agreement under this Article. Any failure on the part of the City to give notice of the Consultant’s default shall not be deemed to result in a waiver of the City’s legal rights or any rights arising out of any provision of this Agreement. 7.3 Retention of Funds. Consultant hereby authorizes City to deduct from any amount payable to Consultant (whether or not arising out of this Agreement) (i) any amounts the payment of which may be in dispute hereunder or which are necessary to compensate City for any losses, costs, liabilities, or damages suffered by City, and (ii) all amounts for which City may be liable to third parties, by reason of Consultant’s acts or omissions in performing or failing to perform Consultant’s obligation under this Agreement. In the event that any claim is made by a third party, the amount or validity of which is disputed by Consultant, or any indebtedness shall exist which shall appear to be the basis for a claim of lien, City may withhold from any payment due, without liability for interest because of such withholding, an amount sufficient to cover such claim. The failure of City to exercise such right to deduct or to withhold shall not, however, affect the obligations of the Consultant to insure, indemnify, and protect City as elsewhere provided herein. 7.4 Waiver. Waiver by any party to this Agreement of any term, condition, or covenant of this Agreement shall not constitute a waiver of any other term, condition, or covenant. Waiver by any party of any breach of the provisions of this Agreement shall not constitute a waiver of any other provision or a waiver of any subsequent breach or violation of any provision of this Agreement. Acceptance by City of any work or services by Consultant shall not constitute a waiver of any of the provisions of this Agreement. No delay or omission in the exercise of any right or remedy by a non-defaulting party on any default shall impair such right or remedy or be construed as a waiver. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement. 7.5 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 7.6 Legal Action. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel F.7.a Packet Pg. 188 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -17- specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. Notwithstanding any contrary provision herein, Consultant shall file a statutory claim pursuant to Government Code Sections 905 et. seq. and 910 et. seq., in order to pursue a legal action under this Agreement. 7.7 Termination Prior to Expiration of Term. This Section shall govern any termination of this Contract except as specifically provided in the following Section for termination for cause. The City reserves the right to terminate this Contract at any time, with or without cause, upon written notice to Consultant. In addition, the Consultant may terminate this Contract for cause, upon sixty (60) days’ advance written notice to City. Upon receipt of any notice of termination, Consultant shall immediately cease all services hereunder except such as may be specifically approved by the Contract Officer. Except where the Consultant has initiated termination, the Consultant shall be entitled to compensation for all services rendered prior to the effective date of the notice of termination and for any services authorized by the Contract Officer thereafter in accordance with the Schedule of Compensation or such as may be approved by the Contract Officer, except as provided in Section 7.3. In the event the Consultant has initiated termination, the Consultant shall be entitled to compensation only for the reasonable value of the work product actually produced hereunder. In the event of termination without cause pursuant to this Section, the terminating party need not provide the non-terminating party with the opportunity to cure pursuant to Section 7.2. 7.8 Termination for Default of Consultant. If termination is due to the failure of the Consultant to fulfill its obligations under this Agreement, City may, after compliance with the provisions of Section 7.2, take over the work and prosecute the same to completion by contract or otherwise, and the Consultant shall be liable to the extent that the total cost for completion of the services required hereunder exceeds the compensation herein stipulated (provided that the City shall use reasonable efforts to mitigate such damages), and City may withhold any payments to the Consultant for the purpose of set-off or partial payment of the amounts owed the City as previously stated. 7.9 Attorney’s Fees. If either party to this Agreement is required to initiate or defend or made a party to any action or proceeding in any way connected with this Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney’s fees. Attorney’s fees shall include attorney’s fees on any appeal, and in addition a party entitled to attorney’s fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. F.7.a Packet Pg. 189 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -18- ARTICLE 8. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION 8.1 Non-liability of City Officers and Employees. No officer or employee of the City shall be personally liable to the Consultant, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Consultant or to its successor, or for breach of any obligation of the terms of this Agreement. 8.2 Conflict of Interest. Consultant covenants that neither it, nor any officer or principal of its firm, has or shall acquire any interest, directly or indirectly, which would conflict in any manner with the interests of City or which would in any way hinder Consultant’s performance of services under this Agreement. Consultant further covenants that in the performance of this Agreement, no person having any such interest shall be employed by it as an officer, employee, agent or subcontractor without the express written consent of the Contract Officer. Consultant agrees to at all times avoid conflicts of interest or the appearance of any conflicts of interest with the interests of City in the performance of this Agreement. 8.3 Covenant Against Discrimination. Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, gender, sexual orientation, marital status, national origin, ancestry or other protected class in the performance of this Agreement. Consultant shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, gender, sexual orientation, marital status, national origin, ancestry or other protected class. 8.4 Unauthorized Aliens. Consultant hereby promises and agrees to comply with all of the provisions of the Federal Immigration and Nationality Act, 8 U.S.C.A. §§ 1101, et seq., as amended, and in connection therewith, shall not employ unauthorized aliens as defined therein. Should Consultant so employ such unauthorized aliens for the performance of work and/or services covered by this Agreement, and should any liability or sanctions be imposed against City for such use of unauthorized aliens, Consultant hereby agrees to and shall reimburse City for the cost of all such liabilities or sanctions imposed, together with any and all costs, including attorney’s fees, incurred by City. ARTICLE 9. MISCELLANEOUS PROVISIONS 9.1 Notices. Any notice, demand, request, document, consent, approval, or communication either party desires or is required to give to the other party or any other person shall be in writing and either served personally or sent by prepaid, first-class mail, in the case of the City, to the City Manager F.7.a Packet Pg. 190 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -19- and to the attention of the Contract Officer (with her/his name and City title), City of Grand Terrace, 22795 Barton Rd, Grand Terrace, CA 92313, and in the case of the Consultant, to the person(s) at the address designated on the execution page of this Agreement. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated at the time personally delivered or in seventy-two (72) hours from the time of mailing if mailed as provided in this Section. 9.2 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 9.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 9.4 Integration; Amendment. This Agreement including the attachments hereto is the entire, complete and exclusive expression of the understanding of the parties. It is understood that there are no oral agreements between the parties hereto affecting this Agreement and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings, if any, between the parties, and none shall be used to interpret this Agreement. No amendment to or modification of this Agreement shall be valid unless made in writing and approved by the Consultant and by the City Council. The parties agree that this requirement for written modifications cannot be waived and that any attempted waiver shall be void. 9.5 Severability. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder unless the invalid provision is so material that its invalidity deprives either party of the basic benefit of their bargain or renders this Agreement meaningless. 9.6 Warranty & Representation of Non-Collusion. No official, officer, or employee of City has any financial interest, direct or indirect, in this Agreement, nor shall any official, officer, or employee of City participate in any decision relating to this Agreement which may affect his/her financial interest or the financial interest of any corporation, partnership, or association in which (s)he is directly or indirectly interested, or in violation of any corporation, partnership, or association in which (s)he is directly or indirectly interested, or in violation of any State or municipal statute or regulation. The determination of F.7.a Packet Pg. 191 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 -20- “financial interest” shall be consistent with State law and shall not include interests found to be “remote” or “noninterests” pursuant to Government Code Sections 1091 or 1091.5. Nor shall any such officer or employee participate in any decision relating to the Agreement which affects her/his financial interest or the financial interest of any corporation, partnership or association in which (s)he is, directly or indirectly, interested, in violation of any State statute or regulation, including but not limited to the Political Reform Act (Government Code Sections 81000, et seq.) Consultant warrants and represents that it has not paid or given, and will not pay or give, to any third party including, but not limited to, any City official, officer, or employee, any money, consideration, or other thing of value as a result or consequence of obtaining or being awarded any agreement. Consultant further warrants and represents that (s)he/it has not engaged in any act(s), omission(s), or other conduct or collusion that would result in the payment of any money, consideration, or other thing of value to any third party including, but not limited to, any City official, officer, or employee, as a result of consequence of obtaining or being awarded any agreement. Consultant is aware of and understands that any such act(s), omission(s) or other conduct resulting in such payment of money, consideration, or other thing of value will render this Agreement void and of no force or effect. Consultant’s Authorized Initials 9.7 Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which said party is bound. This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the parties. [SIGNATURES ON FOLLOWING PAGE] F.7.a Packet Pg. 192 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 21 01247.0006/760563.3 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first-above written. CITY: City of Grand Terrace, a municipal corporation ATTEST: Konrad Bolowich, City Manager Debra Thomas, City Clerk APPROVED AS TO FORM: ALESHIRE & WYNDER, LLP Adrian R. Guerra, City Attorney CONSULTANT: SWEEPING CORPORATION OF AMERICA, LLC, a California limited liability company By: Name: Title: By: Name: Title: Address: Two corporate officer signatures required when Consultant is a corporation, with one signature required from each of the following groups: 1) Chairman of the Board, President or any Vice President; and 2) Secretary, any Assistant Secretary, Chief Financial Officer or any Assistant Treasurer. CONSULTANT’S SIGNATURES SHALL BE DULY NOTARIZED, AND APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO CONSULTANT’S BUSINESS ENTITY. F.7.a Packet Pg. 193 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO On , 2022 before me, , personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT SI ( INDIVIDUAL CORPORATE OFFICER TITLE(S) PARTNER(S) LIMITED GENERAL ATTORNEY-IN-FACT TRUSTEE(S) GUARDIAN/CONSERVATOR OTHER GNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES)) TITLE OR TYPE OF DOCUMENT NUMBER OF PAGES DATE OF DOCUMENT SIGNER(S) OTHER THAN NAMED ABOVE A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document. F.7.a Packet Pg. 194 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/760563.3 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO On , 2022 before me, , personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT SI ( INDIVIDUAL CORPORATE OFFICER TITLE(S) PARTNER(S) LIMITED GENERAL ATTORNEY-IN-FACT TRUSTEE(S) GUARDIAN/CONSERVATOR OTHER GNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES)) _ TITLE OR TYPE OF DOCUMENT NUMBER OF PAGES DATE OF DOCUMENT SIGNER(S) OTHER THAN NAMED ABOVE A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document. F.7.a Packet Pg. 195 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) A-1 01247.0006/760563.3 EXHIBIT “A” SCOPE OF SERVICES I. Consultant will perform the following Services: Consultant shall provide street sweeping services in a thorough and professional manner, and to provide labor, tools, equipment, materials and supplies necessary to complete the work in a timely manner that will meet the City’s requirements. A. Objectives - The primary objectives of the sweeping program are to: i. Establish and adhere to a regular schedule of performance ii. Maintain gutter flow lines free of debris for free flow of water iii. Maintain a state of cleanliness for road safety acceptable to the City and its residents. iv. Meet all Federal, State, County and City laws, regulations, and ordinances v. Meet South Coast Air Quality Management District (AQMD) requirements vi. Meet all National Pollution Discharge Elimination System (NPDES) requirements to remove and properly dispose of dust, silt, dirt, leaves and other organic and inorganic materials from the City streets prior to such materials entering the City’s storm drain system. vii. The City has approximately 100 curb miles that require street sweeping per month. B. Services i. Consultant shall furnish all labor, equipment, tools, fuel, insurance, supervision, disposal costs and materials (except water), to sweep the City’s streets in accordance with the schedule and specifications contained in this Exhibit. ii. During the term of the Agreement, the Consultant shall sweep by machine all residential public streets, commercial public streets and all the paved public alleys in the City, in accordance with the sweeping schedule as established by the City pursuant to Exhibit “A-1”. iii. Commercial and residential streets are defined for the purposes of this contract as all areas of public City streets which are paved and which are regularly used for the operation of motor vehicles. C. Description of Work F.7.a Packet Pg. 196 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) A-2 01247.0006/760563.3 i. City of Grand Terrace (Residential) – One (1) Time Per Month 1. The current six (6) zone schedule will be followed as provided in Exhibit “A-1”. ii. Grand Terrace Business District – One (1) Time Per Week 1. Both sides of Barton Road from western City limit at 21800 Barton Road to the eastern City limit at 23200 Barton Road. 2. Both sides of Mt. Vernon from Main (North) to the northern City limit approximately 1500 feet north of Grand Terrace Road. iii. City Lots – One (1) Time Per Month 1. City Hall (22795 Barton Rd., Grand Terrace, California). 2. City Parks: a. Veterans Freedom Park (21950 Pico St., Grand Terrace, California) b. Richard Rollins Community Park (22745 De Berry St., Grand Terrace, California) c. Grand Terrace Fitness Park (21937 Grand Terrace Rd., Grand Terrace, California) 3. Senior Center located at 22627 Grand Terrace Rd., Grand Terrace, California. iv. On-Call, Special Event, and Emergency Street Sweeping. Services shall include On-Call and Special Event Street Sweeping Services and Emergency Street Sweeping (as defined below). Consultant shall be compensated for On-Call and Special Event Street Sweeping Services and Emergency Street Sweeping pursuant to Exhibit “C-1”. 1. On-Call and Special Event Street Sweeping. Consultant shall respond to City within two (2) hours of receiving a notification of the need for On-Call and Special Event Street Sweeping Services from the City. Such On-Call and Special Event Street Sweeping shall be carried out pursuant to such request from City. Consultant shall provide City with the name, email, phone number, and any other contact information as may be required by Contract Officer of a contact person for all requests (including, but not limited to, after- hours requests) for On-Call and Special Event Street Sweeping Services, and shall update such information in writing immediately upon any change in such information and/or contact person For the F.7.a Packet Pg. 197 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) A-3 01247.0006/760563.3 purposes of this Agreement, the term “On-Call and Special Event Street Sweeping Services” shall mean the street sweeping of locations and at times that are not contemplated by this Agreement; however, On-Call and Special Event Street Sweeping Services shall not include “Emergency Street Sweeping” as defined below. 2. Emergency Street Sweeping. Emergency Street Sweeping shall be provided by Consultant after-hours and on weekends and holidays as may be needed from time to time. Consultant shall respond to City within two (2) hours of receiving a notification of the need for an emergency sweep from the City. Such Emergency Street Sweeping shall be carried out pursuant to such request from City. Consultant shall provide City with the name, email, phone number, and any other contact information as may be required by Contract Officer of a contact person for all requests (including, but not limited to, after-hours requests) for Emergency Street Sweeping, and shall update such information in writing immediately upon any change in such information and/or the contact person. For the purposes of this Agreement, the term “Emergency Street Sweeping” shall mean emergency street sweeping for events such as non-hazardous spills, accident clean-ups and unusual conditions. v. Residentially zoned areas shall be swept between 6:00 am and 3:00 pm on Thursdays. Commercially zoned areas shall be swept from 9:00 pm to 6:00 am. If any complaints arise from the sweeping times other than the 6:00 am to 3:00 pm times in residentially zoned areas, the Consultant shall work with the City’s Public Works Department to resolve the issue to the City’s satisfaction, provided that the determination of the City Manager, or his or her designee, shall be final. D. Special Requirements i. The Consultant shall obtain a City of Grand Terrace business license. ii. Consultant shall utilize a GPS Navigation System with the ability to track the street sweeping activity and provide a monthly report to the City of the streets serviced. iii. Street sweeping services shall not exceed 8 mph on city streets. E. Labor, Equipment and Materials i. The Consultant shall use and furnish at their own expense all labor, equipment, and materials necessary for the satisfactory performance of the works set forth in this contract. ii. The operators shall be competent in all aspects of street sweeper operations. This includes knowledge of all operational aspects of the equipment used, F.7.a Packet Pg. 198 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) A-4 01247.0006/760563.3 knowledge of the California Vehicle Code, knowledge of standard safety practices, and knowledge of notification procedures should the need arise to contact City personnel. iii. The primary equipment shall be of a recognized make and shall be kept in good and safe repair and not greater than 10-years old for either the chassis and/or the vacuum system. Semi-annual inspection of all equipment must be conducted with findings from those inspections to be submitted to the City in writing. F. Quality Control i. Sweeping shall be done in a neat, orderly and professional manner. The street sweeper shall leave designated areas of sweeping free of dirt, litter, debris, obstructions, smears and visual dust in accordance with the City’s standards of cleanliness. ii. While sweeping shall normally consist of a single pass over an area, the Consultant shall make additional passes or such extra effort as may be required to adequately clean the street. Extra effort shall be required when sweeping equipment leaves a dirt/silt smear in its pathway. Extra effort will be strictly enforced during and after windy conditions and storm weather. The cost of any extra effort shall be included in the contract cost. iii. Items that cannot be swept such as: tree limbs, palm fronds, rocks, trash and debris shall be removed from the sweeping path by the sweeping operator rather than going around it. Larger obstructions such as impaired vertical and/or horizontal clearance by tree limbs, construction or landscaping debris shall be immediately reported to the City when the location cannot be swept. iv. The City Manager or his/her designee shall be the sole judge