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03/12/2024CITY OF GRAND TERRACE CITY COUNCIL [AMENDED] AGENDA ● MARCH 12, 2024 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: 841 7071 4036 Password: 703761 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) 954-5207 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) 954-5207, 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) 954-5207 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 [28 CFR 34.102.104 ADA Title II]. Agenda Grand Terrace City Council March 12, 2024 City of Grand Terrace Page 2 CALL TO ORDER Convene City Council. Invocation Pledge of Allegiance AB 2449 Disclosures Remote participation by a member of the legislative body for just cause or emergency circumstances. Roll Call Attendee Name Present Absent Late Arrived Mayor Bill Hussey    Mayor Pro Tem Doug Wilson    Council Member Jeff Allen    Council Member Kenneth J. Henderson    City Manager Konrad Bolowich    City Attorney Adrian Guerra    City Clerk Debra Thomas    Finance Director Christine Clayton    A. REORDERING OF, ADDITIONS TO, OR REMOVAL OF ITEMS FROM THE AGENDA B. 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. C. SPECIAL PRESENTATIONS Certificate of Recognition - Council Member Sylvia Rodriguez-Robles Agenda Grand Terrace City Council March 12, 2024 City of Grand Terrace Page 3 D. NEW BUSINESS - PART I 1. Council Selection from Alternatives to Fill City Council Vacancy or Order Special Election RECOMMENDATION: Consider methods available for filling the vacancy on the City Council; select a method for filling the vacancy from the alternatives provided, and direct staff to take the necessary steps to implement the selected alternative to fill the vacancy. DEPARTMENT: CITY CLERK E. 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. 2. Waive Full Reading of Ordinances on Agenda DEPARTMENT: CITY CLERK 3. Approval of Minutes – Regular Meeting – 02/27/2024 DEPARTMENT: CITY CLERK 4. Second Reading by Title Only, with Further Reading Waived, an Ordinance Amending Title 12.08 'Street Excavation' of the Municipal Code RECOMMENDATION: 1. Direct the City Attorney to read by title only, waive further reading, and adopt AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE AMENDING TITLE 12.08 STREET EXCAVATION. DEPARTMENT: PUBLIC WORKS 5. Resolution Opposing Initiative No. 21-0042A1, the Taxpayer Protection and Government Accountability Act RECOMMENDATION: Staff recommends that the City Council adopt a resolution opposing Initiative No. 21- 0042A1, the Taxpayer Protection and Government Accountability Act. DEPARTMENT: CITY MANAGER Agenda Grand Terrace City Council March 12, 2024 City of Grand Terrace Page 4 6. Award Contract to Mike Roquet Construction Inc. for Asphalt Repairs Due to Storm Damage Along Vivienda Avenue RECOMMENDATION: Award a contract to Mike Roquet Construction Inc. for construction services, including asphalt surface repairs and erosion mitigation measures, due to storm damage along Vivienda Avenue. The contract amount is $39,355 with a 10% contingency ($3,935). Authorize the City Manager to execute the agreement, subject to City Attorney approval as to form. DEPARTMENT: PUBLIC WORKS 7. Auditor's Annual Financial Report and Related Documents for the Fiscal Year Ended June 30, 2023 RECOMMENDATION: Receive and File the Auditor's Annual Financial Report and related documents for the Fiscal Year ended June 30, 2023. DEPARTMENT: FINANCE 8. Housing Successor Agency Annual Financial Report for the Year Ended June 30, 2023 RECOMMENDATION: Receive and file the Auditor's Annual Financial Report and related document for the City's Housing Successor Agency. DEPARTMENT: FINANCE 9. Measure I Fund Annual Financial & Compliance Report for the Year Ended June 30, 2023 RECOMMENDATION: Receive and file the Auditor's Annual Financial & Compliance Report and related document for the City's Measure I Fund. DEPARTMENT: FINANCE F. PUBLIC HEARINGS 10. Introduction and First Reading by Title Only, with Further Reading Waived an Ordinance Amending Title 18 (Zoning) of the Grand Terrace Municipal Code to Amend an Existing Municipal Code Section Specifying the Design Standards for New and Existing Trash Enclosures. This Ordinance Will Not be Enforced Retroactively and Apply Only to New Buildings and Existing Buildings Undergoing Alterations Where a Building Permit is Required Per CA Building Code [A] 105.1 with Alterations Encompassing 50% or More of the Existing Total Building Area. Agenda Grand Terrace City Council March 12, 2024 City of Grand Terrace Page 5 RECOMMENDATION: Introduction and First Reading by title only, with further reading waived, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE, CALIFORNIA, AMENDING SECTIONS 18.10.090, 18.33.050, 18.36.060, 18.39.060, 18.40.060, AND 18.56.080 OF TITLE 18 (ZONING) OF THE GRAND TERRACE MUNICIPAL CODE, TO ESTABLISH DESIGN STANDARDS FOR TRASH ENCLOSURES" DEPARTMENT: PLANNING & DEVELOPMENT SERVICES G. UNFINISHED BUSINESS None. H. NEW BUSINESS - PART II 11. Community Benefit Fund Grant Award to the Terrace View Elementary PTA in the Amount of $2,000 RECOMMENDATION: Approve the Community Benefit Fund grant application from the Terrace View Elementary PTA in the amount of $2,000 to support the 6th Grade Science Camp DEPARTMENT: FINANCE 12. Design Selection for New All-Electric Senior Bus RECOMMENDATION: Propose CITY COUNCIL BE GIVEN THE OPPORTUNITY TO SELECT ONE OF THE FOUR DESIGNS PRESENTED FOR THE NEW SENIOR BUS DEPARTMENT: PUBLIC WORKS 13. Mayor's Appointments to Boards, Commissions, and Committees RECOMMENDATION: Mayor to Appoint Representatives to the various Boards, Commissions, and Committees for Council Approval. DEPARTMENT: CITY CLERK/CITY ATTORNEY 14. 2023-24 Mid-Year and Year-End Budget Review RECOMMENDATION: Receive and file the FY2023-24 Mid-Year and Year-End Report. DEPARTMENT: FINANCE Agenda Grand Terrace City Council March 12, 2024 City of Grand Terrace Page 6 I. FUTURE AGENDA ITEMS At this time, the City Council may propose items for discussion and/or action at a future duly agendized City Council meeting. A consensus of a majority of the quorum is required to place an item on a future agenda. J. CITY COUNCIL COMMUNICATIONS Council Member Kenneth J. Henderson Council Member Jeff Allen Council Member Sylvia Robles Mayor Pro Tempore Doug Wilson Mayor Bill Hussey K. CITY MANAGER COMMUNICATIONS L. CLOSED SESSION None. M. ADJOURN The Next Regular City Council Meeting will be held on Tuesday, March 26, 2024, 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. AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Council Selection from Alternatives to Fill City Council Vacancy or Order Special Election PRESENTED BY: Debra Thomas, City Clerk RECOMMENDATION: Consider methods available for filling the vacancy on the City Council; select a method for filling the vacancy from the alternatives provided, and direct staff to take the necessary steps to implement the selected alternative to fill the vacancy. 2030 VISION STATEMENT: This staff report supports City Council Goal #5, “Engage in Proactive Communication” by allowing community input on potential procedures on filling City Council vacancies. BACKGROUND: On February 8, 2022, the City Council approved Resolution No. 2022-10 approving guidelines for filling City Council Vacancies by Appointment which provided general guidelines on filling City Council vacancies by Appointment. On March 6, 2024, Council Member Sylvia Rodriguez-Robles officially submitted her resignation, effective immediately, thus creating a vacancy on the City Council. The term for this Council seat expires in November, 2024. DISCUSSION: Pursuant to Government Code section 36512, the City Council is required to either fill the vacancy by appointment or call a special election to fill the vacancy within 60 days from the commencement of the vacancy. If the council calls a special election, the special election is required to be held on the next regularly established election date, but not less than 114 days from the call of the special election. A person elected to fill a vacancy holds office for the unexpired term of the former incumbent. The next regularly established election date is November 5, 2024, which would be more than 114 days after the call for a special election. However, the vacant term is set to expire in November, 2024. If the council fills the vacancy by appointment, the person appointed to fill the vacancy will hold office for the unexpired term of the former incumbent. On February 8, 2022, the City Council adopted Resolution 2022-10, adopting D.1 Packet Pg. 7 “Guidelines for Filling City Council Vacancies by Appointment” (“Guidelines”). The purpose of the Guidelines was to provide general guidelines on filling City Council vacancies by appointment. The guidelines are not intended to be restrictive such that the City Council is unable to act in a different manner that is consistent with applicable law, such as Government Code Section 365121 (which provides vacancy filling requirements). With the above in mind, the guidelines set out the following procedures in the event of a vacancy on the City Council: 1. Initial Meeting. Within 7 days of the commencement of the vacancy, a regular or special meeting of the City Council shall be scheduled for the purposes of filling the vacancy and to provide direction to staff on seeking applications from candidates to fill the vacancy or to provide such other direction as may be appropriate, including, but not limited to, direction consistent with Government Code Section 36512. If the City Council determines to fill the vacancy by appointment, then the City Council will proceed to the meetings provided below. 2. First Meeting – Interview Selection: Within 15 days of holding the Initial Meeting, a regular or special meeting of the City Council shall be scheduled so that the City Council may consider and select potential candidates to be interviewed. 3. Second Meeting – Candidate Interviews: Within 15 days of the First Meeting, a regular or special meeting of the City Council shall be scheduled so that the City Council may interview potential candidates. 4. Third Meeting – Candidate Appointment: Within 15 days of the Second Meeting, a regular or special meeting of the City Council shall be scheduled so that the City Council may appoint an individual from the interviewed candidates to fill the City Council vacancy. 5. Special Election: In the event that the City Council does not fill the vacancy by appointment, then a regular or special meeting of the City Council shall be called prior to the 60th day from the commencement of the vacancy for the purpose of calling a special election to fill such vacancy in a manner consistent with Government Code Section 36512. If the council fills the vacancy by appointment, the resident appointed will fill the unexpired term through November 2024 when the next general election takes place. At that juncture, the appointee may run for the open seat for the next (4) year election cycle through 2028. The deadline to appoint a Grand Terrace resident is no later than April 8, 2024. 1 The Guidelines contain a scrivener’s error and incorrectly cite to Government Code section 34512. The correct citation is Government Code section 36512, which governs the filling of vacancies by appointment. D.1 Packet Pg. 8 FISCAL IMPACT: There would be no fiscal impact associated with this action. The monthly stipend for the City Council is indicated in the budget. ATTACHMENTS: • Council Member Sylvia Rodriguez-Robles Resignation - Effective March 6, 2024 (PDF) • CC Resolution No. 2022-10 (PDF) APPROVALS: Debra Thomas Completed 03/06/2024 10:06 AM Adrian Guerra Completed 03/06/2024 3:35 PM Finance Completed 03/06/2024 3:41 PM City Manager Completed 03/07/2024 8:53 AM City Council Pending 03/12/2024 6:00 PM D.1 Packet Pg. 9 D.1.a Packet Pg. 10 At t a c h m e n t : C o u n c i l M e m b e r S y l v i a R o d r i g u e z - R o b l e s R e s i g n a t i o n - E f f e c t i v e M a r c h 6 , 2 0 2 4 ( F i l l i n g C i t y C o u n c i l V a c a n c y ) RESOLUTION NO. 2022-10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE ADOPTING GUIDELINES ON THE FILLING OF VACANCIES ON THE CITY COUNCIL WHEREAS, Government Code Section 36512(b) provides that, in the event of a vacancy on the City Council, the City Council "... shall, within 60 days from the commencement of the vacancy, either fill the vacancy by appointment or call a special election to fill the vacancy"; and WHEREAS, the City Council prefers to fill vacancies in its membership by appointment and, therefore, the guidelines attached hereto, and incorporated herein by this reference, as Exhibit A were prepared ("Guidelines"); and WHEREAS, the City Council desires to adopt the Guidelines so that will enable it to fill vacancies effectively and efficiently in its membership; and WHEREAS, the Guidelines are not intended to be restrictive and the City Council may otherwise act in a manner that conflicts with the Guidelines but is consistent with applicable law; WHEREAS, the Clty Council intends that, to the extent the Guidelines conflict with general law, general law shall govern; WHEREAS, based upon the forgoing, the City Council therefore desires to adopt the Guidelines. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Grand Terrace, as follows: Section 1. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference. Section 2. The Guidelines are hereby adopted in substantially the form as attached hereto and incorporated herein by this reference as Exhibit A. Section 3. The City Attorney is authorized to make such non-substantive or technical changes to the Guidelines as may be required to ensure that the Guidelines are consistent with applicable law. Section 4. The City Manager is authorized to take all actions necessary and appropriate to implement the Guidelines. Section 5. This Resolution shall immediately take effect upon passage. CC Reso No.2022-10 Page 1 of 4 February 8,2022 D.1.b Packet Pg. 11 At t a c h m e n t : C C R e s o l u t i o n N o . 2 0 2 2 - 1 0 ( F i l l i n g C i t y C o u n c i l V a c a n c y ) PASSED, APPROVED and ORDERED by the City Council of the City of Grand Terrace, California at a regular meeting held on the 8th day of February, 2022. Darc Mc Mayor ATTEST: ebra Thomas City Clerk APPROVED AS TO FORM: Adrian R. Guerra City Attorney CC Reso No.2022-10 Page 2 of 4 February 8,2022 D.1.b Packet Pg. 12 At t a c h m e n t : C C R e s o l u t i o n N o . 2 0 2 2 - 1 0 ( F i l l i n g C i t y C o u n c i l V a c a n c y ) EXHIBIT "A" Guidelines for Filling City Council Vacancies by Appointment I.Purpose and Limitations The purpose of these guidelines is to provide general guidelines on filling City Council vacancies by appointment. These guidelines are not intended to be restrictive and shall not be interpreted as restricting the City Council's authority to otherwise act pursuant to law. As such, these guidelines are only intended to express the City Council's preference to fill a vacancy by appointment and, therefore, the City Council may act in a manner that is in conflict with these guidelines, provided that such acts are consistent with applicable law. To the extent that there is a conflict between these guidelines and general law, general law shall govern. II. 60-Day Deadline Under General Law In relevant part, Government Code Section 34512(b) provides that " If a vacancy occurs in an elective office provided for in this chapter, the council shall, within 60 days from the commencement of the vacancy, either fill the vacancy by appointment or call a special election to fill the vacancy." Thus, the City Council must either fill a vacancy or call a special election within 60 days. III. General Procedures A. Initial Meeting: Within 7 days of the commencement of the vacancy, a regular or special meeting of the City Council shall be scheduled for the purposes of filling the vacancy and to provide direction to staff on seeking applications from candidates to fill the vacancy or to provide such other direction as may be appropriate, including, but not limited to, direction consistent with Government Code Section 34512. If the City Council determines to fill the vacancy by appointment, then the City Council will proceed to the steps outlined in Section III(B). B. Filling By Appointment 1. First Meeting — Interview Selection: Within 15 days of holding the Initial Meeting, a regular or special meeting of the City Council shall be scheduled so that the City Council may consider and select potential candidates to be interviewed. 2. Second Meetinq — Candidate Interviews: Within 15 days of the First Meeting, a regular or special meeting of the City Council shall be scheduled so that the City Council may interview potential candidates. 3. Third Meeting — Candidate Appointment: Within 15 days of the Second Meeting, a regular or special meeting of the City Council shall be scheduled so that the City Council may appoint an individual CC Reso No.2022-10 Page 3 of 4 February 8,2022 D.1.b Packet Pg. 13 At t a c h m e n t : C C R e s o l u t i o n N o . 2 0 2 2 - 1 0 ( F i l l i n g C i t y C o u n c i l V a c a n c y ) from the interviewed candidates to fill the City Council vacancy. C. Special Election: In the event that the City Council does not fill the vacancy by appointment, then a regular or special meeting of the City Council shall be called prior to the 60th day from the commencement of the vacancy for the purpose of calling a special election to fill such vacancy in a manner consistent with Government Code Section 34512. D. Adjustments. The timelines provided herein may be extended or shortened by the City Council, provided that such timelines may not be extended in violation of Government Code Section 36512. Further, the City Council may schedule additional meetings as needed, provided that the meetings do not conflict with timelines provided under Government Code Section 36512. E. Multiple Vacancies. In the case of multiple vacancies on the City Council, the procedure described above may be run concurrently for each vacancy and may be adjusted as necessary to ensure compliance with Government Code Section 36512. IV. Appointment Criteria Government Code Section 34512 does not provide criteria for filling a City Council vacancy by appointment. As such, the following is a list of suggested criteria: A. The individual's availability to serve as a Council Member in light of other commitments, such as a job. B. The individual's knowledge and experience with current City issues and governance. C. The individual's level of community engagement, such as participation in community organizations. D. The individual's level of civic engagement, such as participation on City committees, commissions, and boards. E. The individual's goals and objectives if appointed as a City Council member. F. Whether the individual sought a seat on the City Council at the last regular election and, if so, the number of votes the individual received. CC Reso No.2022-10 Page 4 of 4 February 8,2022 D.1.b Packet Pg. 14 At t a c h m e n t : C C R e s o l u t i o n N o . 2 0 2 2 - 1 0 ( F i l l i n g C i t y C o u n c i l V a c a n c y ) STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO CITY OF GRAND TERRACE I Debra L. Thomas, City Clerk of the CITY OF GRAND TERRACE, CALIFORNIA, DO HEREBY CERTIFY that the foregoing Resolution, being Resolution No. 2022-10 was duly passed, approved and adopted by the City Council, approved and signed by the Mayor, and attested by the City Clerk, at the regular meeting of said City Council held on the 8th day of February 2022, and that the same was passed and adopted by the following vote: AYES: Council Members Allen, Wilson, Robles; Mayor Pro Tern Hussey, Mayor McNaboe NOES: None. ABSENT: None. ABSTAIN: None. Executed this 91h day of February 2022, at Grand Terrace, California. Debra L. Thomas City Clerk D.1.b Packet Pg. 15 At t a c h m e n t : C C R e s o l u t i o n N o . 2 0 2 2 - 1 0 ( F i l l i n g C i t y C o u n c i l V a c a n c y ) a a r u V4•" VQ f 3 y v. v a l D.1.b Packet Pg. 16 At t a c h m e n t : C C R e s o l u t i o n N o . 2 0 2 2 - 1 0 ( F i l l i n g C i t y C o u n c i l V a c a n c y ) CITY OF GRAND TERRACE CITY COUNCIL MINUTES ● FEBRUARY 27, 2024 Council Chambers Regular Meeting 6:00 PM Grand Terrace Civic Center ● 22795 Barton Road City of Grand Terrace Page 1 CALL TO ORDER Mayor Bill Hussey convened the Regular Meeting of the City Council for Tuesday, February 27, 2024, at 6:00 p.m. Invocation Pastor Mark Matthews from Grand View Baptist Church gave the Invocation. Pledge of Allegiance Mayor Bill Hussey led the Pledge of Allegiance. AB 2449 Disclosures None. Attendee Name Title Status Arrived Bill Hussey Mayor Present Doug Wilson Mayor Pro Tem Present Sylvia Rodriguez-Robles Council Member Absent Jeff Allen Council Member Present Kenneth J. Henderson Council Member Present Konrad Bolowich City Manager Present Adrian Guerra City Attorney Present Debra Thomas City Clerk Present Christine Clayton Finance Director Present A. REORDERING OF, ADDITIONS TO, OR REMOVAL OF ITEMS FROM THE AGENDA Konrad Bolowich, City Manager announced that Agenda Item No. G.8 Senior Bus Design was removed from the agenda. B. PUBLIC COMMENT Sarah Wilson, Grand Terrace requested that the City Council consider a Gaza, Palestine cease fire proclamation. E.3 Packet Pg. 17 Mi n u t e s A c c e p t a n c e : M i n u t e s o f F e b 2 7 , 2 0 2 4 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council February 27, 2024 City of Grand Terrace Page 2 C. SPECIAL PRESENTATIONS 1. Betty Dominici, CEO of A&A Health gave a PowerPoint presentation on the JC Wallce House. PUBLIC COMMENT Two (2) written public comments were received from the following individuals expressing their concern with JC Wallace House and its residents: Dennis (Rochelle) Rosenkild Crystal Castillo The following members of the public attended the City Council meeting and expressed their concerns with JC Wallce House and its residents: Robert Sanchez Dan Flores Cynthia Ruiz Lisa Pankulics-Green Jay C. Nichols Larissa Hawkins Rita Teron Pam Lemos Martha Light Bobbie Forbes Jessica Campbell Terri Nichols Michelle Sabino Mayor Hussey recessed the regular meeting of the City Council at 7:40 p.m. Mayor Hussey reconvened the regular meeting of the City Council at 7:53 p.m. 2. Adele Lara, President of the Grand Terrace Women’s Club provided the City Council with its Annual Report PUBLIC COMMENT None. E.3 Packet Pg. 18 Mi n u t e s A c c e p t a n c e : M i n u t e s o f F e b 2 7 , 2 0 2 4 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council February 27, 2024 City of Grand Terrace Page 3 D. CONSENT CALENDAR City Manager Bolowich pulled Agenda Item No. D.4 2nd Reading of Ordinance No. 351 from the agenda. RESULT: APPROVED [UNANIMOUS] MOVER: Doug Wilson, Mayor Pro Tem SECONDER: Jeff Allen, Council Member AYES: Bill Hussey, Doug Wilson, Jeff Allen, Kenneth J. Henderson ABSENT: Sylvia Rodriguez-Robles 1. Waive Full Reading of Ordinances on Agenda 2. Approval of Minutes – Regular Meeting – 02/13/2024 APPROVE THE REGULAR MEETING MINUTES FOR FEBRUARY 13, 2024 3. Approval of the January-2024 Check Register in the Amount of $573,046.78 APPROVE THE CHECK REGISTER NO. 01312024 IN THE AMOUNT OF $573,046.78 AS SUBMITTED, FOR THE MONTH ENDING JANUARY 31, 2024. 