09/13/2022CITY OF GRAND TERRACE
CITY COUNCIL
AGENDA ● SEPTEMBER 13, 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: 893 1347 9855
Password: 332916
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 September 13, 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
Hispanic Heritage Month Proclamation
C. CONSENT CALENDAR
The following Consent Calendar items are expected to be routine and noncontroversial.
They will be acted upon by the City Council at one time without discussion. Any Council
Member, Staff Member, or Citizen may request removal of an item from the Consent
calendar for discussion.
1. Waive Full Reading of Ordinances on Agenda
DEPARTMENT: CITY CLERK
2. Approval of Minutes – Regular Meeting – 08/23/2022
DEPARTMENT: CITY CLERK
3. June 16, 2022, Planning Commission, March 10, 2022, Parks & Recreation Advisory
Committee and April 4, 2022, Historical & Cultural Activities Committee Meeting Minutes
Update
RECOMMENDATION:
Receive and file.
DEPARTMENT: CITY CLERK
Agenda Grand Terrace City Council September 13, 2022
City of Grand Terrace Page 3
4. Update City of Grand Terrace Conflict of Interest Code
RECOMMENDATION:
ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE, CALIFORNIA, RESCINDING RESOLUTION NO. 2020-34 IN ITS
ENTIRETY AND ADOPTING A CONFLICT OF INTEREST CODE APPLICABLE TO
DESIGNATED POSITIONS, INCLUDING MEMBERS AND STAFF OF THE PUBLIC
FINANCING AUTHORITY AND THE GRAND TERRACE HOUSING AUTHORITY
DEPARTMENT: CITY CLERK
5. The City Council of the City of Grand Terrace Issue a Letter Requesting that Governor
Gavin Newsom Veto Senate Bill (SB) 1127 (Atkins) Workers’ Compensation: Liability
Presumptions
RECOMMENDATION:
Staff recommends that the City Council authorize the Mayor to execute a letter on its
behalf, requesting Governor Gavin Newsom veto Senate Bill 1127 (Atkins) Workers’
Compensation: Liability Presumptions.
DEPARTMENT: CITY MANAGER
6. Authorize Expenditures for Dog Park Equipment with Per Capital Grant Funds
RECOMMENDATION:
A. Authorize the expenditure of up to $29,302 from Parks Fund (Fund 49) for the
purchase of dog park surface, dog teeter, fire hydrant, dog tunnel, and dog ramps.
B. Authorize sales documentation to procure dog park surface, dog teeter, fire hydrant,
dog tunnel, and dog ramp not to exceed the grant awarded amount.
DEPARTMENT: PUBLIC WORKS
7. Measure I Capital Project Needs Analysis for Fiscal Year 2022-2023 through 2026-2027
RECOMMENDATION:
ADOPT “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE, STATE OF CALIFORNIA, ADOPTING A FIVE-YEAR MEASURE I
CAPITAL PROJECT NEEDS ANALYSIS FOR FISCAL YEAR 2022-2023 THROUGH
2026-2027”
DEPARTMENT: PUBLIC WORKS
8. Award Contract to Goodman & Associates for Preparation of PS&E for 2022-23 CIP
RECOMMENDATION:
A. Award a Contract to Goodman & Associates for Preparing Plans, Specifications and
Estimate (PS&E) for Pavement Rehabilitation Project for the Fiscal Year 2022-23
CIP in the amount of $78,000.
B. Authorize the City Manager to Execute the Agreement and Any Change Orders
subject to City Attorney Approval as to Form.
DEPARTMENT: PUBLIC WORKS
Agenda Grand Terrace City Council September 13, 2022
City of Grand Terrace Page 4
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
F. UNFINISHED BUSINESS
9. Adopt the Resolution Authorizing Participation in the PARS Post-Employment Benefits
Trust Program Administered by Public Agency Retirement Services (PARS) and U.S.
Bank, Appointing the City Manager as the City’s Plan Administrator, and Authorizing the
City Clerk to Execute the Documents and to Implement the Program
RECOMMENDATION:
Consider adoption of the Resolution authorizing the establishment of the PARS Post-
Employment Benefits Trust Program which could be used to pre-fund CalPERS pension
obligations.
DEPARTMENT: FINANCE
10. Unfunded OPEB Liability
RECOMMENDATION:
The City Council approve a Prefunding Agreement and election to pre-fund Other
Post- Employment Benefits (“OPEB”) through the California Employers’ Retiree
Benefit Trust (“CERBT”) fund administered through the California Public Employees’
Retirement System (“CalPERS”); authorize the City Manager (or designee) to
execute all documents to fund and maintain participation in the trust; and authorize
staff to file the necessary forms with CalPERS and to make an initial investment of
$100,000.
DEPARTMENT: FINANCE
G. NEW BUSINESS
11. Approval of Revisions to the City's Fiscal Policies and 1st Reading of Changes to
Ordinance No. 267, Section 32.24.070 B and 32.24.080
Agenda Grand Terrace City Council September 13, 2022
City of Grand Terrace Page 5
RECOMMENDATION:
Approve the proposed revisions to the attached fiscal policies and 1st Reading of
changes to Ordinance No. 267, Section 3.24.070 B and Section 3.24.080.
DEPARTMENT: FINANCE
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
K. RECESS TO CLOSED SESSION
CLOSED SESSION
1. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to Government Code Section 54956.9(b)
Number of Cases: One
RECONVENE TO OPEN SESSION
REPORT OUT OF CLOSED SESSION
L. ADJOURN
The Next Regular City Council Meeting will be held on Tuesday, September 27, 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 ● AUGUST 23, 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,
August 23, 2022, at 6:00 p.m.
Invocation
The Invocation was given by Pastor Tim Miller of Heritage Baptist Church.
Pledge of Allegiance
Council Member Doug Wilson led the Pledge of Allegiance.
Attendee Name Title Status Arrived
Darcy McNaboe Mayor Present
Bill Hussey Mayor Pro Tem Present
Sylvia Robles Council Member Absent
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 Present
A. RECESS TO CLOSED SESSION
Mayor McNaboe recessed the regular meeting of the City Council to closed session at
6:03 p.m.
CLOSED SESSION
1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS, pursuant to Government
Code Section 54956.8
Property: 22582 City Center Court (APN 1178-011-12-0000
City negotiator: Konrad Bolowich, City Manager
Negotiating parties: County of San Bernardino
Under negotiation: Price and terms of payment
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Minutes Grand Terrace City Council August 23, 2022
City of Grand Terrace Page 2
RECONVENE TO OPEN SESSION
Mayor McNaboe reconvened the regular meeting of the City Council from closed
session at 6:08 p.m.
REPORT OUT OF CLOSED SESSION
Mayor McNaboe announced that there was no reportable action taken.
B. REORDERING OF, ADDITIONS TO, OR REMOVAL OF ITEMS FROM THE AGENDA
Konrad Bolowich, City Manager added an introduction of Assistant Chief, Martin Serna
to the Special Presentations of the agenda.
C. SPECIAL PRESENTATIONS
A commendation was presented by the City Council to Assistant Fire Chief, Dan Mejia
of the San Bernardino County Fire Protection District for his years of service.
Chief Mejia introduced Assistant Fire Chief, Martin Serna, who will be replacing Chief
Mejia upon his retirement. Chief Serna took a few moments to provide the City Council
with some of his background information.
D. CONSENT CALENDAR
RESULT: APPROVED [UNANIMOUS]
MOVER: Jeff Allen, Council Member
SECONDER: Bill Hussey, Mayor Pro Tem
AYES: Darcy McNaboe, Bill Hussey, Doug Wilson, Jeff Allen
ABSENT: Sylvia Robles
1. Waive Full Reading of Ordinances on Agenda
2. Approval of Minutes – Regular Meeting – 08/09/2022
APPROVE THE REGULAR MEETING MINUTES OF AUGUST 9, 2022
3. City Department Monthly Activity Report - June 2022
RECEIVE AND FILE.
4. Approval of the July-2022 Check Register in the Amount of $729,737.43
APPROVE THE CHECK REGISTER NO. 07312022 IN THE AMOUNT OF $729,737.43
AS SUBMITTED, FOR THE MONTH ENDING JULY 31, 2022.
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Minutes Grand Terrace City Council August 23, 2022
City of Grand Terrace Page 3
5. Authorize Purchase Order for Replacement Street Signs and Sign Drilling Equipment
1. AUTHORIZE THE EXPENDITURE OF $33,935.48 FROM ARPA FUND (FUND 94)
FOR THE PURCHASE OF REPLACEMENT OF CITY STREET SIGNS AND
$5,484.89 SIGN DRILLING EQUIPMENT
2. AUTHORIZE CITY MANAGER TO EXECUTE A PURCHASE ORDER AND ALL
NECESSARY SALES DOCUMENTATION TO PROCURE CITY STREET SIGNS
AND SIGN DRILLING EQUIPMENT
6. Adopt Ordinance No. 341 of the City Council of the City of Grand Terrace, California,
Amending Section 5.42.170 (Containers - Located for Collection) of Chapter 5.42
(Integrated Waste Management) of Title 5 (Business Taxes, Licenses and Regulations)
of the Grand Terrace Municipal Code to Identify Locations for Placement of Residential
Waste Containers for Pick-Up by Waste Haulers
THAT THE CITY COUNCIL APPROVE THE ORDINANCE TO IDENTIFY LOCATIONS
FOR PLACEMENT OF RESIDENTIAL WASTE CONTAINERS FOR PICK-UP BY
WASTE HAULERS
7. Adopt Ordinance No. 342 of the City Council of the City of Grand Terrace, California
Amending Section 6.04.090 (Impoundment of Animals) of Chapter 6.04 (Animal Control)
of Title 6 (Animals) of the Grand Terrace Municipal Code, Which Amends the City's
Animal Control Regulations Pertaining to Impoundment of Animals
THAT THE CITY COUNCIL APPROVE THE ORDINANCE ALLOWING FOR
IMPOUNDMENT OF UNLICENSED ANIMALS
8. Declare the City Property Located at 22582 City Center Court, Grand Terrace, CA as
Exempt Surplus Land and Approve the Sale Thereof to the San Bernardino County Fire
Protection District and the Related Purchase and Sale Agreement
1. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE
DECLARING THE REAL PROPERTY LOCATED AT 22582 CITY CENTER
COURT IN THE CITY OF GRAND TERRACE AS EXEMPT SURPLUS LAND AND
MAKING FINDINGS RELATED THERETO.
2. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE,
CALIFORNIA FINDING THAT THE SALE OF REAL PROPERTY LOCATED AT
22582 CITY CENTER COURT, GRAND TERRACE, CA TO THE SAN
BERNARDINO COUNTY FIRE PROTECTION DISTRICT AND THE APPROVAL
OF THE RELATED PURCHASE AND SALE AGREEMENT IS NOT SUBJECT TO
CEQA; AND APPROVING THE CITY’S SALE THEREOF AND THE RELATED
PURCHASE AND SALE AGREEMENT, CONTINGENT UPON A GENERAL PLAN
CONFORMANCE FINDING PURSUANT TO GOVERNMENT CODE SECTION
65402 AND AN EXEMPT SURPLUS DETERMINATION PURSUANT TO THE
SURPLUS AND ACT
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Minutes Grand Terrace City Council August 23, 2022
City of Grand Terrace Page 4
9. Acquisition and Installation of Code, Building and Planning Software
THAT THE CITY COUNCIL AUTHORIZE THE CITY MANAGER OR HIS DESIGNEE
TO EXECUTE THE CONTRACT FOR THE INSTALLATION, MIGRATION AND
OPERATION OF GOVPILOT SOFTWARE AND CLOUD SERVICES.
10. Deed Restriction for Blue Mountain Trail
TO AUTHORIZE AMORTIZATION AND RECORDATION OF DEED RESTRICTION
FOR BLUE MOUNTAIN TRAIL AT SAN BERNARDINO COUNTY ASSESSOR-
RECORDER OFFICE.
11. Five Year Measure I Capital Improvement Plan (MICIP)
ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE OF THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA,
ADOPTING THE MEASURE I FIVE-YEAR CAPITAL IMPROVEMENT PLAN FOR
FY2022/23 THROUGH 2026/27
E. PUBLIC COMMENT
None.
F. PUBLIC HEARINGS - NONE
G. UNFINISHED BUSINESS - NONE
H. NEW BUSINESS - NONE
I. REQUESTS FOR FUTURE AGENDA ITEMS BY CITY COUNCIL - NONE
J. CITY COUNCIL COMMUNICATIONS
Council Member Jeff Allen
Nothing to Report.
Council Member Doug Wilson
Nothing to Report.
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Minutes Grand Terrace City Council August 23, 2022
City of Grand Terrace Page 5
Mayor Pro Tem Bill Hussey
Nothing to Report.
Mayor Darcy McNaboe
Nothing to Report.
K. CITY MANAGER COMMUNICATIONS
Konrad Bolowich, City Manager made the following announcements:
• Barton Road and Van Buren Street were paved last week; striping still needs to
be completed.
• Re-Roofing was completed at City Hall
L. RECESS TO CLOSED SESSION
Mayor McNaboe recessed the regular meeting of the City Council to closed session at
6:25 p.m.
CLOSED SESSION
1. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to Government Code Section
54956.9(b)
Number of Cases: One (1)
RECONVENE TO OPEN SESSION
Mayor McNaboe reconvened the regular meeting of the City Council from closed
session at 7:39 p.m.
REPORT OUT OF CLOSED SESSION
Mayor McNaboe announced there was no reportable action; however, direction was
provided to staff.
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Minutes Grand Terrace City Council August 23, 2022
City of Grand Terrace Page 6
M. ADJOURN
Mayor McNaboe adjourned the Regular Meeting of the City Council in memory of
Salvador Lopez at 7:40 p.m. The Next Regular Meeting of the City Council will be held
on Tuesday, September 13, 2022, at 6:00 p.m.
_________________________________
Darcy McNaboe, Mayor
_________________________________
Debra L. Thomas, City Clerk
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AGENDA REPORT
MEETING DATE: September 13, 2022 Council Item
TITLE: June 16, 2022 Planning Commission, March 10, 2022 Parks
& Recreation Advisory Committee and April 4, 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 Manager directed
the City Clerk 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 August 18, 2022, the Planning Commission held its Regular Meeting and approved
its June 16, 2022, Regular Meeting minutes. The minutes for this meeting is included as
an attachment to this report. The Commission’s next Regular Meeting is scheduled for
September 1, 2022.
On August 11, 2022, the Parks & Recreation Advisory Committee held its Regular
Meeting and approved its March 10, 2022, Regular Meeting minutes. The minutes for
this meeting is included as an attachment to this report. The Committee’s next Regular
Meeting is scheduled for September 8, 2022.
On August 1, 2022, the Historical & Cultural Activities Committee held its Regular
Meeting and approved its April 4, 2022, Regular Meeting minutes. The minutes for this
meeting is included as an attachment to this report. The Committee’s next Special
Meeting is scheduled for September 12, 2022.
FISCAL IMPACT:
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None.
ATTACHMENTS:
• 06-16-2022 (PDF)
• 03-10-2022 (PDF)
• 03-07-2022 (PDF)
APPROVALS:
Debra Thomas Completed 08/29/2022 4:26 PM
City Manager Completed 08/30/2022 12:55 PM
City Council Pending 09/13/2022 6:00 PM
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v CITY OF GRAND TERRACE
CITY COUNCIL & PLANNING COMMISSION/SITE AND ARCHITECTURAL
REVIEW BOARD
MINUTES a JUNE 16, 2022
Community Room Special Meeting Workshop & Regular Meeting 6:30 PM
Grand Terrace Civic Center• 22795 Barton Road
CALL TO ORDER
Mayor Darcy McNaboe convened the Special Meeting Workshop of the City Council
and Planning Commission/Site and Architectural Review Board for Thursday, June 16,
2022, at 6:30 p.m.
PLEDGE OF ALLEGIANCE
Mayor McNaboe led the Pledge of Allegiance.
ROLL CALL
Attendee Name f Title Status Ar.,rived,
Darcy McNaboe Mayor Present
Bill Hussey Mayor Pro Tern Present
Sylvia Robles Council Member Present
Doug Wilson I Council Member Present
Jeff Allen Council Member Present
Edward Giroux Chairman Present
Tara Ceseria Commissioner Present
David Alaniz Commissioner Present
Konrad Bolowich City Manager Present
Robert Khuu Assistant City Attorney Present
Haide Aguirre Associate Planner Present
Debra Thomas City Clerk Present
PUBLIC COMMENT
None.
A. PRESENTATIONS
1. Joint City Council and Planning Commission/Site and Architectural Review Board
Workshop Presentation and Discussion Regarding Objective Design Standards for
Multi-Family Housing and Mixed Use Developments
Konrad Bolowich, City Manager gave the staff report and PowerPoint presentation for
this item.
City of Grand Terrace Page 1
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Minutes Grand Terrace City Council ft Planning Commission/Site and Architectural Review Board June 16, 2022
PUBLIC COMMENT
Vincent Rasso, Grand Terrace shared some background about himself and his interest
in sustainability, environment, and housing needs.
1. THAT CITY COUNCIL AND PLANNING COMMISSION/SITE AND
ARCHITECTURAL REVIEW BOARD (FIRST) RECEIVE A PRESENTATION
REGARDING OBJECTIVE DESIGN STANDARDS (ODS) AND (SECOND)
DISCUSS AND PROVIDE FEEDBACK TO STAFF ON THE PROPOSED DRAFT
OBJECTIVE DESIGN STANDARDS
RESULT: NO ACTION TAKEN
ADJOURN
Mayor Darcy McNaboe adjourned the Special Meeting Workshop of the City Council
and Planning Commission/Site and Architectural Review Board at 7:30 p.m.
CALL TO ORDER
Chairmen Edward Giroux convened the Regular Meeting of the Planning Commission
and Site and Architectural Review Board for Thursday, June 16, 2022, at 7:35 p.m.
ROLL CALL
Attendee Name Title Status-Arrived
Edward Giroux Chairman Present
Tara Cesena Commissioner Present
David Alaniz Commissioner Present
Robert Khuu Assistant City Attorney Present
Haide Aguirre Associate Planner Present
Debra Thomas City Clerk Present
APPROVAL OF AGENDA
2. Motion: APPROVE AGENDA FOR JUNE 16, 2022
RESULT: ADOPTED [UNANIMOUS]
MOVER: Tara,Cesena;Commissioner
SECONDER: David Alaniz,-Commissioner
AYES: Edward A. Giroux;,Tara Cesena, David Alaniz
City of Grand Terrace Page 2
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Minutes Grand Terrace City Council ft Planning Commission/Site and Architectural Review Board June 16, 2022
B. CONSENT CALENDAR
3. Approval of Minutes— Regular Meeting— 03/03/2022
RESULT: ACCEPTED[UNANIMOUS]
MOVER: Tara Cesena, Commissioner
SECONDER: Edward A. Giroux, Chairman
AYES: Edward A. Giroux, Tara Cesena, David Alaniz
4. Approval of Minutes— Regular Meeting — 05/19/2022
RESULT: ACCEPTED [UNANIMOUS]
MOVER: Tara Cesena, Commissioner
SECONDER: Edward A. Giroux, Chairman
AYES: Edward A. Giroux, Tara Cesena, David Alaniz
C. ACTION ITEMS
None.
D. PUBLIC HEARINGS
1. Art in Public Places Ordinance
Haide Aguirre, Associate Planner gave the staff report and PowerPoint presentation for
this item.
Chairman Giroux opened the public hearing at 8:23 p.m.
PUBLIC COMMENT
None.
Chairman Giroux closed the public hearing at 8:23 p.m.
Commissioner Cesena moved, with a second from Commissioner Alaniz to approve
staff recommendation with the following additional recommendations:
Art Value Requirements be calculated '/2% of 1% of the estimated total building
valuation for single-family residential projects.
Art Applicability for residential subdivisions or developments apply to four or
more units.
Perform language clean up in the proposed ordinance.
City of Grand Terrace Page 3
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Minutes Grand Terrace City Council tt Planning Commission/Site and Architectural Review Board June 16, 2022
ADOPT A RESOLUTION OF THE PLANNING COMMISSION/SITE AND
ARCHITECTURAL REVIEW BOARD OF THE CITY OF GRAND TERRACE
CALIFORNIA, RECOMMENDING THAT THE CITY COUNCIL MAKE A
DETERMINATION THAT ZONING CODE AMENDMENT 22-04 IS EXEMPT FROM
CEQA PURSUANT TO SECTION 15061(B)(3) AND RECOMMENDING THE CITY
COUNCIL ADOPT AN ORDINANCE AMENDING TITLE 18 OF THE GRAND
TERRACE MUNICIPAL CODE BY AMENDING CHAPTER 18.06 (DEFINITIONS) AND
ADDING CHAPTER 18.81 ESTABLISHING ART IN PUBLIC PLACES
REQUIREMENTS
RESULT:, APPROVED [UNANIMOUS]
MOVER: Tara Cesena, Commissioner
SECONDER: David Alaniz, Commissioner
AYES:. Edward-A. Giroux, Tara Cesena„David Alaniz
E. INFORMATION TO COMMISSIONERS
None.
F. INFORMATION FROM COMMISSIONERS
Commissioner Alaniz announced the unveiling of the Curtain of Courage at the
Government Center in downtown San Bernardino to honor the fourteen (14) fallen
victims of the December 2, 2015, terrorist attack.
ADJOURN
Chairman Edward Giroux adjourned the Regular Meeting of the Planning Commission
and Site and Architectural Review Board at 8:30 p.m. to the next scheduled meeting of
the Planning Commission/Site and Architectural Review Board to be held on July 7,
2022, at 6:30 p.m.
Edward Giroux, C airman of the rand De ra L. Thomas, City Clerk
Terrace Planning Commission
City of Grand Terrace Page 4
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o-
CITY OF GRAND TERRACE
PARKS & RECREATION ADVISORY COMMITTEE
REGULAR MEETING
March 10, 2022 —4:15 p.m.
City Hall Community Room — North
22795 Barton Road, Grand Terrace, CA 92313
MINUTES
CALL MEETING TO ORDER:
Chair Brian Phelps convened the Regular Meeting of the Parks & Recreation Advisory
Committee at 4:25 p.m.
PLEDGE OF ALLEGIANCE:
Committee Member Terry Reagan led the Pledge of Allegiance.
ROLL CALL:
Present: Committee Member Reagan; Vice-Chair Firnkoess; Chair Phelps
Absent:Committee Members Freund, Hogue
Staff: Debra Thomas, City Clerk
1. Approve February 10, 2022, Regular Meeting Minutes
Vice-Chair Firnkoess moved, with a second from Committee Member Reagan to
approve the February 10, 2022, Regular Meeting minutes.
Ayes: Committee Member Reagan; Vice-Chair Firnkoess; -Chairman
Phelps
Absent:Committee Members Freund, Hogue
2. Public Comments
None.
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Minutes Parks It Recreation Advisory Committee March 10, 202X
3. Discussion:
a. Kyle Bacon Field — New Signage
Debra Thomas, City Clerk announced to the Committee that the original
March 5, 2022, t-ball field dedication had to be postponed. The t-ball field
dedication has been rescheduled for April 2, 2022, at 11:45 a.m. at
Veteran's Freedom Park.
b. Committee Youth Member
City Clerk Thomas explained that as of the meeting date, no applications for
the youth member vacancy has been 'received. Vice:Chair Firnkoess
indicated that she would provide city staff with other contacts at the high
school to help coordinate the recruitment of a youth committee member.
Committee Member Reagan asked if the youth committee member will have
voting rights. City Clerk Thomas will review the position description and will
report back to the Committee confirming whether voting rights exist for the
position.
c. 15th Annual Walk on Blue Mountain — De-Brief
City Clerk Thomas informed the Committee that the 15th Annual Walk on
Blue Mountain was a success and that 400-450 people participated. Vice-
Chair Firnkoess requested confirmation that other organizations can have a
booth set up at the event other than the Friends of Blue Mountain and the
City. City Clerk Thomas informed the Committee that, other organizations
may pass out information about their programs at City'events.
There was also a suggestion,by Vice-Chair Firnkoess that the City create an
information board to be placed at the beginning, of the trail so that
participants will; be provided with the rules and regulations of the trail,
importance of hydration, trash pick-up, dog waste 'pickup. It was also
requested that a no admittance sign be created to be placed at the entrance
of the trail at the closing time of admittance up the mountain. Some
participants-harassed the volunteers when they were informed, they were
unable to go up the mountain after 10:45 am.
Vice-Chair Firnkoess suggested that the Sunday service performed at the
top of the mountain be scheduled earlier between 9:00 am — 9:30 pm
d. City of Grand Terrace Park Improvements— Grant Funding
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v Minutes Parks Et Recreation Advisory Committee March 10, 2022
City Clerk Thomas provided the Committee with. an update on each of the
City's parks and plans for improvements. The Committee was provided with
a copy of the grant funding requests submitted to the State for informational
purposes only.
4. Committee Member Comments
Vice-Chair Firnkoess wanted to request an update on Art in Public Places.
City Clerk Thomas informed the Committee that an. item is being prepared to go
before the Planning Commission in the next 60 days.
Committee Member Reagan suggested that the priority projects identified by the
Committee be included in the presentation.
Chair Phelps asked if the digital sign on Palm and Barton Road could be repaired
for use in advertising such as events, notices of vacancies, programs, etc. He
thought the City had an agreement to use the one in front of CVS and asked if
staff could find out if that agreement is still in place.
5. Staff Comments
None.
6. Adjournment
Chair Phelps adjourned the Regular Meeting of the Parks & Recreation Advisory
Committee at,5:20 p.m.
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Brian Ph6lpd, thair Debra.L. Thomas, Committee Secretary
Next Meeting Date:
April 14, 2022 @ 4:15 p.m.
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Historical and Cultural Activities Committee
Minutes for month of—March 7, 2022
Location—2"d Floor conference Room
Members present—Christina Valdivia-Phelps, Renae Walker, Franke 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 2"d 5 yes 0 no 0 abstain—Renae needs
to amend to include Louise being present at February Meeting
Treasurers Report: Franke read the treasurers report Louise motioned'to accept, Christina 2"d 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 22"d. 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, 111 come 15t 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
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AGENDA REPORT
MEETING DATE: September 13, 2022 Council Item
TITLE: Update City of Grand Terrace Conflict of Interest Code
PRESENTED BY: Debra Thomas, City Clerk
RECOMMENDATION: ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF GRAND TERRACE, CALIFORNIA, RESCINDING
RESOLUTION NO. 2020-34 IN ITS ENTIRETY AND
ADOPTING A CONFLICT OF INTEREST CODE
APPLICABLE TO DESIGNATED POSITIONS, INCLUDING
MEMBERS AND STAFF OF THE PUBLIC FINANCING
AUTHORITY AND THE GRAND TERRACE HOUSING
AUTHORITY
2030 VISION STATEMENT:
This staff reports supports Goal No. 5 in that the Conflict of Interest Code promotes
transparency within the organization and community.
BACKGROUND:
The Political Reform Act requires every local government agency to review its Conflict
of Interest Code biennially. In reviewing the City's Conflict of Interest Code, staff
identified staff positions that should be removed and positions that should be included in
the Code. The positions included in the attached Resolution properly reflect positions
that may potentially have a material effect on his/her financial interest in the decision
making process.
The changes made are listed as follows:
Position Added to the Code Under City Manager:
Senior Management Analyst
Positions Added to the Code Under Planning & Development Services:
Senior Planner
Positions Removed from the Code:
Budget Officer
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FISCAL IMPACT:
This item does not require an expenditure of funds.
ATTACHMENTS:
• 2022-xx - Conflict of Interest Code 2022 (DOCX)
APPROVALS:
Debra Thomas Completed 08/30/2022 9:46 AM
City Manager Completed 08/30/2022 12:58 PM
City Council Pending 09/13/2022 6:00 PM
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CC Reso No. 2022-xx Page 1 of 6 September 13, 2022
RESOLUTION NO. 2022-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GRAND TERRACE, CALIFORNIA, RESCINDING
RESOLUTION NO. 2018-38 IN ITS ENTIRETY AND
ADOPTING A CONFLICT OF INTEREST CODE
APPLICABLE TO DESIGNATED POSITIONS, INCLUDING
MEMBERS AND STAFF OF THE PUBLIC FINANCING
AUTHORITY AND THE GRAND TERRACE HOUSING
AUTHORITY
WHEREAS, the California Fair Political Practices Commission has adopted
Section 18730 of Title 2 of the California Code of Regulations which contains the terms
of a Standard Conflict of Interest Code, which can be incorporated by reference, and
which may be amended by the Fair Political Practices Commission to conform to
amendments in the Political Reform Act after public notice and hearings; and
WHEREAS, a Conflict of Interest Code for City officials, employees and
commissioners was adopted on September 22, 2020, by Resolution No. 2020-34; and
WHEREAS, since the last revision of the Grand Terrace Conflict of Interest Code
on September 22, 2020, it has been determined that there are proposed revisions to the
Code; and
WHEREAS, Government Code Section 87306.5 requires every local agency to
review its Conflict of Interest Code in all even-numbered years.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE,
CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS
FOLLOWS:
SECTION 1. Resolution No. 2020-34 is hereby rescinded.
SECTION 2. In compliance with Government Code Section 87300, the City Council
hereby adopts the FPPC’s Model Conflict of Interest Code authorized by 2 CCR § 18730
and the attached Exhibit “A” Designated Employees, and Exhibit “B” Appendix of
Disclosure Categories.
SECTION 3. The City Clerk shall certify to the passage and adoption of this
Resolution, and it shall take effect and be in force.
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CC Reso No. 2022-xx Page 2 of 6 September 13, 2022
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand
Terrace, California, at a regular meeting held on the 13th day of September 2022.
___________________________
Darcy McNaboe, Mayor
ATTEST:
Debra L. Thomas
City Clerk
APPROVED AS TO FORM:
Adrian Guerra
City Attorney
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CC Reso No. 2022-xx Page 3 of 6 September 13, 2022
EXHIBIT “A”
Designated Employees
The following is a listing of positions for which the employee is required to submit
Statements of Economic Interest (Form 700) pursuant to the Political Reform Act of 1974.1
To the extent that certain positions are required to perform actions on behalf of the City
and also another agency or authority (such as the Successor Agency), the following
disclosure requirements shall also apply to duties performed on behalf of any such
agency/agencies.
DEPARTMENTS / POSITIONS DISCLOSURE CATEGORIES
City Attorney
City Attorney 1
Assistant City Attorney 1
Deputy City Attorney 1
City Council / Boards of Directors
Members of City Council2 1
City Clerk
City Clerk 1
City Manager
City Manager 1
Assistant City Manager 1
Senior Management Analyst 2
1 Government Code § 87200 already requires the following individuals (among others) to disclose their
economic interests: mayors, city council members, planning commissioners, city managers, city attorneys,
city treasurers, other public officials who manage public investments, and candidates for any of these offices
at any election. For ease of reference, this Conflict of Interest Code includes such individuals, even though
they already have statutory disclosure obligations. This code is not intended to increase or decrease their
existing statutory obligations to disclose.
2 Members of the City Council currently serve as ex officio members of the following Boards: (1) Grand
Terrace Public Financing Authority (2) Grand Terrace Housing Authority. All City Councilmembers already
are required to disclose all financial interests that they have which may be affected by their membership on
the City Council, and therefore, they are already required to disclose all interests which may also affect the
actions they take as members of these boards.
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CC Reso No. 2022-xx Page 4 of 6 September 13, 2022
Finance Department
Director of Finance/Treasurer 1
Finance Manager 1
Principal Accountant 2
Senior Accountant 2
Management Analyst 2
Budget Officer 2
Fire Department
Fire Chief or Designee to Grand Terrace 1
Planning Commission Members 1
Planning & Development Services
Planning & Development Services Director 1
Senior Planner 1
Assistant Planner 2
Building Official 1
Animal Control / Code Enforcement Officer 2
Police Department
Sheriff Captain assigned to Grand Terrace 1
Sheriff Lieutenant assigned to Grand Terrace 2
Public Works
Public Works Director 1
Management Analyst 2
Consultants* 1
*Consultants (and certain people filling new positions – see below) shall be included in
the list of designated employees and shall disclose, pursuant to the broadest disclosure
category in the Code, subject to the following limitations:
The City Manager or Agency’s Executive Director may determine in writing that a
particular consultant, although a “designated position,” is hired to perform a range
of duties that is limited in scope and thus is not required to fully comply with the
disclosure requirements described in this section. Such written determination shall
include a description of the consultant’s duties and based upon that description, a
statement of the extent of disclosure requirements. The City Manager/Executive
Director’s determination is a public record and shall be retained for public
inspection in the same manner and location as this Conflict of Interest Code.
Commission Regulation Section 18700.3 defines “consultant” as an individual who,
pursuant to a contract with a state or local governmental agency:
(1) Makes a governmental decision whether to:
a. Approve a rate, rule, or regulation;
b. Adopt or enforce a law;
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CC Reso No. 2022-xx Page 5 of 6 September 13, 2022
c. Issue, deny, suspend, or revoke any permit, license, application,
certificate, approval, order or similar authorization or entitlement;
d. Authorize the agency to enter into, modify, or renew a contract provided
it is the type of contract which requires agency approval;
e. Grant agency approval to a contract which requires agency approval and
in which the agency is a party or to the specifications for such a contract;
f. Grant agency approval to a plan, design, report, study, or similar item;
g. Adopt, or grant agency approval of, policies, standards, or guidelines for
the agency or for any subdivision thereof; or
(2) Serves in a staff capacity with the agency and that capacity participates in
making a governmental decision as defined in Regulation 18704(a) and (b)
or performs the same or substantially all the same duties for the agency that
would otherwise be performed by an individual holding a position specified
in the agency’s Conflict of Interest Code under Section 87302.
Newly Created Positions
To the extent required by Commission Regulation 18219, as it may be amended from
time to time, “an employee in a newly created position that makes or participates in the
making of decision and whose specific position is not yet listed in the conflict of interest
code” is also required to disclose pursuant to the broadest disclosure category, subject
to the same limitation, above, via which the City manager may determine, in writing, that
the employee is not required to fully comply with the disclosure requirements, etc.
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CC Reso No. 2022-xx Page 6 of 6 September 13, 2022
EXHIBIT “B”
DISCLOSURE CATEGORIES
CATEGORY
1 Full Disclosure – All interests in real property as well as investments, business
positions and sources of income, including gifts, loans, and travel payments.
2 Full Disclosure – (excluding interests in real property) – Investments and business
positions and sources of income, including gifts, loans, and travel payments.
3 Interest in Real Property – Interests in real property located in the city, including
property located within a two mile radius of any property owned or used by the
City.
4 General Contracting – Investments, business positions and of income, including
gifts, loans and travel payments from sources that provide leased facilities, goods,
equipment, vehicles, machinery, or services, including training or consulting
services, of the type utilized by the City.
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AGENDA REPORT
MEETING DATE: September 13, 2022 Council Item
TITLE: The City Council of the City of Grand Terrace Issue a Letter
Requesting that Governor Gavin Newsom Veto Senate Bill
(SB) 1127 (Atkins) Workers’ Compensation: Liability
Presumptions
PRESENTED BY: Konrad Bolowich, City Manager
RECOMMENDATION: Staff recommends that the City Council authorize the Mayor
to execute a letter on its behalf, requesting Governor Gavin
Newsom veto Senate Bill 1127 (Atkins) Workers’
Compensation: Liability Presumptions.
2030 VISION STATEMENT:
This staff report supports Goal #1, Ensuring Fiscal Viability and Goal #4, Develop and
Implement Successful Partnerships.
BACKGROUND:
Existing law establishes a workers’ compensation system, administered by the
Administrative Director of the Division of Workers’ Compensation, to compensate an
employee for injuries arising out of and in the course of their employment. Existing law
requires an injured employee to file a claim form with the employer. Under existing law,
except for specified injuries, if liability is not rejected within 90 days after the date the
claim form is filed with the employer, the injury is presumed compensable, and the
presumption is rebuttable only by evidence discovered subsequent to the 90-day period.
Existing law prohibits aggregate disability payments for a single injury occurring on or
after January 1, 2008, causing temporary disability from extending for more than 104
compensable weeks within a period of 5 years from the date of injury, except if an
employee suffers from certain injuries or conditions.
DISCUSSION:
Senate Bill (SB) 1127 (Atkins), as amended on August 15, 2022, is a concern as it
would significantly alter how presumptive workers’ compensation claims are managed,
undoubtedly increasing lawsuits and workers’ compensation claims to public agencies.
SB 1127 includes three significant changes to current law, as follows:
1. Employees with a presumptive cancer claim would be entitled to up to 240 weeks
of temporary disability, a sizable increase from the current 104-week limit.
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2. The current 90-day period to investigate a workers’ compensation claim would be
shortened to 75 days. A natural consequence of shortening the investigative
period would be more claims being conditionally denied.
3. Presumptive claims that are “unreasonably rejected” (denied) would be subject to
a penalty of up to $50,000. As there is currently no standard for what constitutes
an unreasonable denial, there would be plenty of leeway for judges to award
penalties to employees.
California Joint Powers Insurance Authority (CJPIA) has created a letter template that
addresses the issues detailed above which urges Governor Newsom to veto the bill.
CJPIA is asking public agencies to oppose SB 1127. Attached is a copy of the letter for
City Council’s review which states its concern about the bill and that the City requests
Governor Newsom veto the bill, as it would increase lawsuits and workers’
compensation costs for public agencies.
FISCAL IMPACT:
None.
ATTACHMENTS:
• 09-14-2022 - Senate Bill 1127 (PDF)
APPROVALS:
Konrad Bolowich Completed 09/07/2022 1:55 PM
City Manager Completed 09/07/2022 1:55 PM
City Council Pending 09/13/2022 6:00 PM
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September 14, 2022
Governor Gavin Newsom
1021 O Street, Suite 9000
Sacramento, CA 95814
SUBJECT: Senate Bill 1127
Dear Governor Newsom,
On behalf of the City of Grand Terrace City Council, I write in opposition to Senate Bill (SB)
1127 (Atkins), as amended on August 15, 2022, because it fundamentally alters longstanding rules
and timeframes for determining eligibility for workers’ compensation claims and would
dramatically increase systemic friction and litigation. SB 1127 creates a new, reduced timeline for
employers to decide whether to cover a claimed injury. However, it does not synchronize other
statutes and regulations that prevent employers from complying with the new timeline. The bill
changes the rules for all presumptive claims, but the provisions applied to public employers are
particularly challenging.
SB 1127 has three main provisions, each of which is problematic:
• Reduces the timeframe allotted to employers to investigate rebuttable presumption
claims: SB 1127 proposes to shorten the time provided for employers to examine claims from
90 to 75 days. The bill does not, however, make a single change to the statutory and regulatory
provisions that cause investigations to take more than 90 days.
• Imposes new penalties on employers: SB 1127 proposes new and unprecedented penalties
on all claims covered by presumption statutes. The penalty would apply when “liability has
been unreasonably rejected for claims of injury” and would cost up to $50,000. These claims
are predominantly for public safety employees whose salaries are taxpayer-funded. As
proposed, these claims would have a higher standard of evidence because of the presumption,
an objectively inadequate timeline to investigate claims, and substantial penalties for getting
the process wrong.
City of Grand Terrace, 22795 Barton Road, Grand Terrace, CA 92313
www.grandterrace-ca.gov 909-824-6621
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September 14, 2022
Governor Gavin Newsom
Subject: Senate Bill 1127
Page 2
• More than doubles the duration of temporary disability for cancer presumption claims:
SB 1127 would extend the term of temporary disability benefits from 104 to 240 weeks for
claims covered by cancer presumption statutes. Currently, covered employees have full and
tax-free wage replacement benefits for one year and access to disability retirement benefits
that can, in some cases, be received concurrently with temporary disability benefits.
We humbly request that you veto this bill as it will undoubtedly increase lawsuits and workers’
compensation costs for our agency.
Sincerely,
Darcy McNaboe
Mayor
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AGENDA REPORT
MEETING DATE: September 13, 2022
TITLE: Authorize Expenditures for Dog Park Equipment with Per
Capital Grant Funds
PRESENTED BY: Shanita Tillman, Management Analyst
RECOMMENDATION: 1. Authorize the expenditure of up to $29,302 from Parks
Fund (Fund 49) for the purchase of dog park surface, dog
teeter, fire hydrant, dog tunnel, and dog ramps
2. Authorize sales documentation to procure dog park
surface, dog teeter, fire hydrant, dog tunnel, and dog ramp
not to exceed the grant awarded amount
2030 VISION STATEMENT:
This staff report supports City Council Goal # 4 “Develop and Implement Successful
Partnerships” by working with state agencies to secure funding for programs and
projects to deliver services benefiting our community.
BACKGROUND:
The State Department of Parks and Recreation has been delegated the responsibility by
the Legislature of the State of California for the administration of the Per Capita Grant
Program. The City has needs for funding to provide additional features to City parks.
DISCUSSION:
Through the Per Capita Grant program, the City can provide additional amenities at
multiple parks. The Dog Park located on Vista Grande Way and Grand Terrace Rd. is
set to have surface maintenance performed, installation of a dog teeter, two fire
hydrants, dog tunnel, and two dog walk ramps:
Equipment Company Price Expended
Amount
Dog Crawl American Recycled
Products
$1,289.00 $12,618.67
Teeter Totter $1,564.00
Park Fire Hydrant $1,100.00
Dog Walk $7,460.00
Equipment Company Available Grant Funds
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Dog Park Surface EZ Sunnyday $16,683.33
Staff is recommending the approval of the expenditure for the dog park equipment from
American Recycled Product and the purchase order for the dog park surface
maintenance performed by EZ Sunnyday.