of the quality of work. In the event that the results of a sweep are considered to be unsatisfactory, the City will notify the Consultant of exact location and description of deficiency. The Consultant shall completely re-sweep the unsatisfactory area at its own expense and shall provide responses within one (1) working day of receiving notice of the deficient sweeping. v. The Consultant shall also provide back-up capabilities for instances when sweeping cannot be completed on schedule due to street sweeper mechanical failure. G. Disposal i. Consultant shall dispose of all refuse and debris collected from sweeping operations in the City’s Corporate Yard. The cost for disposal is not included in the Agreement cost. F.7.a Packet Pg. 199 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) A-5 01247.0006/760563.3 H. Sweeping Practices and Standards of Performance i. Areas of Street – Areas of the street to be swept include curb lines along both sides of the roadway or to the edge of the pavement where no curb exists, along all curbs on raised medians, over all portions of painted median, painted left and right turn pockets, and all intersection turn pockets and arterial intersection center areas and dead spots are to be maintained on the same frequency as the median or intersection for which they are associated and included in the curb mile price. Curb returns (radii) at intersections of arterial and residential streets will be swept along their entire length and free of debris on scheduled arterial sweeping days. Excluded from areas to be swept are those that would cause damage to the equipment used. While Consultant is normally responsible for the 8’ strip (sweeper width), curb to curb sweeping, an additional width of street may need to be swept at some locations due to unforeseen circumstances and shall be included within the curb mile price. ii. Flow of Traffic – Sweeping shall be accomplished in the same direction as traffic flow at all times during sweeping iii. Warning Devices – Vehicles shall be equipped with top-mounted warning lights (rotating or beacon) visible for 360̊ or comparable traffic safety lights when sweeping. A rear-mounted left/right arrow stick shall be required for arterial and bike lane sweepers. iv. Sweeping Speed – Sweeping speed shall be adjusted to street and debris condition with a maximum speed of eight miles per hour (8 MPH). City streets swept while driver exceeds eight miles per hour (8 MPH) will be re- swept in their entirety at Consultant’s expense. In addition, a verbal warning will be given for the first violation. A written warning will be given for the second violation, and a “Failure to Perform” notice will be issued upon the third violation. v. Notification of Non-sweeping – Consultant shall provide City representatives on a daily basis (when applicable) with a list of all streets not swept when regular sweeping schedule is interrupted for any reason and shall deduct said street from Consultant’s invoices for that day/week. Consultant shall provide a list of streets that cannot be swept to the City by the end of each day that Consultant is required to sweep streets pursuant to this Agreement. The City shall notify the Consultant by phone on non- sweeping conditions due to inclement weather. The City’s notification will serve as a non-sweep day and Consultant shall not be compensated by the City unless an alternative sweeping schedule is coordinated by the Consultant and is submitted to the City for its written approval and Consultant actually performs such street sweeping pursuant to the alternative sweeping schedule. For such street sweeping, Consultant shall F.7.a Packet Pg. 200 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) A-6 01247.0006/760563.3 be compensated pursuant to the Cost per Curb Mile rates provided in Section I of Exhibit “C-1”. vi. Holidays and Potential Conflicts with the Waste and Recycling Contractor – Consultant will observe all City holidays and holidays observed by the City’s franchised waste hauler. Approved non-sweep days will not be paid for by the City unless an alternative sweeping schedule is coordinated by the Consultant and is submitted to the City for its written approval and Consultant actually performs such street sweeping pursuant to the alternative sweeping schedule. For such street sweeping, Consultant shall be compensated pursuant to the Cost per Curb Mile rates provided in Section I of Exhibit “C-1”. Trash and recycling collection days will take priority over street sweeping days and cannot be both performed on the same day. Currently, the City is serviced by Burrtec Waste Industries, Inc. on Monday, Tuesday and Wednesday (Fridays for City parks); however, Consultant shall independently verify Burrtec Waste Industries, Inc.’s schedule within the City. I. Water i. The Consultant shall obtain water for sweeping operations at points designated by the City. Necessary water shall be furnished at the expense of the City. II. As part of the Services, Consultant will prepare and deliver the following tangible work products to the City: A. In addition to any tangible work products required elsewhere in this Agreement, Consultant shall prepare and deliver such tangible work products that may be required by the City from time to time under this Agreement. III. In addition to the requirements of Section 6.2 and this Exhibit, during performance of the Services, Consultant will keep the City appraised of the status of performance by delivering the following status reports: A. Consultant shall prepare and deliver such status reports as may be required by the City from time to time under this Agreement. IV. All work product is subject to review and acceptance by the City, and must be revised by the Consultant without additional charge to the City until found satisfactory and accepted by City. F.7.a Packet Pg. 201 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) A-7 01247.0006/760563.3 Exhib it “A-1” Sweeping Schedule F.7.a Packet Pg. 202 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) A-8 01247.0006/760563.3 Exhibit A-2 General Provisions N/A F.7.a Packet Pg. 203 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) B-1 01247.0006/760563.3 EXHIBIT “B” SPECIAL REQUIREMENTS (Superseding Contract Boilerplate) N/A F.7.a Packet Pg. 204 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) D-1 01247.0006/760563.3 EXHIBIT “C” SCHEDULE OF COMPENSATION I. Consultant shall perform the Services at the rates provided in Exhibit “C-1” of this Agreement. A. For Services not including On-Call and Special Event Street Sweeping and Emergency Street Sweeping, Consultant shall only be compensated per curb mile actually swept pursuant to the Cost per Curb Mile provided in Section I of Exhibit “C-1”. Consultant’s compensation provided herein shall not exceed the applicable maximums provided in Section I of Exhibit “C-1”. B. For On-Call and Special Event Street Sweeping and Emergency Street Sweeping, Consultant shall be compensated per hour pursuant to Section II of Exhibit “C-1”. Consultant’s compensation provided herein shall not exceed the applicable maximum provided in Section II of Exhibit “C-1”. C. Within the budgeted amounts for the Services described above, and with the written approval of the Contract Officer, funds may be shifted from one subbudget to another so long as the Contract Sum is not exceeded per Section 2.1, unless Additional Services are approved per Section 1.8. II. The City will compensate Consultant for the Services performed upon submission of a valid invoice to City of Grand Terrace, 22795 Barton Rd., Grand Terrace, CA 92313, to the attention of the City Manager. Each invoice shall include: A. Purchase Order Number B. Project name/description C. Line items for all personnel describing the work performed, the title/classification under which such personnel is billed, the number of hours worked, the number of curb miles swept (including weekly start and completion odometer readings for the vehicle utilized), and the hourly rate pay. D. Line items for all materials and equipment properly charged to the Services. E. Line items for all other approved reimbursable expenses claimed, with supporting documentation. F. Line items for all approved subcontractor labor, supplies, equipment, materials, and travel properly charged to the Services. G. Such other information as may be required by the Contract Officer. III. The total compensation for the Services shall not exceed $54,505 as provided in Section 2.1 of this Agreement. F.7.a Packet Pg. 205 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) D-2 01247.0006/760563.3 IV. The Consultant’s billing rates for the Services are attached as Exhibit “C-1”. F.7.a Packet Pg. 206 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) D-3 01247.0006/760563.3 Exhib it “C-1” I. Regularly Scheduled Street Sweeping Street Sweeping Service Year 1 4/1/2022 to 4/1/2023 Cost per Curb Mile (approx. 88 miles) Residential Thursdays Between 6:00 AM and 3:00 PM – 2 zones per Thursday (see map) and Business District Wednesday to Thursdays between 9:00 PM and 6:00 AM (see map) $45.42 Street Sweeping Services Year 1 4/1/2022 to 4/1/2023 Maximum Annual Compensation Residential Thursdays Between 6:00 AM and 3:00 PM – 2 zones per Thursday (see map) and Business District Wednesday to Thursdays between 9:00 PM and 6:00 AM (see map) $48,079.00 For Services not including On-Call and Special Event Street Sweeping and Emergency Street Sweeping, Consultant’s total compensation under this Agreement shall not exceed $48,079. II. On-Call and Special Event Street Sweeping and Emergency Street Sweeping Year 1 3/1/2022 to 2/28/2023 Hourly Rate Sunday Through Saturday On-call and Special Event Street Sweeping and Emergency Street Sweeping $110.00 For On-Call and Special Event Street Sweeping and Emergency Street Sweeping, Consultant’s total compensation under this Agreement shall not exceed $6,426. F.7.a Packet Pg. 207 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) D-4 01247.0006/760563.3 EXHIBIT “D” SCHEDULE OF PERFORMANCE I. Consultant shall perform all Services timely in accordance with the schedule developed by the City, as provided in Exhibits A and A-1, and subject to modification by written approval of the Contract Officer. II. Unless earlier terminated in accordance with Article 7 of this Agreement, this Agreement shall continue in full force and effect until completion of the services but not exceeding one (1) year from the date hereof. The Parties may agree to extend the term of this Agreement by two (2) terms of one (1) year each. F.7.a Packet Pg. 208 At t a c h m e n t : S t r e e t S w e e p i n g A g r e e m e n t [ R e v i s i o n 1 ] ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.b Packet Pg. 209 At t a c h m e n t : E x h i b i t A - 1 ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 210 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 211 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 212 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 213 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 214 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 215 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 216 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 217 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 218 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 219 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 220 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 221 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 222 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 223 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 224 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 225 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 226 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 227 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 228 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 229 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 230 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) F.7.c Packet Pg. 231 At t a c h m e n t : C l e a n S t r e e t B i d - F u l l ( S t r e e t S w e e p i n g C o n t r a c t ) CITY OF GRAND TERRACE COUNTY OF SAN BERNARDINO STATE OF CALIFORNIA CONTRACT DOCUMENTS SPECIFICATIONSANDSTANDARDDRAWINGS FOR STREET SWEEPING SERVICES FEBRUARY 2022 MODIFIED DATES BELOW [Editor’s Note: Timeline Dates below are Subject to Change] • Issuance of Bid by City Tuesday, November 30, 2021 • Deadline Questions/Clarification Requests Tuesday, December 7, 2021 (5:00 pm) • Deadline for Submitting Complete Proposals Tuesday, December 14, 2021 (11:00 am) • Presentation to City Council for Final Approval Tuesday, January 11, 2022 01247.0006/750132.1 F.7.d Packet Pg. 232 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 Table of Contents NOTICE INVITING INFORMAL BIDS ................................................................................................. 3 INSTRUCTIONS TO BIDDERS ............................................................................................................... 6 PROPOSAL ..................................................................................................................................... 10 Bid Schedule ....................................................................................................................... 12 Addenda Acknowledgment .................................................................................................. 15 Bidder's Information ............................................................................................................. 16 Designation Of Subcontractors ............................................................................................ 18 References .......................................................................................................................... 19 Non-Collusion Affidavit ......................................................................................................... 20 Form Of Bid Bond ................................................................................................................ 21 CONTRACT AGREEMENT ................................................................................................................... 23 Faithful Performance Bond .................................................................................................. 31 Labor And Material Bond ..................................................................................................... 33 Worker's Compensation Insurance Certificate ...................................................................... 36 GENERAL PROVISIONS ...................................................................................................................... 37 Section 1 - Definitions And Abbreviations ................................................................................. 37 Section 2 - Specifications, Drawings And Related Data ........................................................... 40 Section 3 - Engineer-Contractor Relations ................................................................................ 40 Section 4 - Materials And Workmanship .................................................................................. 44 Section 5 - Progress And Payment ........................................................................................... 46 Section 6 - Bonds, Insurance, Legal Responsibility, And Public Safety.................................... 49 Section 7 - State Of California Requirements ........................................................................... 53 SPECIAL PROVISIONS ................................................................................................................... 55 Exhibit A .............................................................................................................................. 55 Map ..................................................................................................................................... 59 F.7.d Packet Pg. 233 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 NOTICE INVITING INFORMAL BIDS NOTICE IS HEREBY GIVEN on behalf of and as authorized by the City Council of the City of Grand Terrace (hereinafter referred to as the "City"), will receive sealed bids at 22795 Barton Road, Grand Terrace, California, 92313 in care of the Public Works Department, until 11:00 a.m. on Tuesday, December 14, 2021 for street sweeping services within the City of Grand Terrace (“Project”) designated as: STREET SWEEPING SERVICES BID NO. 22-01 At the time designated for receiving sealed bids on said Project, the bids will be opened, examined, and a determination will be made. All bids MUST be in writing, must be sealed in an opaque envelope, and addressed to the City, c/o Public Works Department, and delivered or mailed to the City at 22795 Barton Road Grand Terrace, California 92313 in care of the Public Works Department. The envelope shall be plainly marked in the upper left-hand corner as follows: ATTENTION: CITY OF GRAND TERRACE c/o PUBLIC WORKS DEPARTMENT (BIDDER'S NAME AND ADDRESS) BID FOR: STREET SWEEPING SERVICES CONTRACTOR MUST HAVE CLASS “A” OR "B" LICENSE THE ENGINEER'S ESTIMATE: $55,000 PER YEAR FOR 3 YEARS Any bid received after the hour stated above for any reason whatsoever, will not be considered for any purpose but will be returned, unopened, to the bidder. This project involves providing citywide street sweeping services for the City of Grand Terrace. The work shall be done under the supervision of the Director of Public Works/ City Engineer and no work or portion of the work shall be paid for until it is approved for payment by the Director of Public Works / City Engineer, but this shall not prevent approval of and payment for completed portions of the work as it progresses, payment acceptance of these portions or of the completed project. Each bidder must submit a proposal to the City, c/o Public Works Department, on standard forms provided in the bid package. Said proposal is to be accompanied by a cash deposit, a certified or cashier’s check, or a bid bond, made payable to the City, in an amount not less than 10 percent of the total bid submitted said cash deposit or check shall be forfeited or said bond shall become payable in the event the bidder depositing the same does not within ten (10) calendar days after written notice execute the Contract. F.7.d Packet Pg. 234 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 The successful bidder will be required to furnish with the Contract a Faithful Performance Bond in the amount of 100 percent of the Contract price, and a Payment Bond in the amount of 100 percent of the Contract price. The successful bidder will also be required to furnish certificates of insurance evidencing that all insurance coverage as required by the Specification has been so secured. The Contractor may, at Contractor’s sole cost and expense, substitute securities equivalent to any monies withheld by the City to insure performance under the Contract. Such securities shall be deposited with the City, or a state federally chartered bank as escrow agent, who shall pay such monies to the Contractor upon satisfactory completion of the Contract. Such securities, if deposited by the Contractor, will be valued by the City, whose decision on valuation of the securities shall be final. The Contractor shall be the beneficial owner of any securities substituted for monies withheld and shall receive any accrued interest thereon. Securities eligible for investment shall include those listed in Government Code Section 16430 and Government Code Section 4590. No such substitution shall be accepted until the escrow agreement, letter of credit, form of security and any other document related to said substitution is reviewed and found acceptable by the City’s attorney. The City reserves the right to waive any informalities or irregularities or to reject any or all bids, or any portions of any bid, or to reject and then negotiate the amount and/or terms of any bid with any bidder, and to be the sole judge of the merits of the respective bids received. The award of Contract, if made, will be on the basis of the lowest cost to the City to a responsible bidder whose proposal complies with all the prescribed requirements, including, but not limited to the Grand Terrace Municipal Code. No bidder may withdraw his bid for a period of thirty (30) days after the bid opening. Contract Documents may be examined at the City of Grand Terrace Public Works Department located at 22795 Barton Road, Grand Terrace, CA 92313 or may be obtained by email request to Shanita Tillman, Management Analyst, at stillman@grandterrace-ca.gov. Any questions regarding the bid documents should be directed via e-mail to the Management Analyst, Shanita Tillman. stillman@grandterrace-ca.gov. The successful bidder will be required to pay not less than the prevailing wage scale, determined by the Director of the California Department of Industrial Relations, copies of which scale are on file in the office of the City Clerk and the office of the Director of Public Works / City Engineer, and which shall be made available to any interested party upon request. Effective January 1, 2015, to be awarded and to perform work on Public Works projects, prime contractors and subcontractors must possess and maintain registration with the Department of Industrial Relations (DIR) at https://efiling.dir.ca.gov/PWCR. This is a separate requirement from the Contractors State License Board (CSLB) licensing requirement. See the Special Provisions for additional details. F.7.d Packet Pg. 235 