5. MOU with San Bernardino County Health Department for SB 1383 Edible Food Generator Inspections ACCEPTING AND ADOPTING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF GRAND TERRACE AND SAN BERNARDINO COUNTY DEPARTMENT OF PUBLIC HEALTH ENVIRONMENTAL HEALTH SERVICES, FOR THE PERIOD OF FEBRUARY 27, 2024, THROUGH DECEMBER 31, 2025, FOR SB 1383 EDIBLE FOOD GENERATOR INSPECTIONS 6. Non-Owner Occupied/Rental Property Program ELIMINATE NON-OWNER OCCUPIED/RENTAL PROPERTY PROGRAM AND GOOD LANDLORD PROGRAM 7. Approve Amendment No. 4 to the San Bernardino Associated Governments Joint Powers Authority Agreement, and Approve the Incremental Increase in Member Dues to $18,405 STAFF RECOMMENDS CITY COUNCIL APPROVE AMENDMENT NO. 4 TO THE SAN BERNARDINO ASSOCIATED GOVERNMENTS JOINT POWERS AUTHORITY AGREEMENT AND APPROVE THE INCREMENTAL INCREASE IN MEMBER DUES TO $18,405. E. PUBLIC HEARINGS - NONE E.3 Packet Pg. 19 Mi n u t e s A c c e p t a n c e : M i n u t e s o f F e b 2 7 , 2 0 2 4 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council February 27, 2024 City of Grand Terrace Page 4 F. UNFINISHED BUSINESS - NONE G. NEW BUSINESS 9. Consideration of a Resolution of the City Council of the City of Grand Terrace Approving a Form Reimbursement and Indemnification Agreement to be Used in Relation to Development Projects Within the City and Authorizing the Execution Thereof by the City Manager Subject to City Attorney Approval as to Form Adrian Guerra, City Attorney gave the staff report for this item. 1. ADOPT A RESOLUTION APPROVING A FORM REIMBURSEMENT AND INDEMNIFICATION AGREEMENT AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE SAME SUBJECT TO CITY ATTORNEY APPROVAL AS TO FORM. RESULT: APPROVED [UNANIMOUS] MOVER: Kenneth J. Henderson, Council Member SECONDER: Doug Wilson, Mayor Pro Tem AYES: Bill Hussey, Doug Wilson, Jeff Allen, Kenneth J. Henderson ABSENT: Sylvia Rodriguez-Robles H. FUTURE AGENDA ITEMS 1. Motion: Direct Staff to Bring Back a Future Agenda Item to Discuss a Potential Conditional Use Permit Review of JC Wallace House in Accordance with Grand Terrace Municipal Code Section 18.83.032 RESULT: ADOPTED [UNANIMOUS] MOVER: Kenneth J. Henderson, Council Member SECONDER: Bill Hussey, Mayor AYES: Bill Hussey, Doug Wilson, Jeff Allen, Kenneth J. Henderson ABSENT: Sylvia Rodriguez-Robles E.3 Packet Pg. 20 Mi n u t e s A c c e p t a n c e : M i n u t e s o f F e b 2 7 , 2 0 2 4 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council February 27, 2024 City of Grand Terrace Page 5 2. Motion: Direct Staff to Bring Back a Future Agenda Item to Discuss Consideration of an Ordinance Regulating Street Takeovers, Fines, Penalties, Impounding Vehicles and Traffic Control Devices RESULT: ADOPTED [UNANIMOUS] MOVER: Jeff Allen, Council Member SECONDER: Kenneth J. Henderson, Council Member AYES: Bill Hussey, Doug Wilson, Jeff Allen, Kenneth J. Henderson ABSENT: Sylvia Rodriguez-Robles I. CITY COUNCIL COMMUNICATIONS Council Member Kenneth J. Henderson Nothing to Report. Council Member Jeff Allen Nothing to Report Mayor Pro Tempore Doug Wilson Mayor Pro Tem Wilson attended the following events and meetings: · Grand Terrace Area Chamber of Commerce Business of the Month recognition of Grocery Outlet on February 24, 2024. Mayor Bill Hussey Mayor Hussey attended the following events and meetings: · Grand Terrace Area Chamber of Commerce Business of the Month recognition of Grocery Outlet on February 24, 2024 J. CITY MANAGER COMMUNICATIONS City Manager Bolowich announced the following: · The Annual Blue Mountain Hike will be held on Sunday, March 3, 2024, beginning at 8:00 a.m. · The city’s sales tax revenue remained consistent for the last year. E.3 Packet Pg. 21 Mi n u t e s A c c e p t a n c e : M i n u t e s o f F e b 2 7 , 2 0 2 4 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) Minutes Grand Terrace City Council February 27, 2024 City of Grand Terrace Page 6 K. CLOSED SESSION - NONE L. ADJOURN Mayor Hussey adjourned the regular meeting of the City Council at 8:25 p.m. The Next Regular City Council meeting will be held on Tuesday, March 12, 2024, at 6:00 p.m. _________________________________ Bill Hussey, Mayor _________________________________ Debra L. Thomas, City Clerk E.3 Packet Pg. 22 Mi n u t e s A c c e p t a n c e : M i n u t e s o f F e b 2 7 , 2 0 2 4 6 : 0 0 P M ( C o n s e n t C a l e n d a r ) AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Second Reading by Title Only, with Further Reading Waived, an Ordinance Amending Title 12.08 'Street Excavation' of the Municipal Code PRESENTED BY: Shanita Tillman, Senior Management Analyst RECOMMENDATION: 1. Direct the City Attorney to read by title only, waive further reading, and adopt AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE AMENDING TITLE 12.08 STREET EXCAVATION. BACKGROUND: The City of Grand Terrace enacted Ordinance No. 64, incorporating Chapter 12.08 into the Grand Terrace Municipal Code (GTMC) to regulate excavations and trenching in public rights of way. Subsequent amendments occurred in 1990 (Ordinance No. 125) concerning cash deposits and public service companies, in 2005 (Ordinance No. 218) addressing fines for non-compliance, and in 2020 (Ordinance No. 330) granting the City Council authority over fees and deposits. DISCUSSION: On January 9, 2024, staff proposed adopting Chapter 12.08 to the Council. Following the meeting, the Council recommended adding a jack and boring requirement along specific streets. The revision process aims to simplify content, update language to align with prevailing standards, introduce a new street pavement moratorium, and remove "Attachment A: Specifications for Construction Within the Right of Way." Going forward, construction specifications will be overseen directly by the City Engineer to eliminate redundancy and ensure compliance with the latest engineering standards and guidelines. The proposed amendments include Section 12.08.330, which introduces a new pavement moratorium to address pavement degradation, maintain street structural integrity, ensure smooth transportation, and minimize negative visual impacts. Key provisions include limitations on excavation for recently constructed streets dating back to FY 2020-21 and a post-construction moratorium extending up to five years. For slurry-sealed streets, this moratorium extends up to three years unless the applicant agrees to cover the cost of resurfacing the street. On February 13, 2024, staff brought the item back to Council with revisions, and the E.4 Packet Pg. 23 Council approved the amendments. FISCAL IMPACT: The adoption of the ordinance will not result in any fiscal impact. ATTACHMENTS: • Ord No. 351 (DOCX) • Chapter 12.08 Street Excavations (DOCX) APPROVALS: Shanita Tillman Completed 02/20/2024 2:50 PM Finance Completed 02/21/2024 7:24 AM City Manager Completed 02/22/2024 2:55 PM City Council Pending 03/12/2024 6:00 PM E.4 Packet Pg. 24 CC Ord No. 351 Page 1 of 3 February 27, 2024 ORDINANCE NO. 351 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE, STATE OF CALIFORNIA, AMENDING CHAPTER 12.08 (“STREET EXCAVATIONS”) OF TITLE 12 (“STREETS, SIDEWALKS AND PUBLIC PLACES”) OF THE GRAND TERRACE MUNICIPAL CODE IN ITS ENTIRETY BY ESTABLISHING EXCAVATION AND TRENCHING STANDARDS WHEREAS, in 1982 the City of Grand Terrace (“City”) adopted Ordinance No. 64, adding Chapter 12.08 relating to Excavations in City Streets and Public Places (“Chapter 12.08”) to the Grand Terrace Municipal Code (“GTMC”), in order to establish rules and regulations to govern excavations and trenching within the public right of way by project applicants, residents, and utility companies; and WHEREAS, in 1990 the City adopted Ordinance No. 125 amending Chapter 12.08 of the GTMC by repealing section 12.08.360, and adding sections 12.08.080 entitled Cash Deposits and 12.08.360 entitled Public Service Companies; and WHEREAS, in 2005 the City adopted Ordinance No. 218 adding section 12.08.410 to Chapter 12.08 establishing fines of $1,000.00 for failure to obtain a street cut permit and failure to comply with specifications established in the chapter; and WHEREAS, in 2020 the City adopted Ordinance No. 330 amending sections 12.08.080 and 12.08.260 in Chapter 12.08 to authorize the City Council to adopt certain fees and deposits by resolution; and WHEREAS, the City desires to amend Chapter 12.08 (Street Excavations) of the GTMC to streamline its content, update the language to align with prevailing standards, include a directional boring requirement, as practical, along main thoroughfares within the City such as Barton Rd, Mount Vernon Ave, De Berry St, Van Buren St, Pico St, Main St, and Observation St, implement a new, street pavement moratorium, and remove “Attachment A: Specifications for Construction Within the Right of Way.” Henceforth, all pertinent construction specifications shall be diligently adhered to as promulgated and directed by the City Engineer. This obviates the necessity for redundant documentation and ensures conformity with the most up-to-date engineering standards and guidelines. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Recitals. The above recitals are true and correct and incorporated herein by reference. SECTION 2. CEQA. The City Council finds that the actions contemplated by this Ordinance are exempt from the California Environmental Quality Act ("CEQA") pursuant to Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, E.4.a Packet Pg. 25 At t a c h m e n t : O r d N o . 3 5 1 ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) CC Ord No. 351 Page 2 of 3 February 27, 2024 Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. SECTION 3. Chapter 12.08 (“Street Excavations”) of Title 12 (“Streets, Sidewalks and Public Places”) of the Grand Terrace Municipal Code is hereby amended and shall be replaced and superseded in its entirety, by the revised Chapter 12.08 (“Street Excavations”) of Title 12 (“Streets, Sidewalks and Public Places”) as set forth in Exhibit “A”, attached hereto and incorporated herein by this reference as though set forth in full. SECTION 4. City of Grand Terrace seeks to ameliorate pavement degradation, maintain structural integrity of thoroughfares, maintain and preserve a smooth surface for all modes of transportation, and reduce negative visual impacts. By revising Chapter 12.08 (Street Excavations), property owners, contractors or utilities companies with proposed projects that require excavation of roadways can more effectively plan for excavation activities while preserving the integrity of public right of ways. SECTION 5. The inclusion of a comprehensive street pavement moratorium for those public right of ways that have recently been constructed or rehabilitated serves as an instrumental mechanism in preserving and fortifying the structural integrity of the City's thoroughfares. This measure ensures that the newly rehabilitated streets remain undisturbed during a critical period, thereby optimizing the efficacy of the rehabilitation and safeguarding the municipality's infrastructure investments. SECTION 6. Severability. If any provision(s) of this Ordinance or the application thereof to any person or circumstances is held invalid or unconstitutional by any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect any other provision or application, and to this end the provisions of this ordinance are declared to be severable. The City Council hereby declares that they would have adopted this ordinance and each section, subsection, sentence, clause, phrase, part or portion thereof, irrespective of the fact that any one or more sections, subsections, clauses, phrases, parts or portions thereof be declared invalid or unconstitutional. SECTION 7. Posting. The City Clerk shall certify to the passage and adoption of this Ordinance by the City Council and shall cause this ordinance to be published or posted in accordance with Government Code Section 36933 as required by law. SECTION 8. This Ordinance shall take effect and be in full force and effect from and after thirty (30) calendar days after its final passage and adoption. PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace at a regular meeting held on the 12th day of March, 2024. _____________________________ Bill Hussey Mayor E.4.a Packet Pg. 26 At t a c h m e n t : O r d N o . 3 5 1 ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) CC Ord No. 351 Page 3 of 3 February 27, 2024 ATTEST: ____________________________ Debra Thomas City Clerk APPROVED AS TO FORM: ____________________________ Adrian R. Guerra City Attorney E.4.a Packet Pg. 27 At t a c h m e n t : O r d N o . 3 5 1 ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) Title 12 - STREETS, SIDEWALKS AND PUBLIC PLACES Chapter 12.08 STREET EXCAVATIONS 01247.0001/960130.2 Grand Terrace, California, Municipal Code Page 1 of 12 Chapter 12.08 STREET EXCAVATIONS E.4.b Packet Pg. 28 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Page 2 of 12 12.08.010 Title of ordinance. The ordinance codified in this chapter shall be known and may be cited as the "Street Excavation Ordinance." 12.08.020 Definitions. For the purposes of this Chapter, the following terms shall have the meaning designated unless it is clear from the context that a different meaning is intended: A. "Applicant" means any person making written application to the City Engineer for an encroachment permit under this Chapter. B. “Directional Boring” also known as horizontal directional drilling (HDD), means a trenchless method of installing underground pipes, conduits, or cables in a curved or straight line with minimal surface disruption. This technique involves drilling a pilot hole horizontally and then enlarging it to accommodate the desired utility. C. "Excavation" means any opening in the surface of a public place made in any manner whatsoever except an opening into a lawful structure below the surface of a public place, the top of which is flush with the adjoining surface and so constructed as to permit frequent openings without injury or damage to the public place. D. "Encroachment" means constructing or placing temporary or permanent structures, improvements, facilities or materials in, on, over, or under any public right-of-way or using any right-of-way so as to prevent, obstruct, or interfere with the normal use of that way, including but not limited to the performance of any of the following acts: i. Excavating or disturbing the public right-of-way; ii. Erecting or maintaining any post, sign, pole, fence, guard rail, wall, pipe, conduit, cable, wire, communication service equipment, or other facility or structure on, over, or under a public right-of-way; iii. Planting any tree, shrub, grass, or other growing thing within the public right-of-way; iv. Placing or leaving on the public right-of-way any rubbish, brush, earth, or material; v. Constructing, placing, or maintaining on, over, under, or within a public right-of-way any pathway, sidewalk, driveway, or other surfacing; any culvert or other surface drainage or subsurface drainage facility; or any pipe, conduit, wire, communication service equipment or facility, or cable; and vi. Constructing, placing, planting, or maintaining any structure, embankment, excavation, tree, or other object adjacent to the public right-of-way which causes or may cause an encroachment. E. "Facility" means pipe, pipeline, tube, main, service, trap, vent, vault, manhole, meter, gauge, regulator, valve, conduit, wire, tower, pole, catch basin, pole line, anchor, cable, junction box, transformer or any other material, structure or object of any kind or character, whether enumerated in this Chapter or not, which is or may be lawfully constructed, left, placed or maintained in, upon, along, across, under or over a public place. F. "Permit holder" means any person who has been granted and has in full force and effect an encroachment permit issued under this Chapter. E.4.b Packet Pg. 29 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Page 3 of 12 G. "Person" means any person, firm, partnership, association, corporation, company, political body or organization of any kind. H. "Public place" means any public street, way, place, alley, sidewalk, park, square, or any other public property owned or controlled by any governmental agency in a governmental capacity. I. "Public utility" means any electrical corporation, gas corporation, heat corporation, water corporation, telephone corporation, pipeline corporation, sewer corporation, telegraph corporation, where the service is performed for, or the commodity delivered to, the public or any portion thereof. J. "Slurry seal" means a mixture of polymer modified asphalt emulsion, mineral aggregate, mineral filler, water, and other additives, properly proportioned, mixed, and spread in accordance with the City of Grand Terrace and Caltrans standard plans specifications, and details, whichever is more stringent or as directed by the City Engineer and usually less than one-half inch in thickness. K. "Street" means any street, highway, sidewalk, alley, avenue or other public way or public ground in the City. L. "Street overlay" means one or more courses of asphalt construction on an existing pavement; usually greater than one-half inch in thickness; generally includes an asphalt leveling course to correct the contour of the old pavement. M. "Substructure" means any pipe, conduit, duct, tunnel, manhole, vault, buried cable or wire or any other facility located below the surface of any public place. 12.08.030 Permit required. No person shall dig, excavate, tunnel, undermine, or in any manner break up any street or public place, deposit, place ,or leave upon any public place any earth or other excavated material obstructing or tending to interfere with the free use of the public place, or fill any excavation in any public place, unless such person has first obtained an encroachment permit , as defined in section 12.10.020. The City Engineer shall have authority under this Chapter to issue encroachment permits as provided in Chapter 12.10. 12.08.040 Application. No encroachment permit shall be issued unless a written application for the issuance of an encroachment permit is submitted to the City Engineer. The written application shall follow guidelines set forth in section 12.10.040, as amended from time to time. 12.08.050 Fee. A permit fee shall be charged by the City Engineer for the issuance of an encroachment permit. Such fee shall be in accordance with the fee schedule established by the City Council and adopted by resolution. 12.08.060 Inspection costs—Deposits. All excavation shall be subject to inspection by the City Engineer. Actual costs of such inspections, computed at current permit and inspection rates, shall be paid by the permit holder Before an encroachment permit is issued, the permit holder shall deposit with the City an amount estimated to cover costs of the inspection, plan review, and repair and/or replacement costs, and shall include any third-party costs, computed based on the rates stated in the resolution setting a fee schedule. The remaining balance of the deposit, if any, shall be returned to the permit holder within one year of project completion. Return of the deposit shall be conditioned upon the permit holder's compliance with this Chapter. Public service companies shall be billed for inspection costs on a monthly basis. E.4.b Packet Pg. 30 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Created: 2023-06-14 12:18:08 [EST] (Supp. No. 13) Page 4 of 12 12.08.070 Signs. All places of business and residences abutting the public right of way that are within the limits of any construction zone shall be notified, by the permit holder, by mail or door hangers at least five (5) days prior to commencement of work. This written notification shall be approved in advance by the City Engineer and explain the sequence of work and indicate any restrictions of access. . 