FISCAL IMPACTS:
The grant is for $177,952.00. Most of the project activities are slated to occur in
economically disadvantaged neighborhoods. Because of this, City matching funds will
be $5,200.00. The funding for the equipment will come from:
Parks (Fund 49) Account 49-471-700-000-000
ATTACHMENTS:
• Dog Park Equipment Invoice (PDF)
• EZ Sunnyday Quote (PDF)
APPROVALS:
Shanita Tillman Completed 08/29/2022 2:44 PM
Finance Completed 08/30/2022 2:07 PM
City Manager Completed 09/07/2022 11:24 AM
City Council Pending 09/13/2022 6:00 PM
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AGENDA REPORT
MEETING DATE: September 13, 2022 Council Item
TITLE: Measure I Capital Project Needs Analysis for Fiscal Year
2022-2023 through 2026-2027
PRESENTED BY: Shanita Tillman, Management Analyst
RECOMMENDATION: ADOPT “A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF GRAND TERRACE, STATE OF
CALIFORNIA, ADOPTING A FIVE-YEAR MEASURE I
CAPITAL PROJECT NEEDS ANALYSIS FOR FISCAL
YEAR 2022-2023 THROUGH 2026-2027”
2030 VISION STATEMENT:
This staff report supports Goal #2 "Maintain Public Safety" by investing in improvements
to public infrastructure.
BACKGROUND:
The Measure I Strategic Plan requires local jurisdictions to annually adopt a Five-Year
Capital Project Needs Analysis (CPNA), which documents project or program needs by
fiscal year and includes the anticipated funding sources, funding amounts and project
phasing where appropriate. San Bernardino Associated Governments' staff will use
these submittals, along with similar information from SANBAG departments, in a cash-
flow analysis necessary for effective implementation of the Measure I Strategic Plan.
The Master Agreement for the CPNA was approved by the City Council in May 2010.
DISCUSSION:
Measure I revenue can only be used for transportation improvement and traffic
management programs authorized in the Expenditure Plans set by Ordinance No. 04-01
and Ordinance No. 89-1 of the Authority. The Strategic Plan and Expenditure Plan
require each local jurisdiction applying for revenue from the Valley Major Street - Arterial
Program to annually adopt and update the Five-Year CPNA.
The CPNA, as recommended, identifies one project in the City where funds would
improve traffic capacity and operations, subject to availability of Arterial Program
funding. The project description is:
Extend Commerce Way from 900’ n/o De Berry St to Main St from 0 to 4
lanes.
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Staff is recommending that the City Council adopt a resolution approving the proposed
updated Five-Year Measure I Capital Projects Needs Analysis for Fiscal Years 2022/23
through 2026/27.
FISCAL IMPACT:
The City previously committed to obligate $1,000,000 from development impact fees
(arterial improvements account) over the five-year period including FY22-23 thru FY26-
27 to advance the design and construction of Commerce Way, a major circulation
improvement project. The City requested $1,973,128.55 in Measure I subventions over
the five-year period for this project. The City’s commitment to obligate development
impact fees is a requirement to receive the Measure I - Arterial Program funds as this
represents the development fair share (approximately 40%) of the cost. The CPNA does
not obligate General Fund revenue.
The CPNA is updated annually. If development impact fee revenues are not generated
at the anticipated pace, the City will need to explore other funding options, delay the
project, or reduce the project scope accordingly. Should the City’s priorities change in
the future, the CPNA may be revised at any time with the changes reported to SBCTA.
ATTACHMENTS:
• CPNA Resolution September 2022 (DOCX)
• 2024-2028 CPNA (2022) Grand Terrace (PDF)
APPROVALS:
Shanita Tillman Completed 08/31/2022 3:04 PM
Finance Completed 09/01/2022 9:36 AM
City Manager Completed 09/01/2022 12:38 PM
City Council Pending 09/13/2022 6:00 PM
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Nexus Project Cost 3,500,000$
Dev. Loan?No
5-Year Advance?No
Public Share:60.1%
Dev. Share:39.90%
Project Information Phase Funding PRIOR* FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FUTURE
Total Cost:$137,508.80
Fund Type:MSI Arterial $ 137,509 $ - $ - $ - $ - $ - $ -
- Select Fund - $ - $ - $ - $ - $ - $ - $ -
- Select Fund - $ - $ - $ - $ - $ - $ - $ - - Select Fund - $ - $ - $ - $ - $ - $ - $ -
Other: ______ $ - $ - $ - $ - $ - $ - $ -
PS&ETotal Cost:$48,593.40
Fund Type:MSI Arterial $ 25,848 $ - $ - $ - $ - $ - $ - DEV FEE $ 22,746 $ - $ - $ - $ - $ - $ -
- Select Fund - $ - $ - $ - $ - $ - $ - $ -
- Select Fund - $ - $ - $ - $ - $ - $ - $ -
Other: ______ $ - $ - $ - $ - $ - $ - $ -
ROWTotal Cost:$519,375.00
Fund Type:MSI Arterial $ 73,195 $ 208,000 $ 51,375 $ - $ - $ - $ -
DEV FEE $ 134,805 $ 52,000 $ - $ - $ - $ - $ -
- Select Fund - $ - $ - $ - $ - $ - $ - $ -
- Select Fund - $ - $ - $ - $ - $ - $ - $ - Other: ______ $ - $ - $ - $ - $ - $ - $ -
CONSTTotal Cost:$2,578,750.00
Fund Type:MSI Arterial $ - $ 416,000 $ 855,702 $ 205,500 $ - $ - $ -
DEV FEE $ - $ 416,000 $ 480,048 $ 205,500 $ - $ - $ -
- Select Fund - $ - $ - $ - $ - $ - $ - $ - - Select Fund - $ - $ - $ - $ - $ - $ - $ - - Select Fund - $ - $ - $ - $ - $ - $ - $ - - Select Fund - $ - $ - $ - $ - $ - $ - $ - Other: ______ $ - $ - $ - $ - $ - $ - $ -
*Prior should identify any expenses incurred in prior years that have not yet been reimbursed by SBCTA including anticipated FY 2022/2023 expenses.
Capital Project Needs Analysis
City of Grand Terrace
Valley Arterial Sub-Program
Extend Commerce Wy from 900'
n/o DeBerry St to Main St from 0 to 4 lanes
Current Total Project Cost Estimate:$0.00
Total Measure I Request:
$1,973,128.55
(Summation of Measure I)
Comments:
2024-2028 CPNA (2022) Grand Terrace - Proj 1
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AGENDA REPORT
MEETING DATE: September 13, 2022
TITLE: Award Contract to Goodman & Associates for Preparation of
PS&E for 2022-23 CIP
PRESENTED BY: Shanita Tillman, Management Analyst
RECOMMENDATION: 1. Award a Contract to Goodman & Associates for
Preparing Plans, Specifications and Estimate (PS&E) for
Pavement Rehabilitation Project for the Fiscal Year 2022-23
CIP in the amount of $78,000.
2. Authorize the City Manager to Execute the Agreement
and Any Change Orders subject to City Attorney Approval as
to Form.
2030 VISION STATEMENT:
This staff report supports Goal #2 "Maintain Public Safety" by investing in critical
improvements to infrastructure
BACKGROUND:
On May 24, 2022, the City Council approved a 5-Year Capital Improvement Program
(CIP) for Fiscal Years 2022/23 through 2026/27.
DISCUSSION:
Staff solicited proposals from five consulting firms for preparation of Plans,
Specifications & Estimates (PS&E) for the FY2022-23 Capital Improvement Plan (CIP).
Three (3) firms declined to submit proposals noting the size of the project and their
inability to submit a proposal due to their workload. The firms of Willdan and Goodman
& Associates submitted proposals. The proposal from Goodman & Associates was
selected to provide the PS&E for this project based on professional expertise,
experience, service level and references.
Therefore, staff is recommending that Council award a contract to Goodman &
Associates for the development of Plans, Specifications and Estimates for the pavement
rehabilitation project in the amount of $78,000 and authorize the City Manager to
execute the contract subject to City attorney approval as to form.
ENVIRONMENTAL IMPACT:
This project is CEQA exempt.
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FISCAL IMPACT:
The cost of the PS&E from Goodman & Associates is $78,000 and will be supported by
ARPA funds from Account No. 94-175-257-000-000.
ATTACHMENTS:
• Goodman proposal (PDF)
• RFP for Consultants (DOCX)
• Goodman & Associates Agreement (DOCX)
APPROVALS:
Shanita Tillman Completed 09/01/2022 2:06 PM
Finance Completed 09/07/2022 1:35 PM
City Manager Completed 09/07/2022 1:55 PM
City Council Pending 09/13/2022 6:00 PM
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2079 Sky View Drive • Colton, Ca 92324 • (909) 824-2775 •FAX (909) 824-2807
email • doug@goodman-assoc.com
Goodman
&ASSOCIATES
July 26, 2022
Kamran Dadbeh
22795 Barton Road Grand Terrace, CA 92313 (emailed)
Subject: Proposal for Engineering
Project: Pavement re-hab projects (listed below)
Dear Kamran,
Per your request we offer the following scope of services for this project based on our
discussions:
Plan Preparation
1. Street Improvement Plans – pavement rehabilitation a. Title Sheet, General Notes, Vicinity Map
b. Plan View only (based on Google aerial images) i. Mt. Vernon to Barton Road ii. La Cadena Dr. from Litton Ave. to Barton Road
iii. Michigan Ave. from W. Main St. to Commerce Way iv. Pico St. from Cul-de-Sac at west end to east end of Pico
c. Pavement and Grinding details
d. Locations of Sidewalk removal and replacement e. Striping/re-striping Plans
2. Project Estimate of Quantities
3. Specifications Total Fee - $78,000
The above fees do not including a field survey or geotechnical testing. Upon notice to proceed,
we anticipate it will take 60 days to complete the plans for submittal to the City. This proposal is
valid for 90 days.
Thank you for the opportunity to participate in your project. Regards,
GOODMAN & ASSOCIATES
DL Goodman
Douglas L. Goodman
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City of Grand Terrace
22795 Barton Road
Grand Terrace, CA 92313
REQUEST FOR PROPOSALS
Professional Engineering Services
FOR
Street Pavement Rehabilitation
Project 2022-23-A
SUBMITTAL DEADLINE
Monday July 25, 2022
Commented [KD1]:
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1. INTRODUCTION
The City of Grand Terrace requests sealed proposals (RFP) from qualified
engineering firms to provide design for the street rehabilitation project for various
streets. The successful firm will have experience in the preparation of plans,
specifications and estimate (PS&E) for design of street rehabilitation and ability to
provide options and creative solutions.
2. PROJECT SCHEDULE
The anticipated project schedule is as follows:
1. RFP Submittal Deadline: Monday July 25, 2022
2. Determination of Most Qualified Firm(s) Monday August 1, 2022
3. Contract Award (Tentatively scheduled for Tuesday August 23, 2022)
3. SCOPE OF WORK
The selected firm will be required to perform street rehabilitation design services
to be specified more fully in a contract agreement to be negotiated after selection.
Below is the project list:
Mt. Vernon from Main Street to Barton Road
La Cadena Dr. from Litton Ave to Barton Road
Michigan Avenue from W. Main St. to Commerce Way
Pico St. from CDS (West End) to East End
The proposal shall include at a minimum the following tasks:
Preliminary Engineering
Utility Coordination
Preparation of PS&E
Bidding Process
Construction Engineering
Schedule
Fee
4. PROPOSAL SUBMITTAL
Interested firms shall submit one PDF and one Word copy of the proposal by e-
mail to Kamran Dadbeh, at kdadbeh@grandterrace-ca.gov by Monday July 25,
2022
Inquiries may be sent by email to kdadbeh@grandterrace-ca.gov.
The City will not respond to phone inquiries. Question(s) shall be submitted by
Monday July 18, 12 noon.
Field Code Changed
Field Code Changed
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5. PROPOSAL CONTENT AND FORMAT
The Proposal should be prepared simply and economically, providing a straight
forward, concise description of the respondent's proposal to meet the requirements
of this RFP. Emphasis shall be on the quality, completeness, clarity of content,
responsiveness to the requirements.
The submittal proposals are to contain the following elements:
Firm Organization, Credentials, Background – include a brief profile of your firm
and any team member’s. Identify the project team, including organizational chart
and lines of authority and area of responsibility.
Experience - Consultant’s experience with at least three recent public agency
projects of similar scope, including references with contact person and telephone
number, and participation of staff being proposed on this project.
6. MISCELLANEOUS
a. Standard City Contract Services Agreement
The consultant will enter into an agreement with the City based upon the contents
of the RFP and the consultant’s response. The City’s standard form of agreement
is included (see Attachment A). The consultant shall carefully review the
agreement, especially the indemnity and insurance provisions.
There will be no modifications or exceptions to the standard contract agreement.
b. Modification or Withdrawal of Submittals
Any Proposals received may be withdrawn or modified prior to the submittal due
date by written request to the CITY by the prime consultant.
c. Property Rights
Proposals received become the property of the City of Grand Terrace.
d. Confidentiality
Before award of the contract, all proposals will be designated confidential. After
award of the contract all Proposals become public record. Contracts are
considered awarded after they are fully executed by both parties and approved by
the CITY. Any language purporting to render any portion of the Proposal to be
excluded from public review will be regarded as non-effective and will be
disregarded.
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e. Addendum to Request for Qualifications
The CITY reserves the right to amend the RFP Notice by addendum before the
final submittal date.
f. Non-Commitment of the CITY
This RFP does not commit the CITY to award a contract, to pay any costs incurred
in the preparation of a Proposal for this request, or to procure or contract for
services.
All products used or developed in the execution of any contract resulting from this
RFP will remain in the public domain at the completion of the contract.
g. Americans with Disabilities Act
The consultant shall comply with the Americans with Disabilities Act (ADA) of 1990,
which prohibits discrimination on the basis of disability, as well as all applicable
regulations and guidelines issued pursuant to the ADA (42 U.S.C. Section 12101
et seq.).
h. Conflict of Interest Concerning Consultant(s)
Prospective consultants shall disclose any financial, business, or other relationship
with the City of Grand Terrace that may have an impact upon the outcome of this
contract. Prospective consultants shall also list current clients who may have a
financial interest in the outcome of this contract.
i. References
The CITY reserves the right to check references not only for those stated in the
Proposal but also references from the CITY’s consultant evaluation reports.
Reference information provided in the Proposal found to be in error may be
reflected as a reduction in the evaluation score.
7. CONSULTANT EVALUATION AND SELECTION PROCESS
The CITY will select a consultant for the project based on the following criteria:
a) The City will review all Proposals and award a contract, or contracts, based on a
firm’s qualifications, personnel, previous experience with this type of project.
and what is most advantageous to the City.
b) City may request consultants, who appear to be most qualified for this project, to
participate in a brief oral interview and presentation of their proposal.
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c) Proposed scope of services, and demonstration of an approach to the project, that
is most beneficial to the City.
d) Effective use of resources and man-hours proposed for the project.
e) The City staff will negotiate a contract with the best qualified firm for the desired
consulting services. In the event City staff is unable to negotiate a satisfactory
contract with the firm considered to be the most qualified, negotiations with that
firm shall be formally terminated. Negotiations will then be undertaken with the
next most qualified firm. Failing accord with the second most qualified firm, the
City staff will terminate negotiations and continue the negotiation process with the
next most qualified firms in order of their evaluation ranking until an agreement is
reached, and a firm is selected and an agreement is executed.
ATTACHMENTS
Attachment “A” Standard City Contract Services Agreement
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Attachment “A”
Standard City Contract Services Agreement
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01247.0001/514137.3 12/30/2021 2
CITY OF GRAND TERRACE
AGREEMENT FOR CONTRACT SERVICES FOR
Street Pavement Rehabilitation
Project 2022-23-A
This “CITY OF GRAND TERRACE AGREEMENT FOR CONTRACT SERVICES FOR
________________” (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 ______________ (herein “Consultant”).
NOW, THEREFORE, the parties hereto agree as follows:
1. SERVICES OF CONSULTANT
Scope of Services. In compliance with all of the terms and conditions of this
Agreement, the Consultant shall perform the work or services set forth in the “Scope of Services”
attached hereto as Exhibit “A” and incorporated herein by reference. Consultant warrants that it
has the experience and ability to perform all work and services required hereunder and that it shall
diligently perform such work and services in a professional and satisfactory manner.
Compliance With Law. All work and services rendered hereunder shall be provided
in accordance with all ordinances, resolutions, statutes, rules, and regulations of the City and any
Federal, State or local governmental agency of competent jurisdiction.
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 the Agreement.
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.
COMPENSATION
Contract Sum. For the services rendered pursuant to this Agreement, Consultant
shall be compensated in accordance with the “Schedule of Compensation” attached hereto as
Exhibit “C” and incorporated herein by this reference, but not exceeding the maximum contract
amount of ______________________________ Dollars ($________) (“Contract Sum”).
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
C.8.b
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01247.0001/514137.3 12/30/2021
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, 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 the City of any invoice provided by the Consultant shall not constitute a
waiver of any rights or remedies provided herein or any applicable law.
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 cost 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 but not exceeding a total contract amount of Five Thousand Dollars ($5,000)
or in the time to perform of up to ninety (90) days may be approved by the Contract Officer. Any
greater increases, taken either separately or cumulatively, must be approved by the City Council.
No claim for an increase in the Contract Sum or time for performance shall be valid unless the
procedures established in this Section are followed.
PERFORMANCE SCHEDULE
Time of Essence. Time is of the essence in the performance of this Agreement.
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 thirty (30) days cumulatively.
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
C.8.b
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01247.0001/514137.3 12/30/2021
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.
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) year from the date hereof, except as otherwise provided in the Schedule of
Performance (Exhibit “D”).
COORDINATION OF WORK
Representative of Consultant. ____________________________ is hereby
designated as being the representative of Consultant authorized to act on its behalf with respect to
the work and services specified herein and make all decisions in connection therewith. All
personnel of Consultant and any authorized agents shall be under the exclusive direction of the
representative of Consultant. 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, and shall keep City informed of
any changes.
Contract Officer. City Manager [or such person as may be designated by the City
Manager] is hereby designated as being the representative the City authorized to act in its behalf
with respect to the work and services specified herein and to make all decisions in connection
therewith (“Contract Officer”).
Prohibition Against Subcontracting or Assignment. Consultant shall not contract
with any entity to perform in whole or in part the work or services required hereunder without the
express written approval of the City. Neither this Agreement nor any interest herein may be
assigned or transferred, voluntarily or by operation of law, without the prior written approval of
City. Any such prohibited assignment or transfer shall be void.
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. Consultant shall perform all services
required herein as an independent contractor of City 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, or that it is a member of a joint enterprise
with City.
INSURANCE AND INDEMNIFICATION
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:
C.8.b
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(a) Commercial 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, either
the general aggregate limit shall apply separately to this contract/location, or 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 either
(i) bodily injury liability limits of $100,000 per person and $300,000 per occurrence and property
damage liability limits of $150,000 per occurrence or (ii) combined single limit liability of
$1,000,000. Said policy shall include coverage for owned, non-owned, leased, hired cars, and any
other 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
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) Additional Insurance. Policies of such other insurance, as may be required
in the Special Requirements in Exhibit “B”.
(f) 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 be subject to all of the requirements stated
herein.
General Insurance Requirements.
All of the above policies of insurance shall be primary insurance and shall name the City,
elected and appointed officers, employees and agents as additional insureds and any insurance
maintained by City or 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, officers, employees and agents and their respective
insurers. 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
C.8.b
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01247.0001/514137.3 12/30/2021
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 this 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 endorsement 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.
The 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 City’s Risk Manager or other
designee of the City due to unique circumstances.
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:
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;
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;
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.
C.8.b
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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.
RECORDS, REPORTS, AND RELEASE OF INFORMATION
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 Officer to evaluate the performance of such services and shall keep such records for a
period of three years following completion of the services hereunder. 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.
Reports. Consultant shall periodically prepare and submit to the Contract Officer
such reports concerning the performance of the services required by this Agreement or as the
Contract Officer shall require.
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 the City without prior written
authorization from the Contract Officer.
(b) Consultant 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 the City notice of such court order
or subpoena.
(c) If Consultant provides any information or work product in violation of this
Agreement, then the 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.
C.8.b
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(d) Consultant shall promptly notify the City should Consultant 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 thereunder. The 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 the City and to provide the City with the
opportunity to review any response to discovery requests provided by Consultant.
Ownership of Documents. All studies, surveys, data, notes, computer
files, reports, records, drawings, specifications, maps, designs, photographs, documents and other
materials (the “documents and materials”) prepared by Consultant in the performance of this
Agreement shall be the property of the City and shall be delivered to the City 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 the City of its full
rights of ownership use, reuse, or assignment of the documents and materials hereunder.
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.
ENFORCEMENT OF AGREEMENT AND TERMINATION
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. 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.
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 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, 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. If Consultant does not cure the default, the City may take necessary steps to terminate
this Agreement under this Article.
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 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 any legal action under
this Agreement.
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
C.8.b
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different times, of any other rights or remedies for the same default or any other default by the
other party.
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 at any time
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. 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, but not exceeding the compensation provided therefore in the Schedule of
Compensation Exhibit “C”. 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.
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.
MISCELLANEOUS
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
ensure 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
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.
Notice. 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 and to the attention of the Contract Officer (with her/his name and
C.8.b
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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.
Integration; Amendment. 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. This Agreement may be amended at any time
by the mutual consent of the parties by an instrument in writing.
Severability. In the event that part of 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 portions 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.
Waiver. No delay or omission in the exercise of any right or remedy by non-
defaulting party on any default shall impair such right or remedy or be construed as a waiver. A
party’s consent to or approval of any act by the other party requiring the party’s consent or approval
shall not be deemed to waive or render unnecessary the other party’s consent to or approval of any
subsequent act. 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.
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 any be granted,
whether legal or equitable, shall be entitled to reasonable attorney’s fees, whether or not the matter
proceeds to judgment.
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.
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.
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
C.8.b
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01247.0001/514137.3 12/30/2021
municipal statute or regulation. The determination of “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. 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 _______
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 the following page.]
C.8.b
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01247.0001/514137.3 12/30/2021
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
_____________________________________
Konrad Bolowich, City Manager
ATTEST:
____________________________________
Debra Thomas, City Clerk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
____________________________________
Adrian R. Guerra, City Attorney
CONSULTANT:
_____________________________________
_____________________________________
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.
C.8.b
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01247.0001/514137.3 12/30/2021
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
INDIVIDUAL
CORPORATE OFFICER
_______________________________
TITLE(S)
PARTNER(S) LIMITED
GENERAL
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER 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.
C.8.b
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01247.0001/514137.3 12/30/2021
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
INDIVIDUAL
CORPORATE OFFICER
_______________________________
TITLE(S)
PARTNER(S) LIMITED
GENERAL
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER 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.
C.8.b
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01006-0001/301444.1 A-1
EXHIBIT “A”
SCOPE OF SERVICES
I. Consultant will perform the following Services:
A.
B.
C.
II. As part of the Services, Consultant will prepare and deliver the following tangible
work products to the City:
A.
B.
C.
III. In addition to the requirements of Section 6.2, during performance of the Services,
Consultant will keep the City appraised of the status of performance by delivering
the following status reports:
A.
B.
C.
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.
V. Consultant will utilize the following personnel to accomplish the Services:
A.
B.
C.
C.8.b
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01247.0001/514137.3 12/30/2021 B-1
EXHIBIT “B”
SPECIAL REQUIREMENTS
(Superseding Contract Boilerplate)
C.8.b
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01247.0001/514137.3 12/30/2021
EXHIBIT “C”
SCHEDULE OF COMPENSATION
I. Consultant shall perform the following tasks at the following rates:
RATE TIME SUB-BUDGET
A. __________ __________ __________ __________
B. __________ __________ __________ __________
C. __________ __________ __________ __________
D. __________ __________ __________ __________
II. A retention of ten percent (10%) shall be held from each payment as a contract
retention to be paid as part of the final payment upon satisfactory completion of
services.
III. Within the budgeted amounts for each Task, and with the approval of the Contract
Officer, funds may be shifted from one Task 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.
IV. The City will compensate Consultant for the Services performed upon submission of
a valid invoice. Each invoice is to include:
A. Line items for all personnel describing the work performed, the number of hours
worked, and the hourly rate.
B. Line items for all materials and equipment properly charged to the Services.
C. Line items for all other approved reimbursable expenses claimed, with supporting
documentation.
D. Line items for all approved subcontractor labor, supplies, equipment, materials, and
travel properly charged to the Services.
V. The total compensation for the Services shall not exceed $______ as provided in
Section 2.1 of this Agreement.
VI. The Consultant’s billing rates for all personnel are attached as Exhibit C-1.
C.8.b
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01247.0001/514137.3 12/30/2021
EXHIBIT “D”
SCHEDULE OF PERFORMANCE
I. Consultant shall perform all Services timely in accordance with the schedule to be
developed by Consultant and subject to the written approval of the Contract Officer
and the City Attorney’s office.
II. Consultant shall deliver the following tangible work products to the City by the
following dates.
A.
B.
C.
III. The Contract Officer may approve extensions for performance of the services in
accordance with Section 3.2.
C.8.b
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01247.0001/514122.2 12/30/2021
AGREEMENT FOR CONTRACT SERVICES
By and Between
CITY OF GRAND TERRACE
and
GOODMAN & ASSOCIATES
C.8.c
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01247.0001/514122.2 12/30/2021
-2-
AGREEMENT FOR CONTRACT SERVICES
BY AND BETWEEN THE CITY OF GRAND TERRACE AND
GOODMAN & ASSOCIATES
This “AGREEMENT FOR CONTRACT SERVICES BY AND BETWEEN THE CITY OF
GRAND TERRACE AND GOODMAN & ASSOCIATES” (herein “Agreement”) is made and
entered into this 13 day of September, 2022 by and between the City of Grand Terrace, a California
municipal corporation (“City”) and Goodman & Associates, (“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
quality as well as fit for the purpose intended. For purposes of this Agreement, the phrase “highest
C.8.c
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01247.0001/514122.2 12/30/2021
-3-
professional standards” shall mean those standards of practice recognized by one or more first-class
firms performing similar work under similar circumstances.
1.2 Consultant’s Proposal.
The Scope of Service 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 such proposal 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 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.
1.5 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.
1.6 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.
C.8.c
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01247.0001/514122.2 12/30/2021
-4-
1.7 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.
1.8 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.
1.9 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 Seventy Eight Thousand Dollars ($78,000.00) (“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
C.8.c
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01247.0001/514122.2 12/30/2021
-5-
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.
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.
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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:
(Name) (Title)
(Name) (Title)
(Name) (Title)
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,
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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 [_____________________________ 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
Consultant in its business or otherwise or a joint venturer or a member of any joint enterprise with
Consultant.
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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
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
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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.
[to be initialed] ______________
Consultant Initials
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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;
(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
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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 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
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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.
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
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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 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
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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 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.
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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.
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.
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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 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.
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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
“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.)
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01247.0001/514122.2 12/30/2021
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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]
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01247.0001/514122.2 12/30/2021 19
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
______________________________________
Konrad Bolowich, City Manager
ATTEST:
______________________________________
Debra Thomas, City Clerk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
______________________________________
Adrian R. Guerra, City Attorney
CONSULTANT:
GOODMAN & ASSOCIATES
______________________________________
______________________________________
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
Address: 2079 Sky View Drive
Colton, CA 92324
Tel: 909-824-2275
Fax: 909-824-2807
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.
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01247.0001/514122.2 12/30/2021
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
INDIVIDUAL
CORPORATE OFFICER
_______________________________
TITLE(S)
PARTNER(S) LIMITED
GENERAL
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER 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.
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01247.0001/514122.2 12/30/2021
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
INDIVIDUAL
CORPORATE OFFICER
_______________________________
TITLE(S)
PARTNER(S) LIMITED
GENERAL
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER 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.
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EXHIBIT “A”
SCOPE OF SERVICES
I. Consultant will perform the following Services:
A. Consultant shall prepare Street Improvement Plans for the City’s 2022-23-A
Pavement Rehabilitation Project as follows (“Plans”):
1. Street Improvement Plans – pavement rehabilitation
a. Title Sheet, General Notes, Vicinity Map
b. Plan View only (based on Google aerial images)
i. Mt. Vernon from Main Street to Barton Road
ii. La Cadena Dr. from Litton Ave. to Barton Road
iii. Michigan Avenue from W. Main St. to Commerce Way
iv. Pico St. from CDS (West End) to East End
c. Pavement and Grinding details
d. Depict existing sidewalk needing removal/replacement
e. Striping/re-striping Plans
B. Consultant shall prepare Estimate of Quantities for the City’s 2022-23-A
Pavement Rehabilitation Project (“Estimate”).
C. Consultant shall prepare Specifications for the City’s 2022-23-A Pavement
Rehabilitation Project (“Specifications”).
D. Consultant shall meet with City staff regarding the Services upon request by City
staff, which shall include a kick-off meeting if requested.
II. As part of the Services, Consultant will prepare and deliver the following tangible work
products to the City:
A. Complete set of Plans, Specifications and Estimate shall be completed pursuant
to the Schedule of Performance as provided in Exhibit “D”.
III. In addition to the requirements of Section 6.2, 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 provide a status report regarding the Services upon completing
50% of the Plans.
B. Consultant shall provide a status report regarding the Services upon completing
90% of the Plans.
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
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01247.0001/514122.2 12/30/2021
accepted by City.
V. Consultant will utilize the following personnel to accomplish the Services:
A. Doug Goodman, Scott Harjehausen
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EXHIBIT “B”
SPECIAL REQUIREMENTS
(Superseding Contract Boilerplate)
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01247.0001/514122.2 12/30/2021
EXHIBIT “C”
SCHEDULE OF COMPENSATION
I. The total compensation for the Services shall not exceed $78,000 as provided in Section
2.1 of this Agreement.
II. The City will compensate Consultant for the Services performed upon submission of a
valid invoice at completed milestones as follows:
A. Payment of 50% of contract amount upon presentation of 50% status report and plans.
B. Payment of 40% of contract amount upon presentation of 90% status report and plans.
C. Payment of 10% of contract amount upon presentation of Final Plans, Specifications
and Estimates.
C.8.c
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01247.0001/514122.2 12/30/2021 D-1
EXHIBIT “D”
SCHEDULE OF PERFORMANCE
I. Consultant shall perform and complete all Services within 60 days from the date of
Notice to Proceed by the Contract Officer.
C.8.c
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AGENDA REPORT
MEETING DATE: September 13, 2022 Council Item
TITLE: Adopt the Resolution Authorizing Participation in the PARS
Post-Employment Benefits Trust Program Administered by
Public Agency Retirement Services (PARS) and U.S. Bank,
Appointing the City Manager as the City’s Plan
Administrator, and Authorizing the City Clerk to Execute the
Documents and to Implement the Program
PRESENTED BY: Terry Shea, Interim Finance Director
RECOMMENDATION: Consider adoption of the Resolution authorizing the
establishment of the PARS Post-Employment Benefits Trust
Program which could be used to pre-fund CalPERS pension
obligations.
2030 VISION STATEMENT:
This staff report supports Goal #1, Ensuring Fiscal Viability by addressing funding
options to reduce pension costs.
BACKGROUND:
At its meeting of June 14, 2022, Council indicated they would like to further explore the
use of a Section 115 Trust to address the City’s unfunded liabilities. This report to the
City Council is a recommendation to setup a Section 115 Trust to better plan for and
manage the City’s pension unfunded liability.
In compliance with this direction, staff contacted four providers to solicit proposals from
qualified vendors for IRS Section 115 Pension Trust Services. Finance staff reviewed,
compared, and evaluated the respective proposal responses. Interviews were
conducted by the Interim Finance Director with each respondent. The interview included
questions to assess the experience of each respondent, their historical success
achieving investment performance goals, costs to both establish and maintain the trust,
and the complexity of administrative process to both establish and administer the trust.
In total, the City received three responses to the request for information: CalPERS,
Keenan, and PARS. The fourth provider PFM declined to respond. Finance Staff found
all three firms to be professionally qualified to provide trust services. However, the Staff
were unanimous in recommending PARS for providing trust services based on
qualifications, experience, staff knowledge, cost, and ease of administrative process.
Keenan has strong experience with the management of IRS Section 115 Trusts and
F.9
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currently manages other post-employment benefit (OPEB) and IRS Section 115
Pension Trusts for 66 agencies.
CalPERS is an agency of the State of California charged to administer defined benefit
pension, employer contribution prefunding, health benefits, long term care insurance,
OPEB prefunding, and supplemental income defined contribution programs, for the
benefit of State, school, and local public agency employees. Currently, CalPERS
manages OPEB and IRS Section 115 Pension Trusts for more than 570 California
public employers. Expanding on their offering of IRS Section 115 trusts, CalPERS, as
of July of 2019, now offers the California Employers Pension Trust (CEPPT). Under this
program, CalPERS is managing $5 million in assets on behalf of six California Public
Employers.
PARS has the most IRS Section 115 pension trusts under management, managing over
420 separate trusts. PARS provided strong experience and a knowledgeable working
group for the City. PARS offered a scaled cost structure that started at 60 basis point for
balances under $5 million.
DISCUSSION:
The City of Grand Terrace has unfunded long-term liabilities for employee pension costs
with CalPERS. We are looking for alternative ways to increase the funded ratio and
reduce our annual costs for CalPERS and one such option is a Section 115 Trust as
offered by PARS. CalPERS is making the following changes which will directly affect the
unfunded liability amounts and employer contributions, lowering the discount rate from
7% to 6.8% and shortening the amortization period for the UAL from 30 years to 20
years.
In 2012, the Government Accounting Standards Board (GASB) issued Statement No.
68, Accounting and Financial Reporting for Pensions. GASB 68 requires that
governmental employers that sponsor Defined Benefit plans (i.e., CalPERS) must
recognize a net pension liability (unfunded accrued liability) on their balance sheet. This
is the difference between the City’s total pension liability (actuarial accrued liability) and
actual plan assets. GASB 68 became effective for the 2014-15 fiscal year.
To address the GASB 68 net pension liability figure, the City’s only prior option was to
commit additional funds to CalPERS (in excess of its annual required contributions) to
reduce its unfunded liability. However, a recent private letter ruling received by PARS
from the IRS established that the City could create a separate trust to "pre-fund" its
CalPERS unfunded liability. This would provide the City with an alternative to sending
funds to CalPERS that will allow for greater local control over assets, investment by a
professional fund management team selected and monitored by the City, with future
excess contributions transferred to CalPERS at the City’s discretion to reduce the City’s
Net Pension Liability.
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To date, three hundred sixty-nine (369) California public agencies have adopted the
Pension Rate Stabilizaion Program (PRSP) through PARS including one hundred forty-
six (146) cities.
Expected benefits offered by the PARS PRSP include:
· Contributions placed in an exclusive benefit trust could address the City’s Net
Pension Liability
· Investment flexibility with Section 115 Trust compared to restrictions on general
fund investments (Govt. Code 53216)
· Increased risk diversification of plan assets through different asset management
· Investments can be tailored to the City’s unique demographics
· Oversight and control of fund management selection, monitoring of performance
and ability to replace fund management based on performance criteria
· Increased flexibility on use of trust assets (i.e., trust assets can be accessed at
any time as long as the assets are used to fund the City’s pension obligations)
· Lower investment management and administrative expenses compared to
CalPERS
· Potential for positive rating agency and investor consideration.
To help public agencies address and manage their GASB 68 liability, PARS has
developed the PARS Post-Employment Benefits Trust Program. PARS has assembled
leading professionals to provide the City with the necessary services required under one
program to pre-fund pension and retiree health care liabilities through an IRS reviewed
program. The program has been established as a multiple employer trust so that public
agencies regardless of size can join the program to receive the necessary economies of
scale to keep administrative fees low and avoid any setup costs. The trust permits the
City, under federal and state law, to invest in a more diversified array of investments to
maximize investment returns long term.
PARS has partnered with US Bank to serve as trustee and its sub-adviser HighMark
Capital Management, Inc., to provide investment management services for the program.
FISCAL IMPACT:
The City’s current Unfunded Accrued Liability (UAL) per the CalPERS actuarial report
as of June 30, 2020, is $5,637,009 and our annual UAL payment is approximately
$597,000. Staff is recommending using a portion of the proceeds received from sale of
the Fire Station Property to the County of San Bernardino. These funds would be used
to offset the UAL and the earnings can be used to help with the annual UAL payment.
Total combined administrative, trustee and investment management fees for PARS, US
Bank and HighMark Capital Management start at 0.60% of assets, are tiered and will
become lower as assets in the program increase. There are no Plan set-up fees.
ATTACHMENTS:
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• Resolution for PARS Program (DOCX)
• Agreement for Administrative Services (PDF)
• City of Grand Terrace - PARS Presentation (PDF)
APPROVALS:
Terry Shea Completed 09/02/2022 10:11 AM
Finance Completed 09/02/2022 11:16 AM
City Manager Completed 09/02/2022 12:24 PM
City Council Pending 09/13/2022 6:00 PM
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RESOLUTION NO. 2022-______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE, CALIFORNIA, APPROVING THE ADOPTION OF THE
PUBLIC AGENCIES POST-EMPLOYMENT BENEFITS TRUST
ADMINISTERED BY PUBLIC AGENCY RETIREMENTS SERVICES
(PARS)
Recitals
WHEREAS, PARS has made available the PARS Public Agencies Post-
Employment Benefits Trust (the “Program”) for the purpose of prefunding pension
obligations; and
WHEREAS, the City of Grand Terrace (“City”) is eligible to participate in the
Program, a tax-exempt trust performing an essential governmental function within the
meaning of Section 115 of the Internal Revenue Code, as amended, and the Regulations
issued there under, and is a tax-exempt trust under relevant statutory provisions of the
State of California; and
WHEREAS, the City’s adoption and operation of the Program has no effect on any
current or former employee’s entitlement to post-employment benefits; and
WHEREAS, terms and conditions of post-employment benefit entitlement, if any,
are governed by contracts separate from and independent of the Program; and
WHEREAS, the City’s funding of the Program does not, and is not intended to,
create any new vested right to any benefit nor strengthen any existing vested right; and
WHEREAS, the City reserves the right to make contributions, if any, to the
Program.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE,
CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:
1. The City Council hereby adopts the PARS Public Agencies Post-
Employment Benefits Trust, effective __________ 2022; and
2. The City Council hereby appoints the City Manager, or his/her successor of
his/her designee as the City’s Plan Administrator for the Program; and
F.9.a
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3. The City’s Plan Administrator is hereby authorized to execute the PARS
legal and administrative documents on behalf of the City and to take whatever additional
actions are necessary to maintain the City’s participation in the Program and to maintain
compliance of any relevant regulation issued or as may be issued; therefore, authorizing
him/her to take whatever additional actions are required to administer the City’s Program.
4. If any section, subsection, sentence, clause, phrase, or portion of this
Resolution is for any reason held to be invalid or unconstitutional by the decision of any
court of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this Resolution. The City Council of the City of Grand Terrace hereby declares
that it would have adopted this Resolution and each section, subsection, sentence,
clause, phrase, or portion thereof irrespective of the fact that any one or more sections,
subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
5. The City Clerk shall certify to the adoption of this Resolution.
6. This Resolution shall take effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand
Terrace at a regular meeting held on the 13th day of September 2022.
__________________________
Darcy McNaboe
Mayor
ATTEST:
__________________________________
Debra Thomas
City Clerk
APPROVED AS TO FORM:
__________________________________
Adrian R. Guerra
City Attorney
F.9.a
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City of grand terrace 1
City of Grand terrace
PARS 115 Trust –OPEB Prefunding Program & Pension Rate Stabilization Program (PRSP)
June 2022
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City of grand terrace 2
Contacts
Rachael Sanders, CEBS
Senior Manager, Consulting
(800) 540-6369 x121
rsanders@pars.org
F.9.c
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City of grand terrace 3
Pars 115 Trust Team
Trust Administrator & Consultant
38
Years of Experience
(1984-2022)
2,000+
Plans under
Administration
1,000+
Public Agency
Clients
$6.7 B
Assets under
Administration
Investment Manager
•Investment sub-advisor to trustee U.S. Bank
•Investment policy assistance
•Uses open architecture
•Active and passive platform options
•Customized portfolios (with minimum asset level)
103
Years of Experience(1919-2022)
$20.2 B
Assets under Management &
Advisement
Trustee
•5th largest commercial bank and one of the
nation’s largest trustees for Section 115 trusts
•Safeguard plan assets
•Oversight protection as plan fiduciary
•Custodian of assets
159
Years of Experience(1863-2022)
$5.0 T
Assets under Administration
490+
115 Trust Clients
•Serves as record-keeper, consultant,
and central point of contact
•Sub-trust accounting
•Coordinates all agency services
•Monitors plan compliance
(IRS/GASB/State Government Code)
•Processes contributions/disbursements
•Hands-on, dedicated support teams
500 K+
Plan Participants
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Subaccounts
OPEB and Pension assets are individually sub-accounted,
and can be divided by dept.,
bargaining group, or cost center
Assets in the PARS Section 115 Combination Trust can be used
to address unfunded liabilities.
Financial Stability
Allows separate investment strategies for OPEB and
Pension subaccounts.
Flexible Investing
OPEB and Pension assets
aggregate and reach lower fees
on tiered schedule sooner –
saving money!
Economies-of-ScaleAnytime Access
Trust funds are available
anytime; OPEB for OPEB
and Pension for Pension.
No set-up costs, no minimum
annual contribution amounts,
and no fees until assets are added.