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 The Contractor shall execute the Contract and shall secure all insurance and bonds required within ten (10) calendar days after the Contractor has been notified in writing of the award of the Contract. The Contractor shall not commence any street sweeping services or order equipment until the City has given the Contractor a Notice to Proceed. The Contractor shall commence street sweeping services within ten (10) calendar days after the Notice to Proceed. Payments will be made by check to the Contractor in accordance with the provisions of the Specifications and on itemized estimates duly certified and approved by the Director of Public Works/City Engineer. F.7.d Packet Pg. 236 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01624|7.0P00a6/g75e0132.1 INSTRUCTIONS TO BIDDERS CITY OF GRAND TERRACE BID NO: 22-01 PUBLIC WORKS DEPARTMENT DUE: December 14, 2021 22795 BARTON ROAD at 11:00 A.M. GRAND TERRACE, CA 92313 Submit bid in sealed envelope as indicated on the cover sheet BIDS NOT DELIVERED PRIOR TO THE HOUR INDICATED WILL BE REJECTED WE ARE PLEASED TO ISSUE THE ENCLOSED SPECIFICATIONS FOR YOUR CONSIDERATION FORM OF PROPOSAL: The bidder shall submit a complete proposal which will include this set of Specifications and any other documents required by these Specifications. The complete proposal shall be enclosed in a sealed envelope bearing the name of the bidder and of the project. In the event there is more than one bidding schedule, the bidder may bid on any individual schedule or on any combination of schedules. All quotations must be signed with the firm's name and by a responsible officer or employee. Obligations assumed by such signature must be fulfilled. Prices quoted by the bidder shall be exclusive of Federal Excise Taxes pursuant to exemption of political subdivision of a State by Federal Law. Prices quoted by the bidder shall mean total cost to the City, Freight on Board, delivered to the City of Grand Terrace. ADDENDA: Any addenda issued during the time of bidding forming a part of the documents shall be acknowledged and signed on the next page of the Bidding Schedule Section C and will be made a part of the Contract. DELIVERY OF PROPOSAL: The proposal shall be delivered by the time and to the place stipulated in the Notice Inviting Informal Bids. It is the bidder's sole responsibility to see that his proposal is received in proper time. Any proposal received after the scheduled closing time for receipt of proposal will be returned to the bidder unopened. WITHDRAWAL OF PROPOSAL: If for any reason you do not wish to bid on the project, mark NO BID and state your reasons for not bidding at this time. This withdrawal request must be signed by the bidder or their authorized representative. Such written request must be delivered to the place stipulated in the Notice Inviting Informal Bids prior to the scheduled closing time for receipt of proposals. By following the necessary withdrawal procedures, you will enhance our efforts to keep our bidders list current. The withdrawal of a proposal shall not prejudice the right of a bidder to file a new proposal. OPENING OF PROPOSALS: The proposals will be officially opened and read at the time and place stipulated in the Notice Inviting Informal Bids. The City Council of the City of Grand Terrace reserves the right to reject any and all proposals and/or waive any informalities thereon. F.7.d Packet Pg. 237 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01724|7.0P00a6/g75e0132.1 We hope you will attend our formal bid opening and obtain the results as we are unable to complete our evaluation and furnish this information by phone until noon the following day. The complete proposal including proposal guaranty shall be enclosed in sealed envelope, endorsed with the bidder's company name and address on the upper left corner, the bid number, name of project, hour and date of bid opening as shown in Notice Inviting Informal Bids and the words "Sealed Bid". (Public opening of proposal does NOT apply to informal bids) Sealed bids shall be addressed to the City of Grand Terrace c/o Public Works Department, 22795 Barton Road, Grand Terrace, California 92313. MODIFICATIONS AND ALTERNATIVE PROPOSAL: Unauthorized conditions, limitations, or provisions attached to a proposal will render it informal and may cause its rejection. The completed proposal forms shall be without interlineations, alterations, or erasures. Alternative proposals will not be considered unless specified. Oral, telegraphic, or telephonic proposals or modifications will not be considered. The City of Grand Terrace cannot honor any explanation or changes in the bid documents unless a written addendum has been issued. DISCREPANCIES IN PROPOSALS: In the event there is more than one bid item in a bidding schedule, the bidder shall furnish a price for all bid items in the schedule, and failure to do so will render the proposal informal and may cause its rejection. In the event there are unit price bid items in a bidding schedule and the "amount" indicated for a unit price bid item does not equal the product of the unit price and quantity, the unit price shall govern, and the amount will be corrected. PROPOSAL GUARANTEE: Each proposal shall be accompanied by a certified or cashier's check or in the amount of not less than 10 percent of the total amount named in the proposal. Said check or bond shall be made payable to the City and shall be given as a guarantee that the bidder, if awarded the work, will enter into a Contract within 15 calendar days after receipt of the Contract from the City, and will furnish the necessary insurance certificates, faithful performance bond, and labor and material bond; each of said bonds to be in the amount stated in the Notice Inviting Informal Bids. In case of refusal or failure to enter into said Contract, the check or bid bond, as the case may be, shall be forfeited to the City. If the bidder elects to furnish a bid bond as his proposal guarantee, they shall use the bid bond form bound herein, or one conforming substantially to it in form. BIDDER'S EXAMINATION OF SITE: Before submitting a proposal, bidder shall carefully examine the drawings, specifications, and other Contract Documents. It will be assumed that the bidder is familiar with existing site conditions and has a clear understanding of the requirements of the Contract regarding the furnishing of materials and performance of work. The submission of a proposal shall be considered conclusive evidence that the bidder has investigated and is satisfied with the character, quality, quantities of work to be performed and materials to be furnished. COMPETENCY OF BIDDERS: In selecting the lowest responsible bidder, consideration will be given not only to the financial standing but also to the general competency of the bidder for the performance of the work covered by the proposal. To this end, each proposal shall be supported by a statement of the bidder's experience as of recent date on the form F.7.d Packet Pg. 238 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 entitled "INFORMATION REQUIRED OF BIDDER", bound herein. The bidder shall have recently provided street sweeping service to not less than 3 projects of similar type and complexity. No proposal for the work will be accepted from a Contractor who is not licensed in accordance with applicable state law. CONTRACTOR'S LICENSING LAWS: In all State projects where Federal funds are involved, no bid submitted shall be invalidated by the laws of this State. However, at the time the Contract is awarded, the Contractor shall be properly licensed in accordance with the laws of this State. The first payment for work or material under any contract shall not be made by the State Controller unless and until the Registrar of Contractors certifies to the Controller that the records of the Contractors State License Board indicate that the Contractor w a s properly licensed at the time the Contract was awarded. Any bidder or contractor not so licensed shall be subject to all legal penalties imposed by law, including, but not limited to, any appropriate disciplinary action by the Contractors State License Board. The department shall include a statement to that effect in the standard form of prequalification questionnaire and financial statement. Failure of the bidder to obtain proper and adequate licensing for an award of a Contract shall constitute a failure to execute the Contract as provided in Section 10181 and shall result in the forfeiture of the security of the bidder. DIR REQUIREMENTS: In order to be awarded and to perform work on public works projects, prime contractors and subcontractors must possess and maintain registration with the Department of Industrial Relations (DIR) at https://efiling.dir.ca.gov/PWCR. This is a separate requirement from the Contractors State License Board (CSLB) licensing requirement. Contractors and subcontractors are to submit electronic payroll records to the DIR's Compliance Monitoring Unit (CMU), in addition to providing wet-ink original copies to the City or its designated labor compliance officer. DISQUALIFICATION OF BIDDERS: More than one proposal from an individual, firm, partnership, corporation, or association under the same or different names will not be considered. Reasonable grounds for believing that any bidder is interested in more than one proposal for the work contemplated will cause the rejection of all proposals in which such bidder is interested. If there is reason for believing that collusion exists among the bidders, all bids will be rejected and none of the participants in such collusion will be considered in future proposals. If applicable, no proposal will be accepted from a Contractor who is not licensed in accordance with the provision of Chapter 9 of Division III of the Business and Profession Code. RETURN OF PROPOSAL GUARANTY: The City will return the proposal guarantees accompanying each of the proposals which are not used in making the award once the Contract has been finally executed. AWARD OF CONTRACT: Award of a Contract, if it is awarded, will be based primarily on the lowest overall cost (total project with additive bids) to the City, and will be made to a responsible bidder whose proposal complies with all the requirements prescribed, including, but not limited to, the Grand Terrace Municipal Code. Preference will be given by the City of Grand Terrace to the lowest responsible bidder furnishing products made in the continental United States. Where the price of an acceptable American made product is within 5% of a non-American made product, award will be made to the domestic manufacturer. F.7.d Packet Pg. 239 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 Evaluation of the bidder's experience and additional information requested on the form "INFORMATION REQUIRED OF BIDDERS", bound herein, also will be a determining factor in arriving at an award. Any such award will be made within 60 calendar days after opening of the proposals. Unless otherwise indicated, a single award will not be made for less than all the bid items in an individual bidding schedule. In the event there is more than one bidding schedule, the City may award schedules individually or in combination. The City reserves the right to reject any or all bids, to waive any informality in a bid, and to make awards in the interests of the City. The requirements imposed by said law and regulations do not prevent a minimal use of foreign cement or steel materials if the cost of such materials used does not exceed one- tenth of 1 percent (0.1%) of the total Contract cost or $2,500, whichever is greater. The Contractor shall furnish the Engineer acceptable documentation of the quantity and value of any foreign cement or steel prior to incorporating such materials into the work. EXECUTION OF CONTRACT: The bidder to whom award is made shall execute a written Contract with the City on the form of agreement provided, shall secure all insurance and shall furnish all certificates and bonds required by the Specifications within 10 calendar days after receipt of the Contract from the City. No Contract shall be binding upon the City until the City Attorney has approved the Contract execution between the City and Contractor. Failure or refusal to enter into a Contract as herein provided or to conform to any of the stipulated requirements in connection therewith shall be just cause for annulment of the award and the forfeiture of the proposal guarantee. If the successful bidder refuses or fails to execute the Contract, the City may award the Contract to the second lowest responsible bidder. If the second lowest responsible bidder refuses or fails to execute the Contract, the City may award the Contract to the third lowest bidder to execute the Contract; such bidder's guarantees shall be likewise forfeited to the City. TIME OF COMPLETION: The Contractor shall be allotted the number of working days as specified in the Agreement to complete the work to the satisfaction of the City. F.7.d Packet Pg. 240 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 PROPOSAL FOR STREET SWEEPING SERVICES Bids due no later than 11:00 AM on Tuesday, December 14, 2021, at the office of Public Works. TO: CITY OF GRAND TERRACE, acting by and through its Governing Body, herein called the "CITY". Pursuant to and in compliance with your Notice to Contractors calling for Bids and other documents relating thereto, the undersigned bidder, having familiarized himself with the terms of the Contract, the local conditions affecting the performance of the Contract, and the cost of the work at the place where the work is to be done, and with the drawings and specifications and other Contract Documents, hereby proposed and agrees to perform within the time stipulated, the Contract, including all of its component parts, and everything required to be performed, and to provide and furnish any and all applicable taxes, utility and transportation services necessary to perform the Contract and complete in a workmanlike manner all of the work required in connection with the project known as: “STREET SWEEPING SERVICES”. All in strict conformity with the specifications and other Contract Documents, including Addenda No. , and , on file at the OFFICE OF THE CITY CLERK, 22795 BARTON ROAD, GRAND TERRACE, CALIFORNIA, 92313, for the sum of: (SEE BID SCHEDULE FOR COST BREAKDOWN OF ITEMS) COMPANY NAME TITLE CITY ZIP CODE TELEPHONE ( ) CONTRACTOR'S LICENSE NO. DIR REGISTRATION NO. F.7.d Packet Pg. 241 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 DATE BIDDER’S NAME, ADDRESS & PHONE STATE CONTRACTOR’S LICENSE NO. CITY BUSINESS LICENSE NO. (if available) CORPORATE SEAL Corporation incorporated under the State of TELEPHONE: (Area Code) BY: Signature Print or type name TITLE: Names and addresses of all members of co-partnership or names and titles of all officers of the corporation: F.7.d Packet Pg. 242 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 BID SCHEDULE FOR STREET SWEEPING SERVICES BIDDER: (Company Name) The undersigned proposes to supply and deliver the materials and services specified below in full accordance with the Contract Documents supplied by the City of Grand Terrace. All prices are to include: delivery, personnel, the cost of fuel, the cost of labor and maintenance, and all other charges related to the street sweeping services provided. Prices are to reflect any additional labor and equipment that may be needed during the high-volume sweeping season in the Spring and in the Fall. Prices are to remain the same for the entire contract period. No travel time of equipment will be allowed. COMPANY NAME CONTRACTOR LICENSE NUMBER FEDERAL TAX ID NUMBER YEARS IN BUSINESS BILLING ADDRESS CITY STATE ZIP CODE TELEPHONE FAX EMAIL ADDRESS CONTACT PERSON TITLE PRIMARY SWEEP VEHICLE INFORMATION YEAR MAKE MODEL LICENSE VEHICLE IDENTIFICATION NUMBER COMPLIANCE WITH CA EMMISSION STANDARDS □ COMPLIANT □ NON-COMPLIANT □ EXEMPT SECONDARY SWEEP VEHICLE INFORMATION YEAR MAKE MODEL F.7.d Packet Pg. 243 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 LICENSE VEHICLE IDENTIFICATION NUMBER COMPLIANCE WITH CA EMISSION STANDARDS □ COMPLIANT □ NON-COMPLIANT □ EXEMPT BASE BID STREET SWEEPING SERVICES - Residential Daily Rate: Thursdays between 6:00 am – 3:00pm – 2 zonesper Thursday Estimated Month l y Curb Mileage YEAR 1 3/1/2022- 2/28/2023 YEAR 2 3/1/2023- 2/29/2024 YEAR 3 3/1/2024- 2/28/2025 100 Business District Daily Rate: Wednesdays to Thursdays between 9:00pm – 6:00am (see map) TOTAL BASE BID AMOUNT $ _ STREET SWEEPING SERVICES Hourly Rate: Sunday through Saturday (On-Call and Special Events as needed) YEAR 1 3/1/2022- 2/28/2023 YEAR 2 3/1/2023- 2/29/2024 YEAR 3 3/1/2024- 2/28/2025 F.7.d Packet Pg. 244 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 ALTERNATIVE BID OPTION 2 – RESIDENTIAL EVEN/ODD SWEEPING FOR ALTERNATE SIDE PARKING STREET SWEEPING SERVICES – Residential ODD/EVEN Daily Rate: Thursdays between 6:00 am – 3:00pm / Business District Daily Rate: Wednesdays to Thursdays between 9:00pm – 6:00am (see map) Estimated Mon t h l y Curb M ileage YEAR 1 3/1/2022- 2/28/2023 YEAR 2 3/1/2023- 2/29/2024 YEAR 3 3/1/2024- 2/28/2025 100 TOTAL ALTERNATE BID AMOUNT $ _ BIDDER’S NAME DATE BIDDER’S SIGNATURE BASIS OF AWARD: THE CITY WILL MAKE AN AWARD TO THE LOWEST, RESPONSIVE/RESPONSIBLE BIDDER. THE LOWEST, RESPONSIVE BIDDER WILL BE DETERMINED BY THE TOTAL B A S E BID. F.7.d Packet Pg. 245 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 ADDENDA ACKNOWLEDGMENT The undersigned acknowledges receipt of the following ADDENDA and the cost if any, or such revisions have been included in the TOTAL BID of the Bidding Schedule (s). ADDENDUM NO. , DATED ADDENDUM NO. , DATED ADDENDUM NO. , DATED ADDENDUM NO. , DATED Name of Bidder Address State License No. Telephone No. By: Signature Title Date the day of , F.7.d Packet Pg. 246 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 BIDDER'S INFORMATION BIDDER certifies that the following information is true and correct: Bidder's Name Business Address Telephone State Contractor's License No. Original Date Issued Expiration Date DIR Registration No. The following are the names, titles, addresses, and telephone numbers of all individuals, firm members, partners, joint ventures, and/or corporate officers having a principal interest in this proposal: The dates of any voluntary or involuntary bankruptcy judgments against any principal having an interest in this proposal, or any firm, corporation, partnership or joint venture of which any principal having an interest in this proposal was an owner, corporate officer, partner, or joint venture are as follows: All current and prior DBA's, alias, and/or fictitious business names for any principal having an interest in this proposal are as follows: F.7.d Packet Pg. 247 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 IN WITNESS WHEREOF, BIDDER executes and submits this proposal with the names, title, hands, and seals of all aforenamed principals this day of , 20 . BIDDER Subscribed and sworn to this day of , 20 . NOTARY PUBLIC F.7.d Packet Pg. 248 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) DESIGNATION OF SUBCONTRACTORS BIDDER proposes to subcontract certain portions of the work, and to procure materials and equipment from suppliers and Bidders as follows: NAME, ADDRESS, TELEPHONE NUMBER, LICENSE NO., AND DIR REG NO. OF SUBCONTRACTORS ITEMS OF WORK Prior to award of contract, Contractor shall submit a list of suppliers and Bidders in writing to the City Engineer. F.7.d Packet Pg. 249 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) REFERENCES The Contractor shall list in the spaces provided below, not less than three comparable contracts which have been completed within the past two years. Contract Year(s) Type of Work Performed Annual Contract Amount Client/Agency Name Contact Name/Title Phone Number 01247.0006/750132.1 F.7.d Packet Pg. 250 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 NON-COLLUSION AFFIDAVIT STATE OF CALIFORNIA ) COUNTY OF ) (NAME), affiant being first duly sworn, deposes and says: that he or she is the of (sole owner, partner, other proper title) , the party making the foregoing bid and (Contracting Firm Name) that the Bid is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the Bid is genuine and not collusive or sham; that the Bidder has not directly or indirectly induced or solicited any other Bidder to put in a false or sham Bid, and has not directly or indirectly colluded, conspired, connived, or agreed with any Bidder or anyone else to put in a sham Bid, or that anyone shall refrain from bidding; that the Bidder has not in any manner, directly or indirectly sought by agreement, communication, or conference with anyone to fix the bid price of the Bidder or any other Bidder, or to fix any overhead, profit, or cost element of the bid price, or of that of any other Bidder, or to secure any advantage against the public body awarding the Contract of anyone interested in the proposed Contract; that all statements contained in the Bid are true; and, further, that the Bidder has not, directly or indirectly, submitted his or her bid price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation, partnership, company associations, organization, bid depository, or to any member or agent thereof to effectuate a collusive or sham Bid. (Public Contract Code Section 7106) Bidder's Name: Bidder's Address: Telephone No.: (Signature of Bidder) (Title) All signatures must be notarized and securely attached to this form. F.7.d Packet Pg. 251 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 FORM OF BID BOND KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned, , as Principal, and as Surety, are hereby and firmly bound unto as Owner in the penal sum of for the payment of which, will and truly to be made, we hereby jointly and severally bind ourselves, our heirs, executors, administrator, successors, and assigns. Signed this day of ,2022. The condition of the above obligation is such that whereas the Principal has submitted to certain Bid, attached hereto and hereby made a part hereof to enter into a Contract in writing for the STREET SWEEPING SERVICES. NOW, THEREFORE, a. If said Bid shall be rejected, or in the alternate, b. If said Bid shall be accepted and the Principal shall execute and deliver a Contract in the Form of Contract attached hereto (properly completed in accordance with said Bid) and shall furnish a bond for his faithful performance of said Contract, and shall in all other respects perform the agreement created by said Bid, then this obligation shall be void, otherwise, the same shall remain in force and effect; it is expressly understood and agreed that the liability of the Surety for any and all claims hereunder shall, in no event, exceed the penal amount of this obligation as herein stated. The Surety, for value received, hereby stipulates and agrees that the obligation of said Surety and its bond shall be in no way impaired or affected by any extension of the time within which the Owner may accept such Bid; and said Surety does hereby waive notice of any such extension. F.7.d Packet Pg. 252 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 IN WITNESS WHEREOF, the Principal and the Surety have hereunto set their hands and seals, and such of them as are corporations have caused their corporate seals to be hereto affixed and these presents to be signed by their proper officers, the day and year first mentioned. PRINCIPAL: BY: SEAL F.7.d Packet Pg. 253 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 CONTRACT AGREEMENT THIS CONTRACTORS AGREEMENT (“Agreement”) is made and entered into this day of 2022, (“Effective Date”) by and between the CITY OF GRAND TERRACE (“City”), a public entity, and ., ("Contractor"), a California Corporation. 