12.08.080 Emergency Repair deposits. Before an encroachment permit as provided in this Chapter is issued, the applicant shall deposit with the City Finance Department a deposit in the amount to be determined by the City Engineer to secure proper repairs of the street cut, computed based on the rates stated in the resolution setting a fee schedule, as applicable. A. An application for an encroachment permit to perform excavation work under this Chapter shall be accompanied by a deposit, payable to the City, in accordance with a schedule of fees set by resolution. No deposit shall be less than the amount as set by resolution of the City Council. Any person intending to make openings, cuts or excavations in streets or public places may make and maintain with the City Finance Director a general annual deposit in the sum of not less than an amount set by resolution of the City Council. Such deposit shall be refunded by the City to the permit holder upon the expiration of such 24-month period and upon request of the permit holder, provided, that the City may use any or all of any such deposit to pay the cost of any work the City performs to restore or maintain the street or public place as provided in this Chapter in the event the permit holder fails to perform such work, in which event the amount refunded to the permit holder shall be reduced by the amount thus expended by the City. The decisions of the City Engineer as to the cost of the work done or repairs made by him under the provisions of this Chapter shall be final and conclusive as to cost. An applicant may submit a bond or letter of credit in a form and amount acceptable to the City Engineer, which shall remain in effect for not less than 24 months, in lieu of a deposit under this provision B. Return of the deposit shall be conditioned upon the permit holder's compliance with this Chapter, and further conditioned that the permit holder must fill, restore, place in good and safe condition, and as near to its original condition the public place or street, and to the satisfaction of the City Engineer for the period of 24 months after the work has been accepted. Any settlement of the surface of the public place or street within that 24 month period shall be deemed conclusive evidence of defective backfilling by the permit holder. Nothing contained in this Subsection shall be construed to require the permit holder to maintain any repairs to pavement made by the City if such repairs should prove defective. C. Any owner of real property repairing or engaging another to repair privately owned property that is not a part of the public place or street shall not be required to give such deposit, but shall comply with all other provisions of this Chapter. 12.08.090 Working Hours. Working hours 7:00 A.M. to 8:00 P.M. Monday - Saturday, and at no time on Sunday or national holidays as per section 8.108.040.C. 12.08.100 Traffic Control. The permit holder shall submit a traffic control plan subject to approval by the City Engineer and take appropriate measures to assure that, during the performance of the excavation work, traffic conditions as nearly normal as practicable are maintained at all times, so as to cause as little inconvenience as possible to the occupants of the abutting property and to the general public. The traffic control plan shall ensure that the schedule and conduct of work avoids unnecessary inconvenience to the public and abutting property owners, E.4.b Packet Pg. 31 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Page 5 of 12 avoids undue delay in construction activities to reduce the public's exposure to construction dust and debris. All street closures shall be approved in advance by the City Engineer. The traffic control plan shall include a detour plan, as applicable. The City Engineer may in his discretion permit the closing of streets to all traffic for a period recommended by him in order for the permit holder to complete the excavation work. The permit holder shall comply with standards set forth by the latest edition of the State of California’s Manual on Uniform Traffic Controls Devices for route and traffic control, including its own vehicles, as directed by the City Engineer. 12.08.110 Traffic and access. Maintain safe and adequate pedestrian and vehicular access to driveways, houses, fire hydrants, buildings, fire and police stations, hospitals, and establishments of similar nature. When an abutting property owner's access across the right-of-way line is to be eliminated or replaced under the Contract, the existing access must not be closed until the replacement access facility is usable. Construct temporary approaches to a crossing and an intersecting highway. The permit holder shall provide safe and adequate pedestrian zones and public transportation stops. Pedestrian crossings shall be provided at intervals not exceeding 200 feet, which shall be maintained unless otherwise approved by the City Engineer. The permit holder shall provide, at the end of the day, vehicular access to residential driveways except when necessary construction precludes such access for reasonable periods of time. If backfill has been completed to such extent that safe access may be provided, and the street is opened to local traffic, the permit holder shall immediately clear the street and driveways and provide and maintain access. The permit holder shall cooperate with the various parties involved in the delivery of mail and the collection and removal of trash and garbage to maintain existing schedules for these services. Unless otherwise authorized, work shall be performed in only one-half the roadway at one time. One-half shall be kept open and unobstructed until the opposite side is ready for use. If one-half a street only is being improved, the other half shall be conditioned and maintained as a detour. The permit holder shall absorb in its bid all costs for the above requirements. 12.08.120 Vital equipment access. The excavation work shall be performed and conducted so as not to interfere with access to fire stations, fire hydrants, fire escapes, water gates, underground vaults, water valves, and all other vital equipment as designated by the City Engineer. Materials or obstructions shall not be placed within 15 feet of fire hydrants. Passageways leading to fire escapes or firefighting equipment shall be kept free of piles of material or other obstructions. 12.08.130 Street Closures, detours, and barricades. The permit holder shall erect and maintain suitable barriers, as approved by the City Engineer, to confine earth from trenches or other excavations to encroach upon streets highways as little as possible. The permit holder shall comply with all standards set forth by the State of California’s Manual on Uniform Traffic Controls Devices, latest edition. The permit holder shall provide barriers, guards, lights, signs, temporary bridges, flag persons and watchpersons, advising the public of detours and construction hazards. The permit holder shall also be responsible for compliance with additional public safety requirements, which may arise during construction. The permit holder shall furnish and install, and upon completion of the work, promptly remove, all signs and warning devices. As part of the initial submittal review process, the permit holder must, in advance of closing, partially closing, or reopening any street, alley, or other public thoroughfare, notify the Police, Fire, School Districts, Department of Transportation, Traffic and Engineering Departments of jurisdictional agencies involved, and comply with their requirements. The City Engineer must first approve all schedule deviations in writing E.4.b Packet Pg. 32 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Created: 2023-06-14 12:18:08 [EST] (Supp. No. 13) Page 6 of 12 12.08.140 Existing utilities. The permit holder shall not interfere with any existing utilities without the written consent of the City Engineer and the utility company or person owning the utility. The permit holder shall notify the various gas, electric, telephone, water, or other public utility companies, 48 hours in advance of the intention to begin work so that they may take any necessary protective measures around their facilities. If removal of an existing utility is necessary, this shall be done by its owner. No utility owned by the City shall be moved to accommodate the permit holder unless the cost of such work is borne by the permit holder. The cost of moving privately owned utilities shall be similarly borne by the permit holder unless other arrangements are made with the owner of the utility. The permit holder shall support and protect (by timbers or otherwise) substructure apparatus which may be in any way affected by the excavation work, and do everything necessary to support, sustain and protect them under, over, along or across the work. The permit holder shall be responsible for any damage done to any public or private property by reason of the breaking of any utilities, water pipes, sewer, gas pipe, electric conduit, or other substructure. In case any of the substructure apparatus is damaged, they shall be repaired by the agency or person owning them, and the expense of such repairs shall be charged to the permit holder, and his or its bond shall be liable therefor. The permit holder shall inform itself as to the existence, and location of all substructures and protect the same against damage. 12.08.150 Abandonment of substructures. Whenever the use of a substructure is abandoned, except the abandonment of a service line designed to serve a single property owner, the person owning, using, controlling or having an interest therein shall, within 30 days after such abandonment, file with the City Engineer a statement in writing giving in detail the location of the substructure so abandoned. When the City determines that the abandoned substructure is an obstruction or is otherwise detrimental to a governmental function, and no other alternatives are available, the owner shall remove such abandoned substructure or pay the cost of its removal during the course of excavation for construction of the facility by the City or any other public body. 12.08.160 Sidewalk excavations. Excavations made in or under a sidewalk shall be subject to compliance with standards as established by the City Engineer. 12.08.150 Protection of the public. The permit holder shall place and maintain barriers and warning devices and take other steps required for the protection of the public, as required and/or established by the City Engineer. Permit holder shall not permit or maintain any unguarded machinery, equipment, or other device having the characteristics of an attractive nuisance likely to attract children and become hazardous to their safety or health. 12.08.170 Equipment and materials in public streets. Equipment must be kept in a good state of repair and maintained in such state during the progress of the work. No worn or obsolete equipment shall be used, and in no case shall the maker’s rating of capacity for any equipment be exceeded. Construction materials may not be stored on public streets, roads, or highways. All materials or equipment not installed or used in the construction shall be stored elsewhere by the permit holder at its expense unless authorized by the City Engineer. Construction equipment shall not be stored at the worksite before its actual use on the work nor after it is no longer needed on the worksite. E.4.b Packet Pg. 33 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Created: 2023-06-14 12:18:08 [EST] (Supp. No. 13) Page 7 of 12 Excavated material, except that which is to be used for backfilling the same day in the adjacent trench, may not be stored on public streets, roads, or highways unless otherwise permitted by the City Engineer. After placing backfill, all excess material shall be removed immediately from the site. 12.08.180 Trenches and tunnels. Trench and tunnel excavation and construction, including care of excavated materials, shall be done in compliance with the requirements as established by the City Engineer. 12.08.190 Protection and restoration of existing improvements The permit holder shall be responsible for the protection of public and private property adjacent to the work and shall exercise due caution to avoid damage to such property. The permit holder shall repair or replace all existing improvements, public or private, which are not designated for removal (e.g., curbs, sidewalks, driveways, fences, walls, signs, utility installations, pavements, structures, etc.) which are damaged or removed as a result of its operations; except when a portion of a sprinkler system within the right-of-way must be removed, the remaining lines shall be reconstructed or capped. Repairs and replacements shall be at least equal to existing improvements and shall match them in finish and dimension. Trees, lawn, and shrubbery that are not to be removed shall be protected from damage or injury. If damaged or removed because of the permit holder’s operations, they shall be restored or replaced in as neatly the original condition and location as is reasonably possible. Lawns shall be reseeded and covered with suitable mulch. The permit holder shall give five days’ notice, in writing, to occupants or owners of adjacent property to permit them to salvage or relocate plants, trees, fences, sprinklers and other improvements within the right-of- way, which are designed for removal and would be destroyed because of the work. All costs for protecting, removing, and restoring existing improvements shall be born by the permit holder. 12.08.200 Damage to existing improvements. All damage done to existing improvements during the progress of the excavation work shall be repaired by the permit holder. Materials for such repair shall conform with the requirements of any applicable code or ordinance. If, upon being ordered, the permit holder fails to furnish the necessary labor and materials for such repairs, the City Engineer shall have the authority to cause the necessary labor and materials to be furnished by the City, and the cost shall be charged against the permit holder, and the permit holder shall also be liable on his or its cash deposit therefor. 12.08.210 Property lines and easements. Property lines and limits of easements shall be indicated on the plan of excavation submitted with the application for the encroachment permit, and it shall be the permit holder's responsibility to confine excavation work within these limits. 12.08.220 Cleanup. As the excavation work progresses, all streets, public places, and private properties shall be maintained free of all rubbish, excess earth, rock, and other debris resulting from such work. permit holder. The permit holder shall, at his or its own expense, clean up and remove all refuse and unused materials of any kind resulting from the work within three (3) days after the completion of the work. Failure to do so within 24 hours of being notified by the City Engineer, the work may be done by the City Engineer, and the cost thereof charged to the permit holder, and the permit holder shall also be liable for the cost thereof. E.4.b Packet Pg. 34 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Created: 2023-06-14 12:18:08 [EST] (Supp. No. 13) Page 8 of 12 12.08.230 Watercourses, sewers, and drains. Permit holders shall provide for the flow of watercourses, sewers and drains and provide for incidental matters as established by the City Engineer. 12.08.240 Breaking through pavement or sidewalk. Permit holders shall comply with the requirements as established by the City Engineer in regard to breaking through any pavement or sidewalks as specified in section 12.08.200. 12.08.250 Substructure installation. Permit holders shall comply with the requirements as established by the City Engineer in regard to the installation of any substructures. 12.08.260 Tunnels. Tunnels under pavement shall not be permitted except by permission of the City Engineer and, if permitted, shall be adequately supported by timbering and backfilling under the direction of the City Engineer. 12.08.270 Fire hydrant use. The use of fire hydrants as sources of water supply shall be subject to the conditions set forth by Riverside Highland Water Company and any required payment by permit holder for such use. 12.08.280 Restoration by City—Guarantee of restoration. A. If the permit holder has failed to restore the surface of the street or public place to its original and proper condition, upon expiration of the time fixed by such permit, or otherwise has failed to complete the excavation work covered by such permit, the City Engineer, if he deems it advisable, shall have the right to do all work and things necessary to restore the street or public place and to complete the excavation work. The permit holder shall be liable for the actual cost and an additional amount equal to the City’s actual costs for general overhead and administrative expenses which shall be set by resolution of the City Council. The City shall have a cause of action for all such costs and for all fees, expenses and amounts paid out and due it for such work, and shall apply in payment of the amount due it any funds of the permit holder deposited as provided in this Chapter, and the City shall also enforce its rights under the permit holder’s deposit provided pursuant to this Chapter. B. It shall be the duty of the permit holder to guarantee and maintain the site of the excavation work in the same condition it was in prior to the excavation work two years after restoring it to its original condition. 12.08.290 Pipe trench standards. The permit holder shall comply with the OSHA’s Trenching and Excavation Safety and rules and regulations as established by the City Engineer in regard to the excavation, construction and maintenance of any trenches for the laying of pipe. E.4.b Packet Pg. 35 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Created: 2023-06-14 12:18:09 [EST] (Supp. No. 13) Page 9 of 12 12.08.300 Completion of work. The permit holder shall prosecute with diligence and expedition, to the satisfaction of the City Engineer, all excavation work covered by the encroachment permit, and shall promptly complete such work and restore the street or public place to its original condition, or as near as may be, as soon as practicable and, in any event, not later than the date specified in the encroachment permit therefor. 12.08.310 Emergency completion. If, in his judgment, traffic conditions, the safety or convenience of the traveling public, or the public interest, require that the excavation work be performed as emergency work, the City Engineer shall have full power to order, at the time the permit is granted, that a crew of men and adequate facilities be employed to expeditiously complete such work as soon as possible. 12.08.320 New pavement moratorium. The following provisions are intended to minimize pavement degradation, maintain structural integrity of streets, maintain a smooth surface for all modes of transportation, and reduce negative visual impacts: A. The City Engineer shall attempt to give notice to all owners of substructures & facilities located within the City streets who might be affected approximately six months prior to the probable date of construction of any new paving or repaving of any street in the City. The failure to give such notice shall not affect the further provisions of this Section. B. No excavation, trenching, or overlay shall be permitted in any street that has been constructed, or reconstructed, the pavement surface shall not be cut or opened for a period of five (5) years after completion and acceptance of the project by the City Council, or from recordation of a notice of completion. On a slurry sealed street, the pavement surface shall not be cut or opened for a period of (3) years from completion unless the person proposing to make such excavation shall agree to pay for resurfacing half the street section with an asphaltic concrete cap of a minimum thickness of two inch for a distance of 50 feet on either side of the excavation on a longitudinal basis from centerline of the street. i. In accordance with this street moratorium, it is hereby declared that all paved streets dating back to FY 2020-21 shall be covered by the moratorium as of their filed notice of completion date. C. As practical, directional boring methods shall be utilized along the City’s main thoroughfares, as required by the City Engineer, including but not limited to the full lengths of Barton Road, Mount Vernon Avenue, De Berry Street, Van Buren Street, Pico Street, Main Street, and Observation Street, to minimize surface disruption while efficiently installing, maintaining, or repairing underground utilities. 12.08.330 Exceptions to New Pavement Moratorium. The City Engineer/Public Works Director may, in his or her sole discretion, grant an exception to the moratorium for: A. Emergencies which endanger life, or public health and safety. B. Work that is mandated by city, state or federal legislation. C. New construction approved by City Council or service to buildings or properties where no other reasonable means of providing service exist E.4.b Packet Pg. 36 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Created: 2023-06-14 12:18:09 [EST] (Supp. No. 13) Page 10 of 12 D. The City Engineer/Public Works Director or City Manager shall grant an exception to Riverside Highland Water Company if the following conditions are met: i. Riverside Highland Water Company (RHWC) will repair or replace the facility, backfill the excavation with new fill dirt and base, and install temporary paving. When multiple trenches have accumulated, RHWC will replace the temporary paving with permanent paving on a quarterly basis or as required by the City Engineer 12.08.340. Request for Moratorium Exception. To request an exception, the applicant shall submit the following information to the Public Works Department: A. The location of excavation. B. Which exception from the moratorium as set forth in section 12.08.330is being claimed. C. Description of the work to be performed. F. Justification from the applicant why the work cannot be deferred until after moratorium expires. 12.08.350 Noise, dust and debris. Each permit holder shall conduct and carry out the excavation work in such manner as to avoid unnecessary inconvenience and annoyance to the general public and occupants of neighboring property. The permit holder shall take appropriate measures to reduce to the fullest extent practical, in the performance of the excavation work, noise, dust and unsightly debris and, during the hours of 8:00 p.m. and 7:00 a.m. Monday through Saturday and all day on Sunday or a national holiday, shall not use, except with the expressed written permission of the City Engineer or, in case of an emergency as otherwise provided in this Chapter, any tool, appliance or equipment producing noise of sufficient volume to disturb the sleep or repose of occupants of the neighboring property. 