No Set Up Cost or Minimums
Retiree Medical Benefits
Prefund OPEB GASB 75
OPEB
Reimburse agency; or
Pay benefits provider
Pension Rate Stabilization Program
Prefund Pension (PRSP)GASB 68
Pension
Reimburse agency; or
Pay retirement system
Assets can be used to:Assets can be used to:
prefundeither or both
General Fund
PARS IRS-Approved Section 115 Trust
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115 Trust –Client list
COUNTIES (34)
Alpine
Amador
Calaveras
Colusa
Contra Costa
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Mariposa
Mendocino
Merced
Mono
Monterey
Napa
Nevada
Placer
Plumas
Riverside
San Benito
San Joaquin
Shasta
Siskiyou
Solano
Sonoma
Sutter
Tehama
Trinity
Tulare
Yolo
Yuba
CITIES & TOWNS (146)
Updated June 2022
Alameda
Alhambra
Anaheim
Angels Camp
Atherton
Atwater
Bakersfield
Beaumont
Bell Gardens
Benicia
Beverly Hills
Bishop
Brea
Brisbane
Burlingame
Camarillo
Capitola
Carmel
Chino Hills
Chula Vista
Claremont
Colma
Commerce
Corcoran
Coronado
Costa Mesa
Covina
Crescent City
Cudahy
Cupertino
Cypress
Daly City
Dana Point
Del Rey Oaks
Dinuba
Duarte
Dublin
El Cajon
El Centro
El Segundo
Elk Grove
Emeryville
Escondido
Fairfax
Fairfield
Fountain Valley
Fullerton
Galt
Garden Grove
Gilroy
Glendale
Goleta
Grass Valley
Half Moon Bay
Hawthorne
Healdsburg
Hemet
Hercules
Hermosa Beach
Huntington Beach
Indian Wells
Indio
La Habra
La Mesa
La Quinta
La Verne
Laguna Niguel
Lake Forest
Lakewood
Lemon Grove
Livermore
Lodi
Los Alamitos
Los Altos Hills
Mammoth Lakes
Manhattan Beach
Merced
Modesto
Monrovia
Morgan Hill
Napa
National City
Norco
Norwalk
Novato
Oakley
Orinda
Oroville
Pacifica
Palmdale
Palo Alto
Pasadena
Patterson
Perris
Pico Rivera
Piedmont
Pinole
Pittsburg
Placentia
Pleasant Hill
Pleasanton
Port Hueneme
Rancho Cucamonga
Redding
Redwood City
Rialto
Richmond
Rio Vista
Riverside
Rohnert Park
Rolling Hills
Rosemead
Ross
San Anselmo
San Jacinto
San Leandro
San Ramon
Santa Ana
Santa Clara
Santa Clarita
Sausalito
Selma
Solana Beach
Stanton
Stockton
Taft
Temecula
Temple City
Thousand Oaks
Tiburon
Tustin
Twentynine Palms
Union City
Upland
Vallejo
Villa Park
Walnut
West Covina
West Sacramento
Westminster
Winters
Woodland
Woodside
Yountville
Yuba City
Yucca Valley
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City of grand terrace 6
115 Trust –Client list
Agoura Hills/Calabasas Community Center Authority
Alameda County Mosquito Abatement District
Alpine Fire Protection District
Beach Cities Health District
Bighorn-Desert View Water Agency
Bodega Bay Public Utilities District
Calaveras County Water District
California Joint Powers Insurance Authority
California Joint Powers Risk Management Authority
Central Contra Costa Sanitary District
Central Contra Costa Transit Authority
Coastline Regional Occupational Program
Coastside Fire Protection District
Conejo Recreation & Park District
Contra Costa County EEs' Retirement Association
Contra Costa Mosquito and Vector Control District
Crestline Village Water District
Delta Diablo
Desert Recreation District
East Bay Regional Park District
East Contra Costa Fire Protection District
East Orange County Water District
Eastern Sierra Community Services District
Eastern Sierra Transit Authority
El Dorado Hills County Water (& Fire) District
Fallbrook Public Utility District
Fresno Irrigation District
Fresno Metropolitan Flood Control District
Glenn-Colusa Irrigation District
Goleta Cemetery District
Goleta West Sanitary District
Great Basin Unified Air Pollution Control District
Greater Vallejo Recreation District
Hayward Area Recreation & Park District
Hesperia Fire Protection District
Housing Authority of the County of Butte
Housing Authority of the County of Contra Costa
Housing Authority of the County of San Bernardino
Housing Authority of the County of Santa Cruz
Humboldt Bay Fire Joint Powers Authority
Humboldt Bay Municipal Water District
Humboldt No. 1 Fire Protection District
Menlo Park Fire Protection District
Mesa Water District
Metropolitan Transportation Commission
Midpeninsula Regional Open Space District
Mid-Peninsula Water District
Mojave Desert Air Quality Management District
Montecito Fire Protection District
Monterey Bay Unified Air Pollution Control District
Moraga-Orinda Fire Protection District
Mosquito & Vector Mgmt Dist. of Santa Barbara Co.
Mountains Recreation and Conservation Authority
Municipal Pooling Authority
Municipal Water District of Orange County
Napa County Mosquito Abatement District
Nevada County Consolidated Fire District
North Central Fire Protection District
Northern Salinas Valley Mosquito Abatement District
Novato Sanitary District
Orange County Fire Authority
Orange County LAFCO
Orange County Mosquito and Vector Control District
Orange County Water District
Orchard Dale Water District
Public Agency Risk Sharing Authority of CA (PARSAC)
Pebble Beach Community Services District
Placentia Library District
Placer County Air Pollution Control District
Placer County Resource Conservation District
Rancho Cucamonga Fire Protection District
Rancho Murieta Community Services District
Regional Housing Authority
Rowland Water District
Sacramento Area Flood Control Agency
San Andreas Sanitary District
San Elijo Joint Powers Authority
San Mateo County Mosquito & Vector Control District
Santa Barbara County Law Library
Santa Cruz Regional 9-1-1 JPA
Santa Fe Irrigation District
Sewer Authority Mid-Coastside
Shasta Valley Cemetery District
South Coast Water District
South Montebello Irrigation District
South Orange County Wastewater Authority
South Placer Fire Protection District
Southern Marin Fire Protection District
State Water Contractors
Superior Court of CA, County of Imperial
Superior Court of CA, County of Inyo
Superior Court of CA, County of Kern
Superior Court of CA, County of Marin
Superior Court of CA, County of Merced
Superior Court of CA, County of Orange
Superior Court of CA, County of San Mateo
Superior Court of CA, County of Shasta
Superior Court of CA, County of Siskiyou
Superior Court of CA, County of Sonoma
Sweetwater Springs Water District
Three Valleys Municipal Water District
Twentynine Palms Water District
Union Sanitary District
Ventura Regional Sanitation District
Walnut Valley Water District
West Bay Sanitary District
West County Wastewater District
Western Riverside Council of Governments
Yorba Linda Water District
Zone 7 Water Agency
SPECIAL DISTRICTS (110)
Shasta County Office of Education
Sonoma County Office of Education
Intelecom
EDUCATION DISTRICTS (3)
Updated June 2022
F.9.c
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City of grand terrace 7
115 Trust –Client list
SCHOOL DISTRICTS (57)
Alisal Union School District
Alta Loma School District
Auburn Union School District
Bass Lake Joint Union Elementary School District
Bellflower Unified School District
Beverly Hills Unified School District
Brea Olinda Unified School District
Calistoga Joint Unified School District
Campbell Union High School District
Compton Unified School District
Corning Union Elementary School District
Coronado Unified School District
Cotati-Rohnert Park Unified School District
El Dorado Union High School District
El Monte Union High School District
Folsom Cordova Unified School District
Fontana Unified School District
Fowler Unified School District
Hermosa Beach City School District
Hesperia Unified School District
Hughes-Elizabeth Lakes Union E. School District
John Swett Unified School District
Lakeside Union School District (San Diego)
Le Grand Union HSD
Lemon Grove School District
Lindsay Unified School District
Madera Unified School District
Manteca Unified School District
Moreno Valley Unified School District
Napa Valley Unified School District
Natomas Unified School District
Newport-Mesa Unified School District
Ocean View School District (Ventura)
Ontario-Montclair School District
Orcutt Union School District
Palmdale School District
Palos Verdes Peninsula Unified School District
Placer Union High School District
Porterville Unified School District
Poway Unified School District
Red Bluff Joint Union High School District
Red Bluff Union Elementary School District
River Delta Unified School District
Riverdale Joint Unified School District
Roseville Joint Union High School District
San Bruno Park School District
San Dieguito Union High School District
San Marino Unified School District
Santa Barbara Unified School District
Santa Rita Union School District
Taft Union HSD
Trona Joint Unified School District
Upland USD
Visalia Unified School District
Westside Union School District
Whittier City School District
Wilsona School District
Allan Hancock CCD
Citrus CCD
Coast CCD
Grossmont-Cuyamaca CCD
Hartnell CCD
Imperial CCD
Marin CCD
Palo Verde CCD
Pasadena Area CCD
Rancho Santiago CCD
Rio Hondo CCD
San Bernardino CCD
San Luis Obispo County CCD (Cuesta)
Shasta-Trinity-Tehama Joint CCD
State Center CCD
Victor Valley CCD
West Valley-Mission CCD
Yosemite CCD
Yuba CCD
COMMUNITY COLLEGE DISTRICTS (19)
Updated June 2022
F.9.c
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City of grand terrace 8
PARS Other post-employment
benefits Program
for prefunding retiree medical obligations
The
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City of grand terrace 9
OPEB Actuarial Results
Data from 2020 ACFRMeasurement Date:
June 30, 2020
Pay-as-you-Go
Discount Rate: 2.45%Percent Change Prefunding
Discount Rate: 5.45%
Total OPEB Liability (TOL)$1,700,064 30-36%▼?
Fiduciary Net Position $0 --$0
Net OPEB Liability (NOL)$1,700,064 30-36%▼?
Service Costfor FY 2019-20 $110,779 --?
Annual Benefit Payments (Pay-as-you-Go)
for FY 2019-20
$46,213 --$46,213
Rule of thumb:For every one percent increase in the discount rate, the unfunded liability is lowered by 10-12%.
F.9.c
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City of grand terrace 10
•Greater expected rate of return (discount rate) which lowers your liabilities
•Contributions into trust are “assets” that offset liabilities on financial statements
•GASB 68 –Pension liabilities listed as line item on Balance Sheet in 2015
GASB 75 –OPEB liabilities listed as line item on Balance sheet in 2018
•GFOA recommends prefunding OPEB and considers it “best practice” (January
2012)
•Credit rating companies look more favorably on agencies who adopt an
Irrevocable Trust and prefund
—At least 4 agencies have improved credit rating
—Higher credit rating means lower borrowing costs
•OPEB assets are accessible for OPEB expenses at any time
•Prefunding has no downside other than market fluctuation (similar to pension)
Why prefund OPEB Obligations?
F.9.c
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City of grand terrace 11
PARS Pension Rate
Stabilization Program
for prefunding pension obligations
The
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City of grand terrace 12
•Since 2015, GASB 68
has required disclosing
Net Pension Liability on financial
statements as a line item on the
balance sheet
•Before the concept of pension
prefunding, the only way to
reduce retirement system
unfunded liabilities was to send
additional contributions in
excess of annual required
employer contributions
•Pension trust prefunding
assets can be transferred to
the retirement system at the
Agency’s direction, which can
help offset future rate increases
(i.e., pension rate stabilization).
Background –Pension
CalPERS Changes
CalPERS has announced changes directly
affecting unfunded liability amounts and
employer contributions:
Lowering of Discount Rate 1
CalPERS is lowering the
discount rate from 7.0% to 6.8%.
The impact will be reflected in the
June 30, 2021 valuation reports.
Shortened Amortization Period 2
New actuarial liabilities are
amortized over 20 years instead of
30, increasing required annual
employer contribution amounts*
7.0%
6.8%
30 years
20 years
2 5-year ramp up in payments beginning
FY 15-16 with full impact in FY 19/20.
1 Contributions from policy changes beginning
FY 23-24.
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City of grand terrace 13
Combined
Miscellaneous Groups *
Valuation as of
June 30, 2019
Valuation as of
June 30, 2020 Change
Actuarial Liability $17.5 M $18.2 M 4.2%↑
Assets $12.1 M $12.6 M 3.8%↑
Unfunded Liability $5.4 M $5.6 M 5.2%↑
Funded Ratio 69.3%69.0%0.4%↓
Employer Contribution Amount $603,466 $667,684 10.6%↑(FY 20-21)(FY 21-22)
Employer Contribution Amount –Projected *---$635,300 4.9%↓(FY 27-28)
Pension Funding Status
As of June 30, 2020, City of Grand Terrace’s CalPERS pension plan is funded as follows:
* Data through 2027-28 from Agency’s latest CalPERS actuarial valuation.
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City of grand terrace 14
Why Prefund Pension Obligations?
Complete Local Control over Assets
City has complete control over assets, including contributions, disbursements
and the timing, amount, and risk tolerance level of investments
1.
Pension Rate Stabilization
Assets can be transferred to the retirement system at the City’s direction, potentially
reducing/eliminating large fluctuations in employer contribution amounts
2.
Rainy Day Fund
Emergency source of funds when employer revenues are strained in difficult
budgetary or economic times
3.
Diversification
Allows for investment flexibility and offers the potential for assets to earn greater
returns than the general fund; spread the risk vs. sending additional money to CalPERS
4.
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City of grand terrace 15
•Agency maintains oversight of the
investment manager and the portfolio’s
risk tolerance level
•Investment restrictions that apply to the
general fund (CA Government Code 53601)
are not applicable to assets held in
The PARS Section 115 Irrevocable Trust
•Assets held in The PARS Section 115
Irrevocable Trust can be invested per
Government Code Sections 53216 (Pension)
and 53620 (OPEB)
•Investments can be diversified and invested
in a prudent fashion
•Investments can be tailored to the Agency’s unique demographics and needs
•Increased risk diversification
Investment Flexibility
Diversified Investing
Assets held in The PARS Section
115 Irrevocable Trust can be
diversely invested in a prudent
fashion per Government Code
Sections 53216 (Pension)
and 53620 (OPEB).
GOV §53216 (Pension)
GOV §53620 (OPEB)
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City of grand terrace 16
1. Input Phase
–Target discount rate
–Risk tolerance
–Investment philosophy
–Asset allocation
–Timing on use of funds
2. Model Portfolios 3. Dedicated Portfolio Manager
–Makes recommendation
–Fiduciary responsibility
–Drafts investment policy
–Annual on-site reviews
–Cell phone access
Strategy Equity
Capital Appreciation 65-85%
Balanced 50-70%
Moderate 40-60%
Moderately Conservative 20-40%
Conservative 5-20%
Simple Investment Approach
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City of grand terrace 17
Strategy Equity (%)1 Year 3 Years 5 Years 10 Years
Capital Appreciation 65-85%4.22%11.34%9.99%9.19%
Balanced 50-70%2.49%9.69%8.73%7.94%
Moderate 40-60%1.50%8.42%7.64%6.99%
Moderately Conservative 20-40%-0.56%5.80%5.48%5.16%
Conservative 5-20%-2.02%3.88%3.92%3.79%
HighMark Capital Management
ACTIVE PORTFOLIO RETURNS
* Past performance does not guarantee future results.
As of March 31, 2022
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City of grand terrace 18
Strategy Allocation* (%)
Capital Appreciation
(65-85%Equity)7.01%
Balanced
(50-70% Equity)27.10%
Moderate
(40-60% Equity)38.79%
Mod. Conservative
(20-40% Equity)15.89%
Conservative
(5-20% Equity)1.87%
Other
(Custom)9.35%
TOTAL 100.00%
OPEB Strategy Allocation –Clients
HIGHMARK CAPITAL MANAGEMENT
Active Platform: 58% / Passive Platform: 42%
Capital Appreciation
7.01%
Balanced
27.10%
Moderate
38.79%
Moderately
Conservative
15.89%
Conservative
1.87%
Other
9.35%
As of March 31, 2022
*Allocations are based on agencies who have funded
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City of grand terrace 19
Strategy Allocation* (%)
Capital Appreciation
(65-85%Equity)6.39%
Balanced
(50-70% Equity)10.05%
Moderate
(40-60% Equity)37.90%
Mod. Conservative
(20-40% Equity)34.25%
Conservative
(5-20% Equity)4.57%
Other
(Custom)6.85%
TOTAL 100.00%
PRSP Strategy Allocation –Clients
HIGHMARK CAPITAL MANAGEMENT
Capital Appreciation
6.39%
Balanced
10.05%
Moderate
37.90%
Moderately
Conservative
34.25%
Conservative
4.57%
Other
6.85%
Active Platform: 52% / Passive Platform: 48%
As of March 31, 2022
*Allocations are based on agencies who have funded
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City of grand terrace 20
Plan Set-Up Fee:Ongoing Fees:
None 0.35%for assets under $5 million
0.25%for assets $5-10 million
0.20%for assets $10-15 million
0.15%for assets $15-50 million
0.10%for assets over $50 million
Program Fees
Plan Set-Up Fee:Ongoing Fees:
None 0.25%for assets $0-10 million
0.20%for assets $10-15 million
0.15%for assets $15-50 million
0.10%for assets over $50 million
*PARS does not receive any compensation from the investments or any commissions, back-end loads, or any other forms of compensation.
**Subject to change due to rebalancing, as fees are waived for plan assets in First American Funds (money market)
Trust Administration/Consulting Fees*
Discretionary Trustee/Investment Management Fees**
As of March 31, 2022
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City of grand terrace 21
Sample Funding Policies
1.Contribute 50% of a given year’s realized year
end surplus to address pension liability
2.Contribute full amount of annual PERS employer cont.,
allowing anytime access to trust assets
3.Contribute funds to stabilize PERS employer
Misc. and Safety rates through FY 23-24
4.“One equals five plan” -$1M contribution for 5 years
will save taxpayers $5M over 25 years
5.Contribute Employer contribution equal to the 2.8%
discount rate, with difference going into the Section 115 Trust
6.Contribute the annual savings realized from Reduction in UAL
payment resulting from Pension Obligation Bonds issuance
7.Earmark a portion of a local sales tax to be set
aside for unfunded pension liabilities
8.Use ongoing savings from prepaying CalPERS
unfunded liability vs. higher monthly payments
9.Use one-time revenue source and lower the
minimum General Fund Reserve level (30%20%)
Alameda/Solana Beach
City of Brea
City of Healdsburg
City of Huntington Beach
City of Sausalito
City of Placentia
City of Fountain Valley
City of Pasadena
City of Glendale
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City of grand terrace 22
Steps to Implementation
1 City Council adopts resolution authorizing City to join PARS Combo Trust and appoints
Plan Administrator (PA)
2 City sends signed copy of resolution to PARS
3 PARS sends set of signature-ready documents to City
4 PARS coordinates meeting with City and Highmark Capital Management to discuss
investment options and select strategy
5 City signs documents and returns to PARS
6 PARS works with Trustee/U.S. Bank to establish account
7 PARS notifies City account is ready and includes Contribution Instructions
8 City makes Contribution using Transmittal Form
9 PARS and Highmark conduct annual reviews (unless more frequently desired)
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HighMark Plus Composite (Active)
Current Quarter* -5.24%
Blended Benchmark*,** -4.65%
Year To Date* -5.24%
Blended Benchmark*,** -4.65%
1 Year -2.02%
Blended Benchmark** -1.78%
3 Year 3.88%
Blended Benchmark** 3.62%
5 Year 3.92%
Blended Benchmark** 3.61%
10 Year 3.79%
Blended Benchmark** 3.44%
PARS DIVERSIFIED PORTFOLIOS
CONSERVATIVE
INVESTMENT OBJECTIVE
ANNUAL RETURNS
ASSET ALLOCATION — CONSERVATIVE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.
Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.
Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.
This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.
Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:
HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.
Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.
WHY THE PARS DIVERSIFIED
CONSERVATIVE PORTFOLIO?
Q1 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 7.5% S&P500, 1.5% Russell Mid Cap, 2.5% Russell 2000, 1% MSCI EM (net), 2% MSCI EAFE (net), 52.25% Bloomberg US Agg, 25.75% ICE BofA 1-3 Yr US Corp/Gov’t, 2% ICE BofA US High Yield Master II, 0.5% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012, the blended benchmark was 12% S&P 500; 1% Russell 2000, 2% MSCI EAFE (net), 40% ICE BofA 1-3 Year Corp./Govt, 40% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 15% S&P 500, 40% ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.
To provide a consistent level of
inflation-protected income over
the long-term. The major portion
of the assets will be fixed
income related. Equity securities
are utilized to provide inflation
protection.
Conservative
Moderately Conservative
Moderate
BalancedCapital Appreciation
Efficient Frontier
Risk (Standard Deviation)
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Strategic Range Policy Tactical
Equity 5 – 20% 15% 15%
Fixed Income 60 – 95% 80% 83%
Cash 0 – 20% 5% 2%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of
Embedded Fund Fees)
Index Plus Composite (Passive)
Current Quarter* -5.36%
Blended Benchmark*,** -4.65%
Year To Date* -5.36%
Blended Benchmark*,** -4.65%
1 Year -2.34%
Blended Benchmark** -1.78%
3 Year 3.50%
Blended Benchmark** 3.62%
5 Year 3.54%
Blended Benchmark** 3.61%
10 Year 3.41%
Blended Benchmark** 3.44%
PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 07/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 07/2004
No of Holdings in Portfolio 13
(Gross of Investment Management Fees, but Net of Embedded
Fund Fees)
HighMark Plus Composite (Active)
2008 -9.04%
2009 15.59%
2010 8.68%
2011 2.19%
2012 8.45%
2013 3.69%
2014 3.88%
2015 0.29%
2016 4.18%
2017 6.73%
2018 -1.35%
2019 11.05%
2020 9.03%
2021 2.20%
Index Plus Composite (Passive)
2008 -6.70%
2009 10.49%
2010 7.67%
2011 3.70%
2012 6.22%
2013 3.40%
2014 4.32%
2015 0.06%
2016 3.75%
2017 5.52%
2018 -1.09%
2019 10.37%
2020 8.56%
2021 1.97%
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HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734
ABOUT THE ADVISER
HighMark®Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of
institutional money management experience with $9.4
billion in assets under management and $9.6 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.
ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA ®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo
Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Randy Yurchak, CFA®
Senior Portfolio Manager
Investment Experience: since 2002
HighMark Tenure: since 2017
Education: MBA, Arizona State University;
BS, University of Washington
Asset Allocation Committee
Number of Members: 17
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which
HighMark provides continuous and regular supervisory and
management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment
advisory services (including, but not limited to, investment
research and strategies) for client assets of its parent company,
MUFG Union Bank, N.A.
The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Conservative active and passive objectives.
The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 millionafter fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’spolicies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxesbut do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.
Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.
HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal.
350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com
HOLDINGS
STYLE
Small Cap2.5%
Interm-Term Bond
63.9%
High Yield
1.1%
Short-Term Bond18.2%
Large Cap Core
4.3%
Large Cap Growth
1.6%
Mid Cap1.5%
Intl Stocks2.5%Cash2.1%Large Cap Value1.8%Real Estate0.5%
Holdings are subject to change at the
discretion of the investment manager.
HighMark Plus (Active)Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF
T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF
iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF
Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF
Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm
DFA Large Cap International Portfolio iShares Core U.S. Aggregate
Dodge & Cox International Stock Vanguard High-Yield Corp Adm
MFS International Growth - R6 First American Government Obligations Z
Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
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PARS DIVERSIFIED PORTFOLIOS
MODERATELY CONSERVATIVE
INVESTMENT OBJECTIVE
ANNUAL RETURNS
ASSET ALLOCATION — MODERATELY CONSERVATIVE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.
Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.
Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.
This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.
Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:
HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.
Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.
WHY THE PARS DIVERSIFIED
MODERATELY CONSERVATIVE PORTFOLIO?
Q1 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 15.5% S&P500, 3% Russell Mid Cap, 4.5% Russell 2000, 2% MSCI EM (net), 4% MSCI EAFE (net), 49.25% Bloomberg US Agg, 14% ICE BofA 1-3 Yr US Corp/Gov’t, 1.75% ICE BofA US High Yield Master II, 1% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 -9/30/2012: the blended benchmark was 25% S&P 500; 1.5% Russell 2000, 3.5% MSCI EAFE (net), 25% ICE BofA 1-3 Year Corp./Govt, 40% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007, the blended benchmark was 30% S&P 500, 25% ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.
To provide current income, with
capital appreciation as a
secondary objective. The major
portion of the assets is
committed to income-producing
securities. Market fluctuations
should be expected.
Strategic Range Policy Tactical
Equity 20 - 40% 30% 29%
Fixed Income 50 - 80% 65% 68%
Cash 0 - 20% 5% 3%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of
Embedded Fund Fees)
HighMark Plus Composite (Active)
Current Quarter* -5.15%
Blended Benchmark*,** -4.96%
Year To Date* -5.15%
Blended Benchmark*,** -4.96%
1 Year -0.56%
Blended Benchmark** -0.08%
3 Year 5.80%
Blended Benchmark** 5.76%
5 Year 5.48%
Blended Benchmark** 5.36%
10 Year 5.16%
Blended Benchmark** 5.09%
Index Plus Composite (Passive)
Current Quarter* -5.36%
Blended Benchmark*,** -4.96%
Year To Date* -5.36%
Blended Benchmark*,** -4.96%
1 Year -0.55%
Blended Benchmark** -0.08%
3 Year 5.43%
Blended Benchmark** 5.76%
5 Year 5.12%
Blended Benchmark** 5.36%
10 Year 4.89%
Blended Benchmark** 5.09%
PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 08/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 05/2005
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
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Conservative
Moderately Conservative
Moderate
Capital AppreciationBalanced
(Gross of Investment Management Fees, but Net of Embedded
Fund Fees)
HighMark Plus Composite (Active)
2008 -15.37%
2009 18.71%
2010 10.46%
2011 1.75%
2012 10.88%
2013 7.30%
2014 4.41%
2015 0.32%
2016 4.94%
2017 9.56%
2018 -2.60%
2019 13.73%
2020 10.76%
2021 5.15%
Index Plus Composite (Passive)
2008 -12.40%
2009 11.92%
2010 9.72%
2011 3.24%
2012 8.24%
2013 6.78%
2014 5.40%
2015 -0.18%
2016 5.42%
2017 8.08%
2018 -2.33%
2019 13.53%
2020 9.74%
2021 5.33%
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HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734
ABOUT THE ADVISER
HighMark®Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of
institutional money management experience with $9.4
billion in assets under management and $9.6 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.
ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo
Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Randy Yurchak, CFA®
Senior Portfolio Manager
Investment Experience: since 2002
HighMark Tenure: since 2017
Education: MBA, Arizona State University;
BS, University of Washington
Asset Allocation Committee
Number of Members: 17
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which
HighMark provides continuous and regular supervisory and
management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment
advisory services (including, but not limited to, investment
research and strategies) for client assets of its parent company,
MUFG Union Bank, N.A.
The performance records shown represent a size-weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderately Conservative active and passive objectives.
The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.
Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.
HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal.
350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com
HOLDINGS
STYLE
Small Cap 4.5%
Interm-Term Bond
53.2%
High Yield 1.0%
Short-Term Bond13.3%
Large Cap Core8.4%
Large Cap Growth
3.3%
Mid Cap 3.0%
Intl Stocks 5.2%
Cash 3.3%
Large Cap Value
3.8%Real Estate 1.1%
Holdings are subject to change at the
discretion of the investment manager.
HighMark Plus (Active)Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF
T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF
iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF
Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF
Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm
DFA Large Cap International Portfolio iShares Core U.S. Aggregate
Dodge & Cox International Stock Vanguard High-Yield Corp Adm
MFS International Growth - R6 First American Government Obligations Z
Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
F.9.c
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PARS DIVERSIFIED PORTFOLIOS
MODERATE
INVESTMENT OBJECTIVE
ANNUAL RETURNS
ASSET ALLOCATION — MODERATE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.
Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.
Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.
This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.
Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:
HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.
Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.
WHY THE PARS DIVERSIFIED
MODERATE PORTFOLIO?
Q1 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 – Present: 26.5% S&P500, 5% Russell Mid Cap, 7.5% Russell 2000, 3.25% MSCI EM (net), 6% MSCI EAFE (net), 33.50% Bloomberg US Agg, 10% ICE BofA1-3 Yr US Corp/Gov’t, 1.50% ICE BofA US High Yield Master II, 1.75% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012: the blended benchmark was 43% S&P 500; 2% Russell 2000, 5% MSCI EAFE (net), 15% ICE BofA 1-3 Year Corp./Govt, 30% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 50% S&P 500, 15% ICE BofA 1-3Yr Corp/Gov, 30% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.
To provide current income and
moderate capital appreciation.
It is expected that dividend and
interest income will comprise a
significant portion of total return,
although growth through capital
appreciation is equally important.
Strategic Range Policy Tactical
Equity 40 - 60% 50% 49%
Fixed Income 40 - 60% 45% 46%
Cash 0 - 20% 5% 5%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of
Embedded Fund Fees)
HighMark Plus Composite (Active)
Current Quarter* -5.07%
Blended Benchmark*,** -4.97%
Year To Date* -5.07%
Blended Benchmark*,** -4.97%
1 Year 1.50%
Blended Benchmark** 2.42%
3 Year 8.42%
Blended Benchmark** 8.54%
5 Year 7.64%
Blended Benchmark** 7.61%
10 Year 6.99%
Blended Benchmark** 7.20%
Index Plus Composite (Passive)
Current Quarter* -5.38%
Blended Benchmark*,** -4.97%
Year To Date* -5.38%
Blended Benchmark*,** -4.97%
1 Year 1.94%
Blended Benchmark** 2.42%
3 Year 8.01%
Blended Benchmark** 8.54%
5 Year 7.20%
Blended Benchmark** 7.61%
10 Year 6.80%
Blended Benchmark** 7.20%
PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 10/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 05/2006
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
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Moderately Conservative
Moderate
Capital AppreciationBalanced
(Gross of Investment Management Fees, but Net of Embedded
Fund Fees)
HighMark Plus Composite (Active)
2008 -22.88%
2009 21.47%
2010 12.42%
2011 0.55%
2012 12.25%
2013 13.06%
2014 4.84%
2015 0.14%
2016 6.45%
2017 13.19%
2018 -4.03%
2019 17.71%
2020 12.92%
2021 9.31%
Index Plus Composite (Passive)
2008 -18.14%
2009 16.05%
2010 11.77%
2011 2.29%
2012 10.91%
2013 12.79%
2014 5.72%
2015 -0.52%
2016 7.23%
2017 11.59%
2018 -4.03%
2019 17.52%
2020 11.23%
2021 10.18%
F.9.c
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HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734
ABOUT THE ADVISER
HighMark®Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of
institutional money management experience with $9.4
billion in assets under management and $9.6 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.
ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo
Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Randy Yurchak, CFA®
Senior Portfolio Manager
Investment Experience: since 2002
HighMark Tenure: since 2017
Education: MBA, Arizona State University;
BS, University of Washington
Asset Allocation Committee
Number of Members: 17
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which
HighMark provides continuous and regular supervisory and
management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment
advisory services (including, but not limited to, investment
research and strategies) for client assets of its parent company,
MUFG Union Bank, N.A.
The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderate active and passive objectives.
The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.
Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.
HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal.
350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com
HOLDINGS
STYLE
Small Cap
7.5%
Interm-Term Bond
35.9%
High Yield
1.0%Short-Term Bond9.6%
Large Cap Core14.4%
Large Cap Growth
5.6%
Mid Cap4.9%
Intl Stocks8.1%
Cash4.8%
Large Cap Value6.4%
Real Estate
1.8%
Holdings are subject to change at the
discretion of the investment manager.
HighMark Plus (Active)Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF
T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF
iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF
Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF
Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm
DFA Large Cap International Portfolio iShares Core U.S. Aggregate
Dodge & Cox International Stock Vanguard High-Yield Corp Adm
MFS International Growth - R6 First American Government Obligations Z
Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
F.9.c
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PARS DIVERSIFIED PORTFOLIOS
BALANCED
INVESTMENT OBJECTIVE
ANNUAL RETURNS
ASSET ALLOCATION — BALANCED PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.
Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.
Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.
This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.
Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:
HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.
Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.
WHY THE PARS DIVERSIFIED
BALANCED PORTFOLIO?
Q1 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 – Present: 32% S&P500, 6% Russell Mid Cap, 9% Russell 2000, 4% MSCI EM (net), 7% MSCI EAFE (net), 27% Bloomberg US Agg, 6.75% ICE BofA 1-3 Yr US Corp/Gov’t, 1.25% ICE BofA US High Yield Master II, 2% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 –9/30/2012: the blended benchmark was 51% S&P 500; 3% Russell 2000, 6% MSCI EAFE (net), 5% ICE BofA 1-3 Year Corp./Govt, 30% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 60% S&P 500, 5% ICE BofA1-3Yr Corp/Gov, 30% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.
To provide growth of principal
and income. While dividend and
interest income are an important
component of the objective’s
total return, it is expected that
capital appreciation will
comprise a larger portion of the
total return.
Strategic Range Policy Tactical
Equity 50 – 70% 60% 59%
Fixed Income 30 – 50% 35% 36%
Cash 0 – 20% 5% 5%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of
Embedded Fund Fees)
HighMark Plus Composite (Active)
Current Quarter* -5.03%
Blended Benchmark*,** -5.02%
Year To Date* -5.03%
Blended Benchmark*,** -5.02%
1 Year 2.49%
Blended Benchmark** 3.64%
3 Year 9.69%
Blended Benchmark** 9.92%
5 Year 8.73%
Blended Benchmark** 8.72%
10 Year 7.94%
Blended Benchmark** 8.26%
Index Plus Composite (Passive)
Current Quarter* -5.39%
Blended Benchmark*,** -5.02%
Year To Date* -5.39%
Blended Benchmark*,** -5.02%
1 Year 3.19%
Blended Benchmark** 3.64%
3 Year 9.36%
Blended Benchmark** 9.92%
5 Year 8.22%
Blended Benchmark** 8.72%
10 Year 7.72%
Blended Benchmark** 8.26%
PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 10/2006
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 10/2007
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
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Conservative
Moderately Conservative
Moderate
Capital AppreciationBalanced
(Gross of Investment Management Fees, but Net of Embedded
Fund Fees)
HighMark Plus Composite (Active)
2008 -25.72%
2009 21.36%
2010 14.11%
2011 -0.46%
2012 13.25%
2013 16.61%
2014 4.70%
2015 0.04%
2016 6.81%
2017 15.46%
2018 -4.88%
2019 19.85%
2020 13.85%
2021 11.44%
Index Plus Composite (Passive)
2008 -23.22%
2009 17.62%
2010 12.76%
2011 1.60%
2012 11.93%
2013 15.63%
2014 6.08%
2015 -0.81%
2016 8.26%
2017 13.39%
2018 -5.05%
2019 19.59%
2020 12.07%
2021 12.63%
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HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734
ABOUT THE ADVISER
HighMark®Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of
institutional money management experience with $9.4
billion in assets under management and $9.6 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.
ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo
Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Randy Yurchak, CFA®
Senior Portfolio Manager
Investment Experience: since 2002
HighMark Tenure: since 2017
Education: MBA, Arizona State University;
BS, University of Washington
Asset Allocation Committee
Number of Members: 17
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which
HighMark provides continuous and regular supervisory and
management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment
advisory services (including, but not limited to, investment
research and strategies) for client assets of its parent company,
MUFG Union Bank, N.A.
The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Balanced active and passive objectives.
The composite name has been changed from PARS Balanced/Moderately Aggressive to PARS Balanced on 5/1/2013. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’spolicies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxesbut do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.
Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.
HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal.
350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com
HOLDINGS
STYLE
Small Cap
8.9%
Interm-Term Bond
28.5%
High Yield0.9%
Short-Term Bond6.6%Large Cap Core
17.5%
Large Cap Growth6.8%
Mid Cap6.0%
Intl Stocks
9.6%
Cash
5.5%
Large Cap Value
7.7%
Real Estate2.0%
Holdings are subject to change at the
discretion of the investment manager.
HighMark Plus (Active)Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF
T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF
iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF
Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF
Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm
DFA Large Cap International Portfolio iShares Core U.S. Aggregate
Dodge & Cox International Stock Vanguard High-Yield Corp Adm
MFS International Growth - R6 First American Government Obligations Z
Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
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PARS DIVERSIFIED PORTFOLIOS
CAPITAL APPRECIATION
INVESTMENT OBJECTIVE
ANNUAL RETURNS
ASSET ALLOCATION — CAPITAL APPRECIATION PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.
Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.
Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.
This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.
Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:
HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.
Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.
WHY THE PARS DIVERSIFIED
CAPITAL APPRECIATION PORTFOLIO?
Q1 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: 39.5% S&P500, 7.5% Russell Mid Cap, 10.5% Russell 2000, 5.25% MSCI EM (net), 10.25% MSCI EAFE (net), 16% Bloomberg US Agg, 3% ICE BofA 1-3 Yr US Corp/Gov’t, 1% ICE BofA US High Yield Master II, 2% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill.
To provide growth of principal.
The major portion of the assets
are invested in equity securities
and market fluctuations are
expected.
Strategic Range Policy Tactical
Equity 65 - 85% 75% 73%
Fixed Income 10 - 30% 20% 20%
Cash 0 - 20% 5% 7%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of
Embedded Fund Fees)
Consolidated Composite
Current Quarter* -5.19%
Blended Benchmark*,** -5.09%
Year To Date* -5.19%
Blended Benchmark*,** -5.09%
1 Year 4.22%
Blended Benchmark** 5.24%
3 Year 11.34%
Blended Benchmark** 11.77%
5 Year 9.99%
Blended Benchmark** 10.21%
10 Year 9.19%
Blended Benchmark** 9.58%
PORTFOLIO FACTS
Consolidated Composite
Composite Inception Date 01/2009
No of Holdings in Portfolio 20
Efficient Frontier
Risk (Standard Deviation)
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Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded
Fund Fees)
Consolidated Composite
2008 N/A
2009 23.77%
2010 12.95%
2011 -1.35%
2012 13.87%
2013 20.33%
2014 6.05%
2015 -0.26%
2016 8.79%
2017 16.72%
2018 -5.82%
2019 22.62%
2020 14.50%
2021 14.96%
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HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734
ABOUT THE ADVISER
HighMark®Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of
institutional money management experience with $9.4
billion in assets under management and $9.6 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.
ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo
Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Randy Yurchak, CFA®
Senior Portfolio Manager
Investment Experience: since 2002
HighMark Tenure: since 2017
Education: MBA, Arizona State University;
BS, University of Washington
Asset Allocation Committee
Number of Members: 17
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which
HighMark provides continuous and regular supervisory and
management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment
advisory services (including, but not limited to, investment
research and strategies) for client assets of its parent company,
MUFG Union Bank, N.A.
The performance records shown represent a size-weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Capital Appreciation active and passive objectives.
The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would growto $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.
Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.
HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client’s investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal.
350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com
HOLDINGS
STYLE
Small Cap
10.4%
Interm-Term Bond16.6%
High Yield0.8%
Short-Term Bond2.8%
Large Cap Core
22.1%Large Cap Growth8.3%
Mid Cap
7.5%
Intl Stocks
13.5%
Cash6.6%
Large Cap Value9.4%
Real Estate2.0%
Holdings are subject to change at the
discretion of the investment manager.
HighMark Plus (Active)Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation – Retirement Vanguard Real Estate ETF
T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF
iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF
Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF
Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm
DFA Large Cap International Portfolio iShares Core U.S. Aggregate
Dodge & Cox International Stock Vanguard High-Yield Corp Adm
MFS International Growth - R6 First American Government Obligations Z
Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
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AGENDA REPORT
MEETING DATE: September 13, 2022 Council Item
TITLE: Unfunded OPEB Liability
PRESENTED BY: Terry Shea, Interim Finance Director
RECOMMENDATION: The City Council approve a Prefunding Agreement and
election to pre-fund Other Post- Employment Benefits
(“OPEB”) through the California Employers’ Retiree Benefit
Trust (“CERBT”) fund administered through the California
Public Employees’ Retirement System (“CalPERS”);
authorize the City Manager (or designee) to execute all
documents to fund and maintain participation in the trust;
and authorize staff to file the necessary forms with
CalPERS and to make an initial investment of $100,000.
2030 VISION STATEMENT:
This staff report supports Goal #1, Ensuring Fiscal Viability by addressing funding
options to reduce pension costs.
BACKGROUND:
The City of Grand Terrace provides certain medical benefits to eligible retirees. To
be eligible to receive the benefits, retirees must have retired directly from the City
under CalPERS with a service or disability retirement. Such benefits are commonly
referred to as Other Post-Employment Benefits (“OPEB”).
At present, Public Agencies have two options for covering OPEB costs. One option
is referred to as “pay-as-you-go,” where an employer makes the required insurance
premium payments for its retirees as those premiums are due, out of its current
year operating budget. This is the City’s current method. The other option is “pre-
funding,” where funds are set aside in a dedicated trust account. Establishing and
funding an OPEB trust ensures than an employer can meet its future obligations by
leveraging the higher yields, thus decreasing the amount needed to be paid by the
City’s General Fund.
The Government Accounting Standards Board (GASB 75) requires agencies to
account for and disclose their OPEB costs for all active and retired employees.
As of the most recent valuation (June 2019) the City's Net OPEB Liability is
$1,964,307 million for benefits already earned. Without a plan to address the City's
OPEB Liability, it is anticipated that this amount will grow in the near future before
it starts to decline.
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At its meeting of June 14, 2022, Council indicated they would like to further explore the
use of a Section 115 Trust to address the City’s unfunded liabilities. This report to the
City Council is a recommendation to setup a Section 115 Trust to better plan for and
manage the City’s OPEB unfunded liability.
In compliance with this direction, staff contacted four providers to solicit proposals from
qualified vendors for IRS Section 115 OPEB Trust Services. Finance staff reviewed,
compared, and evaluated the respective proposal responses. Interviews were
conducted by the Interim Finance Director with each respondent. The interview included
questions to assess the experience of each respondent, their historical success
achieving investment performance goals, costs to both establish and maintain the trust,
and the complexity of administrative process to both establish and administer the trust.
In total, the City received three responses to the request for information: CalPERS,
Keenan, and PARS. The fourth provider PFM declined to respond. Finance Staff found
all three firms to be professionally qualified to provide trust services. However, the Staff
were unanimous in recommending CalPERS for providing trust services based on
qualifications, experience, staff knowledge, cost, and ease of administrative process.
Keenan has strong experience with the management of IRS Section 115 Trusts and
currently manages other post-employment benefit (OPEB) and IRS Section 115
Pension Trusts for 66 agencies.