1. Scope of Services. Contractor shall perform all the services as described as follows: a) For and in consideration of the payments and agreements hereinafter mentioned to be made and performed by said City, said Contractor agrees with said City to perform and complete in a workmanlike manner all work required under the Bidding Schedule of the City’s Specification, in accordance with the Specifications and Drawings therefor, to furnish at his own expense all labor, materials, equipment, tools and services necessary therefor, except those materials, equipment, tools and services as may be stipulated in said specification to be furnished by said City and to do everything required by this Agreement and the said Specifications and Drawings. b) The Notice Inviting Informal Bids, Instructions to Bidders, Proposal, Information required of Bidder, Specification, Drawings, Exhibits and all addenda issued by the City with respect to the foregoing prior to the opening of bids, are hereby incorporated in and made a part of this Agreement. c) In entering into a Public Works Contract for a subcontract to supply goods, services or materials pursuant to a Public Works Contract, the Contractor or subcontractor offers and agrees to assign to the City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2 commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code, arising from purchases of goods, services, or materials pursuant to the Public Works Contract or the subcontract. This assignment shall be made and become effective at the time the City tenders final payment to the Contractor without further acknowledgment by the parties. 2. Term. This Agreement shall be effective on the date first written above and the Agreement shall remain in effect for thirty (30) c a l e n d a r days or when the work is complete, whichever is sooner, unless terminated as provided herein. 3. Compensation/Payment. Contractor shall perform the Services under this Agreement for the total sum not to exceed _. Payment shall be made in accordance with City's usual accounting procedures upon receipt and approval of an itemized invoice setting forth the services performed. The invoices shall be delivered to City at the address set forth in Section 4, hereof. 4. Notices. Any notices required to be given hereunder shall be in writing and shall be personally served or given by mail. Any notice given by mail shall be deemed given when deposited in the United States Mail, certified and postage prepaid, addressed to the party to be served as follows: F.7.d Packet Pg. 254 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 To City Contractor City of Grand Terrace 22795 Barton Rd. Bldg. B Grand Terrace, CA 92313 5. Prevailing Wage. If applicable, Contractor and all subcontractors are required to pay the general prevailing wage rates of per diem wages and overtime and holiday wages determined by the Director of the Department of Industrial Relations under Section 1720 et seq. of the California Labor Code and implemented the City Council of the City of Grand Terrace. The Director’s determination is on file and open to inspection in the office of the City Clerk and is referred to and made a part hereof; the wage rates therein ascertained, determined, and specified are referred to and made a part hereof as though fully set forth herein. 6. Contract Administration. A designee of the City will be appointed to administer this Agreement on behalf of City and shall be referred to herein as Contract Administrator. 7. Standard of Performance. While performing the Services, Contractor shall exercise the reasonable care and skill customarily exercised by reputable members of Contractors in the Metropolitan Southern California Area and shall use reasonable diligence and best judgment while exercising its skill and expertise. 8. Personnel. Contractor shall furnish all personnel necessary to perform the Services and shall be responsible for their performance and compensation. Contractor recognizes that the qualifications and experience of the personnel to be used are vital to Contractor and timely completion of the Services. 9. Assignment and Subcontracting. Neither party shall transfer any right, interest, or obligation in or under this Agreement to any other entity without prior written consent of the other party. In any event, no assignment shall be made unless the assignee expressly assumes the obligations of assignor under this Agreement, in writing satisfactory to the parties. Contractor shall not subcontract any portion of the work required by this Agreement without prior written approval by the responsible City’s Contract Administrator. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement, including without limitation, the insurance obligations set forth in Section 13. Contractor acknowledges that any transfer of rights may require City Manager and/or City Council approval. 10. Independent Contractor. In the performance of this Agreement, Contractor and his employees, subcontractors, and agents, shall act in an independent capacity as independent contractors, and not as officers or employees of the City or the City of Grand Terrace. Contractor acknowledges and agrees that the City has no obligation to pay or withhold state or federal taxes or to provide workers’ compensation or unemployment insurance to Contractor to Contractors employees, subcontractors, and agents. Contractor as an independent contractor shall be responsible for any and all taxes that apply to Contractor as an employer. 11. PERS Eligibility Indemnity. In the event that Contractor or any employee, agent, or subcontractor of Contractor providing services under this Agreement claims or is determined by a court of competent jurisdiction or the California Public Employees Retirement System (“PERS”) to be eligible for enrollment in PERS as an employee of the City, Contractor shall F.7.d Packet Pg. 255 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Contractor or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City. Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, Contractor and any of its employees, agents, and subcontractors providing service under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in PERS as an employee of City and entitlement to any contribution to be paid by City for employer contribution and/or employee contributions for PERS benefits. 12 Indemnifications. 12.1 Indemnity. Except as to the sole negligence or willful misconduct of the City, Contractor shall defend, indemnify and hold the City, and its officers, employees and agents, harmless from any and all loss, damage, claim for damage, liability, expense or cost, including attorneys’ fees, which arises out of or is in any way connected with the performance of work under this Agreement by Contractor or any of the Contractor's employees, agents or subcontractors and from all claims by Contractor's employees, subcontractors and agents for compensation for services rendered to in the performance of this Agreement, notwithstanding that the City may have benefitted from their services. This indemnification provision shall apply to any acts or omissions, willful misconduct or negligent conduct, whether active or passive, on the part of Contractor or of Contractor's employees, subcontractors or agents. 12.2 Attorney’s Fees. The parties expressly agree that any payment, attorneys’ fees, costs or expense that the City incurs or makes to or on behalf of an injured employee under the City’s self-administered workers' compensation is included as a loss, expense or cost for the purposes of this Section, and that this Section shall survive the expiration or early termination of the Agreement. 13. Insurance. 13.1 General Provisions. Prior to the City’s execution of this Agreement, Contractor shall provide satisfactory evidence of, and shall thereafter maintain during the term of this Agreement, such insurance policies and coverages in the types, limits, forms and ratings required herein. The rating and required insurance policies and coverage’s may be modified in writing by the City’s Risk Manager or City Attorney, or a designee, unless such modification is prohibited by law. 13.1.1 Limitations. These minimum amounts of coverage shall not constitute any limitation or cap on Contractor’s indemnification obligations under Section 12 hereof. 13.1.2 Ratings. Any insurance policy or coverage provided by Contractor as required by this Agreement shall be deemed inadequate and a material breach of this Agreement, unless such policy or coverage is issued by insurance companies authorized to transact insurance business in the State of California with a policy holder’s rating of A- or higher and a Financial Class of VII or higher. 13.1.3 Cancellation. The policies shall not be canceled unless thirty (30) days prior written notification of intended cancellation has been given to City by certified or registered mail, postage prepaid. 13.1.4 Adequacy. The C i t y, its officers, employees and agents make no F.7.d Packet Pg. 256 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) representation that the types or limits of insurance specified to be carried by Contractor pursuant to this Agreement are adequate to protect. If Contractor believes that any required insurance coverage is inadequate, Contractor will obtain such additional insurance coverage as deems adequate, at Contractor's sole expense. 13.2 Workers’ Compensation Insurance: By executing this Agreement, certifies that Contractor is aware of and will comply with Section 3700 of the Labor Code of the State of California requiring every employer to be insured against liability for workers’ compensation, or to undertake self-insurance before commencing any of the work. Contractor shall carry the insurance or provide for self-insurance required by California law to protect said Contractor from claims under the Workers’ Compensation Act. Prior to City's execution of this Agreement, Contractor shall file with City either (1) a certificate of insurance showing that such insurance is in effect, or that Contractor is self- insured for such coverage, or (2) a certified statement that Contractor has no employees, and acknowledging that if Contractor does employ any person, the necessary certificate of insurance will immediately be filed with City. Any certificate filed with City shall provide that City will be given ten (10) days prior written notice before modification or cancellation thereof. 13.3 Commercial General Liability and Automobile Insurance. Prior to City's execution of this Agreement, Contractor shall obtain, and shall thereafter maintain during the term of this Agreement, commercial general liability insurance and automobile liability insurance as required to insure against damages for personal injury, including accidental death, as well as from claims for property damage, which may arise from or which may concern operations by anyone directly or indirectly employed by, connected with, or acting for or on behalf of Contractor. The City and the City, and its officers, employees and agents, shall be named as additional insureds under the Contractor’s insurance policies. 13.3.1 Contractor’s commercial general liability insurance policy shall cover both bodily injury (including death) and property damage (including, but not limited to, premises operations liability, products-completed operations liability, independent ’s liability, personal injury liability, and contractual liability) in an amount not less than $1,000,000 per occurrence and a general aggregate limit in the amount of not less than $2,000,000. 13.3.2 Contractors automobile liability policy shall cover both bodily injury and property damage in an amount not less than $500,000 per occurrence and an aggregate limit of not less than $1,000,000. All of Contractor’s automobile and/or commercial general liability insurance policies shall cover all vehicles used in connection with Contractor’s performance of this Agreement, which vehicles shall include, but are not limited to, owned vehicles, leased vehicles, Contractor’s employee vehicles, non-owned vehicles and hired vehicles. 13.3.3 Prior to City's execution of this Agreement, copies of insurance policies or original certificates and additional insured endorsements evidencing the coverage required by this Agreement, for both commercial general and automobile liability insurance, shall be filed with City and shall include the City and its officers, employees and agents, as additional insured’s. Said policies shall be in the usual form of commercial general and automobile liability insurance policies, but shall include the following provisions: It is agreed that the City of Grand Terrace and its officers, employees, and agents, 01247.0006/750132.1 F.7.d Packet Pg. 257 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 are added as additional insures under this policy, solely for work done by and on behalf of the named insured for the City of Grand Terrace. 13.4 Subcontractors’ Insurance. Contractor shall require all of its subcontractors to carry insurance, in an amount sufficient to cover the risk of injury, damage or loss that may be caused by the subcontractors’ scope of work and activities provided in furtherance of this Agreement, including, but without limitation, the following coverage’s: Workers Compensation, Commercial General Liability, Errors and Omissions, and Automobile liability. Upon City’s request, Contractor shall provide City with satisfactory evidence that Subcontractors have obtained insurance policies and coverages required by this section. 14. Business Tax. Contractor understands that the Services performed under this Agreement constitutes doing business in the City of Grand Terrace, and Contractor agrees that Contractor will register for and pay a business tax pursuant to Chapter 5.04 of the Grand Terrace Municipal Code and keep such tax certificate current during the term of this Agreement. 15. Time of Essence. Time is of the essence for each and every provision of this Agreement. 16. City's Right to Employ Other. City reserves the right to employ other in connection with the Services. 17. Solicitation. Contractor warrants that they have not employed or retained any person or City to solicit or secure this Agreement, nor has it entered into any agreement or understanding for a commission, percentage, brokerage, or contingent fee to be paid to secure this Agreement. For breach of this warranty, City shall have the right to terminate this Agreement without liability and pay only for the value of work has performed, or, in its sole discretion, to deduct from the Agreement price or otherwise recover from Contractor the full amount of such commission, percentage, brokerage or commission fee. The remedies specified in this section shall be in addition to and not in lieu of those remedies otherwise specified in this Agreement. 18. General Compliance with Laws. Contractor shall keep fully informed of federal, state and local laws and ordinances and regulations which in any manner affect those employed by Professional, or in any way affect the performance of services by Contractor pursuant to this Agreement. Contractor shall at all times observe and comply with all such laws, ordinances and regulations, and shall be solely responsible for any failure to comply with all applicable laws, ordinances and regulations. 19. Amendments. This Agreement may be modified or amended only by a written Agreement and/or change order executed by the Contractor and the City. 20. Termination. City, by notifying Contractor in writing, shall have the right to terminate any or all of professional’s services and work covered by this Agreement at any time, with or without cause. In the event of such termination, Contractor may submit s final written statement of the amount of Contractor's services as of the date of such termination based upon the ratio that the work completed bears to the total work required to make the report complete, subject to the City’s rights under Sections 16 and 21 hereof. In ascertaining the work rendered through the termination date, City shall consider completed work, work in progress and complete F.7.d Packet Pg. 258 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 and incomplete reports and other documents only after delivered to City. 20.1 Other than as stated below, City shall give Contractor thirty (30) days prior written notice prior to termination. 20.2 City may terminate this Agreement upon fifteen (15) days written notice to Contractor, in the event: 20.2.1 Contractor substantially fails to perform or materially breaches the Agreement; or 20.2.2 City decides to abandon or postpone the Services. 21. Offsets. Contractor acknowledges and agrees that with respect to any business tax or penalties thereon, utility charges, invoiced fee or other debt which Contractor owes or may owe to the City, City reserves the right to withhold and offset said amounts from payments or refunds or reimbursements owed by City to Contractor. Notice of such withholding and offset shall promptly be given to by City in writing. In the event of a dispute as to the amount owed or whether such amount is owed to the City, City will hold such disputed amount until either the appropriate appeal process has been completed or until the dispute has been resolved. 22. Successors and Assigns. This Agreement shall be binding upon City and its successors and assigns, and upon Contractor and its permitted successors and assigns, and shall not be assigned by, Contractor either in whole or in part, except as otherwise provided in paragraph 9 of this Agreement. 23. Governing Law, Venue, Dispute Resolution and Attorneys' Fees. This Agreement shall be governed by and construed in accordance with laws of the State of California. Prior to commencing suit in a court of competent jurisdiction, any controversy, dispute or claim arising out of the Agreement shall first be submitted to an alternative dispute resolution process as set forth in Section 24 herein. Any action at law or in equity brought by either of the parties hereto for the purpose of enforcing a right or rights provided for by this Agreement shall be tried in a court of competent jurisdiction in the County of San Bernardino, State of California, and the parties hereby waive all provisions of law providing for a change of venue in such proceedings to any other county. In the event either party hereto shall bring suit to enforce any term of this Agreement or to recover any damages for and on account of the breach of any term or condition of this Agreement, it is mutually agreed that the prevailing party in such action shall recover all costs thereof, including reasonable attorneys' fees, to be set by the court in such action. 24. Alternative Dispute Resolution. In the event of any controversy, dispute or claim arising out of or relating to this Agreement, the parties hereto shall consult and negotiate with each other and, recognizing their mutual interest, attempt to reach a solution satisfactory to both parties. If they do not reach settlement within a period of 60 days, the matter shall be submitted to an alternative dispute resolution process, either nonbinding arbitration or mediation, (“Process”) by written notice from either party to the other. The parties shall meet and confer in good faith and select a Process and an arbitrator or a mediator that is agreeable to both sides. The selected Process shall be completed no later than 120 days (“Process Period”) after tender of the aforementioned written notice, unless the Parties mutually agree to an extension of the Process Period. If the matter is not successfully resolved by the selected Process, within the Process Period, the parties are free to commence litigation in a court of competent jurisdiction as defined in Section 23 herein. Any litigation commenced without both parties’ consent prior to the end of the Process Period, shall be subject to a stay until the end of the Process Period. The Parties F.7.d Packet Pg. 259 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 further agree to equally bear the cost of the Process. 