12.08.330 Monument preservation. Any monument set for the purpose of locating or preserving the lines of any street or property subdivision, or a precise survey reference point, or a permanent survey benchmark within the city shall not be removed or disturbed or caused to be removed or disturbed without first obtaining permission in writing from the city engineer so to do. Permission to remove or disturb such monuments, reference points or benchmarks shall only be granted upon condition that the person applying for such permission shall pay all expenses incident to the proper replacement of this monument by a registered professional engineer or a registered land surveyor. 12.08.340 Rule and regulation promulgation. The city engineer shall make such inspections as are necessary in the enforcement of this chapter. The city engineer shall have the authority to promulgate and cause to be enforced such rules and regulations as may be reasonably necessary to enforce and carry out the intent of this chapter. 12.08.350 City work exempted. The provisions of this chapter shall not be applicable to any excavation work performed under the direction of city authorities by employees of the city. The provisions of this chapter shall apply to any permit holder performing work for the city except to the extent exempted by the city engineer or where a particular provision is inconsistent with a specific provision of the contract under which such work is to be performed. E.4.b Packet Pg. 37 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Page 11 of 12 12.08.360 Public utility companies. All persons operating public utilities in the city either under regulations of the State Public Utilities Commission or authorized by the state to operate the public utility, and having the right, either by general or special permission to enter upon the streets and open and excavate pavements, sidewalks or disturb the surface thereon by excavation or other work, shall be required to apply for a permit for all work in the public right-of-way. A blanket permit may be issued for periods up to one year to place or to repair any facility which does not interfere with, disturb, destroy or remove any street improvement, or involve the making of any excavation in or below the surface of the street or interfere with any installation owned by any other person. Excavations in excess of four feet by four feet shall not be made without prior approval of plans by the city Engineer. 12.08.370 Insurance. A permit holder, prior to the commencement of excavation work under this chapter, shall furnish the city engineer satisfactory evidence, in writing, that the permit holder has in force and will maintain in force during the performance of the excavation work and the period of the encroachment permit, public liability insurance for the protection of the city and the permit holder against claims for injury or death to any person or persons or damage to any property arising out of the performance of such excavation work. Such policy shall provide coverage of not less than $4,000,000 for all damages arising out of bodily injuries to or death of one or more persons in any one occurrence, and not less than $2,000,000 for all damages and/or destruction of property in any one occurrence, and not less than $2,000,000 for all damages and/or destruction of property during the policy period. Such policy shall guarantee payment of any final judgment rendered against the permit holder or the city within the coverage provided, irrespective of the financial condition of or of any acts or omissions of such permit holder. Such policy shall specifically name the city as an additional insured and shall further provide that the insurance coverage thereby afforded shall not be terminated or cancelled except upon thirty days' written notice to the city. 12.08.380 Nonliability of city. This chapter shall not be construed as imposing upon the city or any official or employee any liability or responsibility for damages to any person injured by the performance of any excavation work for which an encroachment permit is issued under this chapter, nor shall the city or any official or any employee thereof be deemed to have assumed any such liability or responsibility by reason of inspections authorized under this chapter, the issuance of any permit, or the approval of any excavation work. 12.08.390 Enforcement. The city engineer and/or their designee shall have the authority to promulgate and cause to be enforced such rules and regulations as are reasonably required to provide for the matters governed by this chapter and to supplement the same and to provide for the enforcement of this chapter. Violation of such rules and regulations shall constitute a violation of this chapter. 12.08.400 Violation—Misdemeanor. Any person violating any of the provisions of this chapter is guilty of a misdemeanor. 12.08.410 Fines for failure to obtain a encroachment permit. A. Description of Violation. Encroachment permits along with a city of Grand Terrace construction application package can be obtain from the public works department. Failure to obtain a permit will result in a fine of one thousand dollars for each occurrence. Fine* $1,000.00 per each occurrence E.4.b Packet Pg. 38 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) 01247.0001/960130.2 Page 12 of 12 Permit holders performing street cuts and resulting patching that are not performed correctly in accordance with section 12.08.300C Fine* $1,000.00 per each occurrence and require the permit holder to repair and restore the street per engineer’s standards. E.4.b Packet Pg. 39 At t a c h m e n t : C h a p t e r 1 2 . 0 8 S t r e e t E x c a v a t i o n s ( S e c o n d R e a d i n g : O r d i n a n c e A m e n d i n g S t r e e t E x c a v a t i o n T i t l e 1 2 . 0 8 ) AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Resolution Opposing Initiative No. 21-0042A1, the Taxpayer Protection and Government Accountability Act PRESENTED BY: Konrad Bolowich, City Manager RECOMMENDATION: Staff recommends that the City Council adopt a resolution opposing Initiative No. 21-0042A1, the Taxpayer Protection and Government Accountability Act. 2030 VISION STATEMENT: This staff reports supports the City’s Mission to Preserve and Protect our Community and its Exceptional Quality of Life Through Thoughtful Planning, Within the Constraints of Fiscally Responsible Government. BACKGROUND: The Taxpayer Protection and Government Accountability Act would revise the California Constitution with provisions that limit voters’ authority and input, adopt new and stricter rules for raising taxes and fees, and may make it more difficult to impose fines and penalties for violation of state and local laws. The measure puts billions of local government tax and fee revenues at risk statewide with related core public service impacts. The measure could have significant negative impacts on the City of Grand Terrace operations and core service delivery. The proposed constitutional initiative is sponsored by the California Business Roundtable. I. MAJOR PROVISIONS Fees and Charges1: • Except for licensing and other regulatory fees, fees and charges may not exceed the “actual cost” of providing the product or service for which the fee is charged. “Actual cost” is the “minimum amount necessary.” The burden to prove the fee or charge does not exceed “actual cost” is changed to “clear and convincing” evidence. 1 Initiative No. 21-0042A1 (pgs.4-6; Section 1 (a)-(j) E.5 Packet Pg. 40 • Requires fees and charges paid for the use of local and state government property and the amount paid to purchase or rent government property to be “reasonable.” These fees and charges are currently allowed to be market-based. Whether the amount is “reasonable” (introducing a new legal standard aiming to force below market fee and charge amounts) must be proved by “clear and convincing evidence.”2 The standard may significantly reduce the amount large companies (e.g., oil, utilities, gas, railroads, garbage/refuse, cable, and other corporations) will pay for the use of local public property. • Prohibits fees on new development based on vehicle miles traveled. Taxes3: • Taxes and fees adopted after Jan. 1, 2022, that do not comply with the new rules, are void unless reenacted4. • Invalidates Upland decision that allows a majority of local voters to pass special taxes. The measure specifies that taxes proposed by the initiative are subject to the same rules as taxes placed on the ballot by a city council. • Expressly prohibits local advisory measures which allow local voters to express a preference for how local general tax dollars should be spent.5 • Requires voter approval to expand existing taxes (e.g., Utility, Transient Occupancy) to new territory (e.g., annexations) or to expand the tax base (e.g., new utility service) • New taxes can only be imposed for a specific time period. • City charters may not be amended to include a tax or fee. • All state taxes require majority voter approval. Fines and Penalties6: • May require voter approval of fines, penalties, and levies for corporations and property owners that violate state and local laws unless a new, undefined adjudicatory process is used to impose the fines and penalties. DISCUSSION/ADDITIONAL BACKGROUND: 2 Initiative No. 21-0042A1 (pg.5; (3)) 3 Initiative No. 21-0042A1 (pgs.4-6; Section 1 (a)-(j) 4 Initiative No. 21-0042A1 (pg.7; Section 6 (Sec. 2)(g) 5 Initiative No. 21-0042A1 (pg.6 (3)) 6 Initiative No. 21-0042A1 (pg. 5 (4)) E.5 Packet Pg. 41 On Jan. 4, 2022, the California Business Roundtable filed the “Taxpayer Protection and Government Accountability Act” or AG# 21-0042A1. On Feb. 1, 2023, the measure qualified for the November 2024 ballot. The League of California Cities, along with a broad coalition of local governments, labor and public safety leaders, infrastructure advocates, and businesses, strongly opposes this initiative. Local government revenue-raising authority is currently substantially restricted by state statute and constitutional provisions, including the voter approved provisions of Proposition 13 of 1978, Proposition 218 of 1996, and Proposition 26 of 2010. The Taxpayer Protection and Government Accountability Act adds and expands restrictions on voters and local government tax and fee authority. Fees and Taxes Local governments levy a variety of fees and other charges to provide core public services. Major examples of affected fees and charges are: • Nuisance abatement charges, such as for weed, rubbish, and general nuisance abatement to fund community safety, code enforcement, and neighborhood cleanup programs. • Commercial franchise fees. • Emergency response fees, such as in connection with DUI. • Advanced Life Support (ALS) transport charges. • Document processing and duplication fees. • Transit fees, tolls, parking fees, and public airport and harbor use fees. • Facility use charges, fees for parks and recreation services, garbage disposal tipping fees. Virtually every city, county, and special district must regularly (e.g., annually) adopt increases to fee rates and charges and revise rate schedules to accommodate new users and activities. Most of these would be subject to new standards and limitations under threat of legal challenge. Based on the current volume of fees and charges imposed by local agencies, including council-adopted increases to simply accommodate inflation, Cal Cities estimates the amount of local government fee and charge revenue at risk is approximately $2 billion per year including those adopted since Jan. 1, 2022. Over ten years, $20 billion of local government fee and charge revenues will be at heightened legal peril. E.5 Packet Pg. 42 Hundreds of local tax measures were approved in 20227 that likely do not comply with the provisions of the initiative. Nearly $2 billion of annual revenues from these voter- approved measures will cease a year after the effective date of the measure, reducing the local public services funded by these measures, unless the tax is re-submitted for voter approval. Reductions on local government tax revenues have impacts on core services and infrastructure including fire and emergency response, law enforcement, streets and roads, drinking water, sewer sanitation, parks, libraries, affordable housing, homelessness prevention, and mental health services. Fines and Penalties Under existing law, cities are required to provide due process before imposing a penalty or fine for violation of its municipal code: 1. A local agency must adopt administrative procedures that govern imposing fines and penalties, including providing a reasonable period of time for a person responsible for a continuing violation to correct or remedy the violation [Gov't Code 53069.4]. 2. Notice must be given to the violating party before imposing the penalty; and give the party an opportunity to be heard and present any facts or arguments [Merco Construction Engineers v. Los Angeles Unified School District (1969) 274 CA 2d 154, 166]. 3. The fine may not be "excessive" [U.S. Constitution amendments VIII and XIV]. The initiative converts administratively-imposed fines and penalties into taxes unless a new, undefined, and ambiguous “adjudicatory due process” is followed. This provision may put at risk authority to impose fines and penalties for violations of state and local law. FISCAL IMPACT: The Taxpayer Protection and Government Accountability Act will take billions of dollars away from local government services statewide. Some of the revenues affected by this Act for the City of Grand Terrace include: • Citywide fee schedule passed by Council on July 11, 2023 that increased revenues by $200K could be reversed. • The Transaction Tax estimated at $1.9M that will be placed on the November ballot could be reversed. 7 http://www.californiacityfinance.com/Votes2211final.pdf E.5 Packet Pg. 43 • Development Impact Fees that will be part of a fee study within the next few months could be reversed. • Decrease in commercial franchise fees. ATTACHMENTS: • Oppose Initiative #21-0042A1 (DOCX) • 21-0042A1 (Taxes) (PDF) • California City Finance (PDF) APPROVALS: Konrad Bolowich Completed 03/06/2024 10:53 AM Adrian Guerra Completed 03/07/2024 11:28 AM Finance Completed 03/07/2024 11:35 AM City Manager Completed 03/07/2024 11:35 AM City Council Pending 03/12/2024 6:00 PM E.5 Packet Pg. 44 CC Reso No. 2024-xx Page 1 of 2 March 12, 2024 RESOLUTION NO. 2024-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE, CALIFORNIA, STATE OF CALIFORNIA OPPOSING INITIATIVE #21-0042A1, TAXPAYER PROTECTION AND GOVERNMENT ACCOUNTABILITY ACT WHEREAS, an association representing California’s wealthiest corporations is spending tens of millions of dollars to promote a deceptive ballot measure currently eligible for the November 2024 statewide ballot; and WHEREAS, the measure creates constitutional loopholes that allow corporations to pay far less than their fair share for the impacts they have on our communities, which could force residents and taxpayers to pay more to maintain services; and WHEREAS, the measure threatens billions of dollars every year in local government funding for services like fire and emergency response, law enforcement, affordable housing, services to support homeless residents, mental health services, and more; and WHEREAS, the measure threatens the Transaction Tax estimated at $1.9M for an increase in law enforcement services, the $200K increase in citywide fees from our fee study as well as any future revenues derived from fees, taxes, fines and penalties; and WHEREAS, the measure is an attack on voters’ rights, containing undemocratic provisions that would make it more difficult for local voters to pass measures to fund services, provisions that retroactively cancel measures recently passed by voters, and provisions that prevent voters from passing advisory measures that provide direction on how they want their local tax dollars spent; and WHEREAS, the measure contains intentionally restrictive language that will encourage hundreds of frivolous lawsuits against cities and local governments – costing taxpayers many millions and stopping investments in vital local services; and WHEREAS, the measure would make it much more difficult for state and local regulators to issue fines and levies on corporations that violate laws intended to protect our environment, public health and safety, and our neighborhoods; and WHEREAS, the measure is opposed by hundreds of local governments, teachers, firefighters, working families and local elected officials. NOW THEREFORE, BE IT RESOLVED that the City of Grand Terrace opposes Initiative #21-0042A1. E.5.a Packet Pg. 45 At t a c h m e n t : O p p o s e I n i t i a t i v e # 2 1 - 0 0 4 2 A 1 [ R e v i s i o n 1 ] ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) CC Reso No. 2024-xx Page 2 of 2 March 12, 2024 BE IT FURTHER RESOLVED, that the City of Grand Terrace will join the “Stop the Taxpayer Deception Act” coalition, a growing coalition of public safety, education, labor, local government, and infrastructure groups throughout the state. The City Clerk shall certify this Resolution, which shall in turn have immediate effect. Staff is directed to email a copy of this adopted Resolution to the League of California Cities at BallotMeasures@calcities.org. PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace at a regular meeting held on the 12th day of March 2024. ________________________________ Bill Hussey, Mayor ATTEST: Debra L. Thomas City Clerk APPROVED AS TO FORM: Adrian Guerra City Attorney E.5.a Packet Pg. 46 At t a c h m e n t : O p p o s e I n i t i a t i v e # 2 1 - 0 0 4 2 A 1 [ R e v i s i o n 1 ] ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) 2 1 -0 0 4 2 Arndt. # / The Taxpayer Protection and Government Accountability Act [Deleted codified text is denoted in strikeout. Added codified text is denoted by italics and underline.] Section 1. Title This Act shall be known, and may be cited as, the Taxpayer Protection and Government Accountability Act. Section 2. Findings and Declarations (a) Californians are overtaxed. We pay the nation's highest state income tax, sales tax, and gasoline tax. According to the U.S. Census Bureau, California's combined state and local tax burden is the highest in the nation. Despite this, and despite two consecutive years of obscene revenue surpluses, state politicians in 2021 alone introduced legislation to raise more than $234 billion in new and higher taxes and fees. (b) Taxes are only part of the reason for California's rising cost-of-living crisis. Californians pay billions more in hidden "fees" passed through to consumers in the price they pay for products, services, food, fuel, utilities and housing. Since 2010, government revenue from state and local "fees" has more than doubled. (c) California's high cost of living not only contributes to the state's skyrocketing rates of poverty and homelessness, they are the pushing working families and job-providing businesses out of the state. The most recent Census showed that California's population dropped for the first time in history, costing us a seat in Congress. In the past four years, nearly 300 major corporations relocated to other states, not counting thousands more small businesses that were forced to move, sell or close. (d) California voters have tried repeatedly, at great expense, to assert control over whether and how taxes and fees are raised. We have enacted a series of measures to make taxes more predictable, to limit what passes as a "fee," to require voter approval, and to guarantee transparency and accountability. These measures include Proposition 13 (1978), Proposition 62 (1986), Proposition 218 (1996), and Proposition 26 (2010). (e) Contrary to the voters' intent, these measures that were designed to control taxes, spending and accountability, have been weakened and hamstrung by the Legislature, government lawyers, and the courts, making it necessary to pass yet another initiative to close loopholes and reverse hostile court decisions. Section 3. Statement of Purpose (a) In enacting this measure, the voters reassert their right to a voice and a vote on new and higher taxes by requiring any new or higher tax to be put before voters for approval. Voters also intend that all fees and other charges are passed or rejected by the voters themselves or a governing body elected by voters and not unelected and unaccountable bureaucrats. (b) Furthermore, the purpose and intent of the voters in enacting this measure is to increase transparency and accountability over higher taxes and charges by requiring any tax measure placed on the ballot- 1 E.5.b Packet Pg. 47 At t a c h m e n t : 2 1 - 0 0 4 2 A 1 ( T a x e s ) ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) either at the state or local level-to clearly state the type and rate of any tax, how long it will be in effect, and the use of the revenue generated by the tax. (c) Furthermore, the purpose and intent of the voters in enacting this measure is to clarify that any new or increased form of state government revenue, by any name or manner of extraction paid directly or indirectly by Californians, shall be authorized only by a vote of the Legislature and signature of the Governor to ensure that the purposes for such charges are broadly supported and transparently debated. (d) Furthermore, the purpose and intent of the voters in enacting this measure is also to ensure that taxpayers have the right and ability to effectively balance new or increased taxes and other charges with the rapidly