PARS has the most IRS Section 115 pension trusts under management, managing over
420 separate trusts. PARS provided strong experience and a knowledgeable working
group for the City. PARS offered a scaled cost structure that started at 60 basis point for
balances under $5 million.
CalPERS is an agency of the State of California charged to administer defined benefit
pension, employer contribution prefunding, health benefits, long term care insurance,
OPEB prefunding, and supplemental income defined contribution programs, for the
benefit of State, school, and local public agency employees. Currently, CalPERS
manages OPEB and IRS Section 115 Pension Trusts for more than 570 California
public employers. CalPERS has extensive experience managing IRS Section 115
Trusts, their CERBT program is the largest trust provider in California measured by both
assets under management and the number of participating employers.
DISCUSSION:
The California Public Employee Retirement System (CalPERS) has established a
program called the California Employers’ Retiree Benefit Trust (CERBT), which is
an IRS Section 115 Trust set up for the sole purpose of receiving employer
contributions that will pay for OPEB costs. This program has been around since
2007 with $15.3 billion in assets under management and has over 600 participants
including cities, counties, school districts, and special districts
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As CERBT is an IRS approved Section 115 Irrevocable Trust, this action would
allow funds deposited into the trust to earn market rates of return greater than
otherwise allowed by the City's investment policy and will offset the City's Unfunded
Actuarial Accrued Liability thereby providing a more secure financial future for the
City of Cathedral City.
Entering into an investment management agreement with CERBT, the OPEB trust
provider, will allow the City to make long-term investments to match its long-term
obligations with the trust assets legally protected from creditors of the employer or
the plan administrator CalPERS. The trust assets are irrevocable and cannot be put
to use for any other purposes.
Why should the City open an IRS Section 115 Trust?
The City would have total financial control of the Section 115 Trust. At this time,
staff is recommending a one-time contribution to open the 115 Trust. There is no
required annual funding amount. The City can make deposits into the Trust
as funds become available to the City. If funds are deposited, they can be
withdrawn in later years to assist with retiree health payments. Additional benefits
are provided below:
• Higher-yielding investments
The CERBT program has averaged 8.06% yield over the past 10 years, with
current yields being closer to 6.50%-7%. With higher yield, the City would benefit
from the effects of compounding interest.
· Reduce unfunded liabilities and future contributions
The CERBT program provides the City the ability to utilize the interest earned to
pay the annual contribution and unfunded OPEB liability.
· Improve financial reporting outcomes
The OPEB actuary would utilize the CERBT’s discount rate, instead of the US
Treasury Bond Buyer rate, lowering the City’s overall OPEB liability. This would
improve City’s overall financial condition.
· CalPERS low administrative fee of 10 basis points (0.1%)
CalPERS CERBT program is the largest provider of Section 115 Trusts with the
lowest Administrative Fee at 10 basis points. CalPERS will not invoice the City
separately for their service; the agency would debit the cost out of the interest
earned.
CERBT does come with risk in that it would be more prone to market and
economic volatility compared to the City’s current investment in LAIF or CAMP.
Also, the IRS Section 115 Trust is irrevocable, meaning the investment can be
only utilized for OPEB costs and not to pay for other unforeseen costs.
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Staff believes opening a CERBT IRS Section 115 Trust with CalPERS, is fiscally
prudent and will secure a healthy financial future for the City.
As stated above, should the City open a Section 115 Trust, the one-time
contribution deposit into the CERBT will earn interest, thus decreasing the amount
to be deposited by the City in future years. If the City decides to open the Section
115 Trust, it would be recorded as an asset to the City’s financials and it would
improve the City’s overall OPEB liability. In addition, staff recommends making a
regular annual contribution to its this OPEB account will greatly enhance the City’s
ability to meet its OPEB obligation over the long term.
FISCAL IMPACT:
The proposed initial funding of $100,000 would come from a portion of the proceeds
from the sale of the Fire Station to the County of San Bernardino. This does not
impact our current General Fund budget; however, would be a new budget
appropriation from the General Fund.
ATTACHMENTS:
• prefund-opeb-agreement (PDF)
• delegation-authority (PDF)
• cerbt-strategy-1 (PDF)
• cerbt-strategy-2 (PDF)
• cerbt-strategy-3 (PDF)
APPROVALS:
Terry Shea Completed 09/02/2022 10:14 AM
Finance Completed 09/02/2022 11:21 AM
City Manager Completed 09/02/2022 12:24 PM
City Council Pending 09/13/2022 6:00 PM
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Rev 1/12/2022 Page 1 of 10
CALIFORNIA EMPLOYERS’ RETIREE BENEFIT TRUST PROGRAM ("CERBT") AGREEMENT AND ELECTION OF
(NAME OF EMPLOYER) TO PREFUND OTHER POST-EMPLOYMENT BENEFITS THROUGH CalPERS
WHEREAS (1) Government Code Section 22940 establishes in the State Treasury the Annuitants' Health Care Coverage Fund for the prefunding of health care coverage for
annuitants (Prefunding Plan); and WHEREAS (2) The California Public Employees' Retirement System (CalPERS) Board of Administration (Board) has sole and exclusive control and power over the
administration and investment of the Prefunding Plan (sometimes also referred to as CERBT), the purposes of which include, but are not limited to (i) receiving contributions
from participating employers and establishing separate Employer Prefunding Accounts in the Prefunding Plan for the performance of an essential governmental function (ii)
investing contributed amounts and income thereon, if any, in order to receive yield on the funds and (iii) disbursing contributed amounts and income thereon, if any, to pay for costs of administration of the Prefunding Plan and to pay for health care costs or other post-employment benefits in accordance with the terms of participating employers'
plans; and WHEREAS (3) _____________________________________________________
(NAME OF EMPLOYER)
(Employer) desires to participate in the Prefunding Plan upon the terms and conditions
set by the Board and as set forth herein; and WHEREAS (4) Employer may participate in the Prefunding Plan upon (i) approval by the Board and (ii) filing a duly adopted and executed Agreement and Election to Prefund
Other Post-Employment Benefits (Agreement) as provided in the terms and conditions of the Agreement; and
WHEREAS (5) The Prefunding Plan is a trust fund that is intended to perform an
essential governmental function within the meaning of Section 115 of the Internal Revenue Code as an agent multiple-employer defined benefit plan as defined in Governmental Accounting Standards Board (GASB) Statements for Accounting and Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
(OPEB Standards) consisting of an aggregation of single-employer plans, with pooled administrative and investment functions;
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NOW, THEREFORE, BE IT RESOLVED THAT EMPLOYER HEREBY MAKES THE FOLLOWING REPRESENTATION AND WARRANTY AND THAT THE BOARD AND EMPLOYER AGREE TO THE FOLLOWING TERMS AND CONDITIONS:
A. Representation and Warranty Employer represents and warrants that it is a political subdivision of the State of California or an entity whose income is excluded from gross income under Section 115
(1) of the Internal Revenue Code.
B. Adoption and Approval of the Agreement; Effective Date; Amendment (1) Employer's governing body shall elect to participate in the Prefunding Plan by adopting this Agreement and filing with the CalPERS Board a true and correct original
or certified copy of this Agreement as follows:
Filing by mail, send to: CalPERS CERBT (OPEB)
P.O. Box 1494 Sacramento, CA 95812-1494 Filing in person, deliver to:
CalPERS Mailroom CERBT (OPEB) 400 Q Street
Sacramento, CA 95811
(2) Upon receipt of the executed Agreement, and after approval by the Board, the Board shall fix an effective date and shall promptly notify Employer of the effective date of the Agreement.
(3) The terms of this Agreement may be amended only in writing upon the agreement of both CalPERS and Employer, except as otherwise provided herein. Any such amendment or modification to this Agreement shall be adopted and executed in the
same manner as required for the Agreement. Upon receipt of the executed amendment or modification, the Board shall fix the effective date of the amendment or modification.
(4) The Board shall institute such procedures and processes as it deems necessary to
administer the Prefunding Plan, to carry out the purposes of this Agreement, and to maintain the tax exempt status of the Prefunding Plan. Employer agrees to follow such procedures and processes.
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C. Other Post-Employment Benefits (OPEB) Cost Reports and Employer Contributions (1) Employer shall provide to the Board an OPEB cost report on the basis of the
actuarial assumptions and methods prescribed by the Board. Such report shall be for the Board’s use in financial reporting, and shall be prepared at least as often as the minimum frequency required by applicable GASB OPEB Standards. This OPEB cost
report may be prepared as an actuarial valuation report or, if the employer is qualified
under GASB OPEB Standards, may be prepared as an Alternative Measurement
Method (AMM) report. (a) Unless qualified under GASB OPEB Standards, to provide an AMM
report, Employer shall provide to the Board an actuarial valuation report. Such report shall be for the Board's use in financial reporting, and shall be prepared at least as often as the minimum frequency required by GASB OPEB Standards, and shall be:
1) prepared and signed by a Fellow or Associate of the Society of
Actuaries who is also a Member of the American Academy of Actuaries or a person with equivalent qualifications acceptable to the
Board; 2) prepared in accordance with generally accepted actuarial practice and GASB OPEB Standards; and,
3) provided to the Board prior to the Board's acceptance of contributions for the valuation period or as otherwise required by the Board.
(b) If qualified under GASB OPEB Standards, Employer may provide to the
Board an AMM report. Such report shall be for the Board’s use in financial reporting, shall be prepared at least as often as the minimum frequency required by GASB OPEB Standards, and shall be:
1) affirmed by Employer’s external auditor, or by a Fellow or Associate of the Society of Actuaries who is also a Member of the American Academy of Actuaries or a person with equivalent
qualifications acceptable to the Board, to be consistent with the AMM process described in GASB OPEB Standards;
2) prepared in accordance with GASB OPEB Standards; and,
3) provided to the Board prior to the Board's acceptance of contributions for the valuation period or as otherwise required by the Board.
(2) The Board may reject any OPEB cost report for financial reporting purposes submitted to it, but shall not unreasonably do so. In the event that the Board
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determines, in its sole discretion, that the OPEB cost report is not suitable for use in the Board's financial statements or if Employer fails to provide a required OPEB cost report, the Board may obtain, at Employer's expense, an OPEB cost report that meets the
Board’s financial reporting needs. The Board may recover from Employer the cost of obtaining such OPEB cost report by billing and collecting from Employer or by deducting the amount from Employer's account in the Prefunding Plan.
(3) Employer shall notify the Board of the amount and time of contributions which
contributions shall be made in the manner established by the Board. (4) Employer contributions to the Prefunding Plan may be limited to the amount
necessary to fully fund Employer's actuarial present value of total projected benefits, as supported by the OPEB cost report for financial reporting purposes acceptable to the Board. As used throughout this document, the meaning of the term "actuarial present value of total projected benefits" is as defined in GASB OPEB Standards. If Employer’s
contribution causes its assets in the Prefunding Plan to exceed the amount required to fully fund the actuarial present value of total projected benefits, the Board may refuse to
accept the contribution.
(5) No contributions are required. Contributions can be made at any time following the effective date of the Agreement provided that Employer has first complied with the requirements of Paragraph C.
D. Administration of Accounts, Investments, Allocation of Income (1) The Board has established the Prefunding Plan as an agent plan consisting of an
aggregation of single-employer plans, with pooled administrative and investment
functions, under the terms of which separate accounts are maintained for each
employer so that the Employer's assets will provide benefits only under the Employer's post-employment benefit plan(s).
(2) All Employer contributions and assets attributable to Employer contributions shall be separately accounted for in the Prefunding Plan (Employer’s Prefunding Account). (3) Employer’s Prefunding Account assets may be aggregated with prefunding account
assets of other employers and may be co-invested by the Board in any asset classes appropriate for a Section 115 Trust.
(4) The Board may deduct the costs of administration of the Prefunding Plan from the
investment income or Employer’s Prefunding Account in a manner determined by the Board. (5) Investment income shall be allocated among participating employers and posted to
Employer’s Prefunding Account as determined by the Board but no less frequently than annually.
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(6) If Employer's assets in the Prefunding Plan exceed the amount required to fully fund the actuarial present value of total projected benefits, the Board, in compliance with applicable accounting and legal requirements, may return such excess to Employer.
E. Reports and Statements
(1) Employer shall submit with each contribution a contribution report in the form and
containing the information prescribed by the Board.
(2) The Board shall prepare and provide a statement of Employer’s Prefunding Account at least annually reflecting the balance in Employer's Prefunding Account, contributions
made during the period and income allocated during the period, and such other information as the Board determines.
F. Disbursements
(1) Employer may receive disbursements not to exceed the annual premium and other costs of post-employment healthcare benefits and other post-employment benefits as defined in GASB OPEB Standards.
(2) Employer shall notify CalPERS in writing in the manner specified by CalPERS of the persons authorized to request disbursements from the Prefunding Plan on behalf of
Employer.
(3) Employer's request for disbursement shall be in writing signed by Employer's authorized representative, in accordance with procedures established by the Board. The Board may require that Employer certify or otherwise establish that the monies will be used for the purposes of the Prefunding Plan.
(4) Requests for disbursements that satisfy the requirements of paragraphs (2) and (3) will be processed monthly.
(5) CalPERS shall not be liable for amounts disbursed in error if it has acted upon the
written instruction of an individual authorized by Employer to request disbursements. In the event of any other erroneous disbursement, the extent of CalPERS' liability shall be the actual dollar amount of the disbursement, plus interest at the actual earnings rate
but not less than zero. (6) No disbursement shall be made from the Prefunding Plan which exceeds the balance in Employer’s Prefunding Account.
G. Costs of Administration Employer shall pay its share of the costs of administration of the Prefunding Plan, as determined by the Board.
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H. Termination of Employer Participation in Prefunding Plan (1) The Board may terminate Employer’s participation in the Prefunding Plan if:
(a) Employer gives written notice to the Board of its election to terminate;
(b) The Board finds that Employer fails to satisfy the terms and conditions of
this Agreement or of the Board's rules or regulations.
(2) If Employer’s participation in the Prefunding Plan terminates for any of the foregoing reasons, all assets in Employer’s Prefunding Account shall remain in the Prefunding
Plan, except as otherwise provided below, and shall continue to be invested and accrue income as provided in Paragraph D. (3) After Employer’s participation in the Prefunding Plan terminates, Employer may not
make contributions to the Prefunding Plan.
(4) After Employer’s participation in the Prefunding Plan terminates, disbursements from Employer’s Prefunding Account may continue upon Employer’s instruction or
otherwise in accordance with the terms of this Agreement. (5) After the Employer’s participation in the Prefunding Plan terminates, the governing body of the Employer may request either:
(a) A trustee to trustee transfer of the assets in Employer’s Prefunding Account; provided that the Board shall have no obligation to make such
transfer unless the Board determines that the transfer will satisfy
applicable requirements of the Internal Revenue Code, other law and
accounting standards, and the Board’s fiduciary duties. If the Board determines that the transfer will satisfy these requirements, the Board shall then have one hundred fifty (150) days from the date of such
determination to effect the transfer. The amount to be transferred shall be the amount in the Employer's Prefunding Account as of the date of the transfer (the “transfer date”) and shall include investment earnings up to an investment earnings allocation date preceding the transfer date. In no
event shall the investment earnings allocation date precede the transfer date by more than 150 days.
(b) A disbursement of the assets in Employer’s Prefunding Account; provided
that the Board shall have no obligation to make such disbursement unless the Board determines that, in compliance with the Internal Revenue Code, other law and accounting standards, and the Board’s fiduciary duties, all of Employer's obligations for payment of post-employment health care
benefits and other post-employment benefits and reasonable administrative costs of the Board have been satisfied. If the Board determines that the disbursement will satisfy these requirements, the
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Board shall then have one hundred fifty (150) days from the date of such determination to effect the disbursement. The amount to be disbursed shall be the amount in the Employer’s Prefunding Account as of the date
of the disbursement (the “disbursement date”) and shall include investment earnings up to an investment earnings allocation date preceding the disbursement date. In no event shall the investment
earnings allocation date precede the disbursement date by more than 150
days.
(6) After Employer’s participation in the Prefunding Plan terminates and at such time that no assets remain in Employer’s Prefunding Account, this Agreement shall
terminate. (7) If, for any reason, the Board terminates the Prefunding Plan, the assets in Employer’s Prefunding Account shall be paid to Employer after retention of (i) amounts
sufficient to pay post-employment health care benefits and other post-employment benefits to annuitants for current and future annuitants described by the employer’s
current substantive plan (as that term is used in GASB OPEB Standards), and (ii) amounts sufficient to pay reasonable administrative costs of the Board.
(8) If Employer ceases to exist but Employer’s Prefunding Plan continues to exist and if no provision has been made by Employer for ongoing payments to pay post- employment health care benefits and other post-employment benefits to annuitants for
current and future annuitants, the Board is authorized to and shall appoint a third party administrator to carry out Employer's Prefunding Plan. Any and all costs associated with such appointment shall be paid from the assets attributable to contributions by
Employer.
(9) If Employer should breach the representation and warranty set forth in Paragraph A., the Board shall take whatever action it deems necessary to preserve the tax-exempt status of the Prefunding Plan.
I. General Provisions (1) Books and Records.
Employer shall keep accurate books and records connected with the performance of
this Agreement. Employer shall ensure that books and records of subcontractors, suppliers, and other providers shall also be accurately maintained. Such books and
records shall be kept in a secure location at the Employer's office(s) and shall be available for inspection and copying by CalPERS and its representatives. (2) Audit.
(a) During and for three years after the term of this Agreement, Employer shall permit the Bureau of State Audits, CalPERS, and its authorized
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representatives, and such consultants and specialists as needed, at all reasonable times during normal business hours to inspect and copy, at the expense of CalPERS, books and records of Employer relating to its
performance of this Agreement. (b) Employer shall be subject to examination and audit by the Bureau of State
Audits, CalPERS, and its authorized representatives, and such
consultants and specialists as needed, during the term of this Agreement
and for three years after final payment under this Agreement. Any examination or audit shall be confined to those matters connected with the performance of this Agreement, including, but not limited to, the costs of
administering this Agreement. Employer shall cooperate fully with the Bureau of State Audits, CalPERS, and its authorized representatives, and such consultants and specialists as needed, in connection with any examination or audit. All adjustments, payments, and/or reimbursements
determined to be necessary by any examination or audit shall be made promptly by the appropriate party.
(3) Notice.
(a) Any notice, approval, or other communication required or permitted under this Agreement will be given in the English language and will be deemed received as follows:
1. Personal delivery. When personally delivered to the recipient. Notice is effective on delivery.
2. First Class Mail. When mailed first class to the last address of the
recipient known to the party giving notice. Notice is effective three delivery days after deposit in a United States Postal Service office or mailbox.
3. Certified mail. When mailed certified mail, return receipt requested. Notice is effective on receipt, if delivery is confirmed by a return receipt.
4. Overnight Delivery. When delivered by an overnight delivery
service, charges prepaid or charged to the sender's account, Notice is effective on delivery, if delivery is confirmed by the delivery
service. 5. Telex or Facsimile Transmission. When sent by telex or fax to the last telex or fax number of the recipient known to the party giving
notice. Notice is effective on receipt, provided that (i) a duplicate copy of the notice is promptly given by first-class or certified mail or by overnight delivery, or (ii) the receiving party delivers a written
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confirmation of receipt. Any notice given by telex or fax shall be deemed received on the next business day if it is received after 5:00 p.m. (recipient's time) or on a nonbusiness day.
6. E-mail transmission. When sent by e-mail using software that provides unmodifiable proof (i) that the message was sent, (ii) that
the message was delivered to the recipient's information processing
system, and (iii) of the time and date the message was delivered to
the recipient along with a verifiable electronic record of the exact content of the message sent.
Addresses for the purpose of giving notice are as shown in Paragraph B.(1) of this Agreement.
(b) Any correctly addressed notice that is refused, unclaimed, or undeliverable because of an act or omission of the party to be notified
shall be deemed effective as of the first date that said notice was refused, unclaimed, or deemed undeliverable by the postal authorities, messenger
or overnight delivery service. (c) Any party may change its address, telex, fax number, or e-mail address by giving the other party notice of the change in any manner permitted by this
Agreement. (d) All notices, requests, demands, amendments, modifications or other
communications under this Agreement shall be in writing. Notice shall be
sufficient for all such purposes if personally delivered, sent by first class,
registered or certified mail, return receipt requested, delivery by courier with receipt of delivery, facsimile transmission with written confirmation of receipt by recipient, or e-mail delivery with verifiable and unmodifiable
proof of content and time and date of sending by sender and delivery to recipient. Notice is effective on confirmed receipt by recipient or 3 business days after sending, whichever is sooner.
(4) Survival
All representations, warranties, and covenants contained in this Agreement, or in any instrument, certificate, exhibit, or other writing intended by the parties to be a part of
their Agreement shall survive the termination of this Agreement until such time as all amounts in Employer's Prefunding Account have been disbursed. (5) Waiver
No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and
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signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy shall be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, nor shall any waiver constitute a continuing
waiver unless the writing so specifies. (6) Necessary Acts, Further Assurances
The parties shall at their own cost and expense execute and deliver such further
documents and instruments and shall take such other actions as may be reasonably required or appropriate to evidence or carry out the intent and purposes of this Agreement.
A majority vote of Employer’s Governing Body at a public meeting held on the ______
day of the month of __________________ in the year _________, authorized entering
into this Agreement.
Signature of the Presiding Officer: ________________________________________
Printed Name of the Presiding Officer: _____________________________________
Name of Governing Body: ______________________________________________
Name of Employer: ___________________________________________________
Date: _______________________________
BOARD OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
BY_____________________________________ MELODY BENAVIDES DIVISION CHIEF, PENSION CONTRACTS AND PREFUNDING PROGRAMS
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
To be completed by CalPERS The effective date of this Agreement is: _________________________
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California Public Employees’ Retirement System California Employers’
Retiree Benefit Trust (CERBT)
400 Q Street, Sacramento, CA 95811
www.calpers.ca.gov
Delegation of Authority to Request Disbursements
California Employers’ Retiree Benefit Trust
(CERBT)
RESOLUTION
OF THE
(GOVERNING BODY)
OF THE
(NAME OF EMPLOYER)
The delegates to the incumbents
(GOVERNING BODY)
in the positions of and
(TITLE)
and/or
(TITLE)
authority to request on
(TITLE)
behalf of the Employer disbursements from the Other Post Employment Prefunding
Plan and to certify as to the purpose for which the disbursed funds will be used.
By
Title
Witness
Date
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Asset Class Target
1Allocation
Target Range Benchmark
Global Equity 59%± 5%MSCI All Country World
Index IMI (Net)
Fixed Income 25%± 5%Bloomberg Long Liability
IndexTreasury Inflation-Protected
Securities ("TIPS")5%± 3%Bloomberg US TIPS
Index, Series LReal Estate Investment
Trusts ("REITs")8%± 5%FTSE EPRA/NAREIT
Developed Index (Net)
Commodities 3%± 3%S&P GSCI Total Return
Index
Cash -+ 2%91-Day Treasury Bill
1 Allocations were approved by the Board at the May 2018 Investment Committee meeting.
Assets Under Management
As of the specified reporting month-end:
SKB0
CERBT Strategy 1 Annual Operating Ratio
$13,674,698,747 0.10%
CERBT Strategy 1 Performance as of May 31, 2022
1 Month 3 Months Fiscal YTD 1 Year 3 Years*5 Years*10 Years*
Since Inception*
(June 1, 2007)
1,3 Gross Return -0.10%-5.87%-7.18%-5.84%8.61%7.13%8.00%5.37%
2,3 Net Return -0.10%-5.89%-7.25%-5.92%8.52%7.04%7.90%5.29%
Benchmark Returns -0.16%-5.95%-7.33%-6.03%8.35%6.85%7.66%4.96%
4 Standard Deviation ----12.98%11.36%9.51%12.65%
* Returns for periods greater than one year are annualized.
1 Gross returns are net of SSGA operating expenses.
2 Net returns are net of SSGA operating expenses, investment management, administrative and recordkeeping fees.
3 Expenses are described in more detail on page 2 of this document.
4 Standard deviation is based on gross returns and is reported for periods greater than 3 years.
California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 1
ObjectiveThe CERBT Strategy 1 portfolio seeks to provide capital appreciation and income consistent with its strategic asset allocation. There is no guarantee that the portfolio will achieve its investment objective.
StrategyThe CERBT Strategy 1 portfolio is invested in various asset classes. CalPERS periodically adjusts the composition of the portfolio in order to match the target allocations. Generally, equities are intended to help build the value of the employer’s portfolio over the long term while bonds are intended to help provide income and stability of principal. Also, strategies invested in a higher percentage of equities seek higher investment returns (but assume more risk) compared with strategies invested in a higher percentage of bonds.
Compared with CERBT Strategy 2 and Strategy 3, this portfolio has a higher allocation to equities than bonds and other assets. Historically, equities have displayed greater price volatility and, therefore, this portfolio may experience greater fluctuation of value. Employers that seek higher investment returns, and are able to accept greater risk and tolerate more fluctuation in returns, may wish to consider this portfolio.
CalPERS Board may change the list of approved asset classes in composition as well as targeted allocation percentages and ranges at any time.
CompositionAsset Class Allocations and BenchmarksThe CERBT Strategy 1 portfolio consists of the following asset classes and corresponding benchmarks:
Portfolio BenchmarkThe CERBT Strategy 1 benchmark is a composite of underlying asset class market indices, each assigned the target weight for the asset class it represents.
Target vs. Actual Asset Class AllocationsThe following chart shows policy target allocations compared with actual asset allocations as of the specified reporting month-end. CalPERS may temporarily deviate from the target allocation to a particular asset class based on market, economic, or other considerations.
0%
20%
40%
60%
80%
GlobalEquity FixedIncome TIPS REITs Commodities Cash
CERBT Strategy 1 Target Actual
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CERBT Strategy Risk Levels
CalPERS offers employers the choice of one of three investment strategies. Projected risk levels among strategies vary, depending upon the target
asset class allocations. Generally, equities carry more risk than fixed income securities.
Asset Class Target Allocations Strategy 1 Strategy 2 Strategy 3
Global Equity 59%40%22%
Fixed Income 25%43%49%
Treasury Inflation-Protected Securites 5%5%16%
Real Estate Investment Trusts 8%8%8%
Commodities 3%4%5%
1 Since June 2018, SSGA has passively managed all CERBT asset classes. Previously, Fixed Income, TIPS and Commodity asset classes were managed internally by CalPERS.
California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 1
General Information
Information AccessibilityThe CERBT Strategy 1 portfolio consists of assets managed internally by CalPERS and/or by external advisors. Since it is not a mutual fund, a prospectus is not available and daily holdings are not published. CalPERS provides a quarterly statement of the employer’s account and other information about the CERBT. For total market value, detailed asset allocation, investment policy and current performance information, please visit our website at: www.calpers.ca.gov.
Portfolio Manager InformationThe CalPERS Board, through its Investment Committee,directs the CERBT investment strategy based on policies approved by the Board of Administration.State Street Global Advisors (SSGA) manages all underlying investments for CERBT, which include: Global Equity, Fixed Income, Real Estate Investment Trusts, Treasury Inflation-Protected Securities, and Commodities.1
Custodian and Record KeeperState Street Bank serves as custodian for the CERBT. Northeast Retirement Services serves as recordkeeper.
ExpensesCERBT is a self-funded trust in which participating employers pay for all administrative and investment expenses. Expenses reduce the gross investment return by the fee amount. The larger the expenses, the greater the reduction of investment return. Currently, CERBT expenses are 0.10% which consist of administrative expenses borne by CalPERS to administer and oversee the Trust assets, investment management and administrative fees paid to SSGA to manage all asset classes, and recordkeeping fees paid to Northeast Retirement Services to administer individual employer accounts. The expenses described herein are reflected in the net asset value per unit. The expense ratio is subject to change at any time and without prior notification due to factors such as changes to average fund assets or market conditions.CalPERS reviews the operating expenses annually and changes may be made as appropriate. Even if the portfolio loses money during a period, the expenses will still be charged.
What Employers OwnEach employer invested in CERBT Strategy 1 owns units of this portfolio, which invests in pooled asset classes managed by CalPERS and/or external advisors. Employers do not have direct ownership of the securities in the portfolio.
PriceThe value of the portfolio changes daily based upon the market value of the underlying securities. Just as prices of individual securities fluctuate, the portfolio’s value also changes with market conditions.
Principal Risks of the PortfolioThe CalPERS CERBT Fund provides California government employers with a trust through which they may prefund retiree medical costs and other post-employment benefits (OPEB). CERBT is not, however, a defined benefit plan. There is no guarantee that the portfolio will achieve its investment objectives or provide sufficient funding to meet employer obligations. Further, CalPERS will not make up the difference between an employer's CERBT assets and the actual cost of OPEB provided to an employer's plan members.
An investment in the portfolio is not a bank deposit,nor is it insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC), CalPERS, the State of California or any other government agency.
There are risks associated with investing, including possible loss of principal. The portfolio’s risk depends in part on the portfolio’s asset class allocations and the selection, weighting and risks of the underlying investments. For more information about investment risks, please see the document entitled “CERBT Principal Investment Risks” located at www.calpers.ca.gov.
Fund PerformancePerformance data shown on page 1 represents past performance and is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an employer’s units, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than historical performance data shown. For current performance information, please visit www.calpers.ca.gov and follow the links to California Employers' Retiree Benefit Trust.
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Asset Class Target
1Allocation
Target Range Benchmark
Global Equity 40%± 5%MSCI All Country World
Index IMI (Net)
Fixed Income 43%± 5%Bloomberg Long Liability
IndexTreasury Inflation-Protected
Securities ("TIPS")5%± 3%Bloomberg US TIPS
Index, Series LReal Estate Investment
Trusts ("REITs")8%± 5%FTSE EPRA/NAREIT
Developed Index (Net)
Commodities 4%± 3%S&P GSCI Total Return
Index
Cash -+ 2%91-Day Treasury Bill
1 Allocations were approved by the Board at the May 2018 Investment Committee meeting.
Assets Under Management
As of the specified reporting month-end:
SKB7
CERBT Strategy 2 Annual Operating Ratio
$1,839,218,667 0.10%
CERBT Strategy 2 Performance as of May 31, 2022
Since Inception*
1 Month 3 Months Fiscal YTD 1 Year 3 Years*5 Years*10 Years*(October 1, 2011)
1,3 Gross Return -0.05%-6.26%-7.43%-5.95%6.59%5.89%6.62%6.91%
2,3 Net Return -0.06%-6.28%-7.50%-6.03%6.50%5.80%6.52%6.80%
Benchmark Returns -0.08%-6.30%-7.51%-6.07%6.41%5.66%6.30%6.64%
4 Standard Deviation ----10.39%9.00%7.66%7.97%
* Returns for periods greater than one year are annualized.
1 Gross returns are net of SSGA operating expenses.2 Net returns are net of SSGA operating expenses, investment management, administrative and recordkeeping fees.3 Expenses are described in more detail on page 2 of this document.
4 Standard deviation is based on gross returns and is reported for periods greater than 3 years.
California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 2
ObjectiveThe CERBT Strategy 2 portfolio seeks to provide capital appreciation and income consistent with its strategic asset allocation. There is no guarantee that the portfolio will achieve its investment objective.
StrategyThe CERBT Strategy 2 portfolio is invested in various asset classes. CalPERS periodically adjusts the composition of the portfolio in order to match the target allocations. Generally, equities are intended to help build the value of the employer’s portfolio over the long term while bonds are intended to help provide income and stability of principal. Also, strategies invested in a higher percentage of equities seek higher investment returns (but assume more risk) compared with strategies invested in a higher percentage of bonds.
Compared with CERBT Strategy 1 and Strategy 3, this portfolio has a moderate allocation to equities, bonds and other assets. Historically, equities have displayed greater price volatility and, therefore, this portfolio may experience comparatively less fluctuation of value compared to CERBT Strategy 1 but more fluctuation of value compared to CERBT Strategy 3. Employers that seek a moderate approach to investing may wish to consider this portfolio.
CalPERS Board may change the list of approved asset classes in composition as well as targeted allocation percentages and ranges at any time.
CompositionAsset Class Allocations and BenchmarksThe CERBT Strategy 2 portfolio consists of the following asset classes and corresponding benchmarks:
Portfolio Benchmark
The CERBT Strategy 2 benchmark is a composite of underlying asset class market indices, each assigned the target weight for the asset class it represents.
Target vs. Actual Asset Class AllocationsThe following chart shows policy target allocations compared with actual asset allocations as of the specified reporting month-end. CalPERS may temporarily deviate from the target allocation to a particular asset class based on market, economic, or other considerations.
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40%
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GlobalEquity FixedIncome TIPS REITs Commodities Cash
Target ActualCERBT Strategy2
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CERBT Strategy Risk Levels
CalPERS offers employers the choice of one of three investment strategies. Projected risk levels among strategies vary, depending upon the target
asset class allocations. Generally, equities carry more risk than fixed income securities.
1 Asset Class Target Allocations Strategy 1 Strategy 2 Strategy 3
Global Equity 59%40%22%
Fixed Income 25%43%49%
Treasury Inflation-Protected Securites 5%5%16%
Real Estate Investment Trusts 8%8%8%
Commodities 3%4%5%
1 Since June 2018, SSGA has passively managed all CERBT asset classes. Previously, Fixed Income, TIPS and Commodity asset classes were managed internally by CalPERS.
California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 2
General Information
Information AccessibilityThe CERBT Strategy 2 portfolio consists of assets managed internally by CalPERS and/or by external advisors. Since it is not a mutual fund, a prospectus is not available and daily holdings are not published. CalPERS provides a quarterly statement of the employer’s account and other information about the CERBT. For total market value, detailed asset allocation, investment policy and current performance information, please visit our website at: www.calpers.ca.gov.
Portfolio Manager InformationThe CalPERS Board, through its Investment Committee,directs the CERBT investment strategy based on policies approved by the Board of Administration.State Street Global Advisors (SSGA) manages all underlying investments for CERBT, which include: Global Equity, Fixed Income, Real Estate Investment Trusts, Treasury Inflation-Protected Securities, and Commodities.1
Custodian and Record Keeper
State Street Bank serves as custodian for the CERBT. Northeast Retirement Services serves as recordkeeper.
Expenses
CERBT is a self-funded trust in which participating employers pay for all administrative and investment expenses. Expenses reduce the gross investment return by the fee amount. The larger the expenses, the greater the reduction of investment return. Currently, CERBT expenses are 0.10% which consist of administrative expenses borne by CalPERS to administer and oversee the Trust assets, investment management and administrative fees paid to SSGA to manage all asset classes, and recordkeeping fees paid to Northeast Retirement Services to administer individual employer accounts. The expenses described herein are reflected in the net asset value per unit. The expense ratio is subject to change at any time and without prior notification due to factors such as changes to average fund assets or market conditions.CalPERS reviews the operating expenses annually and changes may be made as appropriate. Even if the portfolio loses money during a period, the expenses will still be charged.
What Employers OwnEach employer invested in CERBT Strategy 2 owns units of this portfolio, which invests in pooled asset classes managed by CalPERS and/or external advisors. Employers do not have direct ownership of the securities in the portfolio.
PriceThe value of the portfolio changes daily based upon the market value of the underlying securities. Just as prices of individual securities fluctuate, the portfolio’s value also changes with market conditions.
Principal Risks of the Portfolio
The CalPERS CERBT Fund provides California government employers witha trust through which they may prefund retiree medical costs and other post-employment benefits (OPEB). CERBT is not, however, a defined benefit plan. There is no guarantee that the portfolio will achieve its investment objectives or provide sufficient funding to meet employer obligations. Further, CalPERS will not make up the difference between an employer's CERBT assets and the actual cost of OPEB provided to an employer's plan members.
An investment in the portfolio is not a bank deposit, nor is it insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC), CalPERS, the State of California or any other government agency.
There are risks associated with investing, including possible loss of principal. The portfolio’s risk depends in part on the portfolio’s asset class allocations and the selection, weighting and risks of the underlying investments. For more information about investment risks, please see the document entitled “CERBT Principal Investment Risks” located at www.calpers.ca.gov.
Fund PerformancePerformance data shown on page 1 represents past performance and is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an employer’s units, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than historical performance data shown. For current performance information, please visit www.calpers.ca.gov and follow the links to California Employers' Retiree Benefit Trust.
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Asset Class Target
1Allocation
Target Range Benchmark
Global Equity 22%± 5%MSCI All Country World
Index IMI (Net)
Fixed Income 49%± 5%Bloomberg Long Liability
IndexTreasury Inflation-
Protected Securities 16%± 3%Bloomberg US TIPS Index,
Series LReal Estate Investment
Trusts ("REITs")8%± 5%FTSE EPRA/NAREIT
Developed Index (Net)
Commodities 5%± 3%S&P GSCI Total Return
Index
Cash -+ 2%91-Day Treasury Bill
1 Allocations were approved by the Board at the May 2018 Investment Committee meeting.
Assets Under Management
As of the specified reporting month-end:
SKB8
CERBT Strategy 3 Annual Operating Ratio
$797,106,117 0.10%
CERBT Strategy 3 Performance as of May 31, 2022
Since Inception*
1 Month 3 Months Fiscal YTD 1 Year 3 Years*5 Years*10 Years*(January 1, 2012)
1,3 Gross Return -0.12%-6.09%-6.46%-4.98%5.11%4.87%5.25%5.32%
2,3 Net Return -0.12%-6.11%-6.53%-5.06%5.02%4.78%5.15%5.22%
Benchmark Returns -0.13%-6.09%-6.48%-5.01%4.97%4.68%4.94%5.04%
4 Standard Deviation ----8.15%7.01%6.11%6.15%
* Returns for periods greater than one year are annualized.
1 Gross returns are net of SSGA operating expenses.2 Net returns are net of SSGA operating expenses, investment management, administrative and recordkeeping fees.3 Expenses are described in more detail on page 2 of this document.4 Standard deviation is based on gross returns and is reported for periods greater than 3 years.
California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 3
ObjectiveThe CERBT Strategy 3 portfolio seeks to provide capital appreciation and income consistent with its strategic asset allocation. There is no guarantee that the portfolio will achieve its investment objective.
Strategy
The CERBT Strategy 3 portfolio is invested in various asset classes. CalPERS periodically adjusts the composition of the portfolio in order to match the target allocations. Generally, equities are intended to help build the value of the employer’s portfolio over the long term while bonds are intended to help provide income and stability of principal. Also, strategies invested in a higher percentage of equities seek higher investment returns (but assume more risk) compared with strategies invested in a higher percentage of bonds.
Compared with CERBT Strategy 1 and Strategy 2, this portfolio has a lower allocation to equities than bonds and other assets. Historically, funds with a lower percentage of equities have displayed less price volatility and, therefore, this portfolio may experience comparatively less fluctuation of value. Employers that seek greater stability of value, in exchange for possible lower investment returns, may wish to consider this portfolio.
CalPERS Board may change the list of approved asset classes in composition as well as targeted allocation percentages and ranges at any time.
CompositionAsset Class Allocations and BenchmarksThe CERBT Strategy 3 portfolio consists of the following asset classes and corresponding benchmarks:
Portfolio BenchmarkThe CERBT Strategy 3 benchmark is a composite of underlying asset class market indices, each assigned the target weight for the asset class it represents.
Target vs. Actual Asset Class AllocationsThe following chart shows policy target allocations compared with actual asset allocations as of the specified reporting month-end. CalPERS may temporarily deviate from the target allocation to a particular asset class based on market, economic, or other considerations.
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20%
40%
60%
GlobalEquity FixedIncome TIPS REITs Commodities Cash
Target ActualCERBT Strategy3
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CERBT Strategy Risk Levels
CalPERS offers employers the choice of one of three investment strategies. Projected risk levels among strategies vary, depending upon the target
asset class allocations. Generally, equities carry more risk than fixed income securities.
1 Asset Class Target Allocations Strategy 1 Strategy 2 Strategy 3
Global Equity 59%40%22%
Fixed Income 25%43%49%
Treasury Inflation-Protected Securites 5%5%16%
Real Estate Investment Trusts 8%8%8%
Commodities 3%4%5%
1 Since June 2018 SSGA has passively managed all CERBT asset classes. Previously Fixed Income, TIPS and Commodity asset classes were managed internally by CalPERS.
California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 3
General Information
Information AccessibilityThe CERBT Strategy 3 portfolio consists of assets managed internally by CalPERS and/or by external advisors. Since it is not a mutual fund, a prospectus is not available and daily holdings are not published. CalPERS provides a quarterly statement of the employer’s account and other information about the CERBT. For total market value, detailed asset allocation, investment policy and current performance information, please visit our website at: www.calpers.ca.gov.
Portfolio Manager InformationThe CalPERS Board, through its Investment Committee,directs the CERBT investment strategy based on policies approved by the Board of Administration.State Street Global Advisors (SSGA) manages all underlying investments for CERBT, which include: Global Equity, Fixed Income, Real Estate Investment Trusts, Treasury Inflation-Protected Securities, and Commodities.1
Custodian and Record Keeper
State Street Bank serves as custodian for the CERBT. Northeast Retirement Services serves as recordkeeper.
Expenses
CERBT is a self-funded trust in which participating employers pay for all administrative and investment expenses. Expenses reduce the gross investment return by the fee amount. The larger the expenses, the greater the reduction of investment return. Currently, CERBT expenses are 0.10% which consist of administrative expenses borne by CalPERS to administer and oversee the Trust assets, investment management and administrative fees paid to SSGA to manage all asset classes, and recordkeeping fees paid to Northeast Retirement Services to administer individual employer accounts. The expenses described herein are reflected in the net asset value per unit. The expense ratio is subject to change at any time and without prior notification due to factors such as changes to average fund assets or market conditions.CalPERS reviews the operating expenses annually and changes may be made as appropriate. Even if the portfolio loses money during a period, the expenses will still be charged.
What Employers OwnEach employer invested in CERBT Strategy 3 owns units of this portfolio, which invests in pooled asset classes managed by CalPERS and/or external advisors. Employers do not have direct ownership of the securities in the portfolio.