25. Nondiscrimination. During Contractor’s performance of this Agreement, Contractor shall not discriminate on the grounds of race, religious creed, color, national origin, ancestry, age, physical disability, mental disability, medical condition, including the medical condition of Acquired Immune Deficiency Syndrome (AIDS) or any condition related thereto, marital status, sex, or sexual orientation, in the selection and retention of employees and subcontractors and the procurement of materials and equipment, except as provided in Section 12940 of the California Government Code. Further, Contractor agrees to conform to the requirements of the Americans with Disabilities Act in the performance of this Agreement. 26. Severability. Each provision, term, condition, covenant and/or restriction, in whole and in part, of this Agreement shall be considered severable. In the event any provision, term, condition, covenant and/or restriction, in whole and/or in part, of this Agreement is declared invalid, unconstitutional, or void for any reason, such provision or part thereof shall be severed from this Agreement and shall not affect any other provision, term, condition, covenant and/or restriction of this Agreement, and the remainder of the Agreement shall continue in full force and effect. 27. Authority: The individuals executing this Agreement and the instruments referenced herein on behalf of Contractor each represent and warrant that they have the legal power, right and actual authority to bind Contractor to the terms and conditions hereof and thereof. 28. Entire Agreement: This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the parties pertaining to the subject matter of this Agreement and supersedes all prior and contemporaneous understandings or agreements of the parties. Neither party has been induced to enter into this Agreement by, nor is neither party relying on, any representation or warranty outside those expressly set forth in this Agreement. 29. Interpretation. City and Contractor acknowledge and agree that this Agreement is the product of mutual arms-length negotiations and accordingly, the rule of construction, which provides that the ambiguities in a document shall be construed against the drafter of that document, shall have no application to the interpretation and enforcement of this Agreement. 29.1 Titles and captions are for convenience of reference only and do not define, describe, or limit the scope or the intent of the Agreement or any of its terms. References to section numbers are to sections in the Agreement unless expressly stated otherwise. 29.2 This Agreement shall be governed by and construed in accordance with the laws of the State of California in effect at the time of the execution of this Agreement. F.7.d Packet Pg. 260 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 IN WITNESS WHEREOF City and Contractor have caused this Agreement to be duly executed the day and year first above written. THE CITY OF GRAND TERRACE, A public body By: Michael Milhiser City Manager Attest: Debra L. Thomas City Clerk APPROVED AS TO FORM: Adrian Guerra City Attorney CONTRACTOR By: _ [Printed Name] F.7.d Packet Pg. 261 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 FAITHFUL PERFORMANCE BOND KNOW ALL MEN BY THESE PRESENTS, that we a hereinafter called "Principal" and of , State of California, hereinafter called the “Surety”, are held and firmly bound unto of hereinafter called "City" in the penal sum of Dollars ($ ) in lawful money of these ourselves, our heirs, executors, administrators, jointly and severally, firmly by these presents. THE CONDITION OF THIS OBLIGATION is such that whereas, the Principal entered into a certain Contract with the City, dated the day of 2022 a copy of which is hereunto attached and made a part hereof for the construction of: STREET SWEEPING SERVICES NOW, THEREFORE, if the Principal shall well, truly and faithfully perform its duties, all the undertakings, covenants, terms, conditions, and agreements of said by Contract during the original term thereof, and any extensions thereof which may be granted by the City, with or without notice to the Surety, and if he shall satisfy all claims and demands incurred under such Contract, and shall fully indemnify and save harmless the City from all costs and damages which it may suffer by reason of failure to do so, and shall reimburse and repay the City all outlay and expense which the City may incur in making good any default, then this obligation shall be void; otherwise, to remain in full force and effect. PROVIDED FURTHER that the said Surety, for value received hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the Contract or to the F.7.d Packet Pg. 262 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 work to be performed thereunder or the Specifications accompanying the same shall in anyway affect its obligation on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Contract or to the work or to the Specifications. PROVIDED FURTHER, that no final settlement between the City and the Contractor shall abridge the right of any beneficiary hereunder, whose claim may be unsatisfied. IN WITNESS WHEREOF, this instrument is executed in Counterparts, each one of which shall be deemed an original, this the day of 2022. ATTEST: PRINCIPAL SEC. PRINCIPAL SEAL BY ADDRESS AS TO PRINCIPAL ADDRESS SURETY ATTEST: ATTORNEY IN FACT SURETY SEC. ADDRESS SEAL WITNESS AS TO SURETY ADDRESS NOTE: Date of Bond must not be prior to date of Contract F.7.d Packet Pg. 263 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) LABOR AND MATERIAL BOND KNOWN ALL MEN BY THESE PRESENTS, that we hereinafter called "Principal" and of , State of California, hereinafter called "Surety", are held and firmly bound unto of hereinafter called "Owner", in the penal sum of dollars ($ ) in lawful money of these United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, executors, administrators and successors, jointly and severally, firmly by these presents. THE CONDITION OF THIS OBLIGATION IS SUCH THAT WHEREAS, The Principal certain contract with the Owner, dated day of 2022, a copy of which is hereto attached and made a part hereof for the construction of: NOW THEREFORE, if the Principal shall promptly make payment to all persons, firms, subcontractors, and corporations furnishing materials for or performing labor in the prosecution of the work provided for in such contract, and any authorized extension of modification thereof, including all amounts due for materials, lubricants, oil, gasoline, repairs on machines, equipment and tools, consumed or used in connection with the construction of such work, and all insurance premiums of said work, and for all labor, performed in such work whether by subcontractor or otherwise, then this obligation shall be void; otherwise to remain in full force and effect. PROVIDED, FURTHER, that if the original contractor or his subcontractor fails to pay any of the F.7.d Packet Pg. 264 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 persons named in Section 3181, or amounts due under the Unemployment Insurance Code with respect to work or labor performed under the contract, or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of the contractor and his subcontractors pursuant to Section 13020 of the Unemployment Insurance Code, with respect to such work and labor that the surety or sureties will pay for the same, in an amount not exceeding the sum specified in attorney's fee, to be fixed by the court. The original contractor may require of his subcontractors a bond to indemnify the original contractor for any loss sustained by the original contractor because of any default by his subcontractors under this section. PROVIDED FURTHER, that the said surety for value received hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the contract or to the work to be performed thereunder or the specifications accompanying the same shall in any way effect its obligation on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Contract or to the work or to the Specifications. PROVIDED FURTHER, that no final settlement between the Owner and Contractor shall abridge the right of any beneficiary hereunder, whose claim may be unsatisfied. F.7.d Packet Pg. 265 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 IN WITNESS WHEREOF, this instrument is executed in six (6) counterparts, each one of which shall be deemed an original, this the day of , 2022. ATTEST: (Principal) (Principal Sec.) (SEAL) (By) (Address) (Witness as to Principal) (Address) (Surety) ATTEST: (Surety Sec.) (SEAL) (By) (Address) (Address) F.7.d Packet Pg. 266 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 WORKER'S COMPENSATION INSURANCE CERTIFICATE The Contractor shall execute the following form as required by the California Labor Code, Section 1860 and 1861: I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability worker's compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this Contract. DATE: (Contractor) (By) F.7.d Packet Pg. 267 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 GENERAL PROVISIONS SECTION 1 - DEFINITIONS AND ABBREVIATIONS 1.1 CITY The word "City" shall mean the City of Grand Terrace named in the Contract Documents. 1.2 ENGINEER The word "Engineer" shall mean the Director of Public Works or individual authorized by the City to oversee the execution of this Contract, acting either directly or through properly authorized agents, each agent acting only within the scope of authority delegated to him by the Engineer. 1.3 CONTRACTOR The word "Contractor" shall mean the party entering into Contract with the City for performance of the work called for in these specifications and shown on the drawings, including the Contractor's authorized agents. 1.4 SUBCONTRACTOR The word "Subcontractor" shall mean any person, firm, or corporation entering into agreement with the Contractor for performance at the site of the work, of any part of the Contractor's obligation under the Contract. The Contractor, shall in his bid offer, set forth: (a) The name and the location of the place of business of each subcontractor who will perform work or labor or render service to the prime Contractor in or about the construction of the work or improvements, or a subcontractor licensed by the State of California who, under subcontract to the prime Contractor, specially fabricates and installs a portion of the work or improvement according to detailed drawings contained in the plans and specifications, in an amount in excess of one-half of 1 percent of the prime Contractor's total bid. (b) The portion of the work which will be done by each such subcontractor under this contract shall be listed individually. The prime Contractor shall list only one subcontractor for each such portion as is defined by the prime Contractor in his bid. F.7.d Packet Pg. 268 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 1.5 CONTRACT The word "Contract" shall mean the Contract Documents and shall include the written Agreement entered into by the City and the Contractor for the performance of work described in the specifications and shown on the Drawings, together with the Notice Inviting Informal Bids, the Instruction to Bidders, the Proposal, the Information Required of Bidder, the Specifications, the Drawings, all addenda issued by the City with respect to the foregoing prior to the opening of bids, and all change orders issued by the City and signed by the Contractor pertaining to the Contract after the Contract is awarded. 1.6 SPECIFICATIONS The word "Specifications" shall mean the General Conditions of the Contract and the Special Provisions of the Contract, together with all addenda and change orders issued with respect thereto. STANDARD SPECIFICATIONS. The work embraced herein shall be done in accordance with the provisions of the Standard Specifications for Public Works Construction, 2015 Edition, commonly known as the "Greenbook", produced by Public Works Standards, Inc. and published by BNI Publications Inc., insofar as the same may apply, which specifications are hereinafter referred to as the Standard Specifications, and as modified herein. 1.7 DRAWINGS The words "Drawings" or "Contract Drawings" shall mean those drawings accompanying the Specifications which show the location, nature, extent and form of the work together with applicable details. 1.8 COUNCIL The City Council of the City of Grand Terrace. 1.9 ENGINEERS ESTIMATE The lists of estimated quantities of work to be performed as contained in the Contract Documents. 1.10 INSPECTOR The representative of the Engineer or Director of Public Works who is assigned to inspect conformance of the work in accordance with plans and specifications. 1.11 OVERLAY A supplemental surface course placed on an existing pavement to improve its surface conformation or increase its strength. 1.12 ROADBED F.7.d Packet Pg. 269 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 That portion of the street included between the outside lines of curbs or paving. 1.13 STANDARD PLANS Standard Detail Drawings of the County of Riverside/San Bernardino and the State Department of Transportation. 1.14 SURFACE COURSE The top layer of pavement (exclusive of open graded A.C.), designed to provide structural values and a surface resistant to traffic abrasion. 1.15 TRAVELED WAY That portion of the roadway reserved for the movement of vehicles for the general public, exclusive of shoulders and auxiliary lanes. Where traffic has been diverted or restricted to certain lanes, with the approval of the City Engineer, these diversions or restricted lanes become the traveled way. 1.16 RIGHT-OF-WAY Includes City of Grand Terrace Public Right-of-Way and City of Grand Terrace Public Easements. F.7.d Packet Pg. 270 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 SECTION 2 - SPECIFICATIONS, DRAWINGS AND RELATED DATA 2.1 INTENT OF SPECIFICATIONS AND DRAWINGS The intent of the Specifications and Drawings is that the Contractor furnish all plans, labor, materials, equipment and services, except as may be specifically noted otherwise, which are required or necessary to fully complete the work. 2.2 SPECIFICATIONS AND DRAWINGS COMPLEMENTARY The Specifications and Drawings are complementary to each other. 2.3 DISCREPANCIES IN SPECIFICATIONS AND DRAWINGS Any discrepancies, errors, or omissions found in the Specifications or Drawings shall be promptly reported to the Engineer who will issue a correction in writing. The Contractor shall not take advantage of any such discrepancies, errors, or omissions, but shall comply with any corrective measures regarding the same prescribed by the Engineer. 2.4 CONFLICTS BETWEEN SPECIFICATIONS AND DRAWINGS In case of conflict between the Specifications and the Drawings, the Specifications shall govern over the Drawings. In cases of conflict between the General Conditions and Special Provisions of the Specifications, the Special Provisions shall govern over the General Conditions. SECTION 3 - ENGINEER-CONTRACTOR RELATIONS 3.1 ENGINEER'S AUTHORITY (a) The Engineer will decide all questions which may arise as to the quality and acceptability of materials and equipment furnished, work performed, rate of progress of the work, interpretation of the Specifications and Drawings, and all questions as to the acceptable fulfillment of the Contract by the Contractor. (b) Any difference which may arise between the Contractor and any other contractors F.7.d Packet Pg. 271 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 also under the surveillance of the Engineer will be arbitrated by the Engineer; however, the Engineer will not arbitrate disputes between the Contractor and his subcontractors. 3.2 ARBITRATION Any controversy or claim arising out of or relating to this Contract which cannot be resolved by mutual agreement shall be settled by arbitration in accordance with the rules of the American Arbitration Association. 3.3 LEGAL ADDRESS OF CONTRACTOR The address given in the form entitled "INFORMATION REQUIRED OF BIDDER" is hereby designated as the place to which all notices, letters, and other communications to the Contractor will be mailed or delivered. The mailing or delivering to said address of any notice, letter, or other communication shall be deemed sufficient service thereof upon the Contractor. The date of such service shall be the date of such mailing or delivery. Said address may be changed at any time by written notice signed by the Contractor and delivered to the Engineer. 3.4 CONTRACTOR'S SUPERINTENDENCE A qualified superintendent, acceptable to the Engineer, shall superintend the work and shall provide competent supervision of the work until its completion. The superintendent shall have full authority to act in behalf of the Contractor, and all directions given by the Engineer to the superintendent shall be considered given to the Contractor. If the superintendent is not present on a part of the work where the Engineer desires to give instructions, such instructions may be given by the Engineer to the foreman in charge of the particular work to which the instructions apply. Such instructions given to a foreman likewise shall be considered given to the Contractor. Such instructions given by the Engineer to the superintendent or to a foreman, when they concern items of substantial importance, will be confirmed in writing. All instructions within the Engineer's authority as specified in Section 3.01. All as provided for in this Subsection of the Standard Specifications except the Contractor shall submit a phone number or numbers where he or his representative may be contacted 24 hours a day, 7 days a week in the event of an emergency. 3.5 PROTESTS If the Contractor considered any work demanded of him to be outside the requirements of the Contract, or if he considers any order, instruction, or decision of the Engineer or of any inspector to be unfair, he shall, immediately upon receipt of such order, instruction, or decision, ask for a written confirmation of the same, whereupon he shall proceed without delay to perform the work F.7.d Packet Pg. 272 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 or to conform to the order, instruction, or decision satisfactory; but, unless the Contractor finds such order, instruction, or decision satisfactory, he shall within 10 days after receipt of same, file a written protest with the Engineer, stating clearly and in detail his objections and the reasons therefore. Except for such protests or objections as are made of record in the manner specified and within the time stated herein, the Contractor hereby waives all round for protests or objections to the orders, instructions, or decisions of the Engineer and hereby agrees that, as to all matters not included in such protest, the orders, instructions and decisions of the Engineer and hereby agrees that, as to all matters not included in such protest, the orders, instructions and decisions of the Engineer will be limited to matters properly falling within the Engineer's authority as specified in Section 3.01. 3.6 ASSIGNMENT FORBIDDEN (a) The Contractor shall not assign, sublet, sell, transfer, or otherwise dispose of the Contract or any portion thereof, or his right, title, or interest therein, or his obligations thereunder, without the written consent of the Owner. (b) If the Contractor violates the provisions of Subsection 3.10 (a), the Contract may be terminated at the option of the Owner. In such event, the Owner shall be relieved of all liability and obligations to the Contractor, and to his assignee or transferee, growing out of such termination. 3.7 SUBCONTRACTS (a) In the Owner's discretion, subcontracts may be permitted to such extent as shall be shown to be necessary or advantageous to the Contractor in the prosecution of the work and without injury to the Owner's interests. The re-subletting of the work by a subcontractor shall be subject to the same limitations as an original subletting. Each subcontractor shall be properly licensed for the type of work which he is to perform. (b) A copy of each subcontract, if in writing (or if not in writing, then a written statement signed by the Contractor giving the name of the Subcontractor and the terms and conditions of each subcontract), shall be filed promptly upon the Owner's request. Each subcontract shall contain a reference to the Agreement between the Owner and the Contractor, and the terms of that Agreement covered thereby. Each subcontract shall provide for annulment of the same by the Contractor upon written order of the Engineer, if, in the Owner's opinion, the Subcontractor fails to comply with the requirements of the prime Contract insofar as the same may be applicable to this work. (c) The Contractor shall be responsible to the Owner for the acts and omissions of his subcontractor and their employees to the same extent as he is responsible for the acts and omissions of his own employees. Nothing contained in this Section shall create any contractual relationship between any subcontractor and the Owner or relieve the Contractor of any liability or obligation under the prime Contract. F.7.d Packet Pg. 273 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 3.8 SUSPENSION OF WORK (a) The Owner may, by written notice to the Contractor, suspend the work, in whole or in part, for such period or periods as he may deem necessary, due to unsuitable weather, delay in delivery of Owner-furnished equipment or materials, or such other conditions as are considered unfavorable for prosecution of the work, or failure on the part of the Contractor to carry out the provisions of the Contract or to provide materials or workmanship meeting the requirements of the Specifications. Suspended work shall be resumed by the Contractor within 10 days of receipt from the Owner of written notice to proceed. (b) The Contractor shall have no claim for damages alleged to have been suffered by reason of any suspension of the work without termination of the Contract, and he shall receive no additional compensation because of any such suspension. 