increasing costs Californians are already paying for housing, food, childcare, gasoline, energy, healthcare, education, and other basic costs of living, and to further protect the existing constitutional limit on property taxes and ensure that the revenue from such taxes remains local, without changing or superseding existing constitutional provisions contained in Section 1{c) of Article XIII A. (e) In enacting this measure, the voters also additionally intend to reverse loopholes in the legislative two- thirds vote and voter approval requirements for government revenue increases created by the courts including, but not limited to, Cannabis Coalition v. City of Upland, Chamber of Commerce v. Air Resources Board, Schmeer v. Los Angeles County, Johnson v. County of Mendocino, Citizens Assn. of Sunset Beach v. Orange County Local Agency Formation Commission, and Wilde v. City of Dunsmuir. Section 4. Section 3 of Article XIII A of the California Constitution is amended to read: Sec. 3(a} Every levy, charge. or exaction of any kind imposed by state law is either a tax or an exempt charge. illlJ1l ~ Any change in state statute Jaw which results in any taxpayer paying a new or higher tax must be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature, and submitted to the electorate and approved by a maiority vote, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property, may be imposed. Each Act shall include: (A) A specific duration of time that the tax will be imposed and an estimate of the annual amount expected to be derived from the tax. (BJ A specific and legally binding and enforceable limitation on how the revenue from the tax can be spent. If the revenue from the tax can be spent for unrestricted general revenue purposes. then a statement that the tax revenue can be spent for "unrestricted general revenue purposes" shall be included in a separate, stand-alone section. Any proposed change to the use of the revenue from the tax shall be adopted by a separate act that is passed by not less than two-thirds of all members elected to each of the two houses of the Legislature and submitted to the electorate and approved by a maiority vote. (2) The title and summary and ballot label or question required for a measure pursuant to the Elections Code shall. for each measure providing for the imposition of a tax, including a measure proposed by an elector pursuant to Article II, include: {A) The type and amount or rate of the tax; (BJ The duration of the tax: and 2 E.5.b Packet Pg. 48 At t a c h m e n t : 2 1 - 0 0 4 2 A 1 ( T a x e s ) ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) (CJ The use of the revenue derived from the tax. (c} Any change in state law which results in any taxpayer paying a new or higher exempt charge must be imposed by an act passed by each of the two houses of the Legislature. Each act shall specify the type of exempt charge as provided in subdivision (e ), and the amount or rate of the exempt charge to be imposed. Ml._fbt As used in this section and in Section 9 of Article II, "tax" means every aA1f levy, charge, or exaction of any kind imposed by the State state law that is not an exempt charge. e1<eept the follo•Ning: (e) As used in this section. "exempt charge" means only the following: (1) a el:iarge imposes fer a s1=1eeifie eenefit eonferreEl or pri'+'ilege granteEl aireetly to tl:ie 13ayor tl:iat is not 1=1ro>viaeEl to tl:iose not et:iargeEI, anEI whiel:i aoes not e1<ceeEl tl:ie reasonal3Ie costs to tl:ie State of eonferring the benefit or granting the pri¥ilege to the 1=1a¥OF. ill {-2+ A reasonable charge irnposeEl for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the rnasonable actual costs to the State of providing the service or product to the payor. f.11 ~ A charge in,poseEl for the reasonable regulatory costs to the State incident to issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof. (3) A levy, charge. or exaction collected from local units of government. health care providers or health care service plans that is primarily used by the State of California for the purposes of increasing reimbursement rates or payments under the Medi-Cal program, and the revenues of which are primarily used to finance the non-federal portion of Medi-Cal medical assistance expenditures. (4) A reasonable charge iR'l13oseEl for entrance to or use of state property, or the purchase. rental, or lease of state property, except charges governed by Section 15 of Article XI. (5} A fine, or penalty, or other monetary el:large including any applicable interest for nonpayment thereot imposed by the judicial branch of government or the State, as a result of a state administrative enforcement agency pursuant to adiudicatorv due process, to punish a violation of law. (6} A levy, charge, assessment, or exaction collected for the promotion of California tourism pursuant to Chapter 1 (commencing with Section 13995) of Part 4.7 of Division 3 of Title 2 of the Government Code. flL~Any tax or exempt charge adopted after January 1, 2022 ~, but prior to the effective date of this act, that was not adopted in compliance with the requirements of this section is void 12 months after the effective date of this act unless the tax or exempt charge is reenacted B'l the begislatuFe anel signea into law ey tl:ie <iio¥ernoF in compliance with the requirements of this section. [gl[.JlJG:} The State bears the burden of proving by a preponEleranee oftl:le clear and convincing evidence that a levy, charge, or other exaction is an exempt charge and not a tax. The State bears the burden of proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor. ,tR-a-t tl:ie amouRt is RO n,ore tl:ian neeessary to cover the reasonable costs of the go•.•emn,ental actii,•i:t>,• ane 3 E.5.b Packet Pg. 49 At t a c h m e n t : 2 1 - 0 0 4 2 A 1 ( T a x e s ) ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) that the manner in •Nhiel.:i these cests are allecated ts a pa·1er bear a fair er reasenable relatienshi13 ts the 13a·1or's b1:1relens on, or benefits reeei11eel from, the go•.ieFRmental actit.iit'( (2) The retention ofrevenue by, or the payment to. a non-governmental entity ofa levv. charge, or exaction of any kind imposed by state law, shall not be a factor in determining whether the levy. charge, or exaction is a tax or exempt charge. (3) The characterization of a levy, charge, or exaction of any kind as being voluntary, or paid in exchange for a benefit, privilege, allowance, authorization, or asset, shall not be a factor in determining whether the levy, charge, or exaction is a tax or an exempt charge. /4} The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge. (h) As used in this section: (1) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor, and {ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In computing "actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue including, but not limited to taxes, other exempt charges, grants, and state or federal funds received to provide such service or product. (2) "Extend" includes, but is not limited to, doing any of the following with respect to a tax or exempt charge: lengthening its duration. delaying or eliminating its expiration, expanding its application to a new territory or class ofpayor, or expanding the base to which its rate is applied. (3) "Impose" means adopt, enact, reenact, create, establish, collect, increase or extend. (4) "State law" includes, but is not limited to. any state statute, state regulation, state executive order. state resolution, state ruling, state opinion Jetter, or other legal authority or interpretation adopted, enacted. enforced, issued, or implemented by the legislative or executive branches of state government. "State law" does not include actions taken by the Regents of the University of California, Trustees of the California State University, or the Board of Governors of the California Community Colleges. Section 5. Section 1 of Article XIII C of the California Constitution is amended, to read: Sec. 1. Definitions. As used in this article: {a) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor. and {ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In computing "actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue including, but not limited to taxes. other exempt charges, grants, and state or federal funds received to provide such service or product. (b) "Extend" includes, but is not limited to. doing any of the following with respect to a tax. exempt charge, or Article XIII D assessment. fee, or charge: lengthening its duration, delaying or eliminating its expiration. expanding its application to a new territory or class of payor, or expanding the base to which its rate is applied. 4 E.5.b Packet Pg. 50 At t a c h m e n t : 2 1 - 0 0 4 2 A 1 ( T a x e s ) ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) .lfl..W 11General tax" means any tax imposed for general governmental purposes. (d} "Impose" means adopt, enact, reenact, create, establish, collect, increase, or extend. {clJb} "Local government" means any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity, or an elector pursuant to Article fl or the initiative power provided by a charter or statute. (f) "Local law" includes. but is not limited to, any ordinance, resolution, regulation. ruling, opinion letter, or other legal authority or interpretation adopted, enacted, enforced, issued, or implemented by a local government. {gl_{t} "Special district" means an agency of the State, formed pursuant to general law or a special act, for the local performance of governmental or proprietary functions with limited geographic boundaries including, but not limited to, school districts and redevelopment agencies. f11L{d} "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund. 111 i@} As used in this article, and in Section 9 of Article II, "tax" means every aRV-levy, charge, or exaction of any kind, imposed by a local go,;ernmeRt law that is not an exempt charge., exeept tl=le fellowiRg: (i) As used in this section, "exempt charge" means only the following: (1) A cl=large imposeel fer a speeifie beAefit eoAferreel or pri,;ilege graAteel eliFeetl')' to tl=le pa1,ior tl=lat is Rot pre1,•ieleel to these Rot ehargea, aA£l which £lees Rot exeeeel tl=le reaseAable costs to tl=le loeal gm,·ernFAeAt of conferriAg the beAefit or graAting tl:1e pri¥ilege. ill R} A reasonable charge imposes for a specific local government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasoAable actual costs to the local government of providing the service or product. fl1 WA charge im13ose£l for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof. W {4t A reasonable charge imposeel for entrance to or use of local government property, or the purchase, rental, or lease of local government property. Ml. fSt A fine, or penalty, or other FAOA@tar,· eharge including any applicable interest for nonpayment thereat imposed by the judicial branch of government or a local government administrative enforcement agency pursuant to adiudicatorv due process, as a res1,1lt of to punish a violation of law. ill -f6t A charge imposed as a condition of property development. No levv, charge, or exaction regulating or related to vehicle miles traveled may be imposed as a condition of property development or occupancy. f.i1 f7t An AssessFAeRts a Rel property relate el fees assessment. fee. or charge imJ;1oseel iA aeeoraanee witl=l the pro¥isio A5 of subject to Article XI 11 D, or an assessment imposed upon a business in a tourism marketing district, a parking and business improvement area, or a property and business improvement district. 5 E.5.b Packet Pg. 51 At t a c h m e n t : 2 1 - 0 0 4 2 A 1 ( T a x e s ) ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) (7) A charge imposed for a specific health care service provided directly to the payor and that is not provided to those not charged. and which does not exceed the reasonable costs to the local government of providing the health care service. As used in this paragraph, a "health care service" means a service licensed or exempt from licensure by the state pursuant to Chapters 1. 1.3, or 2 of Division 2 of the Health and Safety Code. The local government bears the b1:1rden of proving by a preponderance of the e .. ·ielence that a lew, charge, or other exaction is not a ta1<, that the amo1:1nt is no more than necessaPJ' to cover the reasonable costs of the go•,ernfflental acti•.«ity anel that tJ:ie manner in which those costs are allocateel to a pa•ror bear a fair or reasonable relationship to the pa•ror's blslrdens on, or bene:fits receiveel from, the go1a1ernmental acfa•ity. Section 6. Section 2 of Article XIII C of the California Constitution is amended to read: Sec. 2. Local Government Tax Limitation. Notwithstanding any other provision of this Constitution: (a) Every levy. charge. or exaction of any kind imposed by local law is either a tax or an exempt charge. All taxes imposed by any local government shall be deemed to be either general taxes or special taxes. Special purpose districts or agencies, including school districts, shall have no power to levy general taxes. (b) No local Jaw go,.·ernment whether proposed by the governing body or by an elector, may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body. (c) An•r general tax imposed, el<tended, or increaseel, •.-.iitho1:1t •.·oter approval, lay any local go,.·ernment on or after Janlslary 1, 1995, ana prior ta the effecti,.·e date of this article, shall contin1:1e to be imposed only if appro,.·ea b1• a majority vote of the voters voting in an election OR the issye of the in:iposition, whicl::i election sl::iall be l::ield witl::iin t•Ne 1•ears ef the effectii.ie date of this article and in com13liance with slslbdi\·isien (b}. {El) No local law government. whether proposed by the governing body or by an elector. may impose, eMteRd, er increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. {d) The title and summary and ballot label or question required for a measure pursuant to the Elections Code shall. for each measure providing for the imposition of a tax, include: (1) The type and amount or rate of the tax; (2) the duration of the tax; and (3) The use of the revenue derived from the tax. If the proposed tax is a general tax. the phrase "for general government use" shall be required, and no advisory measure may appear on the same ballot that would indicate that the revenue from the general tax will. could. or should be used for a specific purpose. (e) Only the governing body of a local government. other than an elector pursuant to Article II or the initiative power provided by a charter or statute. shall have the authority to impose any exempt charge. The governing body shall impose an exempt charge by an ordinance specifying the type of exempt charge 6 E.5.b Packet Pg. 52 At t a c h m e n t : 2 1 - 0 0 4 2 A 1 ( T a x e s ) ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) as provided in Section l(i) and the amount or rate of the exempt charge to be imposed. and passed by the governing body. This subdivision shall not apply to charges specified in paragraph (7) of subdivision (i) of Section 1. ff) No amendment to a Charter which provides for the imposition, extension, or increase of a tax or exempt charge shall be submitted to or approved by the electors. nor shall any such amendment to a Charter hereafter submitted to or approved by the electors become effective for any purpose. (q) Any tax or exempt charge adopted after January 1, 2022, but prior to the effective date of this act, that was not adopted in compliance with the requirements of this section is void 12 months after the effective date of this act unless the tax or exempt charge is reenacted in compliance with the requirements of this section. {h)(1) The focal government bears the burden of proving by clear and convincing evidence that a levy, charge or exaction is an exempt charge and not a tax. The local government bears the burden of proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor. (2} The retention of revenue by, or the payment to, a non-governmental entity of a levy. charge, or exaction of any kind imposed by a local law, shall not be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge. (3) The characterization of a levy. charge. or exaction of any kind imposed by a local law as being paid in exchange for a benefit. privilege, allowance, authorization, or asset, shall not be factors in determining whether the levy, charge, or exaction is a tax or an exempt charge. (4) The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge. Section 7. Section 3 of Article XIII D of the California Constitution is amended, to read: Sec. 3. Property Taxes, Assessments, Fees and Charges Limited (a) No tax, assessment, fee, 6f charge, or surcharge, including a surcharge based on the value ofpropertv, shall be assessed 13y a Ry ageRC'f upon any parcel of property or upon any person as an incident of property ownership except: (1) The ad valorem property tax impeseEI p1::1rsYaRt te described in Section 1(a) of Article XIII and Section 1/a) of Article XIII A, and described and enacted pursuant to the voter approval requirement in Section 1/b) Q[Article XII I A. (2) Any special non-ad valorem tax receiving a two-thirds vote of qualified electors pursuant to Section 4 of Article XIII A, or after receiving a two-thirds vote of those authorized to vote in a community facilities district by the Legislature pursuant to statute as it existed on December 31, 2021. (3) Assessments as provided by this article. (4) Fees or charges for property related services as provided by this article. 7 E.5.b Packet Pg. 53 At t a c h m e n t : 2 1 - 0 0 4 2 A 1 ( T a x e s ) ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) (b) For purposes of this article, fees for the provision of electrical or gas service shall not be deemed charges or fees imposed as an incident of property ownership. Section 8. Sections 1 and 14 of Article XIII are amended to read: Sec. 1 Unless otherwise provided by this Constitution or the laws of the United States: (a) All property is taxable and shall be assessed at the same percentage of fair market value. When a value standard other than fair market value is prescribed by this Constitution or by statute authorized by this Constitution, the same percentage shall be applied to determine the assessed value. The value to which the percentage is applied, whether it be the fair market value or not, shall be known for property tax purposes as the full value. (b) All property so assessed shall be taxed in proportion to its full value. (c) All proceeds from the taxation of property shall be apportioned according to law to the districts within the counties. Sec. 14. All property taxed by state or local government shall be assessed in the county, city, and district in which it is situated. Notwithstanding any other provision of/aw, such state or local property taxes shall be apportioned according to law to the districts within the counties. Section 9. General Provisions A. This Act shall be liberally construed in order to effectuate its purposes. B. (1) In the event that this initiative measure and another initiative measure or measures relating to state or local requirements for the imposition, adoption, creation, or establishment of taxes, charges, and other revenue measures shall appear on the same statewide election ballot, the other initiative measure or measures shall be deemed to be in conflict with this measure. In the event that this initiative measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions ofthe other initiative measure or measures shall be null and void. (2) In furtherance of this provision, the voters hereby declare that this measure conflicts with the provisions of the "Housing Affordability and Tax Cut Act of 2022" and "The Tax Cut and Housing Affordability Act," both of which would impose a new state property tax (called a "surcharge") on certain real property, and where the revenue derived from the tax is provided to the State, rather than retained in the county in which the property is situated and for the use of the county and cities and districts within the county, in direct violation of the provisions of this initiative. (3) If this initiative measure is approved by the voters, but superseded in whole or in part by any other conflicting initiative measure approved by the voters at the same election, and such conflicting initiative is later held invalid, this measure shall be self-executing and given full force and effect. C. The provisions of this Act are severable. If any portion, section, subdivision, paragraph, clause, sentence, phrase, word, or application of this Act is for any reason held to be invalid by a decision of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this Act. The People of the State of California hereby declare that they would have adopted this Act and each and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not 8 E.5.b Packet Pg. 54 At t a c h m e n t : 2 1 - 0 0 4 2 A 1 ( T a x e s ) ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) declared invalid or unconstitutional without regard to whether any portion of this Act or application thereof would be subsequently declared invalid. D. If this Act is approved by the voters of the State of California and thereafter subjected to a legal challenge alleging a violation of state or federal law, and both the Governor and Attorney General refuse to defend this Act, then the following actions shall be taken: (1) Notwithstanding anything to the contrary contained in Chapter 6 of Part 2 of Division 3 ofTitle 2 of the Government Code or any other law, the Attorney General shall appoint independent counsel to faithfully and vigorously defend this Act on behalf of the State of California. (2) Before appointing or thereafter substituting independent counsel, the Attorney General shall exercise due diligence in determining the qualifications of independent counsel and shall obtain