PriceThe value of the portfolio changes daily based upon the market value of the underlying securities. Just as prices of individual securities fluctuate, the portfolio’s value also changes with market conditions.
Principal Risks of the Portfolio
The CalPERS CERBT Fund provides California government employers with a trust through which they may prefund retiree medical costs and other post-employment benefits (OPEB). CERBT is not, however, a defined benefit plan. There is no guarantee that the portfolio will achieve its investment objectives or provide sufficient funding to meet employer obligations. Further, CalPERS will not make up the difference between an employer's CERBT assets and the actual cost of OPEB provided to an employer's plan members.
An investment in the portfolio is not a bank deposit,nor is it insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC), CalPERS, the State of California or any other government agency.
There are risks associated with investing, including possible loss of principal. The portfolio’s risk depends in part on the portfolio’s asset class allocations and the selection, weighting and risks of the underlying investments. For more information about investment risks, please see the document entitled “CERBT Principal Investment Risks” located at www.calpers.ca.gov.
Fund PerformancePerformance data shown on page 1 represents past performance and is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an employer’s units, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than historical performance data shown. For current performance information, please visit www.calpers.ca.gov and follow the links to California Employers' Retiree Benefit Trust.
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AGENDA REPORT
MEETING DATE: September 13, 2022 Council & Successor Agency Item
TITLE: Approval of Revisions to the City's Fiscal Policies and 1St
Reading of Changes to Ordinance No. 267, Section
32.24.070 B and 32.24.080
PRESENTED BY: Terry Shea, Interim Finance Director
RECOMMENDATION: Approve the proposed revisions to the attached fiscal
policies and 1st Reading of changes to Ordinance No. 267,
Section 3.24.070 B and Section 3.24.080.
2030 VISION STATEMENT:
This staff report supports City Council Goal #1, “Ensure Our Fiscal Viability,” through
the continuous monitoring of revenue receipts and expenditure disbursements against
approved budget appropriations.
BACKGROUND:
In May 2014, the City’s fiscal policies were approved by City Council. These core fiscal
policies provide a solid framework for the financial administration of the City. The City’s
fiscal policies were revised in September 2015. All policies are subject to update and
revision as operational needs and circumstances change. Likewise, there will be a
need to add or revise policies over time to reflect new operational areas.
DISCUSSION:
The Finance Department has committed to developing a core set of fiscal policies to
improve the City’s internal controls, accountability and overall financial management.
The following is a listing of the policies that have been approved and those in bold and
highlighted in red have been revised for City Council review and approval:
Policies Related to Safeguarding of Assets (Section 1)
• Cash Handling & Control (1.01) (changes made on pg. 1, 2, 3, 4, 6, 7, & 8)
• Petty Cash Funds & Change Boxes (1.02) (changes made on pg. 1 & 2)
• Accounts Receivable (1.03)
• Investments (1.04) (changes made on pg. 1 & 3)
• Fixed Assets (1.05) (changes made on pg. 3)
• Disposition of Surplus Property (1.06)
• Fraud Prevention & Detection (1.07)
Policies Related to Liability (Section 2)
• Accounts Payable (2.01)
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Policies Related to General Fiscal Management (Section 3)
• Purchasing (3.01) (changes made on pg.1, 2, 3, 5, & 6)
• Budget Appropriation Adjustments (3.02)
• Travel & Related Business Expenses (3.03) (changes made on pg. 4, 5, &
Exhibit A)
• Grants (3.04)
• Donations (3.05)
• Reserves (3.06)
• Unclaimed Money (3.07) (changes made on pg. 1)
Therefore, the attached fiscal policies represent a foundation for the City’s fiscal policy
framework, which will be updated periodically on an ongoing basis.
FISCAL IMPACT:
There is no fiscal impact associated with approval of the attached fiscal policies.
ATTACHMENTS:
• Fiscal Policies - Updated 09-13-2022 (PDF)
• Fiscal Policies Ordinance (DOC)
APPROVALS:
Terry Shea Completed 08/31/2022 1:57 PM
Finance Completed 09/01/2022 9:38 AM
City Manager Completed 09/01/2022 12:38 PM
City Council Pending 09/13/2022 6:00 PM
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City of Grand Terrace
Fiscal Policies
revised
September 13, 2022
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City of Grand Terrace
Fiscal Policies
Table of Contents
Policies Related to Safeguarding of Assets (Section 1) Page
•Cash Handling & Control (1.01) ........................................................................ 1
•Petty Cash Funds & Change Boxes (1.02) ........................................................9
•Accounts Receivable (1.03) ............................................................................ 13
-Application for Discharge of Accountability (Exhibit A) .............................. 18
•Investments (1.04) .......................................................................................... 19
•Fixed Assets (1.05) ......................................................................................... 23
•Disposition of Surplus Property (1.06) ............................................................ 26
-Surplus Property Form (Exhibit A) ............................................................. 27
•Fraud Prevention & Detection (1.07) .............................................................. 28
Policies Related to Liability (Section 2)
•Accounts Payable (2.01) ................................................................................ 35
Policies Related to General Fiscal Management (Section 3)
•Purchasing (3.01.01) ..................................................................................... 38
-Environmentally Preferred Purchasing (3.01.02) ....................................... 44
•Budget Appropriation Adjustments (3.02) ....................................................... 52
-Budget Appropriation Adjustment Form (Exhibit A) ................................... 55
•Travel & Related Business Expenses (3.03) .................................................. 56
-Travel Authorization & Expense Reporting Form (Exhibit A) ..................... 67
•Grants (3.04) .................................................................................................. 69
-Grant Proposal Informational Form (Exhibit A) .......................................... 74
-Grant Cost/Benefit Worksheet (Exhibit B) ................................................. 76
•Donations (3.05) ............................................................................................. 77
-Donation Receipt Form (Exhibit A) ............................................................ 81
•Reserves (3.06) .............................................................................................. 82
•Unclaimed Money (3.07) ................................................................................ 86
-Sample Public Notice (Exhibit A) ................................................................89
-Claim Form (Exhibit B) ...............................................................................90
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City of Grand Terrace
Fiscal Policy Policy No. 1.01
Subject: Cash Handling & Control
Effective Date: 9/8/14
09/13/2022
Page 1 of 8
PURPOSE: The purpose of this policy is to establish the practice by which all cash receipts,
or cash equivalents, tendered to the City will be accepted, documented,
recorded, safeguarded and deposited. This policy is also intended to provide staff
with acceptable practices in the handling and safekeeping of cash or cash
equivalents.
DEFINITIONS:
Cashier: Anyone who accepts payments on behalf of the City.
Cash Receipts: Includes coin, currency, checks, money orders, or other cash
equivalents that may be processed by a financial institution. (Debit and credit
card payments are also considered Cash Receipts, although they are not
currently accepted by the City.).)
Cash Receipt Location (CRL): A physical location, other than the Main Cashier
at City Hall, which has been designated as a location to collect and receipt cash
for the City of Grand Terrace.
Main Cashier: Located at the front counter of the Finance Department in City
Hall.
Point of Sale System (POS): A software program that can be run either on a
stand-alone computer or on a network and allows for the recording of cash
collection and receipting related to payments for goods or services.
Remote Deposit: The process for scanning and transmitting checks to the bank
electronically for deposit.
Returned Items: Transactions that have been presented to the bank for deposit
and returned to the City due to account balance or status issues. Such
transactions could include but are not limited to Non-Sufficient Funds (NSF) or
closed accounts.
Starter Checks: Checks that are issued to a bank depositor upon the opening of
a new checking account. These checks typically do not contain any address or
telephone information related to the depositor.
POLICY:
I. Responsibility
A. The Finance Director has oversight, fiduciary, and administrative responsibility for
all cash collections performed by City staff or on behalf of the City by contractors.
B. The Finance Director has the responsibility and authority to ensure that all cash
handling is performed according to this policy.
C. This responsibility shall include:
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City of Grand Terrace
Fiscal Policy Policy No. 1.01
Subject: Cash Handling & Control
Effective Date: 9/8/14
09/13/2022
Page 2 of 8
1. To act as an advisor for cash handling activities performed by City staff.
2. To oversee the cash handling activities on behalf of the City.
3. To verify that all deposits are handled and prepared in accordance with City
policy.
4. To review and implement internal controls as needed to ensure the safety of
City cash and cash equivalents.
II. Scope
A. This policy shall apply to all locations that collect cash or cash equivalents on behalf
of the City.
B. In some cases due to the nature of the collection activity, specialized procedures
may be developed which are different than those outlined within this policy. In these
cases these procedures must be approved by the Finance Director prior to their
implementation.
C. Entities that collect funds on behalf of the City, through a contractual relationship,
may adopt policies and procedures that differ from those outlined herein. In such
cases, these documents must be reviewed and approved by the Finance Director.
III. Internal Controls
A. Standard accounting internal control procedures will be established and followed.
B. Standard accounting internal controls include but are not limited to:
1. Separation of duties. (For example, the person preparing the deposit should be
different from the person who accepted the payment and receipted the
transaction, when it is practical to do so from a staffing standpoint.)
2. Periodic reconciliation of accounts by someone independent of the cash
handling or recording functions.
3. Document Control. Unused manual receipt books should be maintained in a
secured location with access limited to authorized staff.
IV. Collection Locations
A. The Main Cashier in the Finance Department is designated as the primary location
for the collection and deposit of cash receipts. A Cash Receipt Location has also
been authorized for the Community Development Department (CDD) counter and
Child Care Center.
B. Cash Receipts received by the City should be deposited in the City’s bank
whenever accumulated deposits total $5,000 500 or at least once a week. more.
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City of Grand Terrace
Fiscal Policy Policy No. 1.01
Subject: Cash Handling & Control
Effective Date: 9/8/14
09/13/2022
Page 3 of 8
Cash deposits will be made in person at the bank; check deposits may be made in
person at the bank or via Remote Deposit. Deposits processed by the Child Care
Center require a deposit slip submitted to Finance for bank reconciliation purposes.
When the appropriate account coding is not immediately available, the payment
should be deposited and coded to a suspense account until such time that the
coding is identified and communicated to Finance staff. Items placed in suspense
need to be identified and reclassified to their correct account within ten working
days or by the calendar month-end.
C. Any request for the collection of cash receipts at a location other than the Main
Cashier, or CDD counter or Child Care Center must be authorized by the Finance
Director and should include the following information:
1. How customer service will be improved through the processing of payments..
2. The cash custodian(s).
3. How cash activities will be accounted for (for example, cash register, hand
receipts, etc.).
4. How cash receipts will be safeguarded (for example, safe or lockbox)
5. How deposits will be managed.
D. A list of approved collection locations will be maintained by the Finance
Department.
E. All Cash Receipts will be maintained in a secured area with limited access.
F. The establishment of change funds to support collection operations will follow the
guidelines set forth in Fiscal Policy No. 1.02 (Petty Cash Funds & Change Boxes).
G. All City employees who handle cash will be included under the City’s insurance
coverage.
V. Methods of Payment
A. The following methods of payment will be accepted:
1. Cash
2. Checks
3. Money Orders
4. Traveler’s Checks
5. Wires / Electronic Funds Transfer (EFT)
6. Other forms of tender as approved by the Finance Director and the City’s bank.
7. Credit Card Payments (Visa, Mastercard, or Discover)
8. Debit card payments Note: Debit card payments are currently not accepted but
will be recognized as an allowable payment method once the City has
established the procedures to process such payments.
B. Checks
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.01
Subject: Cash Handling & Control
Effective Date: 9/8/14
09/13/2022
Page 4 of 8
1. Checks, Money Orders and Traveler’s Checks are to be made payable to the
City of Grand Terrace.
2. Change will not be made for checks written in excess of the invoice amount. In
cases where the amount of the check is in excess of the invoice amount the
difference will be refunded by means of a City check.
3. Personal Checks
a. Personal checks presented in person must have the customer’s name and
address preprinted on the face of the check.
b. Starter/Blank checks are not to be accepted without the approval of the
Finance Director. Proper identification must be provided and the name,
address and phone number will be placed on the face of the check.
c. Returned Items
i. Returned Items will be subject to a returned check fee.
ii. The amount of the Returned Check Fee will be determined annually
and published in the City’s Fee Schedule.
iii. Payors may not replace the returned item(s) in the same manner as
the original presentment. (For example if the customer provided an
NSF personal check they cannot replace this with another personal
check.)
iv. Upon the occurrence of a returned item, Finance staff will notify the
accepting department so that the related goods or services can be
held until the item is replaced.
v. The Finance Department will maintain a list of customers who have
presented payments that have been returned. The City may require
other forms of payment from customers who have recurring issues
with returned payments.
d. Checks will not be accepted for the following reasons:
i. Post-Dated Checks (Checks written on a future date)
ii. Stale Dated Checks (Checks written 30 days prior)
iii. Checks drawn on foreign currency
e. The following personal check transactions will not be performed:
i. No cash may be given as change for a personal check transaction. If
a check is accepted for an amount greater than the cost of the
service, a payment request must be prepared and processed as a
refund once the check has cleared. In the case of business license
renewals, a credit may be applied to the account.
No Exceptions. (This constitutes an illegal loan of City funds.)
ii. City employee personal checks will not be redeemed (cashed) for
cash.
iii. No two-party checks will be accepted. (A two-party check is made
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.01
Subject: Cash Handling & Control
Effective Date: 9/8/14
09/13/2022
Page 5 of 8
payable to one party and endorsed to the City)
f. When checks are received through the mail the following requirements will
be met:
i. Checks will be restrictively endorsed. The first employee at a Cash
Receipt Location to come in contact with a check is responsible to
have the check restrictively endorsed. Endorsement stamps will be
obtained from the Finance Director or his/her designee. In the case of
checks processed through the Remote Deposit process, the
endorsement is automatically generated.
ii. If the check is payable to the City but lacks sufficient information to
identify the appropriate general ledger account number, write
“SUSPENSE” on the deposit form and present to the Main Cashier or
Finance Department staff. The check will then be deposited into the
bank. When the appropriate general ledger account number is
identified, provide the coding to Finance so that the funds can be
properly applied to the account. The appropriate account should be
identified prior to the month-end closing.
4. Business Checks
Company checks will be inspected to ensure that multiple signatures are in
place if required or if a “not valid over $” statement is included.
5. Traveler’s Checks
a. Traveler’s checks are treated as cash but will require the following
actions:
i. Cashier must witness the customer write in the payee.
ii. Cashier must witness the customer countersign the check.
iii. Signature and countersignature should be compared.
b. Identification will be required.
c. No traveler’s checks drawn on foreign funds will be accepted.
6. Cashier’s Checks / Personal Money Orders
a. Cashier’s Checks and Personal Money Orders will be accepted.
b. Identification will be required.
7. Currency
a. Anyone receiving cash payments is responsible for exercising
reasonable care in screening cash transactions for counterfeit currency.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.01
Subject: Cash Handling & Control
Effective Date: 9/8/14
09/13/2022
Page 6 of 8
b. Mutilated currency is still legal tender. Staff may ask customers to
substitute another bill for the mutilated bill. If they cannot substitute the
bill staff must accept the mutilated bill.
i. Currency is considered mutilated if it is torn, written on, missing a
portion, or otherwise damaged.
ii. Mutilated currency will be exchanged at full value if ¾ of the two serial
numbers are present. Currency that is less than ¾ intact will not be
accepted due to its diminished redemptive value.
iii. Mutilated currency should be removed from the deposit and returned
separately to the bank for collection.
8. Wires / Electronic Fund Transfers (EFT)
a. All wires or EFTs are to be coordinated through the Finance Director or
his/her designee.
b. Documentation supporting the wire/EFT and identifying the correct
revenue coding will be provided to Finance staff prior to the anticipated
date of receipt. This will assist Finance staff in their daily cash
management planning.
VI. Documentation of Transactions
A. All transactions will be recorded by means of an acceptable method of
documentation.
B. Acceptable methods of documentation include:
1. Cash Register
2. Point of Sale System (POS)
3. Manual Receipt books as issued by the Finance Department.
C. Customers must always be provided a receipt which provides the following
information:
1. Amount Paid
2. Date of Transaction
3. Service or Product provided
4. Manner of payment
D. Receipts
1. Receipts provided to customers will be pre-numbered and issued in numerical
sequence by the receipting location (Finance,and CDD counter and Child Care
Center).
2. Manual Receipting will be performed when necessary (e.g., during power
outages, computer system failures, or special events) by utilizing City of Grand
Terrace receipt books, which are maintained and issued by the Finance
Department.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.01
Subject: Cash Handling & Control
Effective Date: 9/8/14
09/13/2022
Page 7 of 8
3. Receipts generated by POS systems or cash registers should have a system
generated receipt number that should be unique and should be issued in
sequence.
E. When City of Grand Terrace manual receipts are issued, copies will be distributed in
the following manner:
1. Customer
2. Issuing department
3. Cash drawer/transaction
4. Receipt book
VII. Balancing and Reconciling
A. It is the responsibility of each cashier to balance and reconcile his/her cash
drawer(s) daily. Cash drawer(s) should be equal to the change fund plus the
balance of cash receipt activity for the day or shift.
B. Cash drawer(s) should be reconciled against the daily cash receipts report, cash
register tape or calculator tape depending on whether the site uses a POS system,
a cash register, or manual receipts.
C. Overage / Shortage
1. When the amount in the cash drawer does not balance with the daily report,
staff will report an Overage or a Shortage as appropriate.
2. When an Overage or Shortage is identified, staff will complete the City of
Grand Terrace Overage/Shortage Form and submit with their deposit.
3. The Overage/Shortage form will require the following information:
a. Date of Deposit
b. Amount of overage/shortage
c. Reason for overage/shortage
d. Signature of staff responsible for drawer
e. Signature of supervisor
4. The Overage/Shortage Form must accompany deposit to the Main Cashier.
5. Overages or Shortages in excess of $10 must be immediately brought to the
attention of the Finance Director or his/her designee upon identification.
6. Under no circumstances is City staff allowed to balance overages by keeping
the overage out of the deposit or balance shortages by taking money from
other sources, such as out of pocket or money held back from a previous
overage.
VIII. Requirements for Deposit
A. All cash receipts will be deposited into the City’s bank account in a timely manner to
ensure the proper posting of accounts and to ensure the safety of staff and City
funds.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.01
Subject: Cash Handling & Control
Effective Date: 9/8/14
09/13/2022
Page 8 of 8
1. Deposits can be made at the Main Cashier during City Hall business hours.
2. Deposits not taken to the bank the same day will be secured by Finance staff in
a fireproof and locked cabinet or safe. A drop safe is utilized at the Child Care
Center for checks not processed the same day as received. No cash is to be
dropped off.
B. All Cash Receipt Locations will prepare deposits whenever accumulated deposits
total $5,000 500 or at least once a week more.
C. Funds received by staff who are not designated as a Cash Receipt Location must
be forwarded to the Finance Department the same day as received.
D. Cash Receipts are not to be sent through the City’s interoffice mail system.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.02
Subject: Petty Cash Funds & Change Boxes
Effective Date: 5/13/14
09/13/2022
Page 1 of 4
PURPOSE: For Petty Cash – To authorize the use of petty cash funds for emergency
purchases and minor out-of-pocket expense reimbursement.
For Change Boxes – To authorize change boxes for the sole purpose of making
change.
DEFINITIONS: Petty Cash is defined as a small fund of cash that is maintained for the payment
of incidental expenses. It may also be advanced to employees on an exception
basis to make small, incidental purchases where payment by check is not
possible or not feasible given the circumstances. It is also available on an
exception basis to reimburse City officials or employees for prior-approved, City
business-related purchases which were originally paid out-of-pocket, and where
reimbursement by check is not feasible under the circumstances.
Change Box is defined as a small fund of cash requiring a particular mix of
denominations of dollar bills and coinage for the explicit purpose of making
change. Reimbursements and advances for incidental City purchases may not
be made from a change fund.
POLICY:
I. Approval to Make Purchases or Receive Reimbursement from Petty Cash
A. Advance approval from the employee’s department head must always be
obtained to make a Petty Cash purchase or to be reimbursed for out-of-pocket
expenses from Petty Cash. Without prior approval, there should be no
expectation that an out-of-pocket expense will be reimbursed by Petty Cash. For
recurring purchases, a standing approval may be given by the department head
so that advance approval is not needed for each transaction.
B. Use of Petty Cash is considered an exception to the standard means of procuring
supplies. Issuance of a City check shall be the preferred method of procurement.
II. Establishment and Authorization of Petty Cash Funds
A. Petty Cash funds have been established in the following amounts:
City Hall (Finance Department) $1,000 550
Child Care Center $500
Community Services * $50 100
* Maintained in the Finance Department and used for special events such as Animal Licensing.
B. Increasing the above amounts or establishing any additional Petty Cash funds
requires written recommendation by the applicable department head and Finance
Director, and approval by the City Manager.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.02
Subject: Petty Cash Funds & Change Boxes
Effective Date: 5/13/14
09/13/2022
Page 2 of 4
III. Maximum Limit For Petty Cash Expense or Reimbursement
A. The maximum amount of Petty Cash that may be used for a particular expense
or reimbursement shall be as follows:
City Hall Petty Cash $200
Child Care Center Petty Cash $200
B. Any request to exceed above limits limit must be approved by the Finance
Director or his/her designee.
IV. Responsibilities and Procedures
A. Fund Custodians
1. Finance Department staff shall maintain the City Hall Petty Cash fund.
The Petty Cash fund maintained at the Child Care Center shall have a
fund custodian appointed by the department head and an appropriate
authorization form on file with the Finance Department.
2. At all times, and without exception, the total Petty Cash fund shall consist
of cash or a combination of cash and approved Petty Cash Request
Forms, which together total the authorized amount of the fund, as
identified in Section II.A of this Policy.
B. Procedures for Advancement of Petty Cash for Incidental Purchases
1. Whether Tthe request is to utilize the City Hall or Child Care Center Petty
Cash fund, the requesting department or individual must complete a Petty
Cash Request Form, which shall provide the date, dollar amount
requested, description, account number to be charged, and the
appropriate signature approvals.
2. In the event the amount requested exceeds the limits set forth in Section
III.A of this policy, the signature of the Finance Director of his/her
designee shall be obtained to approve the disbursement.
3. The Petty Cash Request Form must clearly indicate if the monies are
being “Advanced”.
3. A receipt or other supporting documentation substantiating a purchase is
to be obtained from the employee within two (2) working days following
the purchase.
4. If the purchase was for less than the advanced amount, the fund
custodian must note the actual amount on the voucher form, obtain the
difference in cash from the recipient, and return this amount to the Petty
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.02
Subject: Petty Cash Funds & Change Boxes
Effective Date: 5/13/14
09/13/2022
Page 3 of 4
Cash fund. The recipient and fund custodian should initial the revised
voucher form as concurrence.
5. If the purchase was for more than the advanced amount, the recipient
must submit a new and approved Petty Cash Request Form for the total
amount of the purchase. The fund custodian will reimburse the recipient
for his/her out-of-pocket amount and return the original Petty Cash
Request Form previously submitted.
C. Procedure for Use of Petty Cash for Out-of-Pocket Reimbursement
1. The requesting department or individual must complete the Petty Cash
Request Form for review and approval. The completed form shall provide
date, dollar amount requested, description, account number to be
charged, and the appropriate signature approvals prior to presentation.
2. Actual receipts of the out-of-pocket purchase must be attached to the
Petty Cash Request Form.
3. In the event the amount requested exceeds the limits set forth in Section
III.A of this Policy, the signature of the Finance Director or his/her
designee shall be obtained to approve the disbursement.
D. Replenishment of the Petty Cash Fund
To replenish the Petty Cash fund, the fund custodian will attach all receipts and
the applicable Petty Cash Request Forms, complete a payment request form,
obtain the appropriate authorization signatures, and submit the reimbursement
request to the Finance Department.
V. Approval to Establish or Increase a Petty Cash Fund
A. The Finance Director shall be responsible for review of any request to establish
or increase a Petty Cash fund; however, approval to establish a new fund or
increase an existing fund requires approval of the City Manager.
B. Such requests shall be submitted in writing to the Finance Director by the
department head responsible, and shall include justification for the request. If the
Finance Director is in agreement with the request, he/she will indicate his/her
approval and forward the request to the City Manager for final approval.
VI. Change Boxes
A. Authorization and Control
1. Three (3) Change Boxes are currently authorized in the Finance
Department and integrated with the cash register.
2. Each Change Box maintains cash and coin totaling $200.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.02
Subject: Petty Cash Funds & Change Boxes
Effective Date: 5/13/14
09/13/2022
Page 4 of 4
3. Each Cash Box has a separate custodian with individual password
security and daily reconciliation.
B. Responsibilities and Procedures
1. Departments maintaining Change Boxes shall appoint fund custodians.
2. The procedure for establishing or increasing the amount of a Change Box
shall be the same as that for Petty Cash funds (see Section V of this
policy).
3. Internal control procedures for Change Boxes shall be the same as those
for Petty Cash (see Section VII of this policy).
4. Under no circumstances shall a Change Box be used to advance money
or to reimburse for incidental purchases.
VII. Internal Control
A. Audits of Petty Cash Funds and Change Boxes
1. Audits of Petty Cash funds and Change Boxes will be the responsibility of
the Finance Department and shall consist of unannounced cash counts
on a periodic basis, but no less than semi-annually.
2. Petty Cash custodians shall have the responsibility to balance their
respective Petty Cash funds and Change Boxes on no less than a
monthly basis.
3. Any balancing discrepancies from the periodic cash counts must be
brought to the immediate attention of the Finance Director. Notification
shall consist of a memo from the department head detailing the known or
presumed causes of the discrepancy.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.03
Subject: Accounts Receivable Effective Date: 5/13/14
Page 1 of 5
PURPOSE: To establish uniform guidelines and principles for the recognition, recording,
collection and write-off of accounts receivable related to goods or services
provided by the City or for citations issued by or administered by the departments
of the City.
DEFINITIONS:
Accounts Receivable: A debt owed to the City that arises in the normal course
of business dealings and not supported by negotiable paper; a claim against a
debtor usually arising from sales or services rendered. Accounts receivable
include but are not limited to, rent, concession fees, permit fees, license fees,
citations, and payments for goods and services.
Allowance for Doubtful Accounts: A valuation account (i.e. contra asset) that
is subtracted from the trade receivable on the balance sheet.
Bad Debt: A past due account receivable that, despite best efforts by the City,
remains unsatisfied and for which there is reasonable doubt that the underlying
debt will be satisfied in whole or in part. The expense for a bad debt is
recognized when the account receivable becomes doubtful, which typically
occurs prior to the write-off of the receivable. The recording of Bad Debt is for
accounting purposes only and this action does not discharge the debt. The debt
is still owed to the City, however, the amount shown as owed to the City has
been adjusted off the financial statement to reflect the doubtful collection.
Cognizant Department: The department within the City that negotiated the
agreement or contract, or issued the citation or invoice giving rise to the
particular account receivable.
Debt: In the context of this policy, debt refers to a sum of money due by express
agreement between the City and another party or parties. Debt may be owed the
City by an individual or by a business entity.
Past Due: Refers to an account receivable for which payment has not been
received by the established due date.
Unearned Revenue: An accounting transaction where items are not recognized
as revenue in the current period because they do not meet the “availability” or
“collectability” standards in order to be recorded in the current period.
Write-Off: An accounting transaction that removes an account receivable from
the accounting books and records, and signals the end of any further collection
efforts related to that account receivable.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.03
Subject: Accounts Receivable Effective Date: 5/13/14
Page 2 of 5
POLICY:
I. Scope
This policy pertains to all accounts receivable City-wide whether processed through the
City’s financial system or through other subsidiary systems or processes. Accounts
receivable include all monies owed to the City for services performed, taxes levied, or
citations issued for other persons or organizations including contracts, grants and leases.
II. Responsibilities
A. Finance Department: It is the responsibility of the Finance Department to perform the
following functions:
1. Record the transaction in the City’s general ledger.
2. Maintain supporting documentation.
3. Bill the customer or reimbursing agency. The exception to this is in cases where
the Cognizant Department performs the billing function. In such cases, the
Finance Director must review and approve the billing and collection procedures.
4. Maintain an aging schedule of outstanding Accounts Receivable and follow up
monthly via statements, collection notices or telephone contact, as appropriate,
to collect any amounts outstanding more than 30 days. (Note: While monthly
follow up and collection efforts are administered by the Finance Department, the
Cognizant Department may be asked to assist with collection efforts due to their
relationship with the customer or reimbursing agency.)
5. Coordinate the referral of uncollected Accounts Receivable to a collection
agency, as applicable and further addressed in Section III of this Policy.
6. Annually review the collectability of outstanding accounts at fiscal year-end.
B. Cognizant Department: It is the responsibility of the department providing the service
or issuing the citation to perform the following functions:
1. Obtain an agreement to pay such as contract or other form of documentation.
2. Provide the product or service to the customer.
3. Document the product or service provided.
4. Communicate with Finance staff and provide supporting documentation for the
transaction.
5. Bill customer if not handled by the Finance Department. In cases where the
billing function is performed by the Cognizant Department rather than the
Finance Department, the Finance Director must review and approve the billing
and collection procedures.
6. Communicate with customer or agency to resolve disputes or discrepancies.
7. Assist with collection efforts if requested to do so by the Finance Department.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.03
Subject: Accounts Receivable Effective Date: 5/13/14
Page 3 of 5
8. In conjunction with the Finance Department, annually review the collectability of
outstanding accounts at fiscal year-end.
C. Contractors working on behalf of the City to collect for goods or services provided or
for citations issued are responsible to perform the following functions:
1. Provide to the Finance Department a monthly aging schedule of all Accounts
Receivable including an accounting of current billings, collections and any other
activity conducted on accounts related to City services or citations.
2. Maintain a system that tracks the history and status of customer accounts.
III. Payment Terms / Collections
A. The following payment terms and collection process shall be followed.
1. Payments will be due within 30 days from the invoice date.
2. Interest/Penalty/Late Fees will be charged in a manner consistent with
applicable ordinances or policies. The imposition of interest charges, penalties
or late fees will be communicated to the customer through the following
methods:
a. A warning notice or statement will be sent out thirty (30) days in advance of
the penalty effective date.
b. A new statement will be sent out with the amended invoice/citation amount
including the appropriate interest, penalty or late fee.
3. Statements will be issued on a monthly basis unless there are circumstances
that warrant some other billing cycle. Exceptions from the monthly billing cycle
must be approved by the Finance Director.
4. The Cognizant Department may be requested to assist Finance staff in
collection efforts on accounts more than 60 days outstanding.
5. Accounts more than 60 days outstanding may be assigned to a collection
agency as determined by the Finance Director.
IV. Financial Reporting for Accounts Receivable
A. The Finance Department will record the revenues and associated accounts
receivable in accordance with Generally Accepted Accounting Principles.
B. Periodically, at least annually in conjunction with the fiscal year-end audit, open
accounts receivable balances will be reviewed in order to ensure that the City’s
financial statements accurately and appropriately reflect the status of these
accounts.
C. The collectability of open accounts receivable will be estimated so that they can be
reflected in the City’s financial statements at their net realizable value, which is
consistent with Generally Accepted Accounting Principles. These amounts will be
reflected in the following manner:
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.03
Subject: Accounts Receivable Effective Date: 5/13/14
Page 4 of 5
1. Enterprise Funds: For enterprise funds (if applicable), an allowance for doubtful
accounts will be established in an amount to be determined by the Finance
Director or his/her designee in consultation with the current outside auditor for
the City.
2. Other Funds: Taxes, fees, citations and other types of revenues found in
governmental funds that are due but not collected at year-end, and where there
is some level of uncertainty about the ultimate collectability, will be recorded with
a debit to Accounts Receivable and a credit to Unearned Revenue within the
appropriate fund structure until the uncertainty is resolved at which time the
appropriate entry would be a debit to Unearned Revenue and a credit to the
appropriate revenue account. This method will result in recognizing the
receivable on the financial statements without impacting fund balance with
potential fluctuations as revisions are made to estimates.
V. Write-Offs:
A. As part of the annual review of accounts receivable balances, accounts that have
progressed through the collection process and remain unpaid will be reviewed to
determine collectability. Based on this review, a recommendation for the write-off of
the account or additional collection efforts will be made. The collection process will
consist of, but not be limited to, the following steps or processes:
1. Internal Collection efforts (including consultation with the City Attorney’s office
for potential legal remedies);
2. Assignment to collection agency;
3. Claims to the Franchise Tax Board (Administrative & Parking Citations);
4. Claims to the Department of Motor Vehicles (Administrative & Parking
Citations).
B. The City Manager may, at his/her discretion, discharge from further accountability
any City department, officer, or employee charged by law with the collection of
money which is due and payable if any of the following circumstances apply:
1. The amounts are too small to justify the cost of collection.
2. The likelihood of collection does not warrant the cost involved.
3. The amount has been otherwise lawfully compromised or adjusted.
Such discharge of accountability shall only be made upon consideration and
approval of a verified application submitted by a department or division with the
Finance Director and then approved by the City Manager. Such a discharge of
accountability does not constitute a release of any persons from liability for payment
of any amount due the City.
C. The request to authorize the write-off of accounts must be accompanied by the
following documentation:
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.03
Subject: Accounts Receivable Effective Date: 5/13/14
Page 5 of 5
1. A detailed account aging (listing of date of service/citation and amount owed by
account);
2. A description of collection efforts undertaken;
3. Explanation of reason(s) account(s) is/are determined to be uncollectible;
4. A signed Application for Discharge of Accountability form (Exhibit A).
D. Applications for Discharge of Accountability that have been deemed by the Finance
Director to be appropriate to forgo further collection actions will be submitted to the
City Manager for final approval.
E. A copy of the completed Application for Discharge of Accountability and the
supporting documentation will be forwarded to Finance staff for entry into the City’s
financial system.
G.11.a
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Exhibit A
Application for Discharge of Accountability
1. I, on behalf of the Department apply for
(Department Head) (Department)
Discharge of accountability for collection of the following obligation(s) for the following reason(s): □ The amounts are too small to justify the cost of collection. □ The likelihood of collection does not warrant the cost involved.
□ The amount has been lawfully compromised or adjusted.
□ Other
2. The person(s) or entity(ies) liable for payment are:
(Attach a separate sheet if necessary)
Type/ Account/
Program Invoice # Department Name Date Balance
I certify that all reasonable collection efforts have been attempted and that correspondence files and other collection documentation supporting the reasons for discharge of accountability shown above will be
maintained for three years from the approved date of the discharge of accountability.
(Department Head Signature)
Above Application for Discharge of Accountability:
□ Approved as submitted. □ Approved as submitted.
□ Approved except as noted. □ Approved except as noted.
_______________________________________ ________________________________
(Finance Director Signature) Date (City Manager signature) Date
To: (1) Finance Director
(2) City Manager
From: Applicable Department Head
Date:
Subject: Application for Discharge of Accountability for Collection of Monies Owed the City
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.04
Subject: Investments
Effective Date: 5/13/14
09/13/2022
Page 1 of 4
I. PURPOSE
To establish a policy for the management and oversight of the City’s investments.
II. POLICY
It is the policy of the City of Grand Terrace to invest funds in a manner which will
provide the highest investment return with the maximum security while meeting the
daily cash flow demands of the City and conforming to all statutes governing the
investment of City funds.
III. SCOPE
This investment policy applies to all financial assets of the City. These funds are
audited annually and accounted for in the Annual Financial Report. Funds include
the General Fund, Capital Projects Fund, Special Revenue Funds, Enterprise Funds
and Trust Agency Funds, including funds held by the Successor Agency to the
Grand Terrace Community Redevelopment Agency.
IV. PRUDENCE
Investments shall be made with judgment and care, under circumstances then
prevailing which persons of prudence, discretion and intelligence exercise in the
management of their own affairs, not for speculation, but for investment, considering
the probable safety of their capital as well as the probable income to be derived. The
standard of prudence to be used shall be the “prudent person” standard and shall be
applied in the context of managing an overall portfolio. Investment officers acting in
accordance with written procedures and the investment policy and exercising due
diligence shall be relieved of personal responsibility and/or liability for an individual
security’s credit risk or market price changes.
V. OBJECTIVES
The primary objectives, in order of priority, of the investment program shall be:
A. Safety: Safety of principal is the foremost objective of the investment program.
Investments of the City shall be undertaken in a manner that seeks to ensure
the preservation of capital in the overall portfolio. To attain this objective,
diversification is required in order that potential losses in individual securities
do not exceed the income generated from the remainder of the portfolio.
B. Liquidity: The investment portfolio will remain sufficiently liquid to enable the
City to meet all operating requirements which might be reasonably anticipated.
C. Yield: The investment portfolio shall be designed with the objective of attaining
a market rate of return throughout budgetary and economic cycles, taking into
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.04
Subject: Investments
Effective Date: 5/13/14
09/13/2022
Page 2 of 4
account the investment risk constraints and the cash flow characteristics of the
portfolio.
VI. DELEGATION OF AUTHORITY
Authority to manage the investment of surplus funds is derived from California
Government Code Section 53600, et seq., and this policy. Management of bond
funds is controlled by Government Code Section 5922(d) and such investments must
conform to the requirements of the bond indenture. In some cases, it may be
appropriate for investments of bond proceeds to cover a longer duration than those
limits established for surplus (operating) funds. Management responsibility for the
investment program is hereby delegated to the Treasurer (or Finance Director if a
separate position of Treasurer is not staffed), who shall establish procedures and
operate the investment program consistent with this investment policy. Procedures
may include, but not limited to, references to: safekeeping, repurchase agreements,
wire transfer agreements, collateral/depository agreements and banking services
contracts, as appropriate. The Treasurer (Finance Director) may delegate authority
to subordinates for day-to-day investment transactions. No person may engage in
an investment transaction except as provided under the terms of this policy and the
procedures established by the Treasurer (Finance Director).
VII. ETHICS AND CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from
personal business that could conflict with the proper execution of the investment
program, or which could impair their ability to make impartial investment decisions.
VIII. AUTHORIZED FINANCIAL INSTITUTIONS AND BROKER/DEALERS
A. The City will utilize only financial institutions and broker/dealers who are
authorized to provide investment services in the State of California.
B. No public deposit shall be made except in a qualified public depository as
established by State laws. For broker/dealers of government securities and
other investments, the Treasurer (Finance Director) shall select only
broker/dealers who are licensed and in good standing with the Securities and
Exchange Commission and the Securities Regulation Division of the California
Department of Business Oversight.
C. Broker/dealers and investment advisors utilized by the City shall be approved
by the City Council.
IX. AUTHORIZED INVESTMENTS
The City is empowered by statute and authorized by the City Council to invest in the
following:
A. U.S. Treasury Obligations (Treasury Bills, Treasury Notes)
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.04
Subject: Investments
Effective Date: 5/13/14
09/13/2022
Page 3 of 4
B. Repurchase Agreements
C. Certificates of Deposit with State Banks, National Banks, State or Federal
Savings Associations, State and Federal Credit Unions in California that
are fully insured by federal deposit insurance. The Treasurer (Finance
Director) may waive collateralization in lieu of deposit insurance.
D. Negotiable Certificates of Deposit, Collateralized with U.S. Treasury
Obligations Having a Market Value of 110%. The Treasurer (Finance
Director) may, at his/her discretion, waive security for that portion of a deposit
that is already covered by federal deposit insurance.
E. Passbook Savings Accounts Placed with Federal or State Banks or Credit
Unions that are fully insured by federal deposit insurance. The Treasurer
(Finance Director) may waive collateralization in lieu of federal deposit
insurance.
F. Securities Issued by Federal Agencies
G. Local Agency Investment Fund (LAIF)
1. This is a special fund of the State Treasurer, in which local agencies are
allowed to pool their funds for investment purposes up to a maximum of
$50 $75 million, with no restrictions on the amount of bond proceeds that
can be invested.
2. LAIF is part of the Pooled Money Investment Account (PMIA). The PMIA
began in 1955 and oversight is provided by the Pooled Money Investment
Board (PMIB) and an in-house Investment Committee. The PMIB
members are the State Treasurer, Director of Finance, and State
Controller.
3. All securities are purchased under the authority of Government Code
Section 16430 and 16480.4. The State Treasurer's Office takes delivery of
all securities purchased on a delivery-versus-payment (DVP) basis using a
third-party custodian. All investments are purchased at market and a
market valuation is conducted monthly. Additionally, the PMIA has
policies, goals and objectives for the portfolio to ensure that the goals of
Safety, Liquidity and Yield are not jeopardized and that prudent
management prevails. These policies are formulated by Investment
Division staff and reviewed by both the PMIB and the LIAB on an annual
basis.
4. The State Treasurer's Office is audited by the Bureau of State Audits on
an annual basis and the resulting opinion is posted to the State
Treasurer's Office website following its publication. The Bureau of State
Audits also has a continuing audit process throughout the year. All
investments and LAIF claims are audited on a daily basis by the State
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.04
Subject: Investments
Effective Date: 5/13/14
09/13/2022
Page 4 of 4
Controller's Office as well as an in-house audit process involving three
separate divisions.
H. Mutual Funds issued by diversified management companies as defined by
Section 23701(m) of the Revenue and Taxation Code, provided that the portfolio
of such investment company or investment trust is limited to U.S. government
obligations or agencies of the federal government and repurchase agreements
fully collateralized by such securities.
I. Pools and Other Investment Structures Incorporating Investments
Permitted in California Government Code Sections 53601 and 53635 such
as local government investment pools sponsored by counties and joint powers
authorities. These entities will typically have their own investment policies,
which may differ from that of the City.
X. COLLATERALIZATION
All certificates of deposit must be collateralized by U.S. Treasury obligations held by
a third party. The Treasurer (Finance Director) may waive this requirement up to the
amount already insured by federal deposit insurance.
XI. SAFEKEEPING AND CUSTODY
All securities purchased from broker/dealers shall be conducted on a delivery-
versus-payment (DVP) basis and shall be held by a third-party custodian designated
by the Treasurer (Finance Director) and evidenced by safekeeping receipts. This
would not apply to any book-entry direct purchases from the U.S. Government.