3.9 TERMINATION OF CONTRACT BY OWNER (CONTRACTOR NOT AT FAULT) The Owner may terminate the Contract upon 10 days written notice to the Contractor, if it is found that reasons beyond the control of either the Owner of Contractor make it impossible or against the Owner's interests to complete the work. In such a case, the Contractor shall have no claims against the Owner except (1) for the value of work performed up to the date the Contract is terminated, and (2) for the cost of materials and equipment on hand, in transit or on definite commitment, as of the date the Contract is terminated, which would be needed in the work and which meet the requirements of the Specifications. The value of the work performed and the cost of the materials and equipment delivered to the site, as mentioned above, shall be determined by the Engineer in accordance with the procedure prescribed for the making of the final estimate and payment as described in Section 5.08. 3.10 TERMINATION OF CONTRACT BY OWNER (CONTRACTOR AT FAULT) (a) The Owner may terminate the Contract upon 10 days written notice to the Contractor in the event of any default by the Contractor. It shall be considered a default by the Contractor whenever he shall (1) declare bankruptcy, become insolvent, or assign his assets for the benefit of his creditors; (2) disregard or violate any provisions of the Contract documents or Engineer's instructions, or fail to prosecute the work according to the approved progress schedule; or (3) fail to provide a qualified superintendent, competent workmen, or subcontractors, or materials or equipment meeting the requirements of the Specifications and Drawings. (b) In the event the Contract is terminated in accordance with Subsection 3.14(a), the Owner may take possession of the work and of all materials, tools, equipment, and property of the Contractor, which have been provided in connection with the work, and may complete the work by whatever method or means he may select. The cost of completing the work shall be deducted from the Contract balance and the work completed in accordance with the Drawings and Specifications. If such cost exceeds the balance which would have been due, the Contractor shall pay the excess amount to the Owner. If such cost is less than the balance which could have been due, the Contractor shall have no claim to the difference except to such extent as may be necessary, in the opinion of the Engineer, to reimburse the Contractor or the Contractors sureties for any expense properly incurred for materials, tools, equipment, property, and labor, devoted to the prosecution of the work, of which the Owner shall have received the benefit. In computing F.7.d Packet Pg. 274 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 such expenses, as it relates to equipment and property, the salvage value at completion of the work shall be deducted from the depreciated value at the time the Contract was terminated, and the difference shall be considered as an expense. 3.11 TERMINATION OF CONTRACT BY CONTRACTOR The Contractor may terminate the Contract upon 10 days written notice to the Owner, whenever (1) the entire work has been suspended in accordance with Section 3.12, for 60 consecutive calendar days through no fault or negligence of the Contractor, and notice to resume work or to terminate the Contract has not been received from the Owner within this time period; or (2) the Owner should fail to pay the Contractor any substantial sums due him in accordance with the terms of the Contract and within the time limits prescribed. In the event of such termination, the Contractor shall have no claim against the Owner except for those claims specifically enumerated in Section 3.13. 3.12 FAILURE TO COMPLY If the Contractor should refuse or neglect to comply with the provisions of the Contract or the orders of the Owner, the Owner may have such provisions or orders carried out by others at the expense of the Contractor. SECTION 4 - MATERIALS AND WORKMANSHIP 4.1 SAFEGUARDING OF EQUIPMENT, MATERIALS AND WORK The Contractor shall properly safeguard all equipment, materials, and work against loss, damage, malicious mischief, or tampering by unauthorized persons until acceptance of the work by the City. Locked and covered storage or continuous surveillance by a watchman shall be provided if required to accomplish this purpose. 4.2 NEW MATERIALS AND EQUIPMENT Unless otherwise specified, shown, or permitted by the Engineer, all materials and equipment incorporated in the work shall be new and current manufacture. The Engineer may request the Contractor to furnish manufacturer's certificates to this effect. 4.3 CONTRACTOR'S UTILITIES The Contractor shall provide his own water, telephone, fuel, and all electric power required in performance of the work under the Contract and shall pay all installation charges and monthly bills in connection therewith. F.7.d Packet Pg. 275 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 4.4 DEFECTIVE EQUIPMENT, MATERIALS OR WORK (a) Inspection of the work shall not relieve the Contractor of any of his obligations under the Contract. Even though equipment, materials or work required to be provided under the Contract have been inspected, accepted and estimated for payment, the Contractor shall, at his own expense, replace or repair any such equipment, materials, or work found to be defective or otherwise not in compliance with the requirements of the Contract up to the end of the maintenance and guarantee period. (b) Any equipment or materials brought upon the job site by the Contractor and subsequently rejected by the Engineer as not complying with the requirements of the Contract shall be removed immediately by the Contractor to a satisfactory distance from the job site. (c) If the Contractor shall fail to repair or replace unsatisfactory equipment, materials, or work, or to remove unsatisfactory equipment or materials from the job site, within 10 calendar days after being ordered to do so by the Engineer, the Engineer, acting on behalf of the City, may make the ordered repairs or remove the condemned equipment or materials and the City will deduct the cost thereof from any monies due or to become due the Contractor. 4.5 RUBBISH CONTROL During the progress of the work, the Contractor shall keep the site of the work and other areas used by them in a neat and clean condition, and free from any accumulation of rubbish. 4.6 DUST CONTROL The Contractor shall at all times conduct his work so as to avoid unnecessary dust. He shall provide adequate equipment and water as determined by the Engineer to be necessary for accomplishment of this objective. 4.7 CHARACTER OF WORKMEN Only skilled workmen shall be employed on work requiring special qualifications. When required in writing by the Engineer, the Contractor or any subcontractor shall discharge any person who is, in the opinion of the Engineer, incompetent, disorderly, or otherwise unsatisfactory, and shall not again employ such discharged person on the work except with the consent of the Engineer. Such discharge shall not be the basis of any claim for damages against the City or any of his agents. F.7.d Packet Pg. 276 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 SECTION 5 - PROGRESS AND PAYMENT 5.1 BREAKDOWN OF CONTRACT PRICE Prior to commencement of the work, if requested by the Engineer, the Contractor shall submit a detailed price breakdown of any or all of his bid items for the work. Such price breakdown shall include quantities, unit prices, and any other information required, in sufficient detail, to enable it to be used by the Engineer in preparing the monthly progress estimates. The Contractor shall use the price breakdown form bound with Specifications if one is included. 5.2 CHANGE ORDERS (a) The City may, as the need arises, order changes in the work through additions, deletions, or modifications, without invalidating the Contract. Such changes will be affected through written change orders delivered to the Contractor, describing the change required in the work, together with any adjustment in Contract price or time of completion as hereinafter provided. No such change shall constitute the basis of claims for damage or anticipated profits; however, the City will make reasonable allowance for the value of any work materials or equipment furnished and subsequently rendered useless because of such change. Any adjustment in Contract price resulting from a change order will be considered in computing subsequent monthly payments due the Contractor. Any work performed in accordance with a change order shall be subject to all provisions of the original Contract, and the Contractor's sureties shall be bound thereby to the same degree as under the original Contract. (b) No labor cost for move in and out of minimum charges, other than the hourly rate, shall be allowed for persons available from the force already on the job site. Only the foremen directly supervising the job shall be included in the labor charges. Labor rates for delays will be the actual costs. Labor rates for extra work will be taken from the rates published periodically by the California Department of Transportation. Equipment rental rates for delays and for extra work will be taken from the rates published periodically by the California Department of Transportation. Move in and out or minimum charges other than the hourly rate, shall not apply to equipment available from the force already on the job site. Right-of-way delay factors shown on the Equipment Rental Rates do not apply. Copies of the prevailing Equipment Rental Rates are available from the: STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION 1900 ROYAL OAKS DRIVE SACRAMENTO, CALIFORNIA 95815 (c) Any adjustment in Contract price shall be based on unit price bid on the work, where such bid items are applicable. (d) If the original bid prices are not applicable, the adjustment in Contract price shall be based on a lump sum or unit price agreed upon by the City and the Contractor prior to executing the change order. F.7.d Packet Pg. 277 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 (e) If the original bid prices are not applicable and the City and Contractor are unable to agree upon a lump sum or unit price prior to executing the change order, the adjustment in Contract price shall be made on a cost-plus basis. In such an event, the following items will be included as the direct costs: Materials and supplies Labor (including foremen's wages) Workmen's Compensation Insurance Unemployment insurance contributions paid to the State Social Security Taxes paid to the Federal Government Labor union health and welfare, pension, vacation-holiday, and apprenticeship fund contributions Reasonable value for use of equipment for actual time of use In addition to the direct costs enumerated above, the City will pay to the Contractor for said extra work a percentage of said direct costs to compensate for the following profit and overhead items: Profit General expenses All insurance except Workmen's Compensation Insurance Excise taxes Property taxes License and inspection fees Bond premiums All other items of expense not specifically enumerated above Said percentage will be 15 percent of said direct costs provided the Contractor actually performs said extra work himself. In the event said extra work is performed by a Subcontractor, the percentage paid to the Contractor will be 20 percent of said Subcontractor's direct costs. Said percent will include allowance for profit and overhead costs for both the Contractor and Subcontractor. In the event said extra work is performed through more than one Subcontractor in succession, said percentage will not exceed 25 percent. (f) When work is being performed on a cost-plus basis, the Contractor shall submit written reports as directed by the City, showing all items of direct cost, as defined in Subsection 5.02 (e), which enter into the work. If required by the City, the Contractor shall furnish books, vouchers, invoices, and other records to substantiate the direct cost items listed in said reports. 5.3 OVERTIME Except as otherwise provided in this Section, the Contractor shall receive no additional compensation for overtime work even though such overtime work may be required under emergency conditions and may be ordered by the Engineer in writing. Additional compensation will be paid the Contractor for overtime work only in the event extra work is ordered by the Engineer and the change order specifically authorizes the use of overtime work, and then only to such extent as overtime wages are regularly being paid by the Contractor for overtime work of a similar nature in the same locality. F.7.d Packet Pg. 278 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 5.4 EXTENSION OF TIME (a) The Contractor may be entitled to an extension of Contract time (1) if the work has been suspended by the City, in whole or in part; or (2) Where weather or other circumstances occur which delay progress and which are clearly beyond the control of the Contractor; provided that, in either case, the Contractor is not at fault and is not negligent under the terms of the Contract. The extension of time allowed shall be as determined by the City. (b) To receive consideration, a request for extension of time must be made in writing to the City stating the reason for said request, and such request must be received by the City within 10 days following the end of the delay-causing condition. 5.5 LIQUIDATED DAMAGES (a) The Contractor shall pay to the City the amount of two hundred and fifty dollars ($250) per day, not as a penalty but as liquidated damages, if he fails to complete the work within the time agreed upon. The period for which said damages shall be paid shall be the number of calendar days from the date of termination of any extension of time approved by the City. The City may deduct the amount of said damages from any monies due or to become due the Contractor. (b) The said amount is fixed and agreed upon by and between the Contractor and the City because of the impracticability and extreme difficulty fixing and ascertaining the actual damages the City would sustain; and said amount is agreed to be the amount of damages which the City would sustain. (c) The Contractor will not be assessed liquidated damages for delay in completion of the project, which such a delay was caused by the failure of the City or the Owner of a utility to provide for removal or relocation of an existing unknown utility facility. 5.6 PROGRESS SCHEDULES Within 10 days after award of the Contract, or at such times as may be required by the City, the Contractor shall submit progress schedules showing the order in which he proposed to carry on the work and the dates when the various parts will begin and be completed. Progress schedules shall be subject to the approval of the City and if in his opinion a schedule submitted is inadequate to secure the completion of the work in the time agreed upon, or is otherwise not in accordance with the Specifications, he may require the Contractor to submit a new schedule which will insure timely completion of the work. 5.7 FINAL PAYMENT TERMINATES LIABILITY OF OWNER The acceptance by the Contractor of the final payment referred to in Subsection 5.8(c) shall be a release of the City and its agents from all claims of and liability to the Contractor for anything done or furnished for, or relating to, the work or for any act or neglect of the City or of any person relating or affecting the work, except claims against the City for the remainder, if any, of the amounts kept or retained under the provisions of Section 6.05. F.7.d Packet Pg. 279 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 SECTION 6 - BONDS, INSURANCE, LEGAL RESPONSIBILITY, AND PUBLIC SAFETY 6.1 FAITHFUL PERFORMANCE BOND Each bond which is written by an out-of-state bonding company shall contain the name, address and telephone number of an agent located in the State of California who is authorized to act for the bonding company. The Contractor shall secure with a corporate surety or sureties satisfactory to the City, a bond in the amount of 100 percent of the total Bid Amount to guarantee faithful performance of the Contract. The amount of this Faithful Performance Bond shall be reduced to 50% of the Contract amount or $500.00 whichever is greater and shall remain in full force and effect for one year from the date of the Final Notice of Completion to assure and guarantee against any defective materials furnished in the performance of the Contract. 6.2 LABOR AND MATERIAL BOND The Contractor shall secure with a corporate surety or sureties satisfactory to the City, a bond in the amount of 100 percent of the total Bid Amount to guarantee payment of claims of laborers and material-men under the Contract. 6.3 ADDITIONAL SURETY If, during the life of the Faithful Performance Bond, any of the sureties named in said bond become insufficient in the opinion of the City, he may require the Contractor to furnish additional sufficient sureties within 5 days of receipt of written order to do so. In the event the Contractor fails or neglects to furnish sufficient additional sureties, when ordered, within the prescribed time period, the City may suspend the work or terminate the Contract, and the Contractor shall have no claim for damages. 6.4 CONTRACTOR INDEBTEDNESS Indebtedness incurred for any cause in connection with this work must be paid by the Contractor and the City is hereby relieved at all times from any indebtedness or claim other than payments under terms of the Contract and the Contractor will indemnify and hold harmless the City and its officers and employees from any loss, demand, damages, claims or actions arising from or in connection with said indebtedness. 6.5 UNPAID CLAIMS If, upon or before the completion of the work, or at any time prior to expiration of the period within which claims of lien may be filed of record, any person claiming to have performed any labor or to have furnished any materials, supplies, or services toward the performance of this Contract, or to have agreed to do so, shall file with the City a verified statement of such claim stating in general terms the kind of labor and materials, the value of same, and the name of the person to or for whom the same was furnished, together with a statement that the same has not been paid; or if any person shall bring against the City or any of its agents. Any action to enforce such claim the City will, until the action is settled, withhold from monies due the Contractor an amount sufficient to satisfy the F.7.d Packet Pg. 280 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 decision of the court together with costs. 