written affirmation from independent counsel that independent counsel will faithfully and vigorously defend this Act. The written affirmation shall be made publicly available upon request. (3) A continuous appropriation is hereby made from the General Fund to the Controller, without regard to fiscal years, in an amount necessary to cover the costs of retaining independent counsel to faithfully and vigorously defend this Act on behalf of the State of California. (4) Nothing in this section shall prohibit the proponents of this Act, or a bona fide taxpayers association, from intervening to defend this Act. 9 E.5.b Packet Pg. 55 At t a c h m e n t : 2 1 - 0 0 4 2 A 1 ( T a x e s ) ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) CaliforniaCityFinance.Com Local Revenue Measure Results November 2022 There were over 470 measures on local ballots in California for the November 8, 2022 election including 302 local tax and bond measures. Nearly half of these measures (143) were proposed by or for cities. There were also 24 county, 26 special district and 109 school tax or bond measures. These include 61 measures to increase local sales taxes, 42 parcel taxes, 30 lodging occupancy tax increases, and 27 taxes on cannabis. School Initiative Parcel Tax 2 SpecDistr Initiative Special Tax 2 County Initiative Special Tax5 County General Tax9 City General Tax 119 City Initiative Special Tax 5 City Special Tax 17 City G.O.Bond 2 Special District G.O.Bond 4 Special District ParcelTax 20 County Special Tax 10 School Parcel Tax 7 School Bond 2/3 1 School Bond 99 55% Vote 2/3 Vote Majority Vote Proposed Local Revenue Measures November 2022 © 2022 Michael Coleman School Parcel Tax -init.special 2 Parcel Tax -init.special 5 Busn Ops Tax -init.special 1 Sales Tax -init.special 4 Prop.Transf. -init.special 2 Property Transfer 4 Utility User & Transfer 7 Business Ops 17 Cannabis 26 Lodging Occupancy 27 Sales Tax 47 Sales Tax -special 10 Lodging Occupancy -special 3 Cannabis -special 1 Business Ops 1 Vehicle Registr 2 General Obligation Bond 6Parcel Tax 30 School Parcel 7 School Bond 2/3 1 School Bond 99 55% Vote 2/3 Vote Majority Vote © 2022 Michael Coleman December 30, 2022 Final Schools Cities, counties, special districts Schools Special Districts Counties Cities E.5.c Packet Pg. 56 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 2 – December 30, 2022 Final CaliforniaCityFinance.com There were six city, county and special district general obligation bond measures seeking a total of $1.6 billion in facility improvements for community infrastructure improvements including hospitals, libraries and parks. Among the school measures were 100 bond measures seeking a total of $22.5 billion in school facility improvement funding. There were 9 measures to increase or extend (renew) school parcel taxes. Overall Passage Rates With all votes now tallied, 208 of the 302 tax and bond measures have passed. Local tax measures passed in similar proportions to prior general presidential and gubernatorial elections in California, with the exception that school bonds fared a bit worse (71 percent passing versus 80 percent historical). The overall 69% passage rate is noticeably lower than the last few election cycles. Total Pass Passing% City General Tax (Majority Vote) 119 98 82% County General Tax (Majority Vote) 9 4 44% City Initiative Special Tax -MajorityVote*5 4 80% County Init. Special Tax -Majority Vote* 5 2 40% SpecDistrict Init. Tax -Majority Vote* 2 1 50% City SpecialTax or G.O.bond (2/3 Vote) 19 10 53% County Spec.Tax, G.O.bond (2/3 Vote) 10 4 40% SpecDistrict Tax, G.O.bond (2/3 Vote) 24 9 38% School ParcelTax (2/3 vote) 7 5 71% School Init. Parcel Tax -Majority Vote* 2 0 0% School Bond 2/3 vote 1 0 0% School Bond 55% vote 99 71 72% Total 302 208 69% Local Revenue Measures November 2022 132 177 112 178 191 355 317 198 208 72 56 79 62 77 75 79 62 94 0 50 100 150 200 250 300 350 400 450 500 Nov2006 Nov2008 Nov2010 Nov2012 Nov2014 Nov2016 Nov2018 Nov2020 Nov2022 Pass Fail California Local Tax and Bond Measures Gubernatorial & Presidential Elections ©2022 Michael Coleman 430 268240 191 233 204 386 65% 76% 59% 74%71% 83% 79%260 76% 302 69% E.5.c Packet Pg. 57 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 3 – December 30, 2022 Final CaliforniaCityFinance.com Measure Outcome by Category School bonds are the most common local tax measure in these elections. In this election, a third of the measures were school bonds, each requiring 55 percent voter approval. But there were 127 city or county general purpose majority vote tax measures (sales taxes, business operations taxes, lodging occupancy taxes, etc.) with an overall 80 percent passage rate. Special taxes, requiring two-thirds voter approval, fared worse with just 44 percent passing. Passing and Failing Measures by Type November 2022. 1 2 1 1 2 2 3 2 6 4 15 24 21 19 34 71 1 1 1 1 2 2 2 3 5 1 6 2 2 6 18 13 28 School Bond 2/3 Cannabis Tax -special Busn Ops Tax -special Busn Ops Tax -init.special Property Transfer -init.special Vehicle Registr Tax special Lodging Occup Tax special Sales Tax -init.special Property Transfer Tax -general General Oblig Bond 2/3 Parcel Tax -init. special Utility User & Transfer -general Sales Tax -special Business Ops Tax -general Cannabis Tax -general Lodging Occup Tax -general Parcel Tax -special Sales Tax -general School Bond 55% Pass Fail Includes city, county, special district andschool measures A "general tax" requires majority approval, a "special tax" requires 2/3 approval, an "initiative special tax" requires majorityapproval. E.5.c Packet Pg. 58 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 4 – December 30, 2022 Final CaliforniaCityFinance.com School Measures There were 100 school bond measures this election, all but one requiring 55% voter approval. Overall, statewide, school bond measure success appears to be down from recent general elections. Seventy-one measures passed. Of the $22.4 billion proposed, $20.5 billion was approved, including $5.3 billion for Los Angeles Community College District, $3.2 billion for San Diego Unified School District, and $1.7 billion for Long Beach Unified School District. School Tax and Bond Measures - November 2022. School Bonds  71% (5/7) 72% (71/99) 0% (0/2) 0% (0/1) 0% 20% 40% 60% 80% 100% 55% Vote Bond 2/3 Vote Bond 2/3 Vote Parcel Tax* Initiative Parcel Tax (Maj.Vote) Percent Passing Since 2001 37% Since 2001 80% Since 2001 67% School Bond Measures - 55% voter approval School District County Measure Amount Tax Rate YES%NO% Horicon School District Sonoma Measure E 10,400,000$ $30/$100k 75.2%24.8%PASS Mupu Elementary SD Ventura Measure J 800,000$ $30/$100k 73.9%26.1%PASS Mupu Elementary SD Ventura Measure K 800,000$ $30/$100k 72.7%27.3%PASS Alum Rock Union SD Santa Clara Measure S 71,500,000$ $20/$100k 71.2%28.8%PASS Santa Rosa City Elementary SD Sonoma Measure G 125,000,000$ $30/$100k 70.9%29.1%PASS Stockton Unified SD San Joaquin Measure C 215,000,000$ $50/$100k 70.5%29.5%PASS Santa Cruz City Elementary SD Santa Cruz Measure L 122,000,000$ $30/$100k 70.3%29.7%PASS Compton Unified SD Los Angeles Measure N 350,000,000$ $60/$100k 70.3%29.7%PASS Pasadena City Community College Los Angeles Measure PCC 565,000,000$ $20/$100k 70.1%29.9%PASS Guadalupe Union SD Santa Barbara Measure V 8,500,000$ $30/$100k 70.1%29.9%PASS Orange Center SD Fresno Measure D 6,000,000$ $30/$100k 69.6%30.4%PASS Lemon Grove SD San Diego Measure Q 27,000,000$ $30/$100k 69.4%30.6%PASS Rialto Unified SD San Bernardino Measure A 340,000,000$ $60/$100k 69.2%30.8%PASS Campbell Union SD Santa Clara Measure T 96,000,000$ $30/$100k 69.1%30.9%PASS Farmersville Unified SD Tulare Measure Z 8,600,000$ $60/$100k 68.4%31.6%PASS Guadalupe Union SD Santa Barbara Measure W 849,000$ $30/$100k 68.0%32.0%PASS Planada Elementary SD Merced Measure A 3,100,000$ $30/$100k 67.0%33.1%PASS PASS E.5.c Packet Pg. 59 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 5 – December 30, 2022 Final CaliforniaCityFinance.com East Side Union High SD Santa Clara Measure N 572,000,000$ $30/$100k 66.6%33.4%PASS Kenwood School District Sonoma Measure F 17,000,000$ $30/$100k 66.6%33.4%PASS Forestville Union SD Sonoma Measure D 6,500,000$ $20/$100k 66.5%33.5%PASS Santa Cruz City High SD Santa Cruz Measure K 249,000,000$ $30/$100k 66.1%33.9%PASS Santa Rosa City High SD Sonoma Measure C 398,000,000$ $30/$100k 66.0%34.0%PASS Napa Valley Unified SD Napa Measure A2 25,000,000$ $20/$100k 65.7%34.3%PASS San Diego Unified SD San Diego Measure U 3,200,000,000$ $60/$100k 65.3%34.7%PASS Oak Grove SD Santa Clara Measure P 236,000,000$ $30/$100k 64.9%35.1%PASS Eastside Union SD Los Angeles Measure ES 23,000,000$ $30/$100k 63.8%36.2%PASS South San Francisco Unified SD San Mateo Measure T 436,000,000$ $60/$100k 63.6%36.4%PASS Las Virgenes Unified SD Los Angeles / Ven Measure S 340,000,000$ $36/$100k 63.3%36.7%PASS Union SD Santa Clara Measure R 128,000,000$ $20/$100k 63.0%37.0%PASS Fillmore Unified SD Ventura Measure G 41,600,000$ $50/$100k 63.0%37.0%PASS San Luis Coastal Unified SD San Luis Obispo Measure C 349,000,000$ $49/$100k 63.0%37.0%PASS Sequoia Union High SD San Mateo Measure W 591,500,000$ $14/$100k 63.0%37.1%PASS Lahonda-Pescadero Unified SD San Mateo Measure R 15,000,000$ $60/$100k 62.9%37.1%PASS Walnut Creek SD Contra Costa Measure J 134,000,000$ $22/$100k 62.6%37.4%PASS Salinas Elementary SD Monterey Measure G 74,500,000$ $30/$100k 62.5%37.5%PASS Los Angeles Community College Distr Los Angeles Measure LA 5,300,000,000$ $25/$100k 62.0%38.0%PASS Twin Rivers Unified School District Sacramento / PlaceMeasure J 120,000,000$ $23/$100k 62.0%38.0%PASS West Hills Community College District Fresno, San BenitoMeasure K 25,100,000$ $30/$100k 61.8%38.2%PASS Edison School District Kern Measure G 3,100,000$ $30/$100k 61.8%38.2%PASS Rio Elementary School District Ventura Measure H 72,000,000$ $21/$100k 61.5%38.5%PASS Monrovia Unified SD Los Angeles Measure MM 75,000,000$ $30/$100k 61.4%38.6%PASS Calistoga Joint Unified SD Napa / Sonoma Measure B 41,000,000$ $35/$100k 61.3%38.7%PASS Salinas Elementary SD Monterey Measure H 75,000,000$ $30/$100k 61.1%38.9%PASS Buellton Union SD Santa Barbara Measure R 8,800,000$ $30/$100k 61.0%39.0%PASS Santa Rita Union SD Monterey Measure R 24,900,000$ $30/$100k 60.7%39.4%PASS Redwood City SD San Mateo Measure S 298,000,000$ $24/$100k 60.4%39.6%PASS Patterson Joint Unified SD Stanislaus / Santa Measure E 74,000,000$ $57/$100k 60.3%39.7%PASS Gridley Unified SD Butte Measure J 16,300,000$ $40/$100k 60.2%39.8%PASS Long Beach Unified SD Los Angeles Measure Q 1,700,000,000$ $60/$100k 60.0%40.0%PASS Sunol Glen Unified SD Alameda Measure J 10,900,000$ $52/$100k 59.9%40.1%PASS Ventura Unified School District Ventura Measure E 434,500,000$ $60/$100k 59.9%40.1%PASS Imperial Community College District Imperial Measure B 130,000,000$ $30/$100k 59.4%40.7%PASS Panama Buena Vista SD Kern Measure I 4,000,000$ $30/$100k 58.2%41.8%PASS El Centro Elementary SD Imperial Measure C 17,505,000$ $25/$100k 57.8%42.2%PASS El Centro Elementary SD Imperial Measure E 17,495,000$ $25/$100k 57.7%42.3%PASS Downey Unified SD Los Angeles Measure K 504,000,000$ $50/$100k 57.6%42.4%PASS Palmdale SD Los Angeles Measure PRM 120,000,000$ $30/$100k 57.5%42.5%PASS Santa Monica Community College Los Angeles Measure SMC 375,000,000$ $25/$100k 57.4%42.6%PASS Cerritos Community College Los Angeles Measure CC 425,000,000$ $25/$100k 57.2%42.8%PASS Twin Rivers Unified School District Sacramento Measure K 150,000,000$ $37/$100k 56.7%43.3%PASS * School Bond Measures - 55% voter approval School District County Measure Amount Tax Rate YES%NO% E.5.c Packet Pg. 60 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 6 – December 30, 2022 Final CaliforniaCityFinance.com Selma Unified SD Fresno Measure L 36,000,000$ $60/$100k 56.6%43.4%PASS Pleasanton Unified SD Alameda Measure I 395,000,000$ $49/$100k 56.6%43.4%PASS Oxnard School District Ventura Measure I 215,000,000$ $30/$100k 56.6%43.4%PASS Wheatland Union High SD SFID1 Yuba Measure P 16,000,000$ $30/$100k 56.5%43.5%PASS Wiseburn Unified SD Los Angeles Measure EE 98,000,000$ $30/$100k 56.4%43.6%PASS Alvord Unified SD Riverside Measure J 248,000,000$ $60/$100k 56.3%43.7%PASS Modesto City SD Stanislaus Measure L 198,000,000$ $29/$100k 56.2%43.8%PASS College of the Sequoias Tulare Measure C 95,000,000$ $13/$100k 55.8%44.2%PASS Kern High School District Kern Measure E 160,000,000$ $19/$100k 55.8%44.2%PASS Fairfield/Suisun Unified SD Solano / Napa Measure S 249,600,000$ $40/$100k 55.0%45.0%PASS Coalinga-Huron Unified SD Fresno Measure X 39,200,000$ $46/$100k 55.2%44.8%PASS Napa Valley Unified SD Napa Measure A1 200,000,000$ $20/$100k 54.4%45.6%FAIL Washington Union SD Monterey Measure K 13,500,000$ $18/$100k 54.3%45.7%FAIL Lake Tahoe Unified SD El Dorado Measure K 107,000,000$ $35/$100k 54.3%45.7%FAIL Waterford Unified SD Stanislaus Measure J 5,570,000$ $30/$100k 54.0%46.0%FAIL Lompoc Union SD Santa Barbara Measure A 125,000,000$ $30/$100k 53.7%46.3%FAIL Mark Twain Union Elementary SD Calaveras Measure E 9,300,000$ 19.50/$100k 53.6%46.4%FAIL Capistrano Unified SD SFID#3 Orange Measure G 114,000,000$ $40/$100k 53.4%46.6%FAIL Martinez Unified SD Contra Costa Measure K 9,000,000$ $39/$100k 52.6%47.4%FAIL Imperial Unified School District Imperial Measure D 50,000,000$ $49/$100k 52.6%47.4%FAIL College School District Santa Barbara Measure Y 23,000,000$ $30/$100k 52.0%48.0%FAIL Esparto Unified SD Yolo Measure L 19,900,000$ $60/$100k 51.8%48.2%FAIL Red Bluff Union Elementary SD Tehama Measure F 14,100,000$ $23/$100k 51.0%49.0%FAIL Elverta Joint Elementary SD Sacramento / PlaceMeasure P 4,000,000$ $30/$100k 50.8%49.2%FAIL Fruitvale SD Kern Measure H 23,000,000$ $30/$100k 50.8%49.2%FAIL Ferndale Unified School District Humboldt Measure Q 7,700,000$ $60/$100k 50.6%49.4%FAIL Black Oak Mine Unified SD El Dorado Measure Q 28,900,000$ $39/$100k 50.6%49.4%FAIL Livermore Valley Joint Unified SD Alameda / Contra CMeasure G 450,000,000$ $60/$100k 50.3%49.7%FAIL Travis Unified SD Solano Measure M 64,000,000$ $60/$100k 50.0%50.0%FAIL Calaveras Unified SD Calaveras Measure B 39,300,000$ $50/$100k 49.6%50.4%FAIL West Hills Community College District Fresno, Kings, SanMeasure J 8,600,000$ $10/$100k 47.9%52.1%FAIL Wheatland Union High SD SFID2 Yuba Measure Q 8,700,000$ $30/$100k 47.2%52.8%FAIL Sundale Union Elementary School Tulare Measure W 3,800,000$ $30/$100k 46.4%53.6%FAIL Auburn Union SD Placer Measure E 45,000,000$ $28/$100k 44.3%55.7%FAIL Sundale Union Elementary School Tulare Measure X 4,000,000$ $30/$100k 43.7%56.3%FAIL Vacaville Unified SD Solano Measure Q 229,500,000$ $45/$100k 43.5%56.5%FAIL Amador County Unified SD Amador Measure H 64,000,000$ $50/$100k 43.5%56.5%FAIL Western Placer Unified SD Placer Measure G 185,000,000$ $54/$100k 42.1%58.0%FAIL Kings River-Hardwick Elementary SD Kings Measure K 4,000,000$ $30/$100k 41.3%58.7%FAIL School Bond Measures - 55% voter approval School District County Measure Amount Tax Rate YES%NO% School Bond Measures - Two-Thirds Vote Agency Name County Measure Amount Tax Rate YES%NO% Plumas Lake Elementary SD Yuba Measure R 45,000,000$ $60/$100k 56.2%43.8%FAIL E.5.c Packet Pg. 61 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 7 – December 30, 2022 Final CaliforniaCityFinance.com The passage rates this election may reflect somewhat of a darker mood among the electorate. This doesn’t obviously appear in the results for majority vote tax measures but is more apparent among school bonds and special taxes with higher thresholds for passage. Still, $21.5 billion of general obligation bond approvals ($20.6 billion school, $924,000 other) is the biggest since the November 2016 election. School Parcel Taxes  There were just nine school parcel tax measures. Typically, parcel taxes require two-thirds voter approval. But recent court decisions allow for parcel taxes and other special (earmarked) taxes to be approved by majority vote if the measure is placed on the ballot through a citizen initiative. Two of the parcel taxes were citizen initiatives but neither achieved majority approval. Among the nine conventional two-thirds vote school parcel tax measures, seven were extensions of existing taxes. Those all passed. The two new school parcel taxes failed. School Bonds in California - Presidential and Gubernatorial Approved Requested $ 13.279 $ 14.429 $ 9.782 $ 23.236 $ 15.047 $ 11.775 $ 25.314 $ 15.704 Nov 2012 Nov 2014 Nov 2016 Nov 2018 Nov 2020 $ 13.383 Nov 2022 $ 20.505 $ 22.404 $ 12.168 School Parcel Taxes - 2/3 voter approval Agency Name County Measure Rate Sunset YES%NO% Oakland Unified SD Alameda Measure H $120+/parcel extend 14yrs 80.9%19.1%PASS Ross Elementary SD Marin Measure C $1550+/parcel extend 10yrs 78.6%21.4%PASS Hope School District Santa Barbara Measure S $79/parcel extend 5yrs 76.2%23.8%PASS Campbell Union High SD Santa Clara Measure O $85/parcel extend 10yrs 75.9%24.1%PASS Bayshore Elementary SD San Mateo Measure M $96+/parcel extend 8yrs 69.7%30.3%PASS Loma Prieta Joint Union SD Santa Clara / Santa Cruz Measure M $348/parcel new 8yrs 66.0%34.0%FAIL Cutler-Orosi Joint Unified SD Fresno / Tulare Measure V $48+/sfu new none 50.4%49.6%FAIL School Initiative Parcel Taxes- majority voter approval Agency Name County Measure Rate Sunset YES%NO% South San Francisco (for Schools) San Mateo Measure DD $2.50/sf . none 47.2%52.8%FAIL San Francisco City College San Francisco Measure O $150/sfu . 10yrs 36.7%63.3%FAIL E.5.c Packet Pg. 62 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 8 – December 30, 2022 Final CaliforniaCityFinance.com City, County and Special District Measures Most non-school majority vote general tax measures passed, meeting or surpassing the success of these sorts of measures compared to prior general elections. Of the 128 majority vote tax measures, 102 (80 percent) passed. Among the two-thirds vote city, county and special district special tax and bond measures, less than half passed, a bit lower than historic patterns. Local Add-On Sales Taxes (Transaction and Use Taxes)  Voters in 42 cities and four counties considered general purpose majority vote add-on sales tax rates ranging from 0.25 percent to 1.25 percent. Thirty-two are passing with a couple too close to call. Transactions and Use Tax (Add-on Sales Tax) - General Tax - Majority Approval City County Measure Rate Sunset YES%NO% San Anselmo Marin Measure J same 1 cent 9yrs 74.6%25.5%PASS Union City Alameda Measure Z same 1/2 cent 9yrs 74.2%25.8%PASS Avenal Kings Measure A 1 cent none 72.5%27.5%PASS Westminster Orange Measure Y same 1 cent 20yrs 70.1%29.9%PASS Sausalito Marin Measure L by ½cent to 1cent none 69.1%30.9%PASS Sand City Monterey Measure L by 1/2cent to 1.5cents none 68.7%31.3%PASS Colton San Bernardino Measure S 1 cent none 66.8%33.3%PASS Solana Beach San Diego Measure S 1 cent none 66.7%33.3%PASS Walnut Creek Contra Costa Measure O 1/2 cent 10yrs 65.0%35.0%PASS Goleta Santa Barbara Measure B 1 cent none 64.7%35.3%PASS Watsonville Santa Cruz Measure R 1/2 cent none 64.4%35.6%PASS Brisbane San Mateo Measure U 1/2 cent none 63.9%36.1%PASS Solvang Santa Barbara Measure U 1 cent none 63.1%36.9%PASS 43% (23/53) 80% (102/128) 58% (7/12) 0% 20% 40% 60% 80% 100% Special Tax 2/3 Voter Measures Initiative Special Tax (Majority Vote) General Tax Majority Vote Measures* Percent Passing Since 2001 76% Since 2001 49% City, County, Special District Tax and Bond Measures – November 2022 E.5.c Packet Pg. 63 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 9 – December 30, 2022 Final CaliforniaCityFinance.com There were ten add-on sales tax measures earmarked for specific purposes including five extensions of previously approved rates. Three of these extensions were countywide measures for transportation improvements. Six measures, all in more rural locations, could not achieve the two-thirds vote threshold required for special tax increases. Modesto Stanislaus Measure H 1 cent none 62.8%37.2%PASS McFarland Kern Measure M 1 cent none 62.2%37.8%PASS Larkspur Marin Measure G 1/4 cent none 59.4%40.6%PASS Pacifica San Mateo Measure Y 1/2 cent 9yrs 59.3%40.7%PASS Monterey Park Los Angeles Measure MP 3/4 cent none 58.5%41.5%PASS Sonora Tuolumne Measure Y 1 cent 20yrs 58.3%41.7%PASS Baldwin Park Los Angeles Measure BP 3/4 cent none 58.1%41.9%PASS Hemet Riverside Measure H same 1 cent none 58.0%42.0%PASS Mendota Fresno Measure H 1.25 cent none 57.2%42.8%PASS Tehachapi Kern Measure S 1 cent none 57.2%42.8%PASS Blue Lake Humboldt Measure R 1 cent none 55.4%44.6%PASS County of Mendocino (countywide) Measure P 1/4 cent 10 yrs 55.3%44.7%PASS Vallejo Solano Measure P 7/8 cent none 54.7%45.3%PASS Elk Grove Sacramento Measure E 1 cent none 54.1%45.9%PASS Ridgecrest Kern Measure P 1 cent 9yrs 54.1%46.0%PASS Rio Dell Humboldt Measure O 3/4cent (was 1cent)none 53.3%46.7%PASS Ontario San Bernardino Measure Q 1 cent none 53.2%46.8%PASS Malibu Los Angeles Measure MC 1/2 cent none 52.6%47.4%PASS Chico Butte Measure H 1 cent none 52.4%47.6%PASS Galt Sacramento Measure Q 1 cent none 52.4%47.6%PASS County of Kern unincorporated areas Measure K 1 cent none 50.8%49.2%PASS Escondido San Diego Measure E 3/4 cent 15yrs 49.4%50.6%FAIL Benicia Solano Measure R 3/4 cent none 48.9%51.1%FAIL County of Nevada Nevada Measure V 1/2 cent 10yrs 48.6%51.4%FAIL County of Sutter Sutter Measure A 1 cent 9yrs 48.3%51.7%FAIL Williams Colusa Measure C 1/2 cent none 47.7%52.4%FAIL Arroyo Grande San Luis Obispo Measure D 1 cent none 47.4%52.6%FAIL King City Monterey Measure I by 1/2cent to 1.5cents 10yrs 47.2%52.8%FAIL County of Solano Solano Measure E 1/8 cent none 45.9%54.1%FAIL Gonzales Monterey Measure P same 1 cent 20yrs to 2064 45.3%54.7%FAIL Hermosa Beach Los Angeles Measure B 3/4 cent none 44.6%55.4%FAIL Upland San Bernardino Measure L 1 cent none 44.5%55.5%FAIL Dixon Solano Measure D 1 cent none 44.0%56.1%FAIL El Cajon San Diego Measure P by 1/2cent to 1cent none 39.3%60.7%FAIL Transactions and Use Tax (Add-on Sales Tax) - Special Tax - Two-Thirds Approval Agency