XII. DIVERSIFICATION
The City will diversify its investments by security type and institution.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.05
Subject: Fixed Assets
Effective Date: 5/13/14
09/13/2022
Page 1 of 3
PURPOSE: To establish the criteria for determining fixed assets, as well as their physical
control, accountability, and depreciation.
DEFINITIONS: Fixed Assets refers to land, buildings, equipment, furniture, vehicles, and
improvements other than buildings, acquired by the City of Grand Terrace for
use in the provision of goods and services to its citizens.
Not all Fixed Assets are required to be reported on the balance sheet. Fixed
Assets with very short useful lives, or of small monetary amounts, can be
“expensed” in the period in which they are acquired. Fixed Assets reported on
the balance sheet are said to be “capitalized”, meaning the capital outlay is
recorded as an addition to the asset account, and will have an expected useful
life of at least two years.
The monetary criteria by which governments decide to report Fixed Assets on
the balance sheet, is known as the “capitalization threshold.” Governments
may utilize separate thresholds for different classes of fixed assets, or establish
a single threshold for all of its fixed assets.
Capitalization is a financial reporting issue. It addresses the material
expenditure level by which users of the City’s financial reports are informed of
the policy decision to account for Fixed Assets. It does not eliminate the City’s
responsibility for maintaining adequate control over all of its assets, or other
equipment below the capitalization threshold, to minimize the risk of loss or
misuse.
POLICY:
I. Fixed Asset Capitalization Threshold Criteria
A. Land
Land will be capitalized at actual cost. There is no specific dollar threshold.
B. Improvements to Land
Improvements to land with a value of $25,000 or more will be capitalized.
Improvements valued at less than $25,000 will be expensed in the current year.
C. Buildings and Building Improvements
1. Buildings and building improvements with a value of $25,000 or more will
be capitalized. Buildings and improvements valued at less than $25,000 will
be expensed in the current year.
2 Capitalized cost generally includes such items as site clearance and
excavation, architectural fees, initial landscaping, building construction and
others.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.05
Subject: Fixed Assets
Effective Date: 5/13/14
09/13/2022
Page 2 of 3
D. Equipment and Vehicles
1. Equipment and vehicles with a value of $5,000 or more will be capitalized.
Equipment and vehicles valued at less than $5,000 will be expensed in the
current year.
2. Capitalized cost generally includes purchase price, sales tax, transportation
costs and installation.
B. Useful Life
1. Fixed assets will be capitalized only if they have a useful life of at least two
years following the date of acquisition.
2. Assets that do not meet this criterion shall be expensed regardless of cost.
3. Following are the various Fixed Asset categories and the corresponding
useful life range for each category:
a. Machinery & Equipment 5 – 15 years
b. Vehicles 6 – 15 years
c. Improvements other than Buildings 15 – 20 years
d. Infrastructure 20 – 30 years
e. Buildings 50 years
f. Sewer Lines 90 years
Note: The specific useful life assigned to each asset will be determined by
the Finance Director, in accordance with Governmental Accounting
Standards Board (GASB) Statement No. 34.
C. Final Capitalization Decision Rests with Finance Director
The final decision on whether to capitalize, or how much to capitalize a fixed
asset, rests with the Finance Director or his/her designee.
II. Identification and Inventory
A. Each vehicle, furniture and equipment item that is classified as a Fixed Asset will
have a unique identification tag affixed to the item by Finance staff for security
and control purposes at the time the Fixed Asset is placed in service.
B. An inventory of all Fixed Assets will be conducted by Finance staff annually to
verify that no Fixed Assets are missing nor have been moved to another location.
Any Fixed Assets that are missing or not in the assigned location when the
inventory is conducted must be reported to the City Manager, along with a written
explanation from the director of the department to which the Fixed Asset was
assigned.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.05
Subject: Fixed Assets
Effective Date: 5/13/14
09/13/2022
Page 3 of 3
III. Depreciation
A. Financial Statement Basis:
1. Fixed Assets will be depreciated over their estimated useful lives, as
reflected in the City’s Annual Financial Report, in accordance with GASB
Statement No. 34.
2. The straight-line method of depreciation will be used for all Fixed Assets,
unless it is determined by the Finance Director or his/her designee, and
confirmed by the City’s outside auditor, that another depreciation method is
more appropriate for a given Fixed Asset or a Fixed Asset class.
B. Budgetary Basis:
1. Depreciating Fixed Assets over their useful lives for budgetary purposes is
not required but is a recommended practice in that it establishes an Asset
Replacement Account for each Fixed Asset. Such a practice increases the
City’s annual operating costs, in that depreciation charges become a
budgeted expense, however, it levels operating expenses over time
because when Fixed Assets are replaced, the funds (or a portion of the
funds) have already been set aside and therefore do not need to be re-
budgeted.
2. While the City has not previously depreciated Fixed Assets for budgetary
purposes, it is the City Council’s intent to do so beginning with the FY 2014-
15 budget, and to continue the practice on a go-forward basis thereafter.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.06
Subject: Disposition of Surplus Property Effective Date: 5/13/14
Page 1 of 1
PURPOSE: To define the process for identification and disposal of surplus City supplies,
materials and equipment (collectively referred to as property).
POLICY:
I. Identifying Surplus Property:
A. Departments will be responsible for identifying surplus property within work areas
assigned to their control.
B. Departments will notify the Finance Director of surplus property by completing a
Surplus Property Form (Exhibit A). Such form will include descriptive information
on the property (i.e., license number, model number, serial number, condition of
the item, reason the item is no longer needed, etc.), along with the location of the
property. The form must be approved by the respective department head,
Finance Director and City Manager before disposition of the item is authorized.
C If the surplus property is a Fixed Asset, as defined in Fiscal Policy No. 1.05, the
Fixed Asset identification number must also be included on the Surplus Property
Form, so that the City’s Fixed Asset records can be adjusted accordingly.
D. If a Fixed Asset is being declared as surplus before its useful life (as reflected in
the City’s Fixed Asset records) has been exhausted, detailed justification for the
requested disposal must be provided on the Surplus Disposal Form.
E. Finance staff, in consultation with the City Manager’s Office, will be responsible
for making arrangements to warehouse surplus property, as needed, or
determining if the item can be used by another department.
F. Information Technology staff will be advised if any of the surplus property is
computer or telephone equipment.
II. Disposition of Surplus Property:
A. Supplies, materials and equipment which are determined to be surplus and to
have no further use by the City will be disposed of by Finance staff through trade-
in, sale, auction, or donation.
B. The City Manager or his/her designee will be responsible for determining which
method of disposition will be most advantageous to the City.
C. The method of disposition will be reflected on the Surplus Property Form.
G.11.a
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Exhibit A
Surplus Property Form
Requesting Department Request Date Contact Person
Property Description Location Model No. Serial No.
Condition Reason No Longer
Needed
Recommended Disposal Method
Trade-in Sale Auction Donation
Comments regarding recommended disposal method:
If the surplus property is a fixed asset that is not fully depreciated, please provide detailed
justification for the requested disposal below.
Submitted by: Date Department Head approval Date
Disposal endorsed Disposal approved
Disposal not endorsed Disposal not approved
Finance Director Date City Manager Date
Comments: Comments:
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.07
Subject: Fraud Prevention & Detection Approval Date: 1/28/14
Page 1 of 7
I. PURPOSE AND SCOPE
To establish a policy and procedures for identifying acts that might be fraudulent,
and to describe the steps to be taken when fraud or other dishonest activities are
suspected, and to establish procedures to follow in accounting for missing
funds, investigating other irregularities, and providing for restitution and recoveries.
II. DEFINITIONS
A. Fraud – the intentional false representation, or concealment of material
fact for the purpose of personal gain for oneself or others; or inducing
another to act similarly. Fraud and other similar irregularities include, but
are not limited to:
1. Claim for reimbursement of expenses that are not job-related or
authorized by City policy.
2. Forgery or unauthorized alteration of documents (checks,
promissory notes, time sheets, agreements, purchase orders,
budgets, etc.).
3. Misappropriation of City assets (funds, securities, supplies, furniture,
equipment, etc.).
4. Improprieties in handling or reporting of financial transactions.
5. Authorizing or receiving payment for goods not received or services
not performed.
6. Computer-related activity involving unauthorized alteration,
destruction, forgery, or manipulation of data or misappropriation of
City-owned software.
7. Misrepresentation of information on documents.
8. Misrepresentation of authority.
9. Any apparent violation of Federal, State, or Local laws related to
dishonest activities or fraud.
10. Seeking or accepting anything of material value from those doing
business with the City including vendors, consultants, contractors,
lessees, applicants, and grantees.
B. Employee – In this context, employee refers to any individual or group
of individuals who receive compensation, either full-time or part-time, from
the City of Grand Terrace. The term also includes any volunteer who
provides services to the City through an official arrangement with the City
or a City organization, as well as Council Members, consultants, vendors,
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.07
Subject: Fraud Prevention & Detection Approval Date: 1/28/14
Page 2 of 7
contractors, outside agencies and/or any other parties with a business
relationship with the City of Grand Terrace.
C. Management – In this context, management refers to any administrator,
manager, director, supervisor, or other individual who manages or
supervises funds or other resources, including human resources.
D. Investigator – In this context, Investigator refers to any person, persons or
governmental agency assigned by the City Manager and/or the City Council
to investigate any fraud or similar activity.
E. External Auditor – In this context, External Auditor refers to
independent audit professionals who perform annual audits of the City’s
financial statements.
III. POLICY
A. The City of Grand Terrace is committed to protecting its assets against
the risk of loss or misuse. Accordingly, it is the policy of the City to
identify and promptly investigate any possibility of fraudulent or related
dishonest activities against the City and, when appropriate, to pursue
legal remedies available under the law.
B. This policy applies to any irregularity, or suspected irregularity, involving
Employees, consultants, vendors, contractors, outside agencies, and/or
any other parties with a business relationship with the City.
C. Any investigative activity required will be conducted in an objective and
impartial manner, without regard to the suspected wrongdoer’s length of
service, position, title, or relationship to the City.
D. All Employees are responsible for the detection, reporting and prevention
of fraud, misappropriations, and other irregularities.
E. It is the City’s intent to fully investigate, or cause the investigation of,
any suspected act of fraud, misappropriation, impropriety or other similar
irregularity. An objective and impartial investigation will be conducted
regardless of the position, title, length of service or relationship with the City
of any party who might be or become involved in or becomes the subject of
such investigation.
F. Each department of the City is responsible for instituting and maintaining
a system of internal controls to provide reasonable assurance for the
prevention and detection of fraud, misappropriations, and other
irregularities. Management should be familiar with the types of
improprieties that might occur within their area(s) of responsibility and be
alert for any indications of such conduct.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.07
Subject: Fraud Prevention & Detection Approval Date: 1/28/14
Page 3 of 7
G. Investigator, in conjunction with the City Manager, has the primary
responsibility for the investigation of all activity as defined in this policy.
H. Should the City Manager be a subject of the investigation, the City Attorney
will be substituted for the City Manager in references throughout this policy.
Employees or other individuals suspecting any fraudulent activity by the City
Manager should report his/her concern directly to the City Attorney.
I. Should the City Manager and City Attorney both be subjects of the
investigation, the Mayor will be substituted for the City Manager and City
Attorney in references throughout this policy. Employees or other
individuals suspecting any fraudulent activity by both the City Manager and
City Attorney should report his/her concern directly to the Mayor, who will in
turn advise the other members of the City Council.
J. Throughout the investigation, the Investigator will inform the City Manager
and others that he/she designates, of pertinent investigative findings. The
City Council shall also be immediately advised of the investigation and kept
apprised of its status throughout the investigation.
K. Employees will be granted whistle-blower protection when acting in
accordance with this policy. When informed of a suspected impropriety,
neither the City nor any person acting on behalf of the City shall:
1. Dismiss or threaten to dismiss the Employee,
2. Discipline, suspend, or threaten to discipline or suspend the
Employee,
3. Impose any penalty upon the Employee, or
4. Intimidate or coerce the Employee.
Violations of the whistle-blower protection will result in discipline up to
and including dismissal.
L. Upon the conclusion of the investigation of an allegation of fraud said to
have been committed by an employee or official, the City Council shall be
informed by the City Manager, or by the official whom received the
complaint and authorized the investigation, of the outcome of the
investigation. This shall be done in manner cognizant of the privacy right, if
any, of the accused employee or official, as advised by the City Attorney.
M. The City Manager, following review of investigation results, will take
appropriate action regarding Employee misconduct. Disciplinary action
can include termination, and referral of the case to an appropriate law
enforcement agency and District Attorney’s Office for possible arrest
and prosecution.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.07
Subject: Fraud Prevention & Detection Approval Date: 1/28/14
Page 4 of 7
N. The City will pursue every reasonable effort, including court-ordered
restitution, to obtain recovery of City losses from the offender, or other
appropriate sources.
IV. PROCEDURES
A. Management Responsibilities
1. Management is responsible for being alert to, and reporting fraudulent
or related dishonest activities in their areas of responsibility.
2. Each City official should be familiar with the types of improprieties
that might occur in his or her area(s) of responsibility and be alert for
any indication that improper activity, misappropriation, or dishonest
activity is or was in existence in his or her area(s).
3. When an improper activity is detected or suspected, Management
should determine whether an error or mistake has occurred or if there
may be dishonest or fraudulent activity.
4. If Management determines a suspected activity may involve fraud or
related dishonest activity, they should contact their next immediate
supervisor not involved in the alleged misconduct – and together with
that supervisor inform their Department Director (unless the
Department Director is alleged to have involvement in the alleged
misconduct) and City Manager.
5. If the City Manager is suspected to be involved in the alleged
misconduct, the City Attorney should be notified in lieu of the City
Manager. If the City Manager and City Attorney are both suspected to
be involved in the alleged misconduct, the Mayor should be notified in
lieu of the City Manager or City Attorney. The Mayor will, in turn,
advise the other members of the City Council.
6. Management should not attempt to conduct individual investigations,
interviews, or interrogations. However, Management is responsible
for taking appropriate corrective actions to ensure adequate controls
exist to prevent reoccurrence of improper actions.
7. Management should support the City’s responsibilities and cooperate
fully with the Investigator, other involved departments, and law
enforcement agencies in the detection, reporting, and investigation of
criminal acts, including the prosecution of offenders.
8. Management must give full and unrestricted access to all necessary
records and personnel. All City furniture and contents, including
desks and electronic devices, are open to inspection at any time.
There is no reasonable expectation of privacy.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.07
Subject: Fraud Prevention & Detection Approval Date: 1/28/14
Page 5 of 7
9. In dealing with suspected dishonest or fraudulent activities, great
care must be taken. Therefore, management should avoid the
following:
a. False accusations.
b. Alerting suspected individuals that an investigation is underway.
c. Treating Employees unfairly.
d. Making statements that could lead to claims of false accusations
or other offenses.
10. In handling dishonest or fraudulent activities, Management has the
responsibility to:
a. Make no contact (unless requested) with the suspected individual
to determine facts or demand restitution. Under no
circumstances should there be any reference to “what you did”,
“the crime”, “the fraud”, “the misappropriation”, etc.
b. Avoid discussing the case, facts, suspicions, or allegations with
anyone outside the City, unless specifically directed to do so by
the City Attorney.
c. Avoid discussing the case, facts, suspicions, or allegations with
anyone other than employees who have a need to know such as
the City Manager, City Attorney, Department Head, Finance
Director, Investigator, or law enforcement personnel – and
should direct any City Council inquiries to the City Manager.
d. Direct all inquires from the suspected individual, or his or her
representative, to the Investigator. All inquires from the media
should be directed to the City Manager.
e. Take appropriate corrective and disciplinary action, up to and
including dismissal, after consulting with the City Manager, in
conformance with the City’s Personnel Rules and Regulations
and the appropriate Memorandum of Understanding, as
applicable.
B. Investigator Responsibilities
1. Upon assignment by the City Manager, the Investigator will
promptly investigate the allegations of fraud or other dishonest
activities.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.07
Subject: Fraud Prevention & Detection Approval Date: 1/28/14
Page 6 of 7
2. Employees must cooperate with the Investigator. Refusal to
cooperate, or the conveyance of inaccuracies, may subject an
Employee to disciplinary action up to and including dismissal.
3. In all circumstances where there appears to be reasonable grounds
for suspecting that a fraud has taken place, the Investigator, in
consultation with the City Manager, and City Attorney as appropriate,
will contact the appropriate law enforcement agency.
4. The Investigator shall be available and receptive to receiving
relevant, confidential information to the extent allowed by law.
5. If evidence is uncovered showing possible dishonest or fraudulent
activities, the Investigator will proceed as follows:
a. Discuss the findings with the City Manager and City Attorney.
b. Meet with the City Manager to:
1) Determine if disciplinary actions should be taken.
2) Notify insurers and coordinate the filing of insurance
claims.
c. Take immediate action, in consultation with the City Manager
and City Attorney, to prevent the theft, alteration, or destruction
of evidentiary records. Such action shall include, but is not limited
to:
1) Removing the records and placing them in a secure
location, or limiting access to the records.
2) Preventing the individual suspected of committing the
fraud from having access to the records.
6. In consultation with the City Manager and City Attorney, and the
appropriate law enforcement agency, the Investigator may disclose
particulars of the investigation to potential witnesses if such
disclosure would further the investigation.
7. If the Investigator is contacted by the media regarding an alleged
fraud or audit investigation, the Investigator will not speak with the
media but will instead refer the matter to the City Manager before a
response is made.
8. At the conclusion of the investigation, the Investigator will document
the results in a confidential report to the City Manager. If the report
concludes that the allegations are founded, the report will be
forwarded to the appropriate law enforcement agency and the City
Council will be advised.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 1.07
Subject: Fraud Prevention & Detection Approval Date: 1/28/14
Page 7 of 7
9. Unless exceptional circumstances exist, a person under investigation
for fraud is to be given notice in writing of essential particulars of the
allegations following the conclusions of the audit. Where notice is
given, the person against whom allegations are being made may
submit a written explanation to the Investigator no later than seven
calendar days after notice is received.
10. The Investigator will be required to make recommendations to the
appropriate department for assistance in the prevention of future
similar occurrences.
11. Upon completion of the investigation, including all legal and personnel
actions, all records documents, and other evidentiary material obtained
from the department under investigation will be returned to the City
Manager.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 2.01
Subject: Accounts Payable Effective Date: 5/13/14
Page 1 of 3
PURPOSE: To define the process for review, authorization and payment of vendor invoices.
DEFINITIONS:
Check Register: A report provided to the City Council on a monthly basis
listing payments made to the various City vendors for the
preceding month.
Discount: A percentage or fixed amount that may be deducted from
payment of a vendor’s invoice if payment is made by a
date determined by the vendor. A common discount term
is “1% 10”, meaning that one percent (1%) may be
deducted from the invoice amount if payment is made with
10 days of the invoice date.
EFT: Electronic Funds Transfer; may be used as a payment
alternative to City check when authorized by the Finance
Director.
Invoice: A bill rendered to the City by a vendor requesting payment
for goods or services provided to the City.
Net 30: A specific type of trade credit where the payment is due in
full 30 days after the item is purchased and an invoice
received.
Purchase Order: A City document authorizing a specified quantity of goods
and/or services to be provided to the City at specified
prices and terms.
Receiving Document: A document provided to the City by a vendor attesting to
the delivery of goods and/or services.
Statement: A summary provided by a vendor showing amounts
previously billed, paid, and the unpaid balance.
Vendor: A business entity or agency providing goods and/or
services to the City.
POLICY:
I. Payment Terms
A. In order to maintain good business relations with the City’s Vendors, it is the policy
of the City of Grand Terrace to pay Invoices for authorized goods or services within
30 days of Invoice receipt; (i.e., on a Net 30 basis) unless specified otherwise by
City Purchase Order or contract.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 2.01
Subject: Accounts Payable Effective Date: 5/13/14
Page 2 of 3
B. Invoices offering a Discount should be paid within the Discount terms whenever it
is possible to process and pay the Invoice within those terms, unless it is
determined by the Finance Director that it is more advantageous from a cash
management standpoint to not take the Discount and instead to make payment on
a Net 30 basis. (Minimum amounts that qualify for Discount processing may be
established by the Finance Director in order to ensure that accelerated Invoice
processing is cost effective in relation to the Discount amount.)
II. Invoice Processing
A. Vendors are to be instructed to mail (or e-mail) their Invoices to the City’s Finance
Department, attention Accounts Payable.
B. Invoices received in Accounts Payable are to be date stamped the same day as
received in order to document the date received by the City.
C. Should an Invoice mistakenly be received by a department other than Finance, it
should be given to the Finance Department Accounts Payable staff the same day
as received, so that the date stamp applied to the Invoice will reflect the date
received by the City.
D. On a timely basis, Accounts Payable staff should notify the applicable department
that ordered the goods or services, that an Invoice has been received, so the
responsible departmental staff can review and approve the Invoice for payment.
E. Invoice approval shall be in accordance with the City’s Signature Authorization
Listing. No Invoice should be paid without proper City authorization.
F. If an Invoice is related to a City Purchase Order or contract, the quantity and prices
reflected on the Invoice must be verified by the department responsible for the
purchase to ensure that they are in agreement with the Purchase Order or
contract.
G. If an Invoice is provided by Accounts Payable staff to another department for
review and approval, Accounts Payable staff must maintain a record of the Invoice
and date it was provided to the applicable department to ensure that it is returned
to Accounts Payable in time to meet the City’s Net 30 payment policy or Discount
terms. If there is a dispute regarding the goods or services that were billed to the
City, such that the Net 30 or Discount terms cannot be met, the applicable
department must notify Accounts Payable staff of the dispute.
H. Only original Vendor Invoices should be processed for payment. Payment should
never be made from an Invoice copy or Statement. (Should an original Invoice be
lost, such that a Vendor submits a duplicate Invoice for processing, the duplicate
Invoice should be stamped as a “Duplicate Original” by Accounts Payable staff.)
I. A City check should be mailed for all approved Vendor Invoices within 28 days of
the date of Invoice receipt in order to comply with the Net 30 payment policy,
allowing two days for mail processing and delivery. Exceptions would be Invoices
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City of Grand Terrace
Fiscal Policy Policy No. 2.01
Subject: Accounts Payable Effective Date: 5/13/14
Page 3 of 3
offering Discount terms, which would be paid sooner than 28 days from receipt in
order to qualify for the Discount (also allowing two days for mail processing and
delivery) and payments made by EFT.
J. If the City’s business software system allows a “three-way matching” process, such
that a Purchase Order, Invoice and Receiving Document are electronically
matched, this process should be implemented since it is considered to be an
industry “best practice” and eliminates the need for Invoices to be manually verified
or provided to another department for review and approval.
IIII. City Council Approval
A. A Check Register will be prepared by the Finance Department and submitted to the
City Council for review and approval on a monthly basis during a regularly
scheduled City Council meeting.
B. The Check Register will list all vendor payments for the preceding month along
with a brief description of the type of goods or services purchased and the account
code(s) associated with each payment.
C. In order to meet the Net 30 payment terms, and to take advantage of Discounts
offered by Vendors, payment of Invoices will not be delayed pending approval of
the Check Register.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.01
Subject: Purchasing
Effective Date: 5/13/14
09/13/2022
Page 1 of 6
PURPOSE: The purpose of this policy is to ensure that the City’s purchasing practices are
carried out in accordance with the revised Purchasing Ordinance, which was approved by the
City Council on November 27, 2012 September 13, 2022.
DEFINITIONS:
Notice Inviting Bids: A document issued to specified potential bidders, or
posted on the City’s website, inviting bids for specified merchandise or
service. The subsequent contract is generally awarded to the lowest
responsible bidder.
Purchase Order: A document which authorizes the delivery of specified
merchandise or the rendering of certain service and the making of a charge for
such merchandise or service.
Purchase Requisition: A document submitted by a department requesting
approval to purchase specified merchandise or service. Upon its approval, a
Purchase Order is issued to the selected vendor or service provider.
Purchasing Officer: The Purchasing Ordinance designates a Purchasing
Officer, to be appointed by the City Manager. The City Manager has currently
appointed the City’s Finance Director as the Purchasing Officer. Under the
direction of this position, the Finance Department is charged with the
responsibility of administering the Purchasing Ordinance.
Request for Proposals (RFP): A document issued to specified potential
service providers, or posted on the City’s website, requesting proposals for
services. The subsequent contract is awarded based on a number of factors
including professional expertise, experience, service level, references and
pricing. Consideration of factors other than pricing differentiates an RFP
process from a “Notice Inviting Bids” process.
POLICY & PROCEDURES:
I. Informal Purchases ($0 -2,500 $500)
The following procedures apply:
A. Funds must be budgeted for the goods or services to be purchased.
B. A Purchase Order (P.O.) is not required for purchases.
C. Price quotes are not required for purchases, although they are encouraged when
easily obtainable.
D. Payment for purchases is made by submitting a Request for Payment form with
approval by the applicable Department Head or designee (per the Authorized
Approval Listing).
E. Use of City credit card or petty cash may be appropriate for certain low-value
purchases, with separate guidelines applying to these purchases.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.01
Subject: Purchasing
Effective Date: 5/13/14
09/13/2022
Page 2 of 6
II. Informal Purchases ($2,500-5,000 501 - $1,000)
The following procedures apply:
A. Funds must be budgeted for the goods or services to be purchased.
B. A Purchase Order (P.O.) is required for purchases.
C. Price quotes are not required for purchases, although they are encouraged when
easily obtainable.
D. Payment for purchases is made by submitting a Purchase Requisition form with
approval by the applicable Department Head or designee (per the Authorized
Approval Listing).
E. Approval from the City Manager is required.
III. Open Market Purchases ($5,001-25,000 1,001 - $10,000)
The following procedures apply:
A. Funds must be budgeted for the goods or services to be purchased.
B. Three (3) informal price quotes must be obtained.
C. A Purchase Requisition must be submitted to Finance by the requesting
department with the price quotes attached as back-up. Purchase Requisitions
require approval of the applicable Department Head or designee (per the
Authorized Approval Listing).
D. Following Finance review of the Purchase Requisition, a P.O. will be issued by
Finance and mailed to the vendor, with a copy returned to the originating
department. Funds will also be encumbered in the financial system at this time.
(Note: P.O.s are signed by the Finance Director signifying that funds are available
and that the purchasing requirements have been met.)
E. Invoices to be paid against an approved P.O. do not require a Request for
Payment form. Instead, to expedite processing, an approval stamp may be
utilized on the invoice referencing the applicable P.O. (The account code to be
charged does not need to be referenced on the invoice unless the P.O. is
allocated to multiple account numbers, as the invoice will be charged per the
P.O.) Department Head or designee signature is required on the invoice (per the
Authorized Approval Listing).
IV. Formal Purchases (over $25,000 10,000 )
The following procedures apply:
A. Funds must be budgeted for the goods or services to be purchased.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.01
Subject: Purchasing
Effective Date: 5/13/14
09/13/2022
Page 3 of 6
B. Formal contracting procedures must be followed as enumerated in Section
3.24.080 of the Purchasing Ordinance, including:
1. Notice Inviting Bid
2. Bidders’ List
3. Bidders’ Security
4. Bid Opening Procedure
5. Performance Bonds as applicable
6. Formal Award of Contract by the City Council
C. Following award of contract, a Purchase Requisition should be submitted by the
applicable department, with a copy of the executed contract and City Council staff
report attached as backup. Purchase Requisitions require approval of the
applicable Department Head or designee (per the Authorized Approval Listing).
D. Following Finance review of the Purchase Requisition, a P.O. will be issued by
Finance and mailed to the vendor, with a copy returned to the originating
department. Funds will also be encumbered in the financial system at this time.
(Note: P.O.s are signed by the Finance Director signifying that funds are available
and that the purchasing requirements have been met.)
E. Invoices to be paid against an approved P.O. do not require a Request for
Payment form. Instead, to expedite processing, an approval stamp may be
utilized on the invoice referencing the applicable P.O. number. (The account code
to be charged does not need to be referenced on the invoice unless the P.O. is
allocated to multiple account numbers, as the invoice will be charged per the P.O.)
Department Head or designee signature is required on the invoice (per the
Authorized Approval Listing).
V. Professional Services
A. Professional Services are not awarded via formal bidding, since there are a
number of factors other than pricing used to determine the company that is best
suited to provide the service. Such factors include professional expertise,
experience, service level and references.
B. Although not formally bid, it is recommended that professional services with an
expected value greater than $10,000 utilize a competitive selection process via a
Request for Proposals (RFP).
C. RFPs should be posted on the City’s web page and distributed to known
companies with expertise in the applicable service area. Generally, at least 30
days should be allowed for proposal submittal following the RFP issuance date. It
may also be appropriate to schedule a pre-submittal conference to clarify the RFP
and respond to the interested parties’ questions.
D. Contracts for professional services with a value of $25,000 10,000 or less may be
awarded by the City Manager.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.01
Subject: Purchasing
Effective Date: 5/13/14
09/13/2022
Page 4 of 6
E. Contracts for professional services with a value greater than $25,000 10,000 must
be awarded by the City Council.
F. Following award of contract, a Purchase Requisition should be submitted by the
applicable department, with a copy of the executed contract and City Council staff
report (if applicable) attached as backup. Purchase Requisitions require approval
of the applicable Department Head or designee (per the Authorized Approval
Listing).
G. Following Finance review of the Purchase Requisition, a P.O. will be issued by
Finance and mailed to the vendor, with a copy returned to the originating
department. Funds will also be encumbered in the financial system at this time.
(Note: P.O.s are signed by the Finance Director signifying that funds are
available and that the purchasing requirements have been met.)
H. Invoices to be paid against an approved P.O. do not require a Request for
Payment form. Instead, to expedite processing, an approval stamp may be
utilized on the invoice referencing the applicable P.O. number. (The account code
to be charged does not need to be referenced on the invoice unless the P.O. is
allocated to multiple account numbers, as the invoice will be charged per the P.O.)
Department Head or designee signature is required on the invoice (per the
Authorized Approval Listing).
VI. Single Source Purchases / Waiver of Bidding / Piggy Backing
A. If it is determined that only one company is available or capable of providing the
desired goods or services, the purchase may be approved without obtaining price
quotes (purchases of $5,001 to $25,000 $1,001 to $10,000), conducting formal
bidding (purchases over $25,000 10,000), or utilizing an RFP process
(professional services over $25,000 10,000), provided that approval is received
for the single source purchase, as follows:
1. Purchases with a value of $5,001 - $25,000 $1,001 - $10,000: Memo
explaining the basis for the single source purchase must be submitted by the
applicable Department Head along with the Purchase Requisition and
approved by the City Manager.
2. Purchases with a value greater than $25,000 10,000: Approval for the
single source purchase must be submitted via a staff report in conjunction
with the contract award and approved by the City Council.
B. If a purchase is not considered to be single source but a waiver of
bidding/competitive selection is requested because it is in the best interest of the
City, approvals must be obtained by the City Manager ($5,001 - $25,000 $1,001 -
$10,000) or City Council (over $ 25,000 $10,000) as described above.
C. Justification must be provided if a waiver of bidding/competitive selection is
requested. A waiver is an exception to the competitive bid process. As a result,
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.01
Subject: Purchasing
Effective Date: 5/13/14
09/13/2022
Page 5 of 6
explanation/documentation is required to begin the review process. Below are
examples for requesting the waiver of the bid/competitive selection process:
i. Sole Source: Only one company is available/capable of performing the
task or providing the goods or services; the goods or services provided by
a specific company are unique in quality, performance, or use
specifications.
ii. Time Sensitive: The need for the desired good/service is needed to
correct or prevent an emergency;
iii. Intrinsic Value: When a good or service is determined by its historic,
artistic, or educational value.
D. If the City has determined that another municipality (host agency) has completed
the competitive bid/RFP process awarding a contract within the last 6 months for
goods and/or services that the City may require, in order to avoid time and costs,
the City has the option to “piggyback” on the public agency’s existing contract
provided the following requirements are met:
i. Approval must comply with the purchasing policy as follows:
a. $0 - $2,500 $500 requires Department Head approval;
b. $2,501 - $25,000 501 - $10,000 requires City Manager approval;
and
c. Over $25,000 10,000 requires City Council approval.
ii. The other public agency’s bid and contract award process meet’s the
City’s bid and contract award requirements;
iii. The host agency and the City (piggybacking agency) must sign an
agreement allowing the piggyback;
iv. The vendor/contractor must agree to the piggyback, offering the same
terms and conditions written in their contract to the piggyback agency;
and
v. The vendor must inform both the host agency and the piggybacking
agency in writing that they agree to the piggyback.
VII. Contract Requirements
A. If a purchase involves work to be performed on City premises or the public right of
way, regardless of the dollar amount, a City contract is recommended to
adequately address liability issues. If there is uncertainty regarding whether or not
a contract is needed for a given purchase, the City Attorney should be consulted.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.01
Subject: Purchasing
Effective Date: 5/13/14
09/13/2022
Page 6 of 6
B. Contracts up to $25,000 10,000 in value may be approved by the City Manager,
following City Attorney approval as to legal form. Whenever possible, the
standard City contract form should be used.
C. Contracts over $25,000 10,000 in value require City Council approval via the
agenda process.
D. Contracts should include a requirement for the service provider to obtain a City
Business License. The department administering the contract is responsible for
coordinating with Finance to ensure that a Business License is obtained if the
contract value is $25,000 10,000 or less (City Manager approval). If the contract
value is greater than $25,000 10,000 (City Council approval), the City Clerk’s
Office will coordinate with Finance to ensure that a Business License is obtained.
E. The department administering the contract is also responsible for obtaining the
insurance certificates from the service provider and verifying that the coverage
conforms to the contract requirements if the contract value is $25,000 10,000 or
less (City Manager approval). If the contract value is greater than $25,000 10,000
(City Council approval), the City Clerk’s Office will be responsible for obtaining the
insurance certificates from the service provider and verifying that the coverage
conforms to the contract requirements.
VIII. Conflict of interest and unlawful activity
E. A. Any evaluation or selection practice that would result in unlawful activity
including, but not limited to, kickbacks or unlawful consideration is expressly prohibited.
Any award of a contract where an employee, officer or agent has used his or her position
with the City to influence a governmental decision in which he or she knows or has
reason to know that he or she has a financial interest in any person or entity who seeks
such a contract or in the outcome of the selection process in any way, is expressly
prohibited.
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bullets or numbering, Tab stops: Not at 1.04"
Formatted: Font: (Default) Arial, 11 pt
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.02
Subject: Environmentally Preferable Purchasing Effective Date: 11/15/16
Page 1 of 8
1.0 STATEMENT OF POLICY
It is the policy of the City of Grand Terrace to:
• Institute practices that reduce waste by increasing product efficiency and effectiveness;
Purchase products that minimize environmental impacts, toxics, pollution, and hazards
to worker and community safety;
• Purchase products that reduce greenhouse gas emissions in their production, shipping,
use and discard; and
• Purchase products that include recycled content, are durable and long-lasting, and
conserve energy and water
2.0 PURPOSE
This Policy is adopted in order to:
• Conserve natural resources,
• Minimize environmental impacts such as pollution and use of water and energy,
• Eliminate or reduce toxics that create hazards to workers and our community,
• Support strong recycling markets,
• Reduce materials that are landfilled,
• Increase the use and availability of environmentally preferable products that protect the
environment,
• Identify environmentally preferable products and distribution systems,
• Reward manufacturers and vendors that reduce environmental impacts in their
production and distribution systems or services, and
• Create a model for successfully purchasing environmentally preferable products and
encourage other purchasers in our community to adopt similar goals.
3.0 STRATEGIES FOR IMPLEMENTATION
3.1 Source Reduction
3.1.1 Institute practices that reduce waste, encourage reuse, and result in the purchase of
fewer products.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.02
Subject: Environmentally Preferable Purchasing Effective Date: 11/15/16
Page 2 of 8
3.1.2 Purchase remanufactured products such as toner cartridges, tires, furniture,
equipment and automotive parts when possible.
3.1.3 Consider short-term and long-term costs in comparing product alternatives. This
includes evaluation of total costs expected during the time a product is owned,
including, but not limited to, acquisition, extended warranties, operation, supplies,
maintenance and replacement parts, disposal costs and expected lifetime compared
to other alternatives.
3.1.4 Purchase products that are durable, long lasting, reusable or refillable and to the
extent possible avoid purchasing one-time use or disposable products.
3.1.5 Request vendors eliminate packaging or use the minimum amount necessary for
product protection. Vendors shall be encouraged to take back packaging for reuse.
3.1.6 Specify a preference for packaging that is reusable, recyclable or compostable,
when suitable uses and programs exist.
3.1.7 Encourage vendors to take back and reuse pallets and other shipping materials.
3.1.8 Encourage suppliers of electronic equipment, including but not limited to computers,
monitors, printers, and copiers, to take back equipment for reuse or environmentally
sound recycling when the City of Grand Terrace discards or replaces such
equipment, whenever possible.
3.1.9 Consider provisions in contracts with suppliers of non-electronic equipment that
require suppliers to take back equipment for reuse or environmentally sound
recycling when the City of Grand Terrace discards or replaces such equipment,
whenever possible.
3.1.10 Promote electronic distribution of documents rather than printing or copying.
3.1.11 When producing paper documents, print and copy all documents on both sides to
reduce the use and purchase of paper. Printers and copiers shall be set to default
to duplex.
3.1.12 Reduce the number and type of equipment needed to perform office functions to
save energy and reduce purchasing and maintenance costs. Eliminate desktop
printers, redundant network printers and reduce the number of fax machines leased
or owned by the City of Grand Terrace. Consider lease or purchase of multi-
function devices.
3.1.13 Ensure all imaging equipment is installed with energy and resource-efficient settings
set as default.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.02
Subject: Environmentally Preferable Purchasing Effective Date: 11/15/16
Page 3 of 8
3.2 Recycled Content Products
3.2.1 Purchase products for which the United States Environmental Protection Agency
(U.S. EPA) has established minimum recycled content standard guidelines, such as
those for printing paper, office paper, janitorial paper, construction, landscaping,
parks and recreation, transportation, vehicles, miscellaneous and non-paper office
products.
3.2.2 Purchase multi-function devices, copiers and printers compatible with the use of
recycled content and remanufactured products.
3.2.3 To the extent feasible and in accordance with California Public Contract Code, Sec.
10409, purchase re-refined lubricating and industrial oil for use in its vehicles and
other equipment, as long as it is certified by the American Petroleum Institute (API)
as appropriate for use in such equipment. This section does not preclude the
purchase of virgin-oil products for exclusive use in vehicles whose warranties
expressly prohibit the use of products containing recycled oil.
3.2.4 Ensure pre-printed recycled content papers intended for distribution that are
purchased or produced contain a statement that the paper is recycled content and
indicate the percentage of post-consumer recycled content.
3.3 Energy Efficient and Water Saving Products
3.3.1 Purchase energy-efficient equipment with the most up-to-date energy efficiency
functions. This includes, but is not limited to, high efficiency space heating systems
and high efficiency space cooling equipment.
3.3.2 Replace inefficient interior lighting with energy-efficient equipment when possible.
3.3.3 Replace inefficient exterior lighting, street lighting and traffic signal lights with
energy-efficient equipment when possible. Minimize exterior lighting where possible
to avoid unnecessary lighting of architectural and landscape features while providing
adequate illumination for safety and accessibility.
3.3.4 Purchase U. S. EPA Energy Star certified products when available.
3.3.5 Purchase U.S. EPA WaterSense labeled water-saving products when available.
This includes, but is not limited to, high-performance fixtures like toilets, low-flow
faucets and aerators, and upgraded irrigation systems.
3.4 Green Building Products and Practices
3.4.1 Consider Green Building practices for design, construction, and operation as
described in the LEED Rating Systems for all building and renovations undertaken
by the City of Grand Terrace.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.02
Subject: Environmentally Preferable Purchasing Effective Date: 11/15/16
Page 4 of 8
3.5 Landscaping Products and Practices
3.5.1 Select plants to minimize waste by choosing species for purchase that are
appropriate to the microclimate, species that can grow to their natural size in the
space allotted them, and perennials rather than annuals for color. Native and
drought-tolerant plants that require no or minimal watering once established are
preferred.
3.5.2 Hardscapes and landscape structures constructed of recycled content materials are
encouraged. Limit the amount of impervious surfaces in the landscape. Permeable
substitutes, such as permeable asphalt or pavers, are encouraged for walkways,
patios and driveways.
3.6 Toxics and Pollution Prevention Products and Practices
3.6.1 Manage pest problems through prevention and physical, mechanical and biological
controls when the City of Grand Terrace and its contractors maintain buildings and
landscapes.
3.6.2 Use products with the lowest amount of volatile organic compounds (VOCs), highest
recycled content, low or no formaldehyde and no halogenated organic flame
retardants when purchasing building maintenance materials such as paint,
carpeting, adhesives, furniture and casework.
3.6.3 Prohibit the purchase of products that use polyvinyl chloride (PVC) such as, but not
limited to, furniture and flooring.
3.6.4 Purchase products and equipment with no lead or mercury whenever possible. For
products that contain lead or mercury, the City of Grand Terrace should give
preference to those products with lower quantities of these metals and to vendors
with established lead and mercury recovery programs. In addition, whenever lead-
or mercury-containing products require disposal, the City of Grand Terrace will
dispose of those products in the most environmentally safe manner possible. All
fluorescent lamps and batteries will be recycled.
3.6.5 Purchase or specify commercial carpeting that meets NSF/ANSI 140 Standard for
Sustainable Carpet Assessment and require old carpet that is removed be recycled.
3.6.6 When replacing vehicles, consider less-polluting alternatives to diesel such as
compressed natural gas, bio-based fuels, hybrids, electric batteries, and fuel cells,
as available.
3.7 Bio-Based Products
3.7.1 Encourage the use of vehicle fuels made from non-wood, plant-based contents such
as vegetable oils whenever practicable.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.02
Subject: Environmentally Preferable Purchasing Effective Date: 11/15/16
Page 5 of 8
3.7.2 Use paper, paper products and construction products made from non-wood, plant-
based contents such as agricultural crops and residues when feasible.