6.6 INSURANCE (a) General - The Contractor shall not commence work under this Contract until he has obtained all the insurance required under this Section and such insurance has been approved by the City, nor shall the Contractor allow any subcontractor to commence work on his subcontract until the insurance required of the subcontractor has been so obtained and approved. All insurance required under this Section shall be maintained continuously during the life of the Contract up to the date of acceptance of the work by the City. (b) Worker's Compensation Insurance - The Contractor shall procure and maintain Workmen's Compensation Insurance as required by applicable State or territorial law for all of his employees to be engaged in work at the site of the project under this Contract, and, in case of any such work sublet the Contractor shall require the subcontractor similarly to provide Workman's Compensation Insurance for all of the latter's employees to be engaged in such work unless such employees are covered by the protection afforded by the Contractor's Workmen's Compensation Insurance. In case any class of employees engaged in hazardous work on the project under this Contract is not protected under the Worker's Compensation Statute, the Contractor shall provide and shall cause each subcontractor to provide adequate employer's liability insurance for the protection of such of his employees as are not otherwise protected. (c) Contractor's Public Liability and Property Damage Insurance and Vehicle Liability Insurance - The Contractor shall procure and maintain Contractor's Liability Insurance in the amounts specified herein. (d) Subcontractor's Public Liability and Property Damage Insurance and Vehicle Liability Insurance - The Contractor shall either (1) require each of his subcontractors to procure and to maintain Subcontractor's Public Liability and Property Damage Insurance and Vehicle Liability Insurance of the type and in the amounts specified in the Special Provisions or, (2) insure the activities of his subcontractors in his own policy, in like amount. (e) Builder's Risk Insurance (Fire and Extended Coverage) – (f) Scope of Insurance - The insurance required under Subsections (c) and (d) hereof shall provide adequate protection for the Contractor and his subcontractor's respectively, against damage claims which may arise from operations under this Contract, whether such operations be by the insured or by anyone directly or indirectly employed by him. In addition, the insurance required under subsections (c), (d) and (e) hereof shall name the City and Engineer, and their officers, agents and employees, as "additional insured" under the policies. The insurance coverage should contain the following provisions: "Solely as respects work done by and on behalf of the named insured for the City of Grand Terrace, it is agreed that the City of Grand Terrace, is added as an additional insured under this policy. It is further agreed that the other insurance conditions of the policy are amended to conform therewith." All liability insurance policies shall bear an endorsement or shall have attached a rider whereby it is provided that, in the event of expiration, material alteration, or proposed cancellation of such policies for any reason whatsoever, the City shall be notified by registered or certified mail not less than 30 F.7.d Packet Pg. 281 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 days before expiration, material alteration or cancellation is effective. All liability insurance shall cover comprehensive general and automobile liability for both bodily injury (including death) and property damage, including but not limited to aggregate products, aggregate operations, aggregate protective and aggregate contractual with the following minimum limits: Bodily injury (including death) $1,000,000 each person, $1,000,000 each occurrence Property Damage $500,000 each occurrence, $1,000,000 aggregate Special attention is directed to possible flood hazards, and/or nuisance water such as irrigation and other runoff. The Contractor shall be responsible for all injuries or damages to any portion of the work occasioned by the above causes and he shall make good such injuries or damages at no cost to the City prior to the completion and acceptance of the work. (g) Proof of Insurance - The Contractor shall furnish the City with certificates showing the type, amount, class of operations covered, effective dates and date of expiration of policies. Such certificates shall also contain substantially the following statements: "The insurance covered by this certificate will not be cancelled or materially altered, except after 30 days written notice has been received by the City." 6.7 NO PERSONAL LIABILITY The Contractor shall indemnify and save harmless the City, its officers, agents, and employees, against and from all claims and personal liability arising under or by reason of the Contract or any performance of the work. 6.8 DIR REQUIREMENTS Pursuant to State Senate Bill 854, the following new requirements apply to all public works projects: A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or by Section 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform pubic work pursuant to Section 1725.5 at the time the contract is awarded. The website for contractor registration with the Department of Industrial Relations (DIR) is https://efiling.dir.ca.gov/PWCR; the annual non-refundable fee, valid July 1 through June 30 (state fiscal year), is $300. Contractors and subcontractors must submit electronic payroll records to the DIR's Compliance Monitoring Unit (CMU) in addition to providing wet-ink original copies to the City or its designated labor compliance officer. 6.9 PERMITS AND LICENSES F.7.d Packet Pg. 282 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 Unless otherwise provided in the Special Provisions, the Contractor shall obtain at his own expense all permits and licenses required for prosecution of the work and shall pay all taxes properly assessed against his equipment or property used in connection with the work. No work shall be started within the street right-of-way or on City property until the Contractor has obtained the necessary permits. The Contractor shall obtain and pay for all permits and fees and give all notices necessary and incident to the due and lawful prosecution of the work and to the preservation of the public health and safety. Fees will not be collected on those permits obtained from the City Engineer's Office. For work on private property where shown on the plans, the City will provide rights of entry at no cost to the Contractor. Such rights of entry do not relieve the Contractor of the need to provide at his cost, permits and insurance required of the Contractor by other agencies and organizations. The Contractor shall obtain and pay for all costs incurred for licenses necessitated by his operations. Prior to starting any work, the Contractor shall be required to have a City Business License valid for the life of the Contract; his subcontractors shall also have Business Licenses valid for the time they are engaged in work. 6.10 SALES AND USE TAXES The Contractor shall pay all sales and use taxes assessed by Federal, State or local authorities on materials furnished by the Contractor in performance of the work. 6.11 PATENTS AND COPYRIGHTS The Contractor shall indemnify and save harmless the City and its officers, agents, and employees, against all claims or liability arising from the use of any patented or copyrighted design, device, material, or process by the Contractor or any of his subcontractors in the performance of the work. 6.12 Reserved 6.13 PUBLIC SAFETY AND CONVENIENCE - Please refer to Special Provisions For convenience to the Contractor to comply with the other provisions of this section, the following telephone numbers are listed. If the above telephone numbers are changed, the Contractor is not relieved of his responsibility of notifying the various departments. 6.14 FEDERAL SAFETY AND HEALTH REGULATIONS Fire Department 909-825-0221 Sheriff Department 909-824-0680 Courtesy Ambulance Service 909-884-3155 RTA 909-682-1234 Colton Unified School District 909-976-4110 F.7.d Packet Pg. 283 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 (a) Contractors and subcontractors shall comply with the provisions of the Safety and Health Regulations for construction, promulgated by the Secretary of Labor under Section 107 of the "Contract Work Hours and Safety Standards Act", as set forth in Title 29, C.F.R. (b) Contractors and subcontractors shall comply with the provisions of the Occupational Safety and Health Standards, promulgated by the Secretary of Labor under the "Occupational Safety and Health Act of 1970," as set forth in Title 29. C.F.R. SECTION 7 - STATE OF CALIFORNIA REQUIREMENTS 7.1 WAGES (a) Pursuant to the provisions of the California Labor Code, not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the said work is performed, and not less than the general prevailing rate of per diem wages for legal holidays and overtime work in each craft or type of workmen needed to execute the work contemplated under the Contract, shall be paid to all workmen on and in connection with said work by the Contractor and by any subcontractor doing or contracting to do any part of said work. The Contractor shall, as a penalty to the City, forfeit $25.00 for each calendar day, or portion thereof, for each workman paid less than the stipulated prevailing rates of such work or craft in which such workman is employed, whether paid by the Contractor or by any subcontractors under him. The Contractor agrees to comply with the provisions of Sections 1775 and 1776 of the California Labor Code. The Contractor is also required to post the applicable prevailing wage rates at the jobsite. Pursuant to 1773.2, the Contractor shall refer to the wage schedule on file at the City Clerk's Office at 22795 Barton Road, Grand Terrace, California, 92313. (b) The Contractor and the subcontractors shall comply with the Davis-Bacon Fair Labor Standards Act (40 USC a--276a-5) and the implementation regulations issued pursuant thereto (29 CFR Section 1.5) and any amendments thereof. (c) The issuance, as payment for wages, of any evidence of indebtedness is prohibited unless the same is negotiable and payable on demand without discount. (d) In accordance with the provisions of Section 3700 of the California Labor Code, the Contractor shall secure the payment of compensation to his employees. 7.2 PAYROLL RECORDS Contractor shall provide the City with certified copies of payroll records upon demand, and within 24 hours of such demand. 7.3 APPRENTICES ON PUBLIC WORKS The Contractor shall comply with all applicable provisions of Sections 1775.5 of the California Labor Code relating to employment of apprentices on public works. F.7.d Packet Pg. 284 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 7.4 WORKING HOURS (a) The Contractor shall comply with Chapter 8.108 of the Grand Terrace Municipal Code (“G.T.M.C.”) restricting work between the hours of eight p.m. and seven a.m. weekdays, including Saturday or at any time on Sunday or a National Holiday. (b) The Contractor shall comply with all applicable provisions of Sections 1810 to 1817, inclusive, of the California Labor Code relating to working hours. The Contractor shall, as penalty to the City, forfeit $25.00 for each workman employed in the execution of the Contract by the Contractor or by any subcontractor for each calendar day during which such workman is required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week in violation of the above-mentioned Sections of the California Labor Code. 7.5 CONTRACTOR NOT RESPONSIBLE FOR DAMAGES RESULTING FROM CERTAIN ACTS OF GOD As provided in Sections 4150 and 4152, inclusive, of the California Government code, the Contractor shall not be responsible for the cost of repairing or restoring damage to the work, which damage is determined to have been proximately caused by an Act of God in excess of five percent of the contracted amount, provided, that the work damaged is built in accordance with accepted and applicable building standards and the attached plans and specifications. The Contractor shall obtain insurance to indemnify the City for any damage to the work caused by an Act of God if the premium for said insurance coverage is not called for as a separate bid item in the Bidding Schedule for the work. For the purpose of this Section, the term "Acts of God" shall include only the following occurrences or conditions and effect; earthquakes in excess of a magnitude of 3.5 on the Richter Scale. F.7.d Packet Pg. 285 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 SPECIAL PROVISIONS EXHIBIT A The City of Grand Terrace seeks the services of a qualified bidder to meet the needs of the City in the most cost-effective and efficient manner possible to provide street sweeping services in a thorough and professional manner, and to provide labor, tools, equipment, materials and supplies necessary to complete the work in a timely manner that will meet the City’s requirements. A. Objectives The primary objectives of the sweeping program are to: 1. Establish and adhere to a regular schedule of performance 2. Maintain gutter flow lines free of debris for free flow of water 3. Maintain a state of cleanliness for road safety acceptable to the City and its residents. 4. Meet all Federal, State, County and City laws and ordinances 5. Meet South Coast Air Quality Management District (AQMD) requirements 6. Meet all National Pollution Discharge Elimination System (NPDES) requirements to remove and properly dispose of dust, silt, dirt, leaves and other organic and inorganic materials from the City streets prior to such materials entering the City’s storm drain system. B. Services Requested: 1. Services shall include furnishing all labor, equipment, tools, fuel, insurance, supervision, and materials (except water), to sweep streets in accordance with the schedule and specifications contained in this document. 2. During the term of the contract, the Contractor shall sweep by machine all residential public streets, commercial public streets and all the paved public alleys in the City, in accordance with the sweeping schedule as established by the City prior to execution of the Contract. 3. Commercial and residential streets are defined for the purposes of this contract as all areas of public streets which are paved, and which are regularly used for the operation of motor vehicles. C. Description of Work 1. City of Grand Terrace (Residential) a. The current six (6) zone schedule (MAP) will be followed • Zones 1 & 2 are swept the first Thursday of every month • Zones 3 & 6 are swept the second Thursday of every month • Zones 4 & 5 are swept the third Thursday of every month 2. Grand Terrace Business District – One (1) Time Per Week a. Both sides of Barton Road from western City limit at 21800 Barton Road to the eastern City limit at 23200 Barton Road b. Both sides of Mt. Vernon from Main (North) to the northern City limit approximately 1500 feet north of Grand Terrace Road. 3. City Lots – One (1) Time Per Month a. City Hall b. Parks: Veterans Freedom Park, Rollins Park, and Fitness Park c. Senior Center 4. Services shall include up to six (6) special events a year that will require sweeping beyond the schedule of service mentioned above. F.7.d Packet Pg. 286 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 5. Residentially zoned areas shall be swept between 6:00 am and 3:00 pm on Thursdays. Commercially zoned areas can be swept from 9:00 pm to 6:00 am. If any complaints arise from the sweeping times other than the 6:00 am to 3:00 pm times, the Contractor must work with the Public Works Department to resolve the issue to the City’s satisfaction. D. Description of Work (Residential – Alternative 2) 1. City of Grand Terrace (Residential) – Odd/Even Sweeping of Streets a. The current six (6) zone schedule (MAP) will be amended as needed to allow odd/even street sweeping of residential streets. This arrangement will allow affected homeowners to park their vehicles on the opposite side of the street (alternate side parking) on their designated street sweeping day. 2. All other items listed under “Description of Work” shall remain the same if Option 2 for residential street sweeping is chosen by the City. E. Special Requirements 1. The Contractor shall obtain a City of Grand Terrace business license 2. A GPS Navigation System with the ability to track the street sweeping activity and provide a monthly report of the streets serviced 3. Street sweeping services shall not exceed 8 mph on city streets F. Special Requirement (Optional) 1. Installation of license plate reader that can document cars in violation of street sweeping schedule 2. Provide weekly report and footage to the City or designees directed, of cars/licenses captured by the license plate reader in violation of street sweeping parking schedule G. Labor, Equipment and Materials 1. The Contractor shall use and furnish at his/her own expense all labor, equipment, and materials necessary for the satisfactory performance of the works set forth in this contract. 2. The operators shall be competent in all aspects of street sweeper operations. This includes knowledge of all operational aspects of the equipment used knowledge of the California Vehicle Code, knowledge of standard safety practices, and knowledge of notification procedures should the need arise to contact City personnel. 3. The primary equipment shall be of a recognized make and shall be kept in good and safe repair and not greater than 10-years old for either the chassis and/or the vacuum system. Semi-annual inspection of all equipment must be conducted with findings from those inspections to be submitted to the City in writing. H. Quality Control 1. Sweeping shall be done in a neat, orderly and professional manner. The street sweeper shall leave designated areas of sweeping free of dirt, litter, debris, obstructions, smears and visual dust in accordance with the City’s standards of cleanliness. 2. While sweeping shall normally consist of a single pass over an area, the Contractor shall make additional passes or such extra effort as may be required to adequately clean the street. Extra effort shall be required when sweeping equipment leaves a dirt/silt smear F.7.d Packet Pg. 287 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 in its pathway. Extra effort will be strictly enforced during and after windy conditions and storm weather. The cost of any extra effort shall be included in the contract cost. 3. Items that cannot be swept such as: tree limbs, palm fronds, rocks, trash and debris shall be removed from the sweeping path by the sweeping operator rather than going around it. Larger obstructions such as impaired vertical and/or horizontal clearance by tree limbs, construction or landscaping debris shall be immediately reported to the City when the location cannot be swept. 4. The City Manager or his/her designee shall be the sole judge of the quality of work. In the event that the results of a sweep are considered to be unsatisfactory, the City will notify the Contractor of exact location and description of deficiency. The Contractor shall re-sweep the unsatisfactory area at its own expense, and responses shall be completed within one (1) working day. 5. The Contractor must possess back-up capabilities for instances when sweeping cannot be completed on schedule due to mechanical failure. I. Emergency Sweeps 1. Occasional sweeping required by Contractor to include non-hazardous spills, accident clean-ups and unusual conditions, which would require after-hour, weekend and holiday responses. Response to emergency sweeps shall be within two (2) hours of notification by the City. Contractor shall provide City with name and phone number of contact person for after-hour emergency sweeps. J. Disposal 1. Contractor shall dispose of all refuse and debris collected from sweeping operations in the City’s Corporate Yard. The cost for disposal is not included in the contract cost. K. Sweeping Practices and Standards of Performance 1. Areas of Street – Areas of the street to be swept include curb lines along both sides of the roadway or to the edge of the pavement where no curb exists, along all curbs on raised medians, over all portions of painted median, painted left and right turn pockets, and all intersection turn pockets and arterial intersection center areas and dead spots are to be maintained on the same frequency as the median or intersection for which they are associated and included in the curb mile price. Curb returns (radii) at intersections of arterial and residential streets will be swept along their entire length and free of debris on scheduled arterial sweeping days. Excluded from areas to be swept are those that would cause damage to the equipment used. While Contractor is normally responsible for the 8’ strip (sweeper width), curb to curb sweeping, an additional width of street may need to be swept at some locations due to unforeseen circumstances and shall be included within the curb mile price. 2. Flow of Traffic – Sweeping shall be always accomplished in the same direction as traffic flow during sweeping 3. Warning Devices – Vehicles shall be equipped with top-mounted warning lights (rotating or beacon) visible for 360̊ or comparable traffic safety lights when sweeping. A rear- mounted left/right arrow stick shall be required for arterial and bike lane sweepers. 4. Sweeping Speed – Sweeping speed shall be adjusted to street and debris condition with a maximum speed of eight miles per hour (8 MPH). City streets swept while driver exceeds eight miles per hour (8 MPH) will be re-swept in their entirety at Contractor’s expense. In addition, a verbal warning will be given for the first violation. A written F.7.d Packet Pg. 288 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 01247.0006/750132.1 warning will be given for the second violation, and a “Failure to Perform” notice will be issued upon the third violation. 5. Notification of Non-sweeping – Contractor shall provide City representatives on a daily basis (when applicable) with list of all streets not swept when regular sweeping schedule is interrupted for any reason and shall deduct said street from the sweeping bill for that day/week. Contractor shall provide a list of streets that cannot be swept to the City by the end of the workday. The City shall notify the Contractor by phone on non-sweeping conditions due to inclement weather. The City’s notification will serve as a non-sweep day and will not be paid for by the City unless an alternative sweeping schedule is coordinated by the Contractor and is submitted to the City for approval. The daily rate will be calculated by the total annual cost divided by the number of service days. 6. Holidays and Potential Conflicts with the Waste and Recycling Contractor – Contractor will observe all City holidays and holidays observed by the City’s franchised waste hauler. Approved non-sweep days will not be paid for by the City unless an alternative sweeping schedule is coordinated by the Contractor and is submitted to the City for approval. The daily rate will be calculated by the total annual cost divided by the number of service days. Trash and recycling collection days will take priority over street sweeping days and cannot be both performed on the same day. Currently, Grand Terrace is serviced by Burrtec Waste Industries, Inc. on Monday, Tuesday, and Wednesday (Fridays for City parks). 