County Rate Sunset Use YES%NO% Atwater Merced Measure B same 1 cent none police/fire 73.7%26.3%PASS Santa Rosa Sonoma Measure H same 1/4 cent 20yrs police / fire 72.8%27.2%PASS San Francisco San Francisco Proposition L same 1/2 cent 30yrs transportation 71.8%28.2%PASS County of Colusa Measure A 1/2 cent none EMS 69.4%30.6%PASS Ferndale Humboldt Measure N 3/4 cent to Mar 31, 2031 police/fire 60.4%39.6%FAIL Fresno Fresno Measure M 1/8 cent 20yrs veterans 59.2%40.8%FAIL County of Fresno Measure C same 1/2 cent 10yrs transportation 58.0%42.0%FAIL County of Madera Measure T same 1/2 cent none transportation 52.3%47.7%FAIL Colusa Colusa Measure B 1 cent 4rs police/fire/ems, streets,52.3%47.7%FAIL County of Tuolumne Measure X 1 cent 10yrs sheriff, fire, roads 48.0%52.0%FAIL E.5.c Packet Pg. 64 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 10 – December 30, 2022 Final CaliforniaCityFinance.com There were also four special sales tax measures qualified through citizen initiative. Under recent court rulings, these measures only required majority voter approval for passage. Mendocino County’s library tax and Sacramento County’s transportation renewal passed, but measures in Calaveras and Fresno failed. Transient (Lodging) Occupancy Taxes  There were 22 measures to increase Transient Occupancy (Lodging) Taxes (TOT), including 20 for general purposes (majority approval) and two two-thirds vote special taxes. The small central valley towns of Farmersville and Tulelake, among the few cities in California not to have a TOT, failed in their proposals for new taxes. Transactions and Use Tax (Add-on Sales Tax) - Initiative Special Tax - Majority Approval Agency Rate Sunset Use YES%NO% County of Mendocino Measure O 1/8 cent then 1/4 cent in 2027 none library 60.8%39.2%PASS County of Sacramento Measure A same 1/2 cent 40yrs transportation 55.3%44.7%PASS County of Calaveras Measure A 1 cent none fire 49.4%50.6%FAIL County of Fresno (for CSU ) Measure E 1/5 cent, 1/40 cent (Reedley)20yrs Calif State Univ 46.9%53.1%FAIL Transient Occupancy Tax Tax Measures: Majority Vote General Use Agency County Rate Sunset YES%NO% Santa Cruz Santa Cruz Measure P by 1% to 12%, by 3% none 80.3%19.7%PASS Belmont San Mateo Measure K by 2% to 14%none 79.3%20.7%PASS Trinidad Humboldt Measure P by 4% to 12%none 77.6%22.5%PASS Millbrae San Mateo Measure N by 2% to 14%none 75.8%24.3%PASS Santa Monica Los Angeles Measure CS by 1%, 3% home none 73.7%26.3%PASS Colfax Placer Measure B by 2% to10%none 73.5%26.5%PASS Roseville Placer Measure C by 4% to 10%none 73.0%27.1%PASS Yucca Valley San Bernardino Measure K by 5% to 12%none 71.9%28.1%PASS La Palma Orange Measure P by 4% to 12%none 71.1%28.9%PASS Clovis Fresno Measure B by 2% to 12%none 69.7%30.3%PASS Imperial Beach San Diego Measure R by 4% to 14%none 67.4%32.6%PASS Needles San Bernardino Measure N to short term rentals none 65.1%34.9%PASS Kerman Fresno Measure G 10%none 62.3%37.7%PASS El Paso de Robles San Luis Obispo Measure F by 1% to 11%none 61.2%38.8%PASS Rocklin Placer Measure F by 2% to 10%none 59.8%40.2%PASS Anaheim Orange Measure J to cover online travel none 59.2%40.8%PASS Alameda Alameda Measure F by 4% to 14%none 59.2%40.8%PASS Imperial Imperial Measure G by 4% to 12%none 56.2%43.8%PASS Big Bear Lake San Bernardino Measure P by 2% to 10%none 54.4%45.6%PASS Arcadia Los Angeles Measure HT by 2% to 12%none 54.1%45.9%PASS Grand Terrace San Bernardino Measure M new 10%none 51.9%48.1%PASS El Monte Los Angeles Measure OT by 4% to 14%none 49.7%50.3%FAIL Farmersville Tulare Measure A 10%none 49.3%50.7%FAIL Guadalupe Santa Barbara Measure Z by 4% to 10%none 48.2%51.9%FAIL County of Inyo - Unincorporated Measure Q to short term rentals none 46.5%53.5%FAIL County of Trinity Trinity Measure by 5% to 10%none 44.9%55.1%FAIL Downey Los Angeles Measure D by 4% to 13%none 35.6%64.4%FAIL E.5.c Packet Pg. 65 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 11 – December 30, 2022 Final CaliforniaCityFinance.com There were also three special tax transient occupancy measures in which the proceeds were earmarked for specific purposes and two-thirds voter approval is required for passage. A TOT for the “east slope” area near Lake Tahoe in El Dorado County passed easily, while a lesser increase on the “west slope” area failed. A 1 percent TOT rate proposal in Lompoc likely would have passed easily as a general tax, but by earmarking the tax for police-fire services it failed with 62 percent yes votes. Utility User Taxes  Voters in four cities approved measures to continue existing utility user taxes for general purposes. A new tax in Banning failed. Utility Transfer Taxes  Voters in Santa Clara and Palo Alto authorized the continued transfer of annual revenue from their utilities to support general fund services such as police, fire, paramedics and parks. Utility User Taxes City County Rate Sunset YES%NO% Sebastopol Sonoma Measure N 3.75% (same) extend none 83.5%16.5%PASS Carson Los Angeles Measure UUT 2% electr, gas extend none 78.4%21.6%PASS Hercules Contra Costa Measure N 8% extend none 69.3%30.8%PASS Arcata Humboldt Measure L 3% (same) extend 14yrs 65.6%34.4%PASS Banning Riverside Measure I $0.015/kwh . none 30.0%70.0%FAIL Transient Occupancy Tax Tax Measures: Two-thirds Vote Special Purpose City County Measure Rate Use YES%NO% County of El Dorado - East Slope TahoMeasure S by 4% to 14% streets 81.8%18.2%PASS Lompoc Santa Barbara Measure X by 1% to 11% police/fire 62.0%38.0%FAIL County of El Dorado - West Slope Measure R by 2% to 12% streets 45.8%54.2%FAIL Utility Transfer Taxes City County Rate YES%NO% Santa Clara Santa Clara Measure G 5 % extend none 84.2%15.8%PASS Palo Alto Santa Clara Measure L 18% gas extend none 77.7%22.3%PASS E.5.c Packet Pg. 66 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 12 – December 30, 2022 Final CaliforniaCityFinance.com Business Operations Taxes  Ten cities proposed general revisions and updates of their business operations taxes. All passed. Six other cities had business operation tax proposals targeted to certain types of business activity. These include four measures to tax vacant property. One of these four was San Marino’s special tax, earmarked for police, fire and school services. Had the city made it a general tax, it likely would have passed. But as a special tax, it failed with 56 percent yes vote. A citizen initiative special tax on vacant property in San Francisco got the majority voter approval needed. The proceeds of Proposition M are required to go to affordable housing programs. Business Operations Tax Measures (other than on cannabis) - Majority Vote General Purpose Agency County Rate Focus YES%NO% East Palo Alto San Mateo Measure L 2.5% grossRcpts Resid Rentals resid rental property 69.9%30.1%PASS Brisbane San Mateo Measure O $2.50/rm/day hotels/overnight 69.2%30.8%PASS Berkeley Alameda Measure M $3k/vacant unit vacant property 64.0%36.0%PASS Arcadia Los Angeles Measure SW 5% grossRcpts sports betting 63.9%36.1%PASS South Gate Los Angeles Measure PD $500 plus $1.94 per ton+solid waste processing 46.5%53.5%FAIL Santa Cruz Santa Cruz Measure N $6k/vacant SFU vacant property 44.2%55.8%FAIL Business Operations Taxes - Two-Thirds Vote Special Purpose Agency NameCounty Rate Use YES%NO% San Marino Measure Z $10,000+ on vacant vacant property 55.7%44.3%FAIL Business Operations Taxes - Initiative Special Agency NameCounty Rate Use YES%NO% San Francisco Proposition M $2500-$5000/ vacant resid unit vacant property 54.5%45.5%PASS Business Operations Tax Measures- General Revisions Majority Vote General Use Agency County YES%NO% Pico Rivera Los Angeles Measure AB 75.5%24.5%PASS Burlingame San Mateo Measure X 75.1%24.9%PASS Tracy San Joaquin Measure B 72.6%27.4%PASS Oakland Alameda Measure T 71.4%28.6%PASS Palo Alto Santa Clara Measure K 67.0%33.0%PASS Santa Ana Orange Measure W 64.8%35.2%PASS Culver City Los Angeles Measure BL 60.5%39.5%PASS Santa Clara Santa Clara Measure H 59.5%40.5%PASS Los Gatos Santa Clara Measure J 53.4%46.7%PASS El Segundo Los Angeles Measure BT 51.2%48.8%PASS E.5.c Packet Pg. 67 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 13 – December 30, 2022 Final CaliforniaCityFinance.com Cannabis – Local Excise Taxes  There were 27 measures taxing cannabis, all majority general purpose except in Sacramento County (for the unincorporated area) where the proceeds were earmarked for homeless services. That measure failed, despite getting 54 percent yes votes. Among the general taxes, all passed except two citizen initiative measures that proposed to legalize certain cannabis business activity: Measure X in South El Monte and Measure K in Sausalito. Cannabis Taxes - Majority Vote General Purpose Agency County Rate Sunset YES%NO% El Segundo Los Angeles Measure Y 10% GrossRcpt, $20/sf cultiv none 72.8%27.2%PASS Healdsburg Sonoma Measure M 8% grossRcpt none 72.7%27.3%PASS Pacific Grove Monterey Measure N 6% grossRcpt none 70.8%29.2%PASS Montclair San Bernardino Measure R 7% grossRcpts none 70.3%29.7%PASS Hermosa Beach Los Angeles Measure T 10% GrossRcpt, $20/sf cultiv none 67.6%32.4%PASS Exeter Tulare Measure B 10% retail and other, $10/sf none 66.5%33.5%PASS Santa Monica Los Angeles Measure HMP 10% gross Rcpts none 66.4%33.6%PASS Lynwood Los Angeles Measure TR 5%to10% none 66.4%33.7%PASS Woodland Yolo Measure K 10% grossRcpts none 66.2%33.9%PASS Monterey Monterey Measure J 6% grossRcpt none 65.2%34.8%PASS Tulare Tulare Measure Y 10% retail and other, $10/sf none 65.2%34.8%PASS Encinitas San DiegoMeasure L 4% to 7% of gross receipts none 65.1%34.9%PASS McFarland Kern Measure O $10.00 per square foot for none 63.5%36.5%PASS South Lake Tahoe El Dorado Measure G 6% retail, manufacturing, none 62.9%37.1%PASS Avenal Kings Measure C $25+/sf or 15% gr rcpts none 61.8%38.2%PASS Corona Riverside Measure G 9% of gross receipts for retail none 61.6%38.5%PASS Claremont Los Angeles Measure CT 4%-7% gr rcpts, $1-$10/sf none 61.1%38.9%PASS Laguna Woods Orange Measure T 4%-10% of gross receipts or none 61.1%38.9%PASS County of Los Angeles Uninc Measure C 4% gross receipts retail, 3% none 60.1%39.9%PASS County of San Diego Uninc Measure A 6% retail, 3% distribution, 2% none 57.4%42.6%PASS Huntington Beach Orange Measure O 6% retail, 1% other none 54.7%45.4%PASS Cudahy Los Angeles Measure BA 15% grossRcpts none 54.0%46.0%PASS South El Monte Los Angeles Measure CM 6% special excise tax on retail none 53.7%46.3%PASS Baldwin Park Los Angeles Measure CB 4% grossRcpts none 51.3%48.7%PASS South El Monte Los Angeles Measure X 8% of noncultivation none 46.2%53.9%FAIL Sausalito Marin Measure K greater of 7.5% net profits or xxx 26.2%73.8%FAIL Cannabis Taxes - Two-Thirds Vote Special Purpose Agency County Rate Sunset YES%NO% County of Sacramento Uninc Measure B 6% retail, 4% manuf, 3% distrib, 2% testing, 3% or $10/sf cultivation none 53.8%46.2%FAIL E.5.c Packet Pg. 68 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 14 – December 30, 2022 Final CaliforniaCityFinance.com Vehicle Registration Taxes  Two counties had measures to extend their existing $1 per vehicle registration taxes, $2 on commercial vehicles. State law requires the proceeds from such a tax to be used for abandoned vehicle abatement. As an earmarked, special tax, two-thirds approval is requires. Property Transfer Taxes  Voters in five charter cities considered increasing their taxes on transfers of real estate. Sanat Monica voters faced competing measures: a general tax pleased on the ballot by the city council and a citizen initiative special tax earmarking the tax proceeds for “homelessness prevention, affordable housing, and schools.” The citizen initiative passed. The city council measure failed. Measure D in the small wealthy enclave of Belvedere would have made that city a charter city and also approved a new property transfer tax. It failed. Abandoned Vehicle Abatement Tax (Fees prior to Prop26 of 2010) - 2/3 voter approval City Measure Name Rate Sunset YES%NO% County of Butte Measure K $1/veh 10yrs 71.3%28.7%PASS County of Amador Measure J $1/veh 10yrs 56.1%43.9%FAIL Property Transfer Taxes - general purpose - majority vote City County Measure Na Rate Sunset YES%NO% San Mateo San Mateo Measure CC by 1% to 1.5% if >$10m none 71.8%28.3%PASS Emeryville Alameda Measure O $15/$1000 if $1m-$2m, $25/$1000 if >$2m none 71.6%28.4%PASS Belvedere Marin Measure D $8/$1k 30yrs 43.8%56.2%FAIL Santa Monica Los Angeles Measure DT $25/$1000 of value >$8m Feb 2023 34.3%65.7%FAIL Property Transfer Tax - Initiative Special - majority vote City County Measure Na Rate Sunset YES%NO% Los Angeles Los Angeles Measure ULA 4% if >$5m, 5.5% if >$10m none 57.3%42.8%PASS Santa Monica Los Angeles Measure GS $56/$1000 if >$8m none 53.3%46.7%PASS E.5.c Packet Pg. 69 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 15 – December 30, 2022 Final CaliforniaCityFinance.com General Obligation Bonds  There were six non-school general obligation bond measures totaling $1.6 billion. Three passed, including Oakland’s $850,000 measure. Next door, in Berkeley, the $650,000 bond measure failed. In all, $1.6 billion in local non-school general obligation bonds were approved. Parcel Taxes – Non-School  There were 29 parcel tax measures for a variety of public services. Fourteen passed. City, County and Special District General Obligation Bond Measures (2/3 vote) Agency Name County Bond Amount Use Tax Rate YES%NO% Seneca Healthcare District Plumas Measure B 42,000,000$ hospital $80/$100k 79.5%20.5%PASS Oakland Alameda Measure U 850,000,000$ general $71/$100k 74.5%25.5%PASS Carmichael Recreation and Park District Sacramento Measure G 31,900,000$ park, recr $19/$100k 67.7%32.3%PASS Cambria Community Health Care District San Luis Obispo Measure G 8,500,000$ hospital $10/$100k 61.6%38.4%FAIL Berkeley Alameda Measure L 650,000,000$ general $41/$100k 58.0%42.0%FAIL Beaumont Library District Riverside Measure M 24,000,000$ library $10/$100k 50.2%49.8%FAIL City, County and Special District Parcel Taxes (2/3 vote) Agency Name County Amount Purpose sunsetYES%NO% Highlands Village Lighting Zone of Benefit El Dorado Measure L $140+/parcel streets . none 86.3%13.7%PASS South Pasadena Los Angeles Measure LL xxx library extend none 86.2%13.8%PASS San Anselmo Marin Measure H $70/parcel library extend 9yrs 84.8%15.2%PASS Pasadena Los Angeles Measure L $41+/sfu library extend 15yrs 84.2%15.8%PASS Fairfax Marin Measure F $94.50*/sfu EMS extend 4yrs 81.8%18.2%PASS Corte Madera Marin Measure E $78+/sfu EMS extend 4yrs 81.4%18.6%PASS Ross Valley Paramedic Authority (CSA #27)Marin Measure N EMS extend 4yrs 80.9%19.1%PASS Tiburon Open Space CFD#2022-1 Marin Measure M $335+/parcel open space . 30yrs*78.8%21.2%PASS Cameron Park Airport District El Dorado Measure J by $600 to $900/parcel airport/streets . none 78.2%21.8%PASS County of Marin Marin Measure B $98/parcel library . 9yrs 76.4%23.6%PASS Albany Alameda Measure K $0.074+/sf fire/EMS extend none 76.0%24.0%PASS Knolls Property Owners CSD El Dorado Measure P by $300+ to $600+/parcel streets . none 75.5%24.5%PASS Schell-Vista Fire Protection District Sonoma Measure O $200/sfu fire/EMS extend 4yrs 74.4%25.6%PASS Circle XX Community Services District Calaveras Measure C $500/sfu streets . 10yrs 70.8%29.2%PASS LTilRdZ f E.5.c Packet Pg. 70 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 16 – December 30, 2022 Final CaliforniaCityFinance.com There were also five citizen initiative non-school parcel tax measures. Three did not receive the majority vote required. City, County and Special District Parcel Taxes (2/3 vote) Agency Name County Amount Purpose sunse tYES%NO% Lynx Trail Road Zone of Benefit El Dorado Measure M by $150 to $450/parcel streets . none 62.7%37.3%FAIL Hickok Road CSD El Dorado Measure N by $200 to $400/parcel streets . 62.5%37.5%FAIL Burney Fire Protection District Shasta Measure B $75/sfu fire . none 62.4%37.6%FAIL Middle River Community Services District Calaveras Measure D by $100 to $200/sfu streets . none 58.3%41.7%FAIL Boulder Creek Recreation and Park Santa Cruz Measure T $36/sfu parks/recr . 30yrs 57.2%42.8%FAIL Hopland Fire Protection District Mendocino Measure N $85/parcel fire increase none 56.7%43.3%FAIL Pomona Los Angeles Measure PS $0.15/sf commercial streets . none 55.8%44.2%FAIL Cathedral City Riverside Measure K 15¢/sf resid parks/recr . none 54.4%45.6%FAIL Desert Recreation District Riverside Measure L 7 cents/sf sfu parks/recr . none 54.2%45.8%FAIL Exeter Public Cemetery Tulare Measure U $35+/parcel cemetery . 53.0%47.0%FAIL Westside Community Healthcare District Merced / Stan Measure D $69+/parcel EMS . none 52.2%47.8%FAIL Bear Valley Community Services District Kern Measure V $185+/parcel entry gate . none 45.6%54.4%FAIL Rancho Murieta Community Services Sacramento Measure R $316+/sfu police . none 45.0%55.0%FAIL Antelope Fire Protection District Mono Measure H $120+/parcel fire . none 44.3%55.7%FAIL Bear Valley Community Services District Kern Measure W $500+/parcel police . none 42.4%57.6%FAIL Los Angeles Los Angeles Measure SP $0.08414/sf parks/recr . 30yrs 35.3%64.8%FAIL City, County and Special District Initiative Parcel Taxes (majority vote) Agency Name County Amount Purpose sunsetYES%NO% Crockett Community Services District Contra Costa Measure L $50/parcel parks/recr none 62.8%37.2%PASS Oakland Alameda Measure Y $68/parcel zoo 20yrs 62.5%37.5%PASS County of Monterey Monterey Measure Q $49/parcel childcare 10yrs 41.1%58.9%FAIL Morro Bay San Luis Obispo Measure B $120+/parcel harbor none 36.0%64.0%FAIL Inverness Public Utility District Marin Measure O $0.20/sf, $150/vacant fire none 27.0%73.0%FAIL E.5.c Packet Pg. 71 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 17 – December 30, 2022 Final CaliforniaCityFinance.com Tax en 0 12 3 11 39 79 27 27 Nov '08 Nov '10 Nov '12 Nov '14 Nov '16 Nov '18 Nov '20 Nov '22 Cannabis Taxes 17 19 19 28 42 59 58 71 47 21 13 2 7 13 30 11 8 10 4 0 10 20 30 40 50 60 70 80 90 Nov '06 Nov '08 Nov '10 Nov '12 Nov '14 Nov '16 Nov '18 Nov '20 Nov '22 Sales Taxes Init.Special Special General 17 12 16 18 14 22 40 20 30 0 10 20 30 40 50 Nov '06 Nov '08 Nov '10 Nov '12 Nov '14 Nov '16 Nov '18 Nov '20 Nov '22 Transient Occupancy (Lodging) Taxes 8 26 21 10 16 9 5 11 7 Nov '06 Nov '08 Nov '10 Nov '12 Nov '14 Nov '16 Nov '18 Nov '20 Nov '22 Utility User Taxes 70 95 63 106 113 184 112 60 100 $9 $22 $4 $14 $12 $25 $16 $13 $22.4 $- $5 $10 $15 $20 $25 $30 $35 $40 $45 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 Nov '06 Nov '08 Nov '10 Nov '12 Nov '14 Nov '16 Nov '18 Nov '20 Nov '22 Bil l i o n s Nu m b e r o f M e a s u r e s School Bonds 2/3 vote bond 55% bond Bonds Value 45 26 26 25 33 39 41 30 35 13 8 3 7 5 12 11 5 6 $2.0 $1.7 $0.1 $0.4 $0.6 $7.3 $2.4 $1.9 $1.6 $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 $10.0 0 10 20 30 40 50 60 70 80 90 100 Nov '06 Nov '08 Nov '10 Nov '12 Nov '14 Nov '16 Nov '18 Nov '20 Nov '22 Bil l i o n s Nu m b e r o f M e a s u r e s Parcel Taxes and GO Bonds 4 21 18 25 8 22 14 13 9 0 5 10 15 20 25 Nov '06 Nov '08 Nov '10 Nov '12 Nov '14 Nov '16 Nov '18 Nov '20 Nov '22 School Parcel Taxes By School Board By Initiative G.O. Bonds ParcelTaxes Bonds Value E.5.c Packet Pg. 72 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 18 – December 30, 2022 Final CaliforniaCityFinance.com Other measures of Note  Measures to impose term limits passed easily in most communities. Sixteen passed. Only one failed, a measure in Milpitas that would have reformed existing limits..  There were 15 measures to convert elected city clerk or treasurer positions to appointed (by city council or manager). Ten passed.  The City of Port Hueneme will not change its name to Hueneme Beach.  Hawthorne and Belvedere will not become charter cities.  