3.7.3 Use bio-based plastic products that are biodegradable and compostable, such as
bags, film, food and beverage containers, and cutlery when feasible.
3.7.4 Purchase compostable plastic products that meet American Society for Testing and
Materials (ASTM) standards as found in ASTM D6400. Meet ASTM D6868
standards for biodegradable plastics used as coatings on paper and other
compostable substrates when feasible.
3.8 Forest Conservation Products
3.8.1 To the greatest extent practicable, do not procure wood products such as lumber
and paper that originate from forests harvested in an environmentally unsustainable
manner.
3.8.2 Encourage the purchase or use of previously used or salvaged wood and wood
products whenever practicable.
4.0 RESPONSIBILITIES
4.1 City of Grand Terrace recognizes its duty to act in a fiscally responsible as well as a
timely manner.
4.2 Nothing contained in this policy shall be construed as requiring a department,
purchaser or contractor to procure products that do not perform adequately for their
intended use, exclude adequate competition, risk the health or safety of workers and
citizens, or are not available at a reasonable price in a reasonable period of time.
4.3 Nothing contained in this policy shall be construed as requiring the City of Grand
Terrace, department, purchaser, or contractor to take any action that conflicts with
local, state or federal requirements.
4.4 Grand Terrace has made significant investments in developing a successful
recycling system and recognizes that recycled content products are essential to the
continuing viability of that recycling system and for the foundation of an
environmentally sound production system.
5.0 IMPLEMENTATION
5.1 The Director of Finance shall implement this policy in coordination with other
appropriate Grand Terrace personnel.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.02
Subject: Environmentally Preferable Purchasing Effective Date: 11/15/16
Page 6 of 8
5.2 Upon request, buyers making the selection from competitive bids shall be able to
provide justification for product choices that do not meet the environmentally
preferable purchasing criteria in this policy.
5.3 Encourage vendors, contractors and grantees to comply with applicable sections of
this policy for products and services provided to the City of Grand Terrace.
6.0 PROGRAM EVALUATION
6.1 The Director of Finance shall periodically evaluate the success of this policy’s
implementation and report to the City Council.
7.0 DEFINITIONS
7.1 “American Society for Testing and Materials” means ASTM International, an open
forum for the development of high quality, market relevant international standards
use around the globe.
7.2 “Bio-Based Products” means commercial or industrial products (other than food or
feed) that utilize agricultural crops or residues but does not include products made
from forestry materials.
7.3 “Biodegradable plastic” means the degradation of the plastic must occur as a result
of the action of naturally occurring microorganisms.
7.4 “Buyer” means anyone authorized to purchase or contract for purchases on behalf
of this jurisdiction or its subdivisions.
7.5 “Compostable plastic” means plastic that is biodegradable during composting to
yield carbon dioxide, water and inorganic compounds and biomass, at a rate
consistent with other known compostable materials and leaves no visually
distinguishable or toxic residues.
7.6 “Contractor” means any person, group of persons, business, consultant, designing
architect, association, partnership, corporation, supplier, vendor or other entity that
has a contract with the City of Grand Terrace or serves in a subcontracting capacity
with an entity having a contract with the City of Grand Terrace for the provision of
goods or services.
7.7 “Degradable plastic” means plastic that undergoes significant changes in its
chemical structure under specific environmental conditions.
7.8 “Energy Star” means the U.S. EPA’s energy efficiency product labeling program.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.02
Subject: Environmentally Preferable Purchasing Effective Date: 11/15/16
Page 7 of 8
7.9 “Energy-Efficient Product” means a product that is in the upper 25% of energy
efficiency for all similar products, or that is at least 10% more efficient than the
minimum level that meets Federal standards.
7.10 “Federal Energy Management Program” is a program of the Department of Energy
that issues a series of Product Energy Efficiency Recommendations that identify
recommended efficiency levels for energy-using products.
7.11 “LEED Rating System” means the most recent version of the Leadership in Energy
and Environmental Design (LEED) Rating System, approved by the U.S. Green
Building Council, and designed for rating new and existing commercial, institutional,
and residential buildings.
7.12 “NSF/ANSI” means NSF International follows the American National Standards
Institute (ANSI) standards development process. Standards are developed by joint
committees (balanced stakeholder groups of public health, industry and user
representatives).
7.13 "Post-consumer Material" means a finished material which would normally be
disposed of as a solid waste, having reached its intended end-use and completed its
life cycle as a consumer item, and does not include manufacturing or converting
wastes.
7.14 “Pre-consumer Material” means material or by-products generated after
manufacture of a product is completed but before the product reaches the end-use
consumer. Pre-consumer material does not include mill and manufacturing trim,
scrap, or broke which is generated at a manufacturing site and commonly reused
on-site in the same or another manufacturing process.
7.15 “Recovered Material” means fragments of products or finished products of a
manufacturing process, which has converted a resource into a commodity of real
economic value, and includes pre-consumer and post-consumer material but does
not include excess resources of the manufacturing process.
7.16 “Recycled Content” means the percentage of recovered material, including pre-
consumer and post-consumer materials, in a product.
7.17 “Recycled Content Standard” means the minimum level of recovered material and/or
post-consumer material necessary for products to qualify as “recycled products.”
7.18 “Recycled Product” means a product that meets the City of Grand Terrace’s
recycled content policy objectives for post-consumer and recovered material.
7.19 “Remanufactured Product” means any product diverted from the supply of discarded
materials by refurbishing and marketing said product without substantial change to
its original form.
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City of Grand Terrace
Fiscal Policy Policy No. 3.01.02
Subject: Environmentally Preferable Purchasing Effective Date: 11/15/16
Page 8 of 8
7.20 “Reused Product” means any product designed to be used many times for the same
or other purposes without additional processing except for specific requirements
such as cleaning, painting or minor repairs.
7.21 “Source Reduction” refers to products that result in a net reduction in the generation
of waste compared to their previous or alternate version and includes durable,
reusable and remanufactured products; products with no, or reduced, toxic
constituents; and products marketed with no, or reduced, packaging.
7.22 “U.S. EPA Guidelines” means the Comprehensive Procurement Guidelines
established by the U.S. Environmental Protection Agency for federal agency
purchases as of October 2007 and any subsequent versions adopted.
7.23 “Water-Saving Products” are those that are in the upper 25% of water conservation
for all similar products, or at least 10% more water-conserving than the minimum
level that meets the Federal standards.
7.24 “WaterSense” means a partnership program by the U.S. Environmental Protection
Agency. Independent, third-party licensed certifying bodies certify that products
meet EPA criteria for water efficiency and performance by following testing and
certification protocols specific to each product category. Products that are certified
to meet EPA specifications are allowed to bear the WaterSense label.
8.0 EFFECTIVE DATES
8.1 This policy shall take effect on November 15, 2016.
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City of Grand Terrace
Fiscal Policy Policy No. 3.02
Subject: Budget Appropriation Adjustments Effective Date: 5/13/14
Page 1 of 3
PURPOSE: To establish policies and procedures regarding changes to appropriation
amounts after adoption of the Annual Budget by the City Council.
DEFINITIONS:
Type A Adjustments: New or increased appropriations necessary to fund
service level changes, new programs, fixed assets, and expenditures in excess
of approved budget amounts.
Type B Adjustments: New or increased appropriations with offsetting revenues
such that there is no net budgetary impact.
Type C Adjustments: Transfer of budget amounts from one operating program
to another in different funds and/or departments.
Type D Adjustments: Transfer of budget amounts from a Capital Improvement
Plan (CIP) project to another, regardless of fund.
Type E Adjustments: Transfer of budget amounts from one division, program,
or object code to another within the same fund and department.
POLICY:
I. Responsibility
A. Budget adjustments shall be processed at such time it is determined that additional
funds are needed in a program (business unit) so that expenditures will not exceed
the City Council approved appropriation for the program (business unit). This shall
apply to operating programs as well as capital projects.
B. Every budget adjustment request requires the completion of a Budget
Appropriation Adjustment (BAA) Form. Written justification is required on the BAA
Form for all requests.
II. Procedures and Required Approvals
A. Type A: New or increased appropriations from reserves or fund balance
1. New or increased appropriations from reserves or fund balance shall require
City Council approval. A properly completed BAA Form must be submitted as
an attachment to the City Council staff report describing the appropriation
request. The Finance Department will retain the BAA Form following its
review and verification; it will not be included as an attachment to the final staff
report.
2. These adjustments must be approved by the City Council prior to commitment
of funding in excess of budgeted amounts.
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City of Grand Terrace
Fiscal Policy Policy No. 3.02
Subject: Budget Appropriation Adjustments Effective Date: 5/13/14
Page 2 of 3
B. Type B: New or increased appropriations with offsetting revenues; no net
budgetary impact
1. The City Manager is authorized to approve such appropriations.
2. This type of appropriation adjustment shall require the following approvals:
Requestor: Program Supervisor/Manager
Approval: Department Head
Approval: Finance Director
Approval: City Manager or designee
C. Type C: Transfers of budget amounts between operating programs in different
funds and/or departments, regardless of fund, shall require the following approvals:
1. The City Manager is authorized to approve such appropriations.
2. This type of appropriation adjustment shall require the following approvals:
Requestor: Program Supervisor/Manager
Approval: Department Head
Approval: Finance Director
Approval: City Manager or designee
D. Type D: Transfer of budget amounts between Capital Improvement Plan (CIP)
projects, regardless of fund, shall require the following approvals:
1. The City Manager is authorized to approve such appropriations.
2. This type of appropriation adjustment shall require the following approvals:
Requestor: Program Supervisor/Manager
Approval: Department Head
Approval: Finance Director
Approval: City Manager or designee
E. Type E: Transfer of budget amounts from one division, program, or object code to
another within the same fund and department shall require the following approvals:
1. The Finance Director is authorized to approve such appropriations.
2. This type of appropriation adjustment shall require the following approvals:
Requestor: Program Supervisor/Manager
Approval: Department Head
Approval: Finance Director
III. Request Procedures
Requests for Budget Appropriation Adjustments shall be completed on the authorized
BAA Form (Exhibit A).
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City of Grand Terrace
Fiscal Policy Policy No. 3.02
Subject: Budget Appropriation Adjustments Effective Date: 5/13/14
Page 3 of 3
IV. Routing and Follow-up
A. Type A adjustments (City Council approval required)
1. The department requesting the appropriation adjustment is responsible for
completing the BAA request form and attaching it to the corresponding City
Council staff report.
2. The Finance Director will retain the BAA Form following its review and
verification; it will not be forwarded with the staff report for subsequent
reviews and approvals, nor included as an attachment to the staff report.
3. Upon Council approval, the Finance Department will process the budget
adjustment, with no further approvals on the BAA Form required.
B. All Other Types of Adjustments
1. The department shall prepare the BAA Form and specify in the justification
box of the form, the reason for the adjustment request. If there is insufficient
room for the justification, an additional Word document specifying the
purpose or need for the adjustment may be attached.
2. After departmental staff signatures are obtained, the BAA Form should be
routed to the Finance Director for review and final processing.
V. City Council Staff Reports
A. The recommendation and fiscal impact sections of the report to City Council should
include specific reference to the nature of the appropriation adjustment.
1. If the adjustment is to increase an amount of an existing budgeted project or
program, the proper account codes must be included in the recommended
action.
2. If the request is for a new project or program, the report should indicate the
proposed funding sources and amounts of appropriations required.
3. In addition, if new revenue sources are associated with the proposed
project/program (i.e., grants, special revenues, etc.) these should be included
and identified in the recommended City Council action so that appropriate
revenue accounts can be adjusted.
4. A properly completed BAA Form must be submitted as an attachment to the
City Council staff report describing the appropriation request. The Finance
Department will retain the BAA Form following its review and verification; it
will not be included as an attachment to the final staff report.
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Date:
Department:
Cost Center:
Type of Adjustment:
New/Additional Appropriations (Expense) from Reserves/Fund Balance
Required Signatures: 1: Requestor 2: Dept. Head 3: Finance Dept. 5: City Manager 6: City Council
New/Additional Appropriations (Expense) with offsetting Revenue (no net budgetary impact).
Required Signatures: 1: Requestor 2: Dept. Head 3: Finance Dept. 5: City Manager
Transfers between Funds & Departments (Inter-fund/Inter-Departmental Transfers)
Required Signatures: 1: Requestor 2: Dept. Head 3: Finance Dept. 5: City Manager
Transfers between Capital Improvement Program (CIP) projects within the same fund (no net budgetary impact)
Required Signatures: 1: Requestor 2: Dept. Head 3: Finance Dept. 5: City Manager
Transfers between Cost Centers within the same Department & Fund (no net budgetary impact)
Required Signatures: 1: Requestor 2: Dept. Head 3: Finance Dept.
Revenue
Current
Budget
Increase/
(Decrease)
Revised/
Budget
Expense
Current
Budget
Increase/
(Decrease)
Revised/
Budget
Transfer OUT (From)
Current
Budget
Increase/
(Decrease)
Revised/
Budget
Transfer IN (To)
Current
Budget
Increase/
(Decrease)
Revised/
Budget
Prepared by: Requestor Extension:Date:
Authorization: Department Head Extension:Date:
Approval as to Funds: Finance Department Extension:Date:
Authorization: City Manager Extension:Date:
TOTAL
TOTAL
Council Action No.
Justification/Reason for
Budget Appropriation Adjustment
Justification/Reason for
Budget Appropriation Adjustment
EXHIBIT A - City of Grand Terrace Budget Appropriation Adjustment (BAA) Form
Council Action Date
GL Account No.
GL Account No.
Note: For Type A adjustments, please attach minutes from the City Council meeting to provide documentation of City Council approval.
Signature by the Mayor on the BAA Form is not required.
Account Description Justification/Reason for
Budget Appropriation Adjustment
GL Account No.
GL Account No.
Justification/Reason for
Budget Appropriation AdjustmentAccount Description
TOTAL
TOTAL
Account Description
Account Description
A)
B)
C)
D)
E)
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 1 of 10
PURPOSE:
This policy establishes the basic guidelines for travel on City business. It defines the City’s
expectations of its employees (and other City officials) who are required to travel in connection
with their work responsibilities, identifies which expenses will be advanced or reimbursed to the
employee by the City, and which expenses are considered the personal responsibility of the
employee. Business travel is defined as authorized attendance at conferences and seminars,
or authorized travel for any other purpose in connection with official City responsibilities.
Business travel includes one-day trips and trips requiring one or more overnight stays.
As a general rule, this policy is not intended to cover business meetings of less than one day
involving travel of less than 150 miles round trip, even though employees may be reimbursed for
their cost of meals and travel. In such cases Department Head discretion is required and
departments may decide that such travel fits within the scope of this policy. As an example, a
day trip to Los Angeles to attend a business meeting will likely involve meals and transportation
expense reimbursement. However, such travel may involve less than $100 of expenditures and
are generally not considered as part of the scope of this policy.
POLICY:
I. General Standards
A. Mandatory Use of the Travel Authorization & Expense Reporting Form (Exhibit A).
The Travel Authorization & Expense Reporting Form (Travel Form) is a mandatory
document for all employees, whether or not one expects to receive a travel advance
or reimbursement for business related travel expenses. It serves as an estimate of
the total cost of attending conferences, meetings and seminars, and provides
documentation of cash advances, vendor payments and credit card purchases.
Equally important, it serves as documented authorization to travel on City business
and helps identify when the employee is traveling on behalf of the City in case of an
accident or other incident. The requirement to submit a Travel Form also applies to
City Council Members and other appointed officials (such as Planning
Commissioners), who will coordinate travel with the City Manager’s Office and
obtain City Manager approval of the Travel Form as a prudent internal control
measure.
B. Policy Emphasizes Economy and Practicality with Reasonable Subsistence and
Accommodations while on City Business
1. This policy provides for reasonable subsistence, modes of travel, and lodging
and accommodations while on City business. The intent is to allow employees
to eat in moderately priced restaurants, stay in moderately priced hotels, and
travel comfortably. Employees are responsible for using good judgment in
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 2 of 10
making reservations, and travel decisions should emphasize economy and
efficiency at all times. For example:
a. When using air travel, employees should always book flights in coach as
opposed to first class.
b. Although the Internet offers numerous specials and low-priced flights,
flexibility is often sacrificed and sales are often final. Employees should
consider this when booking their flights and can be held personally
accountable if a flight is booked incorrectly, costing the City money. To
provide more flexibility, designated travel agencies should be used.
c. When choosing a hotel for a conference, it is preferable to stay at the
hotel where the conference is being held even though it may be slightly
more expensive than others in the area.
2. It is permissible to combine personal travel with business travel, such as
departing for a business conference a few days early to utilize personal
vacation time. But only strictly business-related expenses will be advanced or
reimbursed and personal travel shall not result in higher business travel costs
or they must be reimbursed to the City.
D. Policy is Not Intended to be All Inclusive
1. This policy is not intended to address every issue, exception or contingency
that may arise in the course of City travel or attendance at meetings.
2. Accordingly, the basic standard that should always prevail is to use good
judgment and economy in the use and stewardship of City funds.
II. Travel Authorization & Expense Reporting Form (“Travel Form”)
A. Travel Authorization
1. Travel Authorization approval by Department Head and City Manager is
required whenever:
a. Total estimated cost will exceed $200; or
b. Overnight accommodations will be required.
2. Department Head authorization is acceptable for employee travel that is
estimated at $200 or less and does not involve overnight accommodations.
3. Travel Restrictions
a. Out-of-state travel authorizations require approval by the City Manager
(or his/her designee).
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 3 of 10
b. Department Head travel authorizations require approval of the City
Manager (or his designee).
4. Determining Methods of Payment for Travel Expenses
a. The City will pay for legitimate and reasonable travel-related business
expenses, including transportation, lodging, registration fees, meals, and
any other related expenses if they are for official business and fit within
these guidelines.
b. There are four methods of payment for travel-related expenses: (1) direct
payment to vendors by check; (2) payment by City credit card (secured in
the Finance Department); (3) reimbursement to the employee for out-of-
pocket expenses; and (4) cash advances, which include per diem.
c. Direct payments to vendors are made by the City to an organization to
pay for specific costs related to the trip. These costs usually include
registration fees, lodging and airfare.
d. City credit card (may be used to prepay travel expenses, including
registration fees, lodging and airfare, or may be used to cover expenses
as they arise on the trip. Credit cards may not be used to advance per
diem.
e. The employee will be reimbursed for actual, reasonable and allowable
out-of-pocket expenses related to travel on City business. The employee
must account for out-of-pocket expenses with receipts.
f. Cash advances, including per diem, are lump sum payments made to the
employee prior to one’s travel based on reasonable estimated expenses.
Ground transportation is often difficult to estimate, but may be advanced
to the employee using reasonable estimates based on the itinerary. Upon
the employee’s return, and with the exception of per diem expenses, the
employee must account for advanced expenses with receipts. Advances
exceeding substantiated expenses must be returned to the City. If
authorized expenses (excluding meals and incidentals covered by per
diem) exceed the amount advanced, the City will reimburse the employee
for the difference.
Note: Receipts are not needed to justify meals and incidental
expenses covered by per diem.
g. To obtain direct vendor payments or to receive a cash advance, the
employee must do the following prior to his trip:
1) Complete the appropriate sections of the Travel Form.
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 4 of 10
2) Attach documentation for all payments requested. This would
include copies of registration forms, announcements, itineraries, and
copies of seminar brochures that provide detail of costs.
3) Attach completed and signed Direct Pay Request forms for all
travel-related payment requests.
a) Include the appropriate authorization signatures.
b) Retain a copy of the completed form to reconcile and account
for actual expenses upon return from trip.
c) Submit the Travel Form and any Direct Pay Request forms to
the Accounts Payable section of the Finance Department.
5. Per Diem (Meals and Incidentals)
a. Meals and incidentals, as defined by Internal Revenue Service (IRS)
guidelines, include all meals and miscellaneous hotel services, such as
tips to waiters and porters. Per Diem will be paid at the current rates
established by IRS guidelines determined by the minimum federal per
diem rate table for the City’s region. All IRS tax rules will apply.
b. By IRS regulations, per diem is defined as travel subsistence extending
beyond one day and there is no requirement to provide receipts.
However, for one day or partial days of travel, meals expense receipts
are required and the standard one day, non-per diem meal allowance will
be $79 45 allocated as follows:
Breakfast: $ 8.00 18.00
Lunch: $12.00 20.00
Dinner: $25.00 36.00
Incidentals: $5.00
If an employee is advanced money for one-day or partial day meals and
the total amount of all receipts is less than the amount advanced, the
difference must be reimbursed to the City.
Conversely, if the employee exceeds the total one-day or partial day
standard non-per diem meal allowance and is requesting
reimbursement, receipts MUST be provided and reimbursement shall be
at the discretion of the Finance Director based on the circumstances.
c. As a general rule, employees are expected to base their requests for
daily meals and incidentals according to the federal per diem rates.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 5 of 10
d. As an alternative, an employee can elect not to receive per diem and
request reimbursement of actual, reasonable and allowable subsistence
expenses that are substantiated with receipts. This alternative must be
approved in advance and receipts must accompany the request for
reimbursement. However, a combination of per diem and reimbursement
of meals and incidental business expenses is prohibited.
e. Partial per diem for travel of more than one day may be advanced
depending on the employee’s departure time and return time. The
request for partial or full per diem will be based on the employee’s
itinerary and will be granted based on a “fair and reasonable” request.
Partial days per diem will be prorated as follows:
1) Travel of less than 12 hours in a day will be prorated to one-half
day of per diem.
2) Travel of 12 hours or more in a day will count as a full day for per
diem.
For example, assuming a daily per diem of $79 45, if an employee
leaves on Monday at 6:00 A.M. to San Francisco for a business
conference and returns to work at 1:00 P.M. on Tuesday, the per diem
advance would be $158 90.
6. Other Expenses
a. Alcoholic Beverages – Expense reimbursement for alcoholic beverages
will not be allowed.
b. Spouses and Guests – Spouses and guests are welcome to accompany
employees on City travel and at conferences, seminars and meetings.
However, any additional costs associated with the participation of a
spouse or guests are the responsibility of the employee.
7. Method of Travel
a. When planning the transportation portion of the trip, the employee must
consider all aspects of cost to the City, such as daily expenses,
overtime, lost work time, and actual transportation costs. In general,
common carrier (bus, train or plane) is preferred mode of transportation.
b. The City will only pay or reimburse employees for the cost of coach class
flights.
c. Employees shall be responsible for canceling any airline or hotel
reservations they will not use. Any charge for an unused reservation
shall be considered the employee’s personal expense, unless failure to
cancel the reservation was due to circumstances beyond the employee’s
control.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 6 of 10
d. If available, a City-owned vehicle should be used for travel unless the
employee receives a mileage allowance.
e. If a City vehicle is not available, or if there is another reason why the
employee should drive his/her personal automobile, the City will
reimburse the employee with either the cost of the most appropriate
means of transportation, or the actual mileage involved in the travel,
whichever is the lesser of the two.
f. The reimbursed mileage rate for use of a private vehicle for City travel
will be at the current Standard Federal Mileage Rate set by the IRS.
g. Mileage reimbursement for a private vehicle being used for City travel
must consider the employee’s normal commute to work and whether the
employee receives a monthly vehicle allowance. If the employee does
not receive a vehicle allowance, the employee is entitled to
reimbursement for all business miles driven, with the following
exceptions:
1) If travel begins and ends at work, the entire business mileage will
be reimbursed.
2) If travel begins at work and ends at home (or vice versa), and if the
total business mileage driven is less than the total mileage that
would have been driven if travel began and ended at work, the total
mileage can be claimed. (Example: John Doe lives in Banning and
is attending a morning conference in Los Angeles. The trip from
Banning to Los Angeles is 75 miles, but is only 60 miles from
Grand Terrace to Los Angeles. Since his normal commute would
bring him to Grand Terrace and 10 miles closer, in this case John
would be reimbursed 120 miles, the round-trip distance from City
Hall).
3) If travel begins at home and ends at home, and if the total business
mileage driven is less than the total mileage that would have been
driven if travel began and ended at work, the total mileage can be
claimed. (Example: Jane Doe lives in Banning and is attending a
conference in Palm Springs. The round-trip mileage from her
house is 120 miles, but would have been 130 miles had she started
at and returned to the Grand Terrace City Hall. In this case Jane
would be reimbursed for the 120-mile round trip).
4) Under no circumstances shall reimbursement be given to the total
business mileage claimed that exceeds the total mileage had the
travel begun and ended at work.
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 7 of 10
h. If an employee already receives a monthly vehicle allowance, a total of
50 miles must be deducted for each one-way travel to or from the
authorized City business travel destination. The mileage exceeding a
50-mile radius is subject to reimbursement, however, the first 50 miles
each way is considered applicable to the employee’s vehicle allowance.
The above four rules shall also apply.
i. In order to drive a privately-owned vehicle on City business, the
employee must:
1) Possess a valid California driver’s license.
2) Carry liability insurance, as required by the State of California
3) Realize that any damage to the employee’s personal vehicle and/or
service or repair occurring on the trip will be the employee’s
responsibility, as insurance costs are factored in the IRS per mile
cost reimbursement.
j. If local ground transportation is needed during the trip, the use of public
transit such as airport shuttles, buses, streetcars, and subways is
appropriate.
k. Ground transportation must be efficient and cost effective. Use of taxis,
hotel courtesy buses and local shuttles are allowed when other public
transit or common carriers are not reasonably available.
l. Requests for advances of ground transportation costs (including tips)
should be substantiated whenever possible. If the cost cannot be
substantiated, advances will be based on a fair and reasonable estimate
of expenses.
m. Ground transportation receipts are required for reimbursement.
Employee requests for out-of-pocket reimbursement of ground
transportation costs without receipts are subject to review and approval
by the Finance Director.
n. The use of a rental car is authorized in cases where it is economical or
more feasible relative to using ground transportation.
o. If a car rental is required, the employee may request reimbursement for
out-of-pocket costs including fuel, upon return from business travel.
Receipts are required. The optional car rental agency-provided
insurance is not a reimbursable cost. Since employees are normally
insured by their own automobile insurance carrier for use of a rental
vehicle, employees may opt for this coverage at their own expense.
p. The City will reimburse all reasonable business travel expenses,
including bridge tolls and parking fees incurred as a result of an
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 8 of 10
employee’s authorized use of a private vehicle or City vehicle while
traveling on City business. Receipts are required.
q. Without receipts, any employee request for out-of-pocket reimbursement
of costs incurred as a result of an employee’s authorized use of a private
vehicle or City vehicle while traveling on City business is subject to
review and approval by the Finance Director and additional approval by
the City Manager.
8. Compensation for Travel Time (Non-Exempt Employees)
a. When travel time exceeds the normal workday or workweek, the City’s
rules for overtime apply to those employees eligible for overtime.
b. In determining overtime compensation, normal commute time should be
deducted from total travel time.
c. Normal unpaid meal periods are not considered work time while
traveling.
d. Overtime eligibility applies equally to drivers and passengers, and should
be granted whether travel occurs during normal workdays or on
weekends or evenings.
9. Lodging
a. Lodging is allowed for attendance at conferences, seminars or meetings
that are in excess of 50 miles or one hour of travel time, one-way, from
the employee’s home. The City Manager may approve exceptions to the
50-mile/one hour minimum if he/she considers the request to be
reasonable and practical, especially considering the destination, the
difficulty of the commute, and the starting time of the conference.
b. Reasonable lodging expenses will be paid at actual cost including taxes
and parking, for as many nights as necessary.
c. The lodging accommodations should be economical and practical. In
general, the employee should select the most reasonably priced
accommodations available, but consistent with the purpose and goals of
the trip.
d. When choosing a hotel for a conference, it is preferable to stay at the
hotel where the conference is being held even though it may be slightly
more expensive than others in the area, in order to reduce transportation
expenses such as cab fares.
e. Other non-business related room charges, including movies or
refreshments are not reimbursable.
G.11.a
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 9 of 10
f. When making lodging reservations, be sure to ask if a “government rate”
is available. Some cities exempt travelers on government business from
their local transient occupancy tax (TOT). This can represent as much
as a 12%-15% savings on lodging costs depending on the TOT rate.
Check with the hotel for this exemption and form.
g. Since there is seldom a difference in the room rate for double
occupancy, it is permissible for an employee to share a room with a
spouse or guest at no additional cost to the City. However, if double
occupancy of a room by a non-City employee results in an increased
room rate, the difference will be the employee’s personal expense.
Furthermore, incurring a non-business related expense using advanced
City funds is prohibited.
10. Incidental Expenses
a. Incidental expenses include but are not limited to tips for persons who
provide services, such as waiters, maids, porters, and baggage
handlers.
b. Incidental expenses incurred while on an overnight business trip are
covered by per diem. To receive reimbursement on incidental expenses
incurred on a day business trip, receipts should be submitted whenever
possible. If the employee is unable to obtain a receipt, the costs should
be documented on the Travel Form as a reimbursement request, along
with an explanation of why a receipt was not available. Reimbursement
of such unsupported expenses will require approval by the Finance
Director and City Manager.
c. Business-related expenses such as telegrams and telephone calls,
copying and faxing, computer accessories, tapes and other training
materials purchased at a conference are reimbursable with receipts, and
become property of the City. Whenever possible, employees should
anticipate the need for supplies and should take whatever they need with
them instead of purchasing these supplies at their destination, where the
cost may be significantly more than what the City would normally pay.
d. Tips are generally an allowable and reimbursable cost of business travel,
but they must be reasonable.
1) For business trips not involving per diem, they should never exceed
15% of the cost of the meal.
2) For ground transportation, they should not exceed 10% of the fare.
11. Non-Reimbursable Expenses
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 10 of 10
Personal entertainment costs are not reimbursable. These include
headphones or alcoholic beverages purchased on airplanes, video rentals
and refreshment bars in hotel rooms, spas and gyms, laundry or dry
cleaning and other items of a personal nature.
B. Travel Expense Report
1. When returning from a trip, a final accounting of all expenses related to the
trip must be approved by the Supervisor and Department Head, and then
submitted to the Finance Department within 15 working days. Department
Head Travel Expense Reports must be approved by the City Manager. City
Manager Travel Expense Reports must be approved by the Finance Director
and Mayor.
2. A Travel Expense Report is required in all cases – there are no exceptions.
This is mandatory whether or not the advance received is equal to the
expenses incurred, whether the employee is eligible for additional
reimbursement, or whether money is owed to the City.
3. If the employee owes the City for the unused balance of a cash advance
(other than per diem), he/she should pay the amount due to the Finance
Department cashier and attach the receipt to his Travel Expense Report.
The amount returned to the City must be applied as a credit to the expense
account originally used for the cash advance.
4. Supervisors and Department Heads approving Travel Expense Reports are
responsible for ensuring that:
a. All expenses are reasonable, necessary and consistent with this policy;
b. Any required receipts are attached;
c. The final disposition is correct (balance due employee, or balance due
City);
d. Any amounts due to the City are fully reimbursed; and
e. Final accounting of all expenses related to the trip is submitted to the
Finance Department within 15 workdays following the employee’s
completed travel.
5. If the City owes the employee money, the employee may request
reimbursement by forwarding the Travel Expense Report to the Finance
Department along with a Request for Payment. If the amount requested is
$100 or less, a Petty Cash Request may be submitted for reimbursement.
Requests for reimbursement will be processed on the next available
Accounts Payable check run, if submitted by the normal Accounts Payable
deadline, but no later than 10 workdays following receipt. Requests for
reimbursement by petty cash will be reimbursed per the City’s Petty Cash &
Change Boxes Policy (Fiscal Policy No. 1.02).
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City of Grand Terrace
Fiscal Policy Policy No. 3.03
Subject: Travel & Related Business Expenses
Effective Date: 5/13/14
09/13/2022
Page 11 of 10
6. If the employee owes the City money, he/she should attach a check to the
Travel Expense Report.
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ORIGINAL
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EXHIBIT A - City of Grand Terrace - Travel Authorization & Expense Reporting Form
Instructions: Prior to travel or training, complete Part I to have anticipated expenses approved. Submit a copy of this approved form with each payment
expense submitted. Complete Part II to confirm total travel expenses including any approved adjustments. If paid with a procurement card, submit a copy of
this approved form with the appropriate bank statement, otherwise submit to Accounts Payable within 15 workdays of the travel end date.
Travel Authorization I Pre-Trip Employee Signature Pre-Trip Supervisor Signature (where applicable)I
Name: Purpose of Trip:
Job Title: Destination:
Dates:
Expense Type Estimated $ Actual $
Registration:
Lodging:
Mileage:
Airfare:
Total:
Per Diem:
Total Travel Days (Enter# of Days) >»
X
Supervisor's Approval
X
Date City Manager Approval (as required)
X
X
Department Head Approval
X
Date
REVISED
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City of Grand Terrace
Fiscal Policy Policy No. 3.04
Subject: Grants Effective Date: 5/13/14
Page 1 of 5
PURPOSE: To clarify, standardize and identify the benefits of seeking potential grants and
the process to properly manage and maximize the use of grants.
GOALS: To seek grant funding that will enhance, support and provide additional services
to the City, which will clearly provide a positive benefit to the community or
needed infrastructure improvements that may not be provided at adequate levels
due to limited City revenues.
POLICY: To perform cost/benefit analysis of a grant request and to identify potential
financial impacts relating to costs associated with the hiring of new personnel,
equipment and technology and other related costs during the term of grant and
after expiration of grant.
I. Pre-Application Process – Review of Grant/Grant Proposal Information Form
A. Upon notification of a potential grant, the City Manager shall assign it to the
applicable department. A department that receives direct notification of a grant
opportunity may also initiate the grant application process after notifying and
receiving concurrence from the City Manager’s office. The department shall
designate a Grant Project Manager to identify and review potential grant sources,
obtain grant application materials and related regulations. This process is not
applicable for ongoing direct allocation grants such as the Community
Development Block Grant (CDBG) program. Sections II, IV and V of the Grant
Policy shall not apply to potential grants of less than $25,000 which the Grant
Project Manager determines have matching or administrative requirements which
can be handled within the approved City budget and current staffing resources.
1. Federal Grants: identify all requirements needed prior to and after
approval of grant such as public hearings, notification of public
clearinghouse, advisory boards, lobbying efforts, monitoring/audits and
type of reporting requirements. Address issues dealing with supplanting
of local funds which restrict funding or existing staff/technology and limit
funding to only new hires and new technology.
2. State Grants: identify state requirements including mandatory
quarterly/annual reports and monitoring.
3. The annual CDBG entitlement process is not addressed in this policy
because the procedures and regulations are outlined under 24 CFR Part
570. Individual projects funded under CDBG shall be applicable to certain
provisions of this policy relating to Federal grants.
II. Completion of Grant Proposal Information Form & Cost/Benefit Worksheet
A. Based on information obtained, the Grant Project Manager shall complete the
Grant Proposal Information Form (Exhibit A) and Grant Cost/Benefit Worksheet
(Exhibit B). The grant funding identified in Exhibit B should be based on a five-
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City of Grand Terrace
Fiscal Policy Policy No. 3.04
Subject: Grants Effective Date: 5/13/14
Page 2 of 5
year budget projection if applicable. Exhibits A and B shall be reviewed and
approved by the Department Head, Finance Director, and City Manager (or
designee) as part of the grant application process.
1. Identify amount or percent of grant funds covering cost of personnel,
consultant services, design, construction, equipment and technology.
2. Identify source and amount of matching funds needed to be budgeted for
the term of the grant.
3. The Finance Director shall determine if adequate funds are available to
meet required local match plus any additional costs exceeding the match.
4. The City Manager and the Finance Director, after consultation with
Human Resources, shall determine whether grants that have supplanting
conditions relating to the hiring of new personnel and technology shall be
considered for funding.
a. Due to the financial impacts of short-term grants that fund
personnel for a limited time, special review must be undertaken to
analyze the cost/benefit of the grant.
b. If the cost/benefit analysis clearly demonstrates a strong
community benefit, the City Manager may: (1) limit the hiring of
new personnel to the term of the grant; or (2) authorize continued
funding of the new personnel costs after termination of the grant.
III. Complete Grant Application
A. The grant application shall be completed by the Grant Project Manager under the
direction of the applicable Department Head. The Grant Project Manager shall
write and complete the grant proposal. The Grant Project Manager shall also
confirm that the grant proposal meets eligibility requirements and is consistent
with the grant guidelines; that goals and objectives are clearly identified; and that
the percent and amount of costs funded by the grant and required matching
funds are clearly identified.
1. Ensure the complete computation of personnel and other applicable costs
such as consultant services, estimated design and construction,
equipment and technology, etc. are included in the grant document.
Obtain the computation of component grant costs as follows:
a. Personnel costs: Finance Department
b. Computer equipment and technology-related costs: Information
Services
c. Design and construction costs: Public Works Department
d. Other miscellaneous costs: Finance Department
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City of Grand Terrace
Fiscal Policy Policy No. 3.04
Subject: Grants Effective Date: 5/13/14
Page 3 of 5
2. Verify the source and amount of the required local match for term of
grant. Ensure that all direct costs or in-kind services are identified and
included in the grant as eligible expenses or City matching funds to the
extent possible.
IV. City Council Review
A. A City Council staff report describing and justifying the benefits of the grant
application request shall be presented to the Council prior to grant submittal. In
the event of agenda scheduling conflicts due to untimely notification by funding
agency of grant deadline, the City Council shall be advised by memo (or other
communication such as the City Manager’s Report) of the grant submittal. A staff
report shall be submitted after grant award notification requesting acceptance of
grant award.
B. Complete resolution for City Council approval if required by grant.
V. Finance Director/City Manager Review
A. The completed grant application shall be reviewed by the Finance Director and
City Manager (or designee) prior to submittal:
1. Review completed grant proposal and staff report to evaluate cost/benefit
of receiving administering grant, assure consistency with program goals
and identification of personnel, equipment, technology and other related
costs.
2. Verify all costs associated with the grant are identified and fully accounted
for throughout the term of the grant.
3. The City Manager (or designee) shall have the exclusive authority to
execute grant agreements, to sign financial reports and grant
applications.
VI. Grant Award Notification
A. Upon notification of award the Grant Project Manager shall take the following
steps:
1. Prepare a staff report to City Council for acceptance of grant award, if the
City Council had not previously approved the grant application. The staff
report must include a Budget Appropriation Adjustment Form to record
grant revenues and expenditures, as further defined in Fiscal Policy No.
3.03 (Budget Appropriation Adjustments). Coordinate with Finance to
establish/set up fund accounts for grant, if necessary.
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City of Grand Terrace
Fiscal Policy Policy No. 3.04
Subject: Grants Effective Date: 5/13/14
Page 4 of 5
2. Following City Council’s acceptance, prepare a News Release for review
and approval of the City Manager’s office.
3. Schedule a meeting to discuss the applicable financial, project
management and reporting requirements of new grant.
a. Review personnel, equipment and technology data to determine if
needs and costs are still applicable or need updating.
b. Set up separate meeting for design and construction projects to
discuss project issues and grant requirements related to Federal
funding such as preparation of construction-related documents
procurement, Davis Bacon compliance standards, etc., and hold a
pre-construction conference and take minutes of meeting.
c. Initiate all necessary procurement activities, distribute grant
documents to those departments involved in the project, hire
grant-funded personnel and purchase equipment and technology.
d. Monitor projects for compliance with grant requirements, assure
timely submittal of required quarterly, semi-annual or annual
progress reports. The Grant Project Manager shall coordinate with
assigned department to specify the responsibilities of the grant-
funded personnel that may involve collection of data for
preparation of reporting requirements.
4. Provide technical and administrative assistance to the grantee
department if needed.
5. Ensure that all grant-funded contracts include the required grant
provisions and route to applicable staff.
6. Prepare appropriate purchase requisitions and progress payment
requests. The Grant Project Manager shall prepare requests for grant
payments and/or reimbursements and obtain appropriate department
signatures and shall review for eligibility of purchase under conditions of
the grant.
7. Coordinate with Finance staff the submittal of copies of grant
documentation associated with grant-funded purchase requisitions. The
Grant Project Manager shall identify personnel, equipment and
technology and reference with specific grant name or number on
documentation for purchase requisition.
8. Prepare electronic transfer draw-downs for Federally-funded projects or
other procedure identified by funding agency.
9. Review/approve change order requests for construction projects.
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City of Grand Terrace
Fiscal Policy Policy No. 3.04
Subject: Grants Effective Date: 5/13/14
Page 5 of 5
VII. Grant Expiration/Project Completion
A. The Grant Project Manager and assigned department shall notify other
departments of project completion.
1. Review departmental grant file for completeness of all required
documentation and mandatory reports. Complete final assessment report
if required.
2. Retain records for the required time period.
3. Participate in grant audit or monitoring.
4. Prepare News Release regarding completion of project if appropriate.
5. Schedule and attend grant close-out meetings (construction projects).
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EXHIBIT A
GRANT PROPOSAL INFORMATIONAL FORM
Name of Grant:
Funding Source: Federal State Other (Describe)
Responsible Department:
Amount of Grant: $
Local Match Required $
Please provide brief answers for the following questions.
1. Is the grant consistent with the policy and goals identified in the Grant Policy (Fiscal Policy
No. 3.04)?
2. Provide brief description of grant.
3. Describe and identity costs for the personnel, equipment, technology, construction, design
and other items required or needed under this grant (refer to Attachment B).
a. Personnel
b. Equipment/Technology
c. Design/Engineering
d. Construction
e. Other
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4. Identify Grant Project Manager and other departments/staff who will be responsible for
implementing the grant and providing project oversight.
5. List procedural requirements for grant such as public hearing, advisory board setup, Davis
Bacon, environmental reviews, etc. and describe any potentially costly monitoring or
compliance issues.
6. Identify required reports (quarterly, semi-annual, annual) to be completed after grant award
and what department/staff would be assigned reporting requirements.