7. Street sweeping does not include any portion of the I-215 freeway as seen in blue on map. L. Water 1. The Contractor shall obtain water for sweeping operations at points designated by the City. Necessary water shall be furnished at the expense of the City. F.7.d Packet Pg. 289 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) 5 MIC H I G A N AV E ST O N E W O O D DR . VI V E N D A AV . PA S C A L PA S C A L Palika Way RE E D AV E . REE D WIL L E T AV E . WIL L E T AV . MT VE R N O N MT VE R N O N AR L I S S DR . AR L I S S DR . HO L L Y DR . KIN G S TON ST OR I O L E AV E . TH A M ES KIN G F I S H E R AV E . CO U N T R Y CL U B LN . PA L M CT . PR E S T O N ST . PR E S T O N ST . CA N A R Y CT PA R A D I S E City of Grand Terrace Street Sweeping Schedule 2022 MAP NLY TO Secondary School Zone—sweep after 8:30 am BRENTWOODST. VIVIENDA WALNUT AV. ETON DR. 1 VICTORIA CARHART AV. NAN- McCLARRENMSTcC. BRITTON LIBRARY DINA PEACOCK WAY AND CIVIC ST. CT. CENTER PALM AVE. BARTON RD. F.S. HAMPTONCT. CENTER CITY CT. COMMERCE WAY JENSEN CT. LAPAIX ST. CNT. CITY CT. LA PAIX ST. DE DESOTO ST. DE SOTO ST. RENE LN. DE SOTO ST. SOTO ORANGEWOOD CT. DEBERRY ST. ST. DEBERRY ST. (END AT CUL-DE- DEBERRY ST. FULMAR DEBERRY ST. WREN ST. M ROLLINS WREN ST. (END AT CUL-DE-SAC) MAVIS ST. MAVIS PARK FINCHST. (END AT CUL-DE- SAC) CARDINALST. CARDINAL ST. VAN BUREN ST THRUSH ST. BLUEBIRD ST. VAN BUREN ST Zone PICO PARK LARK ST. KENTFIELD LARK ST. KENTFIELD FRANKLIN KENT- FRANKLIN ST. LAR KENTFIELDST. 1. First Thursday 2. First Thursday 3. Second Thursday 4. Third Thursday PICO ST. PICO ST. PICO ST. 6 5. Third Thursday TANAGER ST. MAIN ST. SWEEP NORTHSIDE ONLY FLAMINGO TANAGER RAVEN WAY LADERA LAD- MAIN ST. SWEEP NORTHSIDE ONLY FLAMINGO TANAGER ST. RAVEN WAY LADERA ST. FLAMINGO TANAGER ST. RAVEN WAY RAVEN WAY ROBIN WAY ROBIN WAY 6. Second Thursday All Streets in the city will be swept once per month based on the above schedule from 6:00 am to 3:00 pm - PLEASE MOVE ALL VEHICLES FROM THE STREET TERACE AVE. EAST SIDE O School Zone—sweep before 7 am City Hall, Pico Park, and Rollins Park parking lots are swept on the 3rd Thursday each month. City Hall lot swept at 7:00 a.m., Rollins Park & Pico Park following. Times at Rollins & Pico Park can change depending on school starting times. ONLY FROM ROSEDALE TO LITTON AVE. SOUTH SIDE LACADENA PALM AVE. SWEEP NORTH SIDE OF PALM AVE. ONLY (5 DIGIT ADDRESSESS) MAIN ST. SWEEP NORTHSIDE ONLY MAIN ST. SWEEP NORTH SIDE ONLY AND END AT 21582 MAIN ST. 3 E 2 FENCH ST. TH O M A S CT . TA Y L O R ST . RO Y A L AV E . GA R D E N CT. GA R D E N DI C K E N S CT. SA N D B U R G SA N D B U R G CT . MI C H I G A N AV E MI C H I G A N AV E VIV E N D A AV . PA S C A L PA S C A L PA S C A L AV . REE D RE E D AV E . MIR A D O AV E . MIR A D O AV . BR O W N I N G AV E . FR A N K L I N CT. WA R B L E R AV E . WILMAC FR A N K L I N WA Y DU T C H ST . CO N D O R CT . EA G L E CT . PR U I T T CT. MIK E TO D D CT. HO N E Y HI L L DR . E 4 F.7.d Packet Pg. 290 At t a c h m e n t : N o t i c e o f I n v i t i n g I n f o r m a l B i d s 1 1 - 3 0 - 2 1 ( S t r e e t S w e e p i n g C o n t r a c t ) AGENDA REPORT MEETING DATE: April 12, 2022 Council Item TITLE: Direct Staff to Continue to Engage in Cooperative Actions with Neighboring Communities and Stakeholders and to Not Form an Ad Hoc Committee to Address Wild Burro Relocation PRESENTED BY: Konrad Bolowich, City Manager RECOMMENDATION: It is recommended that Staff continue their efforts working with other communities in managing the wild burro incursions into the City. 2030 VISION STATEMENT: This staff report supports Goal #2, Maintain Public Safety” by working to mitigate impacts of wild burro incursions; and Goal #4 “Develop and Implement Successful Partnerships” by working cooperatively with neighboring jurisdictions and stakeholders. BACKGROUND: The City abuts Blue Mountain to the east. This area is undeveloped and provides a wildlife corridor bounded by Beaumont, Calimesa, Redlands, Loma Linda, Moreno Valley, Riverside and Grand Terrace. There are currently multiple herds of wild burros ranging through this area. Wild burros are a protected species. Recent drought conditions, over population and lack of adequate grazing periodically cause these herds to enter more urban areas in search of food and water. The animals while not aggressive, are destructive in their feeding habits and leave droppings in their path. DISCUSSION: The City, through Code Enforcement has been working cooperatively with the adjacent communities, California Dept of Fish and Game, the BLM, and private organizations focused on burro conservation. Staff has developed relationships with the other agencies to coordinate relocation of the burros when necessary. A vendor has been identified to round up animals when needed. Cooperative relationships have been forged with Donkey Land in Reche Canyon to coordinate transportation of incursive animals to more isolated areas. Male animals processed through Donkey Land are altered so that long term population management can take place. The multiple agencies working together are pooling expertise and resources to mitigate theses issues. These efforts are ongoing and in the near future we will continue to have incursions requiring action, but there are processes in place to address such incursions and mitigate the impacts. G.8 Packet Pg. 291 FISCAL IMPACT: There are no financial impacts associated with not establishing an Ad Hoc Committee. There minimal financial impacts associated with rounding up, and relocation of the animals. APPROVALS: Konrad Bolowich Completed 04/05/2022 2:51 PM City Manager Completed 04/05/2022 3:54 PM City Council Pending 04/12/2022 6:00 PM G.8 Packet Pg. 292 CITY OF GRAND TERRACE CITY COUNCIL MINUTES ● MARCH 22, 2022 Council Chamber Regular Meeting 6:00 PM Grand Terrace Civic Center ● 22795 Barton Road City of Grand Terrace ATTACHMENTS TO March 22, 2022 City Council Minutes PowerPoint Presentations MARCH 22, 2022 CITY COUNCIL MEETING Conduct a Public Hearing Proposing an Ordinance Establishing Regulations for Urban Lot Splits and Two-Unit Developments in accordance with Senate Bill No. 9 . Proposing an Ordinance Adopting Amendments Regulations of Accessory Dwelling Units and Junior Accessory Dwelling Units. 2030 Vision Statement Goal 3 to Promote Economic Development by updating zoning and development code in preparation for future growth, and to preserve and protect our community and its exceptional quality of life though thoughtful planning. Senate Bill 9 Became effective on January 1, 2022 Requires local agencies ministerial approval of projects proposing up to two primary dwelling units per parcel in a single –family residential zone. Requires local agencies the ministerial approval of lot splits in single-family residential zones and allows up to two units to be built on each resulting parcel. Background On January 25, 2022, the City Council adopted an Urgency Ordinance (No. 336-U) establishing objective standards for the regulation of lots splits and new units developed under SB 9. The City Council directed staff to bring back a regular ordinance establishing requirements for SB 9 projects. The City Council also directed staff to update the Municipal Code requirements for Accessory Dwelling Units (ADU) and Junior Accessory Dwelling Units (JADU). Background The City Council’s comments: ▪Minimum setbacks requirements ▪Sewer requirements ▪Water requirements ▪Rental program requirements ▪Courtesy notifications to adjacent property owners ▪Replacement of mature trees being removed ▪Parking requirements ▪Development impact fees Background On March 3, 2022, the Planning Commission conducted a public hearing meeting and voted unanimously 4-0 adopting a Resolution recommending the City Council adopt the proposed Ordinances establishing SB 9 standards and updating the regulations for Accessory Dwelling Units. Planning Commission’s comments: Sewer and onsite wastewater treatment systems Water line connections Parking requirements SB 9 Lot Splits SB 9 Lot Split Additional City Standards Courtesy Notice: “At least seven days prior to making a determination on an application for an urban lot split, the City Engineer shall mail a courtesy notice to the owner(s) of each property immediately adjacent to the property where the proposed lot split will be located informing the owner(s) of the submitted application". SB 9 Lot Split Additional City Standards Limitation on development of vacant parcel created by urban lot split. “Notwithstanding any other provision of this code, if an urban lot split results in the creation of a vacant parcel, the only permitted use of such parcel shall be a two-unit development.” SB 9 Lot Split Additional City Standards Deed Restriction, affordable rent requirement “As a condition of approval of,and prior to the issuance of a certificate of occupancy for,a second unit or two-unit development,the property owner shall execute a deed restriction,in a form approved by the city attorney,which shall be recorded on the property,at the property owner’s cost,and shall include the following requirements: SB 9 Lot Split Additional City Standards “A.The second unit or two-unit development shall only be used and developed in accordance with the requirements in this chapter,including but not limited to the development standards in Section 18.65.040 and the prohibition on short- term rentals in Section 18.65.070;and B.Second units,and both units of a two-unit development, if rented,shall only be rented at an affordable rent for lower- income households,as defined in Health and Safety Code Section 50053,and shall only be rented to lower-income households,as defined in Health and Safety Code Section 50079.5,for a minimum of 55 years.” SB 9 Units SB 9 Units Additional City Standards Courtesy Notice: “At least seven days prior to making a determination on an application for a second unit or two-unit development, the Planning Director shall mail a courtesy notice to the owner(s) of each property immediately adjacent to the property where the proposed development will be located informing the owner(s) of the submitted application.” SB 9 Units Additional City Standards Setback requirements: “There shall be at least 15 feet of separation between all detached units on a parcel, including second units, primary units, both units of a two-unit development if they are not attached, and detached accessory dwelling units.” SB 9 Units Additional City Standards Tree Replacement: “If the construction of a second unit or two-unit development will result in the removal of one or more trees with a trunk diameter of six (6) inches or greater, then, as a condition of obtaining a certificate of occupancy, the owner shall plant one new 24-inch box tree on site for each tree removed. The proposed project site shall have a minimum of one tree per unit.” SB 9 Units Additional City Standards Development Impact Fees “As a condition of receiving a certificate of occupancy for a second unit or two-unit development, the applicant shall pay development impact fees in an amount established by city council resolution.” SB 9 Units Additional City Standards Rental term, rental property program compliance, separate conveyance “A. Second units and both units in a two-unit development shall not be rented for a term of less than thirty-one (31) consecutive days.” SB 9 Units Additional City Standards “B. Unless the owner of the property provides the City with an annual certification that a unit is owner-occupied, second units and both units in a two-unit development shall be assumed to be rental units and shall be subject to the requirements in Chapter 5.80 (Non-Owner Occupied/Rental Property Program).” “C. A second primary unit may not be turned into a condominium or otherwise sold separately from the other primary unit on the parcel. The units in a two-unit development may not be turned into condominiums or otherwise sold separately from one another.” SB 9 Units Additional City Standards Wastewater, Water Service “1. Prior to issuance of a building permit for a second unit or either unit of a two-unit development, the City Engineer shall inspect existing sewer lines and/or the onsite wastewater treatment system on the parcel. As part of this inspection, the City Engineer may, if applicable, require documentation of a percolation test completed within the last five years, or, if the percolation test has been recertified, within the last ten years. If the City Engineer determines that the addition of a new unit or units would result in a violation of the requirements of the California Plumbing Code, the requirements of the Santa Ana Regional Water Quality Control Board, and/or other objective City sewer or septic system requirements, then the City shall impose conditions of approval on the development that are necessary to ensure compliance with such requirements.” SB 9 Units Additional City Standards Wastewater, Water Service “2. If a parcel relies on an onsite wastewater treatment system, and a proposed unit would be located on the only part of the parcel that could accommodate a new onsite wastewater treatment system in the event the existing system needed to be replaced, then the City shall require that all existing and proposed units on the parcel be disconnected from the onsite wastewater treatment system and connected to the sewer system as a condition of approval of the development. If such disconnection and connection is not possible, or would require off-site improvements, then the building official, or designee, shall consider whether such circumstances are grounds for denial of the proposed project pursuant to Section 18.65.020.C.” SB 9 Units Additional City Standards Wastewater, Water Service “3. A second unit, and both of the units in a two-unit development, shall each have a separate connection to the main water service line in the street and the applicant shall submit plans for such line(s) to the Riverside Highland Water Company for review and approval. The applicant shall comply will all objective requirements of the Riverside Highland Water Company for the construction and operation of the water line(s).” SB 9 Units Additional City Standards Parking “One new on-site off-street parking space is required for a second unit and one new on-site off-street parking space per unit is required for each unit of a two-unit development. Such parking spaces shall be in addition to all existing parking spaces on the parcel.” SB 9 Units Additional City Standards SB 9 development will be approved through the administrative site and architectural review process SB 9 units can only be up to 800 square feet and 16 feet in height SB 9 developments shall match the primary unit Units cannot be located on a second story SB 9 Legislation Restriction City Council Comments restricted by the legislation: How is SB 9 going to impact the City’s two car garage parking requirement How is SB 9 going to impact the City’s lot coverage ADU/JADU Ordinance ADU/JADU Ordinance Additional City Standards City Council and Planning Commission ADU Ordinance comments: The removal and replacement of trees requirements Non-Owner Occupied/Rental Property Program requirements Sewer and water requirements Parking requirements ADU/JADU Ordinance Additional City Standards JADUs size requirements: ▪No more than 500 square feet in size contained within a single-family residence. ▪The size of the detached ADU will be limited to: Detached ADU Unit Type 850 sq. ft.Studio/one-bedroom units 1,000 sq. ft.Two or more bedrooms units ▪The size of an attached ADU will be limited to: Attached ADU size Unit Type 850 sq. ft. or 50% of the primary dwelling floor area, whichever is less Studio/one-bedroom units 1,000 sq. ft. or 50% of the primary dwelling floor area, whichever is less Two or more bedrooms units ADU/JADU Ordinance ADU/JADU ADU/JADU Additional City Standards ADUs are limited to 16 feet in height and prohibit construction of an ADU/JADU above existing structures; however, existing second stories may be converted into ADUs or JADUs. Requires a 15 feet separation between all detached units on a parcel. ADUs and JADUs cannot be used for short-term rental (less than 31 days). ADUs and JADUs will be approved through the administrative site and architectural review process. ADU/JADU Ordinance Additional City Standards ▪Requires ADUs to match the primary unit. ▪Established development and design standards for manufactured ADU units: ▪No more than 10 years old on the day of the installation ▪It shall be installed on a permanent foundation ▪If the materials to match the primary dwelling are not available at least the color shall match the primary dwelling. ADU/JADU Ordinance Additional City Standards Development Impact Fees “No impact fee shall be imposed for an accessory dwelling unit less than seven hundred fifty square feet. Any impact fees charged for an accessory dwelling unit of seven hundred fifty square feet or more shall be charged proportionately in relation to the square footage of the primary dwelling unit. For purposes of this section, “impact fee” has the meaning given in Government Code Section 65852.2(f)(3)(b).” Environmental Review The adoption of SB 9 regulations is not a “project” for purposes of the California Environmental Quality Act (CEQA) pursuant to Government Code sections 65852.21(j) and 66411.7(n). Additionally, the adoption of an ordinance regarding second units (ADUs) in a single family or multi-family residential zone to implement the provisions of Government Code Sections 65852.2 and 65852.22 is exempt from CEQA review pursuant to Public Resources Code Section 21080.17. Therefore, the proposed Ordinances do not require any environmental review under CEQA. Fiscal Impact There will be no expenditure on the part of the City to adopt this Ordinance The cost to administer the Ordinance will be recovered in part through the application fees Recommendation Staff recommends the City Council to: (1) Conduct a public hearing and (2) After the public hearing, read by title only, waive further reading and introduce the proposed Ordinances establishing objective standards for implementation of Senate Bill No. 9 pertaining to urban lot splits and two-unit developments and updating the City's regulations for Accessory Dwelling Units. Questions ? CITY COUNCIL COMPENSATION, HEALTH BENEFITS, AND AUTO ALLOWANCE MARCH 22, 2022 MUNICIPAL CODE SECTION 2.04.020 AND CITY COUNCIL HEALTH BENEFITS & AUTO ALLOWANCE •Municipal Code 2.04.020 was enacted in 1978. •Each Member of the city council shall receive a stipend of $300.00 per month as provided for in Section 36516 of the Government Code of the State for cities up to an including 35,000 in population. •Government Code 36516 allows for increases in city council compensation. Increases shall not exceed an amount equal to 5 percent for each calendar year from the operative date of the last adjustment. •The City Council compensation has been $300 per month for 44 years. •The City Council receives $200 per month auto allowance,and a health benefit equal to the CalPERS Region 3 Kaiser single premium.The adoption of an ordinance to approve the City Council auto allowance can take place as part of the budget process,or at any other time that the City Council deems appropriate. COMPENSATION SURVEY Grand Terrace Beaumont Calimesa Colton Diamond Bar Highland Loma Linda Perris Yucaipa Compensation $ 300.00 $ 420.00 $ 300.00 $ 400.00 $ 746.00 $ 795.99 $ 1,066.73 $ 1,401.22 $ 500.00 Auto Allowance $ 200.00 $ 220.00 500.00 $ 150.00 Monthly Total $ 500.00 $ 420.00 $ 300.00 $ 620.00 $ 746.00 $ 795.99 $ 1,066.73 $ 1,901.22 $ 650.00 Ranking 7 8 9 6 4 3 2 1 5 CalPERS NA NA NA PERS NA NA PERS PERS NA Monthly Average: $777.77 Health Benefits Equal to the CalPERS Region 3, Kaiser Single Premium Special Events Revision of Grand Terrace Municipal Code (GTMC) Chapter 8.50 •Chapter 8.50 which was adopted in 1997. •The structure of the ordinance addresses Aerial Displays,Street Events and Special Events. •The Special Events section treats all types of events in a similar nature.Although there is a vast difference in impacts and concerns Aerial events •Aircraft, balloons, parachutes, skydiving, hang gliders •Currently prohibited •Continue to be prohibited on the basis of safety concerns. Street events •Marathons,bike-a-thons,triathlons and other such uses of thepublicstreets •Require 30 day review process •The route of the event,starting point and terminus,staging andparkingareasaretypicalinformationrequired •Addition of Sheriff’s Dept.review of the event. •There is no provision in the street event relating to food or foodpreparationrequirements. •It is recommended that the fees remain at the current price asthereisasignificantexpenditureofstafftimerelatedtoreview. •Direct costs for staff,Law Enforcement,Fire and other servicesshouldbepasseddirectlythroughtotheeventpromoter. Community events •Carnivals,rodeos,circus,cook offs,or other events that attractlargenumberofpeople. •Require 30 day review process •Background checks for key individuals •Allow food preparation and sale •Special inspections for rides,games,cooking facilities. •Review a broad spectrum of conditions including parking,security,sanitation,noise,and traffic. •Recommended that the fees be reassessed to account for theelevatedlevelsofstafftimerelatedtoreview. •Direct costs for staff,Law Enforcement,Fire and other servicesshouldbepasseddirectlythroughtotheeventpromoter. Special events •Events which exceed the intended intensity of use for the site,is not a part of the underlying land use permit,or which may otherwise become a hazard. •Require 14-21 day review process •Background check requirement is removed •Sale and preparation of food is prohibited,but there is a ministerial waiver process to accommodate charitable or community benefiting purposes. •It is recommended that fees for these permits either be drastically reduced or eliminated.