7. Describe the cost/benefit aspects of the grant.
8. Complete Attachment B – Grant Cost/Benefit Worksheet
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EXHIBIT B
GRANT COST/BENEFIT WORKSHEET
Expenditure Category Grant Budget
Grant
Budget by
Fiscal Year
Percent
of Grant
Local Match
Budget
Local Match
by Fiscal
Year
Percent
of Local
Match
Revenue Source Local Match
(Description & Account Code)
Total Cost
(Grant plus
Local Match)
Total Cost by
Fiscal Year
Personnel/Title
FY FY FY
FY FY FY
FY FY FY
FY FY FY
FY FY FY
Subtotal
Equipment/Technology
FY FY FY
FY FY FY
FY FY FY
FY FY FY
FY FY FY
Subtotal
Design/Engineering
FY FY FY
FY FY FY
FY FY FY
FY FY FY
FY FY FY
Subtotal
Construction
FY FY FY
FY FY FY
FY FY FY
FY FY FY
FY FY FY
Subtotal
Other FY
FY FY FY
FY FY FY
FY FY FY
FY FY FY
FY FY
Subtotal
Grand Total
FY FY FY
FY FY FY
FY FY FY
FY FY FY
FY FY FY
Total
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City of Grand Terrace
Fiscal Policy Policy No. 3.05
Subject: Donations Effective Date: 5/13/14
Page 1 of 4
PURPOSE: To establish policy and procedures for the solicitation and/or acceptance of
donations made to or for the City. A uniform set of procedures shall be followed
in the acceptance of all donations. Proper approval shall be obtained prior to
acceptance. All cash and capital goods donated to the City shall be accounted
for in accordance with the procedures set forth within this policy.
DEFINITIONS:
Donor: An individual, organization or business entity that is offering a monetary
contribution, personal property or real property to the City as a gift.
Gifts: For purposes of this policy, the terms gift and donation shall be
synonymous. Gifts may be a monetary contribution or a personal and real
property item which the City has accepted, and for which the donor has not
received anything of value in return from the City other than a tax benefit.
Included within the scope of this policy are donations whereby a private business
sponsors or co-sponsors an event on behalf of or in partnership with the City.
POLICY:
I. Legal Basis
A. (Ref. Government Code, Section 37354, Gifts and Bequests.) The City Council,
or its designated representative, may accept or reject any gift made to or by the
City for any public purpose. The City may utilize the gift as prescribed by the
donor or, providing use of the gift or the income from it is not restricted, the gift
may be used for any purpose that furthers City goals and objectives as stated at
the time of acceptance.
B. (Ref. California Code of Regulations, Section 18944.2) A gift will be deemed a
gift to a public agency, and not a gift to a public official, if all of the following
requirements are met: (a) the agency receives and controls the payment; (b) the
payment is used for official agency business; (c) the agency determines the
specific official or officials who shall use the payment; and (d) the agency
memorializes the payment in a written public record and the filing is done within
30 days of receipt of the payment by the agency.
II. Donations to the City
A. Responsibility: Donations with an estimated value of $5,000 or less may be
authorized by the City Manager. Donations with an estimated value exceeding
$5,000 must be approved by City Council. The Finance Director shall be responsible
for managing all donations of cash and for the accounting and inventory of all
donated items.
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City of Grand Terrace
Fiscal Policy Policy No. 3.05
Subject: Donations Effective Date: 5/13/14
Page 2 of 4
B. Solicitation of Gifts: The City Manager may authorize City staff to approach
companies or organizations to request donation of goods, services, or funds to
facilitate the achievement of identified City goals. Such solicitation shall be made
only with the approval of the City Manager.
C. Unsolicited Gifts: Unsolicited donations shall be accepted only if they have a
valid use to the City.
1. Donors who wish to make a gift to the City shall be referred to the
appropriate department head. Those gifts not specific to a given
department shall be referred to the Finance Director.
2. In the event that the offered item does not have any practical use for the
department to which it has been presented, the donor shall be referred to
the Finance Director. If the gift may be of potential value, notice will be
circulated to each Department Head to determine if it can be utilized
elsewhere. The Donor will be notified within two weeks whether the City
will accept the offered gift. If the item clearly has no use to the City or
would be more effectively used elsewhere, the donor will be informed
immediately and referred to an appropriate agency by the Finance
Director.
4. Proof of Ownership: If there is a material question as to the legal
ownership of the offered item, proof of ownership shall be requested.
Such proof of ownership may include but not be limited to copy of title
certificate, receipt for purchase, or signed affidavit verifying ownership.
5. Donors shall be encouraged to place minimal restrictions on the use of a
donated item, allowing the City as much flexibility as possible in
determining its use and liquidation.
D. Conditions for accepting/rejecting donations: Staff shall work with the donor to
assure that restrictions are reasonable and do not leave the donor with
unrealistic expectations regarding use or life of the donation (e.g., if a tree is
donated it could die or be moved). The following are criteria which may be
applied in determining if a donation is appropriate for acceptance:
1. Would use of the item be consistent with existing City policy?
2. Would the maintenance or operating costs associated with the gift be
excessive?
3. Do proposed or imposed conditions or restrictions upon use of the item
make it impractical to accept?
4. Do proposed or imposed conditions or restrictions on disposition of the
item make it impractical to accept?
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City of Grand Terrace
Fiscal Policy Policy No. 3.05
Subject: Donations Effective Date: 5/13/14
Page 3 of 4
5. Is required accounting of acceptance or use of the item excessively
burdensome?
6. Would the item require extensive repair or maintenance, and if so, are
City means readily available to do so?
7. Does use of the item require the purchase of additional material or
equipment to serve the purpose of the gift?
8. Would acceptance of the item present a conflict of interest for the City or
any of its employees? Regardless of the value of the donation, if the
donor is a contractor, potential contractor or there is reason to believe
there may be a conflict of interest, then the offer shall be referred to the
City Manager who will determine if the gift will be accepted, rejected or
submitted to the City Council for approval.
III. Procedures
A. Non-monetary gifts valued at $5,000 or less: Any single donation whose total
value, as determined by the donor, is $5,000 or less.
1. A Donation Receipt Form (Exhibit A) will be completed when donations
are received, with the form completed by City staff.
2. The City will not place any value on the gift for the donor. The donor shall
provide proof of current market value. If real property is donated, a
current appraisal report will be required.
3. The City Manager will promptly acknowledge each gift by letter, thanking
the donor for the gift.
4. The Finance Director shall be notified of the acceptance of any capital
asset. Finance shall make the necessary entries on the respective
accounts and property records to ensure that the property is recorded to
the account of the proper City program. This reporting must take place
no later than 30 days after the receipt of the donated item.
B. Non-monetary gifts valued at more than $5,000:
1. Any gift valued at more than $5,000, as determined by the donor, cannot
be accepted without City Council approval. Subsequent to Council's
acceptance, procedures for acceptance of gifts in excess of $5,000 shall
be the same as those in Section A above.
C. Cash Gifts:
1. Depositing Cash Gifts: All cash gifts shall be deposited immediately with
the Finance Department in accordance with the City's Cash Handling &
Control Policy (Fiscal Policy No. 1.01) and shall be accompanied by a
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City of Grand Terrace
Fiscal Policy Policy No. 3.05
Subject: Donations Effective Date: 5/13/14
Page 4 of 4
copy of the Donation Receipt. Cash donations shall be deposited in the
appropriate restricted or unrestricted revenue account within the
appropriate fund.
2. Restricted Cash Donations:
a. Donation Receipt: Restricted cash donations must be supported
in Finance Department files by the Donation Receipt signed by the
donor, which identifies the name of the donor, the amount and
date of the donation, and the nature of the restriction.
b. Deposit of Restricted Cash Donations: Donations shall be
deposited in a revenue account, which will be managed by the
Finance Director. This fund shall be utilized by all depositing
departments. Upon receipt of donated cash, the department shall
submit a copy of the donation receipt form to the Finance Director
at which time an account number will be assigned to the donation.
c. Council Authorization: A request for authorization must be sent to
the City Council via a staff report and approved by the City
Council before a restricted cash donation is spent for its intended
use. The staff report must state the name of the donor, the
amount of the donation, the date the donation was received and
the nature of the restriction.
d. Procedures for Expending Donated Cash: The donation may be
liquidated by the expending department when an approved
purchase is made. Any over-expenditures will be charged to the
department's operating budget. Funds shall remain in this
account until they are entirely expended in accordance with the
terms of the gift. If the funds are not expended as intended, they
must be returned to the donor, or the donor must provide written
authorization to expend the gift differently than the original
purpose.
d. Monitoring of Cash Donations: The City Council will receive
periodic reports, not less than annually, from the Finance Director
accounting for receipts and expenditures of donated funds.
3. Unrestricted Cash Donations: Unrestricted cash donations shall be
deposited in an unrestricted revenue account in the General Fund.
D. Reporting of Donations: Within 30 days of the end of each quarter, the Finance
Director shall submit a report to City Council that summarizes all donations
received by each department during the prior fiscal year, with an estimate of the
monetary value of the donations.
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EXHIBIT A
DONATION RECEIPT FORM
Date
Donor
Telephone ( )
Address
City State Zip
DONATION DESCRIPTION:
CASH CHECK COMMODITY
(amount) (amount)
Description (be specific)
_____UNRESTRICTED
_____RESTRICTED (identify restrictions)
Total estimated value (estimated by Donor)
Received by: Date:
Signature of City Employee/Department
Donor: Date:
Signature
--------------------------------------------------------------------------------------------------------------------------------------------
The donation was classified and handled in the following manner:
Item was issued a City I.D. number and is located at
Item has short life span. Not classed as a fixed asset.
Unrestricted cash or check deposited in General Fund, account number
Restricted cash or check placed in General Fund, account number ______________________
for use in
_____ Other (explain)
Finance Director Date City Manager Date
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City of Grand Terrace
Fiscal Policy Policy No. 3.06
Subject: Reserves Revision Date: 9/27/16
Page 1 of 4
I. PURPOSE AND SCOPE
To define the policy for establishing and maintaining cash reserves needed for prudent
financial management of the City.
II. POLICY
A. Introduction
The City will maintain cash balances to preserve the City’s credit worthiness and
to adequately provide for:
1. Economic uncertainties, local disasters or catastrophic events, and other
financial hardships or downturns in the local or national economy.
2. Contingencies for unforeseen operating needs.
3. Future debt service requirements.
4. Fixed asset replacements.
5. Cash flow requirements.
6. Legal requirements.
B. Budgetary Reserves
1. A contingency account will be budgeted each fiscal year in the Non-
Departmental cost center to provide for unanticipated expenditures of a
nonrecurring nature. Authorization to expend funds from this account will
require approval of the City Manager.
2. A General Fund Contingency Reserve account will be established and
maintained at the level recommended by the Government Finance Officers
Association of the United States & Canada (GFOA), which is a minimum of
two months of regular General Fund operating revenues or expenditures
(whichever is considered most predictable), to serve as a buffer against
unexpected local disasters or catastrophic events, and other financial
hardships or downturns in the local or national economy. The City will use
General Fund operating revenues as the basis for establishing the two-
month reserve target.
C. Fund Balance Reserves
The City shall report fund balances in accordance with the Governmental
Accounting Standards Board (GASB) Statement 54, which requires fund
balance to be classified in one of five categories as follows:
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City of Grand Terrace
Fiscal Policy Policy No. 3.06
Subject: Reserves Revision Date: 9/27/16
Page 2 of 4
• Non-spendable fund balance includes amounts that are not in a
spendable form (inventory, for example) or are required to be
maintained intact (the principal of an endowment fund, for example).
• Restricted fund balance includes amounts constrained to specific
purposes by their providers (such as grant providers, bondholders,
and higher levels of government) through constitutional provisions or
enabling legislation.
• Committed fund balance includes amounts that can be used only for
the specific purposes determined by a formal action of the City
Council, the government's highest level of decision-making
authority. These funds include:
▪ Fixed Asset Fund - funds may only be used for
equipment replacement of for the purchase of new
equipment;
▪ Community Benefits Fund - funds may only be used
for City Council approved grants to benefit the
community;
▪ Public Safety Services Fund - funds may only be used for
additional public safety services as determined by the
City Manager and approved by City Council.
Commitments may be changed or lifted only by City Council, the
government taking the same formal action that imposed the
constraint originally.
• Assigned fund balance comprises amounts intended to be used
by the government for specific purposes. Intent can be expressed
by the governing body or by an official or body to which the
governing body delegates the authority. In governmental funds
other than the general fund, assigned fund balance represents
the amount that is not restricted or committed. This indicates that
resources in other governmental funds are, at a minimum,
intended to be used for the purpose of that fund.
• Unassigned fund balance is the residual classification for the
general fund and includes all amounts not contained in the other
classifications. Unassigned amounts are technically available for
any purpose. If another governmental fund has a fund balance
deficit, then it will be reported as a negative amount in the
unassigned classification in that fund. Positive unassigned
amounts will be reported only in the general fund.
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City of Grand Terrace
Fiscal Policy Policy No. 3.06
Subject: Reserves Revision Date: 9/27/16
Page 3 of 4
General Fund Contingency
The City shall maintain a committed General Fund contingency reserve equal
to two months of operating revenues. If the reserve level falls below the
minimum level, the City will seek to replenish fund balance within a
reasonable timeframe.
The reserves will be used to provide for temporary financing of unanticipated
extraordinary needs of an emergency nature, such as economic
uncertainties or a local disaster. Intended to act as a short-term solution to
fiscal needs, the contingency reserve will be drawn down as the funding
source of last resort.
Authorization and Action to Commit Fund Balance
The City Council, as the government's highest level of decision-making
authority, may commit fund balance for specific purposes pursuant to
constraints imposed by formal actions taken such as an ordinance or
resolution. These committed amounts cannot be used for any other
purpose unless the City Council removes or changes the specified use
through the same type of formal action taken to establish the
commitment. City Council action to commit fund balance needs to occur
within the fiscal reporting period; however the amount can be determined
subsequently.
Authorization and Action to Assign Fund Balance
The City Council may assign fund balance to a specific purpose in relation
to this fund balance policy. By resolution, the Council has also authorized
the City Manager and/or Finance Director to assign fund balance.
Assignments by the City Manager or Finance Director do not require formal
action by the City Council; however, each assignment must be approved by
either of the authorized officials before the item can be presented in the
financial statements.
D. Use of and Replenishment of General Fund Contingency Reserve
1. The General Fund Contingency Reserve is intended to act as a buffer to
protect service levels during difficult economic times or as a result of
catastrophic events that require significant unanticipated expenditures.
2. During such times, or as a result of such events, the General Fund
Contingency Reserve may decline below the target level (two months of
operating revenues) with City Council authorization. Once the difficult
fiscal times pass, the General Fund Contingency Reserve will be
replenished to its target level as soon as funding permits, as determined
by the City Council through the annual budget process.
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City of Grand Terrace
Fiscal Policy Policy No. 3.06
Subject: Reserves Revision Date: 9/27/16
Page 4 of 4
3. Appropriate sources for replenishment of the General Fund Contingency
Reserve include one-time revenues and other sources not necessary to
support ongoing services.
E. Policy Versus Appropriation of Reserves
This policy establishes target reserve levels for the prudent financial
management of the City. However, specific appropriation of funds into the
various reserve accounts will be subject to the annual budget adoption process
or other City Council budgetary action.
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City of Grand Terrace
Fiscal Policy Policy No. 3.07
Subject: Unclaimed Money Approval Date: 1/14/14
Page 1 of 3
I. PURPOSE AND SCOPE
To establish a policy and related procedures for escheatment and accounting of
unclaimed money in accordance with California Government Code Sections 50050
through 50056.
II. DEFINITIONS
A. Escheatment - The reversion of property to a government entity in the absence of
legal claimants or heirs.
B. Unclaimed Money - Money which is not the property of the City but that remains in
the City’s treasury, including funds related to uncashed checks.
III. POLICY
A. Unclaimed Money that remains unclaimed for at least three (3) years will become
the property of the City if after proper notification the money remains unclaimed.
Unclaimed Money becoming the property of the City, which is in a special fund,
will be transferred to the City’s General Fund, unless otherwise restricted.
B. Unclaimed Money items less than fifteen dollars ($15), or any amount if the owner
is unknown, which remain unclaimed for one (1) year will become the property of
the City without notification and will be transferred to the City’s General Fund,
unless otherwise restricted.
C. All escheated money originating from the Successor Agency to the Community
Redevelopment Agency of the City of Grand Terrace (Agency) will revert to the
appropriate fund.
IV. AUTHORITY
This policy is established in California Government Code Sections 50050 through 50056.
V. PROCEDURES
A. Individual checks/deposits equal to or greater than fifteen dollars ($15):
1. On July 1st, the Finance Department will compile a list of outstanding
checks and/or deposits which are equal to or greater than fifteen dollars
($15) and at least three years old; such checks will be deemed stale dated.
The Finance Department will proceed as follows:
a. A stop payment shall be placed with the bank on all stale-dated checks.
b. Accounts Payable will void stale-dated checks.
c. Accounting will post a Journal Entry to record the stale-dated check
liability.
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City of Grand Terrace
Fiscal Policy Policy No. 3.07
Subject: Unclaimed Money Approval Date: 1/14/14
Page 2 of 3
2. The Finance Department will then publish a notice (Exhibit A) identifying all
such money in a local newspaper of general circulation once a week for two
successive weeks. The notice shall state the payee name, fund in which it
is held, the amount of money, and that the money will become City property
forty-five (45) days after the first publication of the notice. Proof of
publication will be retained in the Finance Department.
B. Claims filed by Party of Interest:
1. Upon or prior to publication and before the date the Unclaimed Money
becomes City property, a party of interest may submit an Unclaimed Money
Claim Form (Exhibit B) with the Finance Department to collect money. The
Finance Department will require proof of identification from the claimant.
Once a decision is rendered by the Finance Department, notification will be
made to the claimant by letter.
2. Upon acceptance, the Finance Department will proceed as follows:
a. Accounts Payable will reissue check to the owner, their heir,
beneficiary, or duly appointed representative, following accounts
payable policies and procedures:
b. The Finance Department will remove the check from the list of
Unclaimed Money to be escheated.
3. If denied, the claimant may file a verified complaint seeking to recover all,
or a designated part, of the money in a court of competent jurisdiction within
San Bernardino County, and must serve a copy of the complaint and the
summons issues thereon upon the Finance Department. The copy of the
complaint and summons shall be served within 30 days of receiving notice
that the claim was denied. The Finance Department shall withhold the
release of the portion of Unclaimed Money for which a court action has
been filed until a decision is rendered by the court.
4. If the court renders a decision in favor of the claimant, the Finance
Department will follow the acceptance procedures identified in this policy to
issue the check.
5. If the court renders a decision in favor of the City, the Finance Department
will proceed as follows:
a. Accounting will reverse the Unclaimed Money liability and record the
revenue.
b. Accounting will record the transfer of escheated special fund cash to
the General Fund, unless otherwise restricted.
c. Any escheated money related to Agency/Trust funds will revert to the
appropriate originating fund and not the General Fund.
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City of Grand Terrace
Fiscal Policy Policy No. 3.07
Subject: Unclaimed Money Approval Date: 1/14/14
Page 3 of 3
i. Property Escheats to City:
1. On the forty-fifth day after the first publication of the notice, those checks
and/or deposits on which no claims were filed escheat to the City. The
Finance Department will follow procedures identified in the preceding
section.
2. On July 1st, the Finance Department will compile a list of outstanding
checks and/or deposits which are less than fifteen dollars ($15), or any
amount if the owner is unknown, and have remained unclaimed in the City
treasury for a period of one (1) year; such checks will be deemed stale
dated. Money identified on the list will escheat to the City and will be
transferred to the General Fund, unless otherwise restricted. The Finance
Department will proceed as follows:
a. A stop payment shall be placed with the bank on all stale-dated
checks.
b. Accounts Payable will void stale-dated checks.
c. Accounting will reclassify the voided check as a credit to Revenue.
d. Accounting will record the transfer of escheated special fund cash to
the General Fund.
e. Any escheated money related Agency/Trust funds will revert to the
appropriate originating fund and not the General Fund.
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EXHIBIT A
CITY OF GRAND TERRACE
UNCLAIMED MONEY SAMPLE PUBLIC NOTICE
NOTICE IS HEREBY GIVEN pursuant to Government Code Sections 50050 through 50056 that
the following money, which is not the property of the City of Grand Terrace, has remained in the
City treasury for more than three (3) years and will become City property if not claimed by
August 14, 20XX.
The owner/depositor, their heir, beneficiary or duly appointed representative may file a claim
requesting release of money with the City of Grand Terrace’s Finance Department, which must
include the claimant’s name, address, telephone number, Employer Identification Number or
Social Security Number, amount of claim, and the grounds on which the claim is founded before
August 14, 20XX. If the claim is denied by the City, the claimant may file a verified complaint
seeking to recover all, or a designated part, of the money in a court of competent jurisdiction
within San Bernardino County, and must serve a copy of the complaint and the summons issues
thereon upon the Finance Department within thirty (30) days of receiving notice that the claim
was denied.
The Unclaimed Money - Claim Form is available at the City of Grand Terrace, Finance
Department, 22795 Barton Road, Grand Terrace, CA.
FUND PAYEE NAME AMOUNT
G.11.a
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EXHIBIT B
CITY OF GRAND TERRACE
UNCLAIMED MONEY CLAIM FORM
Claimant’s Name Taxpayer Identification No. or Social Security No.
Address City/State/Zip Code
( )
Telephone Number
Pursuant to California Government Code Section 50052, I am filing a claim for previously unclaimed
money in the amount of $ , which was published in the
on / / (MM/DD/YY).
The grounds on which I am filing this claim are:
Please attach copies of all support documentation to this claim. Do not attach originals, as the City will retain all
documents.
I hereby certify under penalty and perjury that the information contained and attached to this claim is true
and correct and is being submitted to the City of Grand Terrace to substantiate my claim to money held
by the City. I further certify that I have the authority and right to claim and receive payment of money and
hereby release the City of Grand Terrace, its directors, employees, representatives, attorneys and agents
from all liability and further obligation with respect to this claim.
Printed Name of Claimant Signature of Claimant Date
Mail Completed Forms to:
City of Grand Terrace
Finance Department
22795 Barton Road
Grand Terrace, CA 92313
CITY USE ONLY
Payee Name: Account Code:
Check No. Check Date: Check Amount: $
Accepted: Denied:
Finance Department Signature: Date:
G.11.a
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Chapter 3.24 - Page 1
ORDINANCE NO. 267xxx
I AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE,
CALIFORNIA REPEALING IN THEIR ENTIRETY ORDINANCE NO. 95 AND
CHAPTER 3.24 OF THE MUNICIPAL CODE AND ADOPTING AN ORDINANCE
ESTABLISHING A NEW CHAPTER 3.24 (PURCHASING SYSTEMS) OF TITLE 3 OF
THE MUNICIPAL CODE
WHEREAS, California, Government Code Section 54202 every local agency to
adopt policies and procedures, including bidding regulations, governing purchases of
supplies and equipment by the local agency.
WHEREAS, California Government Code Section 4526 provides that
professional services may be awarded on the basis of demonstrated competence and
on the professional qualifications necessary for the satisfactory performance of the
services required.
WHEREAS, on August 22, 1985, the City Council of the City of Grand Terrace
adopted Ordinance No. 93 adding Chapter 3.24 (Purchasing of Supplies and
Equipment) to Title 3 of the Municipal Code.
WHEREAS, the City Council of the City of Grand Terrace desires to have an
updated ordinance governing purchases. ,
NOW'THEREFORE, it is hereby found, determined, and resolved by the City Council of
the City of Grand Terrace, as follows:
SECTION 1. Ordinance No. 93 and Chapter 3.24 of the Municipal Code are
repealed in their entirety, and a new Chapter 3.24 (Purchasing System) to Title 3 of the
Municipal Code is adopted, as follows:
Chapter 3.24
Purchasing System
Sections:
3.24.010 - Purchasing System Adopted.
3.24.020 - Definition of Terms.
3.24.030 - Purchasing Function Established.
3.24.040 - Purchasing Officer Designated.
3.24.050 - Exemptions from Centralized Purchasing.
3.24.060 - Public Projects Exemptions.
3.24.070 - Purchases under Ten Thousand Dollars.
Formatted: Indent: Left: 0", Right: 0.02"
G.11.b
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Chapter 3.24 - Page 2
3.24.080 - Formal Contract Procedure, Purchases Greater Than Ten Thousand
Dollars.
3.24.090 - Professional and Contractual Services.
3.24.100 - Encumbrance of Funds.
3.24.110 - Inspection and Testing of Supplies, Materials and Equipment.
3.24.120 - Surplus Supplies, Materials and Equipment.
3.24.130 - Bid Splitting Prohibited.
3.24.140 - Equipment Leasing Agreements.
3.24.150 - Maintenance Agreements.
3.24.160 - Cooperative Purchasing Agreements with County or Other Agencies
3.24.170 - "Piggyback" Purchases.
3.24.180 - Exceptions to Competitive Bidding Requirement.
3.24.190 – Conflict of Interest and Unlawful Activity
3.24.010 - Purchasing System Adopted.
In order to establish efficient procedures for the purchase of supplies, materials,
equipment or services at the lowest possible cost commensurate with quality needed, to
exercise positive financial control over purchases, to clearly define authority for the
purchasing function, and to assure the quality of purchases, a purchasing system is
adopted.
3.24.020 - Definition of Terms.
The following terms, whenever used in this chapter, shall be construed as
follows:
A. "Bidders' List" means a current file of sources of supply of articles for each
category of commodities repetitively purchased for city use.
B. "Department" means any department, agency, commission or other unit of the
city government, which derives its support wholly or in part from the city or an
entity associated with the city for which separate financial statements are
required.
C. "Lowest Responsible Bidder" means in addition to price, the "lowest
responsible bidder" will be determined after the following factors have been
considered:
1. The ability, capacity and skill of the bidder to perform the contract or
provide the service required;
2. Whether the bidder has the facilities to perform the contract or provide the
service promptly, or within the time specified, without delay or interference;
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Chapter 3.24 - Page 3
3. The character, integrity, reputation, judgment, experience and efficiency of
the bidder;
4. The bidders record of performance of previous contracts or services;
5. The previous and existing compliance by the bidder with laws and
ordinances relating to the contract or service;
6. The sufficiency of the financial resources and ability of the bidder to
perform the contract or provide the service;
7. The quality, availability and adaptability of the supplies, equipment or
service to the particular use required;
8. The ability of the bidder fo to provide future maintenance and service for
the use of the subject of the contract;
9. The number and scope of conditions attached to the bid.
D. "Open Market" means and pertains to purchases or transactions that are
executed without recourse to formalized purchasing procedure.
E. "Over the Counter" means and pertains to purchases or transactions that are
executed without recourse to competitive bidding and without a purchase
order.
F. "Professional and Contractual Services" means services of engineers,
architects, accountants, attorneys, doctors, consultants and other persons or
businesses with specialized scientific, expert, technical, or other skills of a
similar nature.
G'. "Purchases" means the purchases of supplies, materials, equipment or
services shall include leases or rentals as well as transactions by which the
city acquires ownership.
H. "Purchase Order" means a document which authorizes the delivery of
specified merchandise or the rendering of certain service and the making of a
charge for such merchandise or service.
I. "Requisition" means a written demand or request from the using department to
the purchasing agent for specified article or service.
J. "Responsible Bid" means an offer, submitted by a responsible bidder to furnish
_,, supplies, materials, equipment or services in conformity with the
specifications, delivery terms and conditions and other requirements .included
in the invitation for bids.
G.11.b
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Chapter 3.24 - Page 4
K. "Responsible Bidder" means a bidder who submits a responsible bid and who
is not only financially responsible, but is possessed of the resources,
judgment, skill, ability, capacity and integrity requisite and necessary to
perform the contract according to its terms.
L. "Services" means any and all services including but not limited to the following:
the repair or maintenance of equipment, machinery and other city-owned or
. operated property. The term does not include services rendered by city
officers or employees, or professional and other contractual services which are
in their nature unique and not subject to competition.
M. "Specifications" means a formulated, definite and complete statement of what
is required by the city of the vendor, in the way of composition, construction,
utility, durability, efficiency, texture, shape, form or dimension.
N. "Supplies, Materials and Equipment" means any and all articles or things
which shall be furnished to or used by any Department, including all printing,
. binding, publications, stationery, forms, journals or reports.
0. "Using Department" means the department that uses the supplies, materials,
equipment or services obtained pursuant to a particular purchase.
3.24.030 - Purchasing Function Established.
There is created a centralized purchasing function, in which is vested authority
for the purchase of supplies, materials, equipment or services.
3.24.040 - Purchasing Officer Designated.
A function of purchasing officer is hereby created and shall be appointed by the
city manager. The purchasing officer may delegate purchasing duties. The duties of
the purchasing officer may be combined with those of any other office or position.
A. The purchasing officer shall have the powers and duties as follows:
1. Purchase or contract for supplies, materials, equipment or services required
by any office or department of the city in accordance with purchasing
procedures prescribed by this section, and such other rules or regulations
as shall be prescribed by the city council;
2. Act to procure for the city the needed quality in supplies, materials,
equipment or services at least expense to the city;
3. Discourage uniform bidding, and endeavor to obtain as full and open
competition as possible on all purchases;
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Chapter 3.24 - Page 5
4. Prepare and recommend to the city manager and city council rules
governing the purchase of supplies, services and equipment for the city;
5. Keep informed of current developments in the field of purchasing prices,
market conditions and new products;
6. Prescribe and maintain such forms as are reasonably necessary to the
operation of this section and other rules and regulations;
7. Recommend the transfer of surplus or unused supplies and equipment
between departments as needed, and the sale of all supplies and
equipment which cannot be used by any department, or which have
become unsuitable for city use.
3.24.050 - Exemptions from Centralized Purchasing.
The city manager may authorize any city department to purchase or contract for
specified supplies, materials, equipment or services but the purchasing officer shall
require that such purchases or contract be made in conformity with the procedures
established by this section, and shall further require periodic reports from the
department on the purchases and contracts made under such written authorization.
3.24.060 - Public Projects Exemptions.
This chapter is expressly made inapplicable to bids for public projects governed
by the procedures in Public Contract Code Section 20100 et seq. The provisions
contained in Public Contract Code Section 20100 et seq. establish the contract
procedures the city shall follow regarding public projects.
3.24.070 - Purchases under Ten Twenty-five Thousand Dollars.
Purchase of supplies, materials, equipment or services not exceeding an
estimated value of ten twenty-five thousand dollars ($10,000) ($25,000) may be made
by a city Department in the open market, pursuant to the procedure prescribed in this
ordinance; provided, however, all quotation may be dispensed with in an emergency, or
where said goods and/or services can be obtained from only one source. A using
department is responsible for insuring there is a sufficient appropriation in the budgetary
account against which said purchase is to be charged.
A. Using Department shall follow the following procedure when making an open
market purchase:
1. Purchases under ten twenty-five thousand dollars shall, whenever possible, be
based on
. at least three (3) informal quotations and shall be awarded to the vendor
submitting the lowest responsible quotation.
G.11.b
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Chapter 3.24 - Page 6
/
2. Solicit quotations from prospective vendors by written request,
electronic mail or by telephone. ·
3. Written quotations shall be submitted to the using department,
which shall keep a record of all open-market orders and quotes
for a period of one· year after the submission of quotes or the
placing of orders.
4. Where written contracts are entered into for purchases made
under this section, the department head is authorized to
execute such contracts on behalf of the city. Such purchases
shall be made only by purchase order. A copy of the-executed
contract shall be maintained on file in the offices of the
requesting department.
5. Using departments shall submit standard purchase order
requisition forms to the purchasing officer when requesting
goods and services pursuant to this section. ·
B. Notwithstanding subsection "A" above, purchases of supplies,
materials, equipment or services not exceeding an estimated
value of five twenty -five hundred dollars ($500) ($2,500)
may be made over t_hethe counter by a department head without
requirement for quotations or comparative pricing. Furthermore,
such goods and services may be obtained without a purchase
order.
3.24.080 - Formal Contract Procedure, Purchases Greater Than Ten Twenty-five Thousand Dollars.
Except as otherwise provided herein, purchases of supplies,
materials, equipment or services with a value greater than ten twenty-five
thousand dollars ($10,000) ($25,000) shall be awarded to the lowest
responsible bidder, pursuant to the procedure prescribed in this section.
Written contracts may be required when in the judgment of the city
manager the public interest is served thereby.
A. Notice inviting bids shall include a general description of the
articles to be purchased and shall state where bid documents
and specifications may be obtained and the time and place for
opening bids.
1. Notice Inviting Bids. Notice inviting bids shall be published by
the city clerk at least ten (10) days before the date of opening of
the bids. Notice ·shall b!3 be published at least once in a
newspaper of general circulation, printed and published in the
Formatted: Indent: Left: 0.07", Space Before: 3.9 pt
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Chapter 3.24 - Page 7
city.
2. Bidders' List. The City shall also solicit sealed bids
from responsible prospective suppliers whose· names
are on the bidders' list
Bidders' Security. When deemed necessary by the purchasing agent, bidders'
security shall be required. Bidders shall be entitled to return of bid security
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Chapter 3.24 - Page 8
upon execution of the contract or upon the readvertisement for bids; provided·
that a successful bidder shall forfeit his bid security upon refusal or failure to
execute the contract within ten (1O) days after the notice of award of contract
has been mailed, unless the city is responsible for the delay. The city council
may, on refusal or failure of the successful bidder to execute the contract, award
it to the next lowest responsible bidder. If the city council awards the contract to
the next lowest bidder, the bidder first awarded the contract shall forfeit only the
portion of his security, which is equal to the difference between his bid and the
bid of the next lowest responsible bidder. If the next lowes't lowest bidder is
awarded the contract and he fails or refuses to execute the contract, he shall
forfeit his entire bid security.
B. Bid Opening Procedure. Sealed bids shall be submitted to the city clerk, and
shall be identified as bids on the envelope. Bids shall be opened in public at the
time and place stated in the public notices. A tabulation of all bids received shall
be open for public inspection during regular business hours for a period of not
less than thirty (30) calendar days after the bid opening.
C. Rejection of Bids. At its discretion, the city council may reject any and all bids
presented, and re-advertise for bids.
D. Award of Contracts. Contracts shall be awarded by the city council to the lowest
responsible bidder except as otherwise provided herein. A master copy of the
contract is to be on file in the city clerk's department upon execution of the
contract.
E. Award of Contracts by City Manager. The city manager is authorized to award
contracts to the lowest responsible bidder when the city council has budgeted
funds for the item(s) and the amount of the award is not more than the
budgeted amount. All contracts awarded pursuant to this section shall require
issuance of a purchase order.
F. Tie Bids. If two or more bids received are for the same total amount or unit
price, quality, service and delivery being equal, and if the public interest will not
permit the delay of re-advertising for bids, the city council may accept the one it
chooses, or accept the lowest bona fide offer by negotiation with the tie bidders
at the time of the bid opening.
G. Performance Bonds. The city shall have authority to require a performance
bond before entering a contract, in such amount as it shall be found
reasonably necessary to protect the best interests of the city. If the city
requires a performance bond, the form and amount of the bond shall be
described in the notice inviting bids.
Single Source Purchases. Single source purchase of goods or services that
can be obtained from only one source may be made by a city Department or
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Chapter 3.24 - Page 9
the purchasing officer without advertising and after approval by the city
council.
H. Waiver of Formal Bidding Requirement. The city council may authorize
purchase of supplies, materials, equipment or services of a value greater than
ten thousand dollars without complying with the above procedures when in the
opinion of the council, compliance with the procedure is not in the best interest
of the city. ·
3.24.090 - Professional and Contractual Services.
Contracts for services of specially trained and professional persons or
businesses shall be exempt from bidding. If possible, quotes from three (3) qualified
vendors shall be obtained prior to the award _of a contract and the award of contract may
be based on the basis of demonstrated competence and on the professional . .
qualifications necessary for the satisfactory performance of the services required. If the
contract is equal to or-below ten thousand dollars, the contract shall require the
approval of, and be executed by, the city managetmanager. All contracts exceeding
ten thousand dollars must be approved by the city council.
3.24.100 - Encumbrance of Funds.
Except in cases of emergency, the purchasing officer shall not issue any
purchase order for supplies, equipment, or services for which there is an insufficient
appropriation in the budgetary account against which said purchase is to be charged.
3.24.110 - Inspection and Testing of Supplies, Materials and Equipment.
The city may inspect supplies, materials and equipment delivered to determine
their conformance with the specifications set forth iri the order or contract. The city shall
have authority to require chemical and physical tests of samples submitted with bids,
and samples of deliveries, which are necessary to determine their quality and.
conformance with specifications.
3.24.120 - Surplus Supplies, Materials and Equipment.
All using departments shall submit to the purchasing officer, at such times
and in such forms as he shall prescribe, reports showing all supplies,
materials and equipment which are no longer used or which have become
obsolete or worn out. The using department, with the concurrence of the
purchasing officer, shall have authority to sell all supplies, materials and
equipment which cannot be used by any department, or which have
become unsuitable for city use, or to exchange the same for or trade the
same in on new supplies and equipment. The purchasing officer shall also
have the authority to make transfers between departments of any usable
surplus supplies, materials or equipment. The sale of supplies, materials
or equipment when the total estimated value exceeds ten thousand dollars
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Chapter 3.24 - Page
10
requires approval by the city council.
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Chapter 3.24 - Page
11
Surplus supplies, materials or equipment which cannot be sold may be
donated to a local not-for-profit organization with approval of the. city
manager.
3.24.130 - Bid Splitting Prohibited.
Splitting orders of supplies, materials, equipment or services into
smaller or separate orders for the purpose of evading the competitive
bidding provisions of this chapter are prohibited.
3.24.140 - Equipment Leasing Agreements.
A. As used in this section:
1. "Leasing of nonpurchasable equipment" means equipment
which is available through "lease only" plans;
2. "Leasing purchasable equipment" means equipment which
can be acquired through "lease with option to purchase" type
plans;
B. Equipment Leasing. Leasing of purchasable or
nonpurchasable equipment shall be in accordance with
subsections 3.24.070 through 3.24.080 of this section.
�-) 3.24.150 - Maintenance Agreements.
A. As used in this section, "maintenance agreements" means
agreements with maintenance service providers for the
maintenance of city equipment in good operating condition
subject to terms and conditions agreeable to both the provider
and the city.
B. Maintenance agreements shall be signed or terminated before
agreement expiration by the purchasing agent with prior approval
of the department head responsible for the equipment.
3.24.160 - Cooperative Purchasing Agreements with County or Other
Agencies.
Nothing contained in this section shall prohibit the voluntary participation by the city in
any voluntary cooperative purchasing agreement(s) or programs entered into between
the city and the state, county, and other municipalities situated within the boundaries of
the county, and the purchasing agent is empowered and authorized to act under the provisions of this section, to procure for the city supplies and equipment in conjunction
with such voluntary cooperative purchasing agreement(s) or programs as may be
entered into by the city. All formal contract and bidding procedures to be followed in such
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Chapter 3.24 - Page
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cases shall be those specifically enumerated in the voluntary cooperative purchasing
agreement or program.
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Chapter 3.24 - Page 13
3.24.170 - "Piggyback" Purchases.
Nothing contained in this section shall prohibit the city from purchasing supplies,
materials, equipment or seNices without complying with the herein bidding procedure,
from a supplier who offers the same or better price, terms and/or conditions as the
supplier previously offered as the lowest responsible bidder under competitive
procurement conducted by another city or public agency, provided that the competitive
procurement process of the other agency meets or exceeds the standards of the city, is
for like or greater quantities, includes all known bidders and that, in the opinion of the
purchasing agent, it is in the best interest of the city. This procurement .practice is
commonly referred to as "piggyback" purchasing. ·
3.24.180 - Exceptions to Competitive Bidding Requirement.
Notwithstanding any provision of this chapter to the contrary, the competitive
bidding provisions of this chapter may be dispensed with when contracts which by their
nature do not lend themselves to award by competitive bidding such as, but not limited
to:
A. Repairs and/or maintenance of equipment which requires unique skills,
abilities or training.
B. Equipment which must be used in order to be compatible with existing city
equipment.
C. Perishable goods.
D. Insurance where obtaining broker quotes is impracticable.
E. Computer hardware, software and licenses which are uniformly priced or have•
a standard governmental price.
F. Supplies, materials or equipment which can be obtained at a favorable price
as a result of other governmental purchasing programs.
G. Emergency is found to exist and the city council authorizes the purchase of
supplies, materials, equipment or services where it is determined that seNice
service involving the public health, safety or welfare would be interrupted if the
normal procedure were followed.
G.
H. Such other circumstances as the city council may determine and document
that will result in cost savings grea.ter greater than those which would result
from the use of customary bidding process.
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Chapter 3.24 - Page 14
H.
3.24.190 – Conflict of Interest and Unlawful Activity.
Any evaluation or selection practice that would result in unlawful activity including, but
not limited to, kickbacks or unlawful consideration is expressly prohibited. Any award of a
contract where an employee, officer or agent has used his or her position with the City to
influence a governmental decision in which he or she knows or has reason to know that he or
she has a financial interest in any person or entity who seeks such a contract or in the
outcome of the selection process in any way, is expressly prohibited.
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Chapter 3.24 - Page 11
=hl - ATTEST:
Mayorofme\if of Grand Terrace
and of the City Council thereof
I, Tracey MartinezDebra Thomas, City Clerk of the City of Grand Terrace, do
hereby certify that the foregoing Ordinance was introduced at a regular meeting of the
City Council on the
13th of November 2012 September 2022, and adopted at a regular meeting of the City
Council of the City
of Grand Terrace held on the 27th day of November 2012 13th day of September 2022, by
the following vote:
AYES: Councilmembers McNaboe, afldyH ys; Mayor Pro Tem Garcia and Mayor
Stanckiewitz
NOES: None
ABSENT: Councilmember Sandoval
ABSTAIN: None
Ap
Richard L. AdamsAdrian Peterson, City Attorney
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