Sales tax increases previously approved by voters in Crescent City and Del Norte County will remain but parcel taxes in Knightsen Community Services District in Contra Costa and El Dorado Hills Community Services District in El Dorado County have been repealed. Term limits Agency Name County YES%NO% Santa Ana Unified SD Orange Measure H 87.3%12.7%PASS Bell Gardens Los Angeles Measure AA 85.7%14.4%PASS Pico Rivera Los Angeles Measure F 85.6%14.5%PASS Aliso Viejo Orange Measure I 84.8%15.2%PASS San Bruno San Mateo Measure BB 84.4%15.6%PASS Escondido San Diego Measure F 82.7%17.3%PASS Baldwin Park Los Angeles Measure TL 80.7%19.3%PASS Oakland Alameda Measure X 79.8%20.2%PASS County of San Benito Measure P 77.4%22.6%PASS Saratoga Santa Clara Measure C 76.7%23.3%PASS Pomona Los Angeles Measure PT 75.3%24.7%PASS Paramount Unified SD Los Angeles Measure P 74.7%25.3%PASS Hollister San Benito Measure S 71.1%28.9%PASS County of Kern Measure J 69.7%30.3%PASS County of San Bernardino Measure D 58.2%41.8%PASS Oxnard Ventura Measure C 56.1%43.9%PASS Milpitas Santa Clara Measure F 37.1%62.9%FAIL City Name Change City County YES%NO% Port Hueneme Ventura Measure D 31.1%68.9%FAIL Charter City City County YES%NO% Hawthorne Los Angeles Measure I 39.8%60.2%FAIL Belvedere Marin Measure D 43.8%56.2%FAIL E.5.c Packet Pg. 73 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) Local Revenue Measure Results November 2022 – 19 – December 30, 2022 Final CaliforniaCityFinance.com ************ For more information: Michael Coleman 530-758-3952. coleman@muniwest.com mjgc rev 21Nov2022 15:45 Appointed City Clerk / City Treasurer / etc. City County YES%NO% San Juan Bautista San Benito Measure W appoint city clerk 57.8%42.3%PASS Pleasant Hill Contra Costa Measure M appoint treasurer 56.6%43.4%PASS San Juan Bautista San Benito Measure V appoint city treasurer 56.0%44.0%PASS National City San Diego Measure M appoint City Clerk 55.0%45.0%PASS Taft Kern Measure Q appoint clerk 54.0%46.0%PASS San Clemente Orange Measure U appoint city clerk 53.1%46.9%PASS Wasco Kern Measure T appoint clerk 52.7%47.3%PASS National City San Diego Measure N appoint City Treasurer 52.5%47.5%PASS Wasco Kern Measure U appoint treasurer 51.4%48.6%PASS San Clemente Orange Measure V appoint city treasurer 50.8%49.2%PASS Yreka Siskiyou Measure Q appoint treasurer 48.6%51.4%FAIL Plymouth Amador Measure E appoint city clerk 39.2%60.9%FAIL Redding Shasta Measure A appoint clerk, treasurer 38.4%61.6%FAIL Plymouth Amador Measure G appoint city treasurer 37.2%62.8%FAIL Yuba City Sutter Measure Z appoint clerk / 34.0%66.0%FAIL Tax and Fee Initiative to Repeal or Revise Agency Name County Rate YES%NO% Crescent City Del Norte Measure T Repeal TrUT 23.3%76.7%FAIL County of Del Norte Del Norte Measure U Repeal TrUT 32.3%67.7%FAIL Knightsen Town Communit Contra Costa Measure R Repeal special tax 59.1%40.9%PASS El Dorado Hills CSD El Dorado Measure H Repeal special tax 90.9%9.2%PASS E.5.c Packet Pg. 74 At t a c h m e n t : C a l i f o r n i a C i t y F i n a n c e ( O p p o s i t i o n t o t h e T a x p a y e r P r o t e c t i o n a n d G o v e r n m e n t A c c o u n t a b i l i t y A c t ) AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Award Contract to Mike Roquet Construction Inc. for Asphalt Repairs Due to Storm Damage Along Vivienda Avenue PRESENTED BY: Shanita Tillman, Senior Management Analyst RECOMMENDATION: Award a contract to Mike Roquet Construction Inc. for construction services, including asphalt surface repairs and erosion mitigation measures, due to storm damage along Vivienda Avenue. The contract amount is $39,355 with a 10% contingency ($3,935). Authorize the City Manager to execute the agreement, 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 February 2, 2024, Southern California was struck by a powerful storm, unleashing torrential rain and fierce winds across the region leading to widespread flooding, downed trees, and significant infrastructure damage. Vivienda Avenue suffered extensive damage to its asphalt surface due to flooding and erosion, necessitating immediate repair efforts to restore safety and accessibility for residents and commuters. DISCUSSION: The recent storm inflicted severe damage along Vivienda Avenue, particularly to its asphalt surface, necessitating urgent repair work to address erosion and ensure safety for residents and commuters. Mike Roquet Construction Inc. was approached to provide a proposal for the necessary repairs, which include approximately 1,350 square feet of asphalt repairs and the installation of 105 linear feet of asphalt berm to mitigate future erosion risks. Staff recommends awarding the contract for $39,355 plus a 10% contingency to address the extensive damage to Vivienda Avenue. It is crucial to restore the road's condition, especially after heavy rainfall has undermined its surface, to improve safety and accessibility for all road users in the area. FISCAL IMPACT: E.6 Packet Pg. 75 The additional appropriation of funds will come from General Fund Reserves and be coded to account 10-175-250-000-000. ATTACHMENTS: • Proposal Grand Terrace Vivienda (PDF) • Mike Roquet Agreement (PDF) APPROVALS: Shanita Tillman Completed 03/04/2024 3:39 PM Finance Completed 03/06/2024 11:22 AM City Manager Completed 03/07/2024 9:16 AM City Council Pending 03/12/2024 6:00 PM E.6 Packet Pg. 76 P.O. Box 539 Highland, CA 92346 (951) 533-3797 Lic #1007568 PROPOSAL Page 1 of 1 City of Grand Terrace February 16, 2024 22795 Barton Rd. Grand Terrace, CA 92313 (909) 824-6623 JOB LOCATION: 22276 VIVIENDA AVE., GRAND TERRACE We hereby submit specifications and estimates for: Item total STREET REPAIR: 1. Saw-cut and remove one area of existing asphalt (13’ wide x 100’), including two asphalt berms and haul away to a legal dump site. 2. Compact bottom of two eroded slope areas. 3. Place class II aggregate base material in two eroded slope areas, and compact material in 6” lifts. 4. Straighten chain link fence by adding and compacting base material around existing post footings. 5. Scarify and compact asphalt subgrade and roadway shoulder. 6. Install variable thickness class II base in proposed asphalt paving area undermined by erosion. 7. Fine-grade and install 4” asphalt in two lifts on 1,350 sq. ft. (13.5’ x 100’). 8. Install 105 lf of 8” asphalt berm along roadway shoulder. Lump sum $39,355.00 GENERAL CONDITIONS: • Prevailing wages are included. • Prices based on one move-in. • Mike Roquet Const. Inc. is not to be held responsible for damage to utility lines below the surface. • Any attorney fees, costs, or other expenses which may be incurred in the collection of monies as may become due under this contract or enforcement of the terms of this contract will be paid for by the customer. • This contract shall be due and payable at Mike Roquet Construction Inc., P.O. Box 539, Highland, CA 92346, within 10 days from the date of invoice. AMOUNT: Thirty-nine thousand, three hundred and fifty-five dollars no cents ($39,355.00) MIKE ROQUET CONSTRUCTION, INC. Submitted by Mike Roquet, President E.6.a Packet Pg. 77 At t a c h m e n t : P r o p o s a l G r a n d T e r r a c e V i v i e n d a ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) 01247.0001/967162.1 PUBLIC WORKS AGREEMENT By and Between CITY OF GRAND TERRACE and MIKE ROQUET CONSTRUCTION INC. E.6.b Packet Pg. 78 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -1- 01247.0001/967162.1 AGREEMENT FOR PUBLIC WORKS SERVICES BETWEEN THE CITY OF GRAND TERRACE AND MIKE ROQUET CONSTRUCTION INC. This AGREEMENT FOR PUBLIC WORKS SERVICES BETWEEN THE CITY OF GRAND TERRACE AND MIKE ROQUET CONSTRUCTION INC. (herein “Agreement”) is made and entered into this 12th day of March, 2024 by and between the City of GRAND TERRACE, a California municipal corporation (“City”) and MIKE ROQUET CONSTRUCTION INC. (“Contractor”). City and Contractor may be referred to, individually or collectively, as “Party” or “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. Contractor, 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 Contractor 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. WORK OF CONTRACTOR 1.1 Scope of Work. In compliance with all terms and conditions of this Agreement, the Contractor shall provide those services specified in the “Scope of Work” 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, Contractor represents and warrants that it has the qualifications, experience, and facilities necessary to properly perform the work required under this Agreement in a thorough, competent, and professional manner, and is experienced in performing the work and services contemplated herein. Contractor shall at all times faithfully, competently and to the best of its ability, experience and talent, perform all services described herein. Contractor covenants that it shall follow the highest professional standards in performing the work and services required hereunder and that all E.6.b Packet Pg. 79 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -2- 01247.0001/967162.1 materials will be both of good quality as well as fit for the purpose intended. For purposes of this Agreement, the phrase “highest professional standards” shall mean those standards of practice recognized by one or more first-class firms performing similar work under similar circumstances. 1.2 Contract Documents. The Scope of Work shall include the “General Provisions” and “Special Provisions,” and Bid Documents contained in and as provided in this Agreement, all of which are incorporated herein by this reference. In the event of any inconsistency between the terms of the bid documents and this Agreement, the terms of this Agreement shall govern. 1.3 Compliance with Law. Contractor 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 Incorporation of Green Book. The provisions of the 2021 Edition of the Standard Specifications for Public Works Construction, as updated by errata, (“Greenbook”) are incorporated herein, except as explicitly modified by the Bid Documents. In the event of any conflict between the provisions of the Greenbook and this Agreement, the terms of this Agreement shall govern. 1.5 Compliance with California Labor Law. (a) Public Work. The Parties acknowledge that the work to be performed under this Agreement is a “public work” as defined in Labor Code Section 1720 and that this Agreement is therefore subject to the requirements of Division 2, Part 7, Chapter 1 (commencing with Section 1720) of the California Labor Code relating to public works contracts and the rules and regulations established by the Department of Industrial Relations (“DIR”) implementing such statutes. The work performed under this Agreement is subject to compliance monitoring and enforcement by the DIR. Contractor shall post job site notices, as prescribed by regulation. (b) Prevailing Wages. Contractor shall pay prevailing wages to the extent required by Labor Code Section 1771. Pursuant to Labor Code Section 1773.2, copies of the prevailing rate of per diem wages are on file at City Hall and will be made available to any interested party on request. By initiating any work under this Agreement, Contractor acknowledges receipt of a copy of the Department of Industrial Relations (DIR) determination of the prevailing rate of per diem wages, and Contractor shall post a copy of the same at each job site where work is performed under this Agreement. (c) Penalty for Failure to Pay Prevailing Wages. Contractor shall comply with and be bound by the provisions of Labor Code Sections 1774 and 1775 concerning the payment of prevailing rates of wages to workers and the penalties for failure to pay prevailing wages. The Contractor shall, as a penalty to the City, forfeit two hundred dollars ($200) for each E.6.b Packet Pg. 80 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -3- 01247.0001/967162.1 calendar day, or portion thereof, for each worker paid less than the prevailing rates as determined by the DIR for the work or craft in which the worker is employed for any public work done pursuant to this Agreement by Contractor or by any subcontractor. (d) Payroll Records. Contractor shall comply with and be bound by the provisions of Labor Code Section 1776, which requires Contractor and each subcontractor to: keep accurate payroll records and verify such records in writing under penalty of perjury, as specified in Section 1776; certify and make such payroll records available for inspection as provided by Section 1776; and inform the City of the location of the records. (e) Apprentices. Contractor shall comply with and be bound by the provisions of Labor Code Sections 1777.5, 1777.6, and 1777.7 and California Code of Regulations Title 8, Section 200 et seq. concerning the employment of apprentices on public works projects. Contractor shall be responsible for compliance with these aforementioned Sections for all apprenticeable occupations. Prior to commencing work under this Agreement, Contractor shall provide City with a copy of the information submitted to any applicable apprenticeship program. Within sixty (60) days after concluding work pursuant to this Agreement, Contractor and each of its subcontractors shall submit to the City a verified statement of the journeyman and apprentice hours performed under this Agreement. (f) Eight-Hour Work Day. Contractor acknowledges that eight (8) hours labor constitutes a legal day's work. Contractor shall comply with and be bound by Labor Code Section 1810. (g) Penalties for Excess Hours. Contractor shall comply with and be bound by the provisions of Labor Code Section 1813 concerning penalties for workers who work excess hours. The Contractor shall, as a penalty to the City, forfeit twenty-five dollars ($25) for each worker employed in the performance of this Agreement by the Contractor or by any subcontractor for each calendar day during which such worker is required or permitted to work more than eight (8) hours in any one calendar day and forty (40) hours in any one calendar week in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the Labor Code. Pursuant to Labor Code section 1815, work performed by employees of Contractor in excess of eight (8) hours per day, and forty (40) hours during any one week shall be permitted upon public work upon compensation for all hours worked in excess of 8 hours per day at not less than one and one-half (1½) times the basic rate of pay. (h) Workers’ Compensation. California Labor Code Sections 1860 and 3700 provide that every employer will be required to secure the payment of compensation to its employees if it has employees. In accordance with the provisions of California Labor Code Section 1861, Contractor certifies as follows: “I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract.” E.6.b Packet Pg. 81 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -4- 01247.0001/967162.1 Contractor’s Authorized Initials ________ (i) Contractor’s Responsibility for Subcontractors. For every subcontractor who will perform work under this Agreement, Contractor shall be responsible for such subcontractor's compliance with Division 2, Part 7, Chapter 1 (commencing with Section 1720) of the California Labor Code, and shall make such compliance a requirement in any contract with any subcontractor for work under this Agreement. Contractor shall take all actions necessary to enforce such contractual provisions and ensure subcontractor's compliance, including without limitation, conducting a review of the certified payroll records of the subcontractor on a periodic basis or upon becoming aware of the failure of the subcontractor to pay his or her workers the specified prevailing rate of wages. Contractor shall diligently take corrective action to halt or rectify any such failure by any subcontractor. 1.6 Licenses, Permits, Fees and Assessments. Contractor shall obtain at its sole cost and expense such licenses, permits, registrations, and approvals as may be required by law for the performance of the services required by this Agreement. Contractor 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 Contractor’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. 1.7 Familiarity with Work. (a) By executing this Agreement, Contractor warrants that Contractor (i) has thoroughly investigated and considered the scope of work 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, Contractor warrants that Contractor has or will investigate the site and is or will be fully acquainted with the conditions there existing, prior to commencement of services hereunder. (b) Contractor shall promptly, and before the following conditions are disturbed, notify the City, in writing, of any: (i) material Contractor believes may be hazardous waste as defined in Section 25117 of the Health & Safety Code required to be removed to a Class I, II, or III disposal site in accordance with existing law; (ii) subsurface, unknown or latent conditions, materially different from those indicated; or (iii) unknown physical conditions at the site of any unusual nature, different from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Agreement, and will materially affect the performance of the services hereunder. Should Contractor discover any latent or unknown conditions, which will materially affect the performance of the services hereunder, Contractor shall immediately inform City of such fact and shall not proceed except at Contractor’s sole risk until written instructions are received from the Contract Officer. E.6.b Packet Pg. 82 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -5- 01247.0001/967162.1 (c) City shall promptly investigate the conditions, and if it finds that the conditions do materially differ, or do involve hazardous waste, and cause a decrease or increase in Contractor's cost of, or the time required for, performance of any part of the work, shall issue a change order per Section 1.10 of this Agreement. (d) In the event that a dispute arises between City and Contractor whether the conditions materially differ, or involve hazardous waste, or cause a decrease or increase in Contractor's cost of, or time required for, performance of any part of the work, Contractor shall not be excused from any scheduled completion date set, but shall proceed with all work to be performed under the Agreement. Contractor shall retain any and all rights provided either by contract or by law, which pertain to the resolution of disputes and protests between the contracting Parties. (e) City will compensate Contractor to the extent required by Government Code Section 4215 by issuing a change order per Section 1.11 of this Agreement. 1.8 Protection and Care of Work and Materials. The Contractor shall adopt reasonable methods, including providing and maintaining storage facilities, 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 caused by City’s own negligence. Stored materials shall be reasonably accessible for inspection. Contractor shall not, without City’s consent, assign, sell, mortgage, hypothecate, or remove equipment or materials which have been installed or delivered and which may be necessary for the completion of the work. 1.9 Warranty. Contractor warrants all work under the Agreement (which for purposes of this Section shall be deemed to include unauthorized work which has not been removed and any non-conforming materials incorporated into the work) to be of good quality and free from any defective or faulty material and workmanship. Contractor agrees that for a period of one year (or the period of time specified elsewhere in the Agreement or in any guarantee or warranty provided by any manufacturer or supplier of equipment or materials incorporated into the work, whichever is later) after the date of final acceptance, Contractor shall within ten (10) days after being notified in writing by the City of any defect in the work or non-conformance of the work to the Agreement, commence and prosecute with due diligence all work necessary to fulfill the terms of the warranty at its sole cost and expense. Contractor shall act as soon as requested by the City in response to an emergency. In addition, Contractor shall, at its sole cost and expense, repair, remove and replace any portions of the work (or work of other contractors) damaged by its defective work or which becomes damaged in the course of repairing or replacing defective work. For any work so corrected, Contractor's obligation hereunder to correct defective work shall be reinstated for an additional one year period, commencing with the date of acceptance of such corrected work. Contractor shall perform such tests as the City may require to verify that any corrective actions, including, without limitation, redesign, repairs, and replacements comply with the requirements of the Agreement. All costs associated with such corrective actions and testing, including the E.6.b Packet Pg. 83 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -6- 01247.0001/967162.1 removal, replacement, and reinstitution of equipment and materials necessary to gain access, shall be the sole responsibility of the Contractor. All warranties and guarantees of subcontractors, suppliers and manufacturers with respect to any portion of the work, whether express or implied, are deemed to be obtained by Contractor for the benefit of the City, regardless of whether or not such warranties and guarantees have been transferred or assigned to the City by separate agreement and Contractor agrees to enforce such warranties and guarantees, if necessary, on behalf of the City. In the event that Contractor fails to perform its obligations under this Section, or under any other warranty or guaranty under this Agreement, to the reasonable satisfaction of the City, the City shall have the right to correct and replace any defective or non-conforming work and any work damaged by such work or the replacement or correction thereof at Contractor's sole expense. Contractor shall be obligated to fully reimburse the City for any expenses incurred hereunder upon demand. 1.10 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. 1.11 Additional Work and Change Orders. (a) 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 Work or make changes by altering, adding to or deducting from said work. No such extra work may be undertaken unless a written change order is first given by the Contract Officer to the Contractor, incorporating therein any adjustment in (i) the Contract Sum, and/or (ii) the time to perform this Agreement, which said adjustments are subject to the written approval of the Contractor (“Change Order”). All Change Orders must be signed by the Contractor and Contract Officer prior to commencing the extra work thereunder. (b) Any increase in compensation of up to ten percent (10%) of the Contract Sum or any increase in the time to perform of up to one hundred eighty (180) days; and does not materially affect the Work and which are not detrimental to the Work or to the interest of the City, may be approved by the Contract Officer. Any greater increases, taken either separately or cumulatively, must be approved by the City Council. (c) Any adjustment in the Contract Sum for a Change Order must be in accordance with the rates set forth in the Schedule of Compensation in Exhibit “C”. If the rates in the Schedule of Compensation do not cover the type of work in the Change Order, the cost of such work shall not exceed an amount agreed upon in writing and signed by Contractor and Contract Officer. If the cost of the Change Order cannot be agreed upon, the City will pay for actual work of the Change Order completed, to the satisfaction of the City, as follows: (i) Labor: the cost of labor shall be the actual cost for wages of workers and subcontractors performing the work for the Change Order at the time such work is E.6.b Packet Pg. 84 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -7- 01247.0001/967162.1 done. The use of labor classifications that would increase the cost of such work shall not be permitted. (ii) Materials and Equipment: the cost of materials and equipment shall be at cost to Contractor or lowest current price which such materials and equipment are reasonably available at the time the work is done, whichever is lower. (iii) If the cost of the extra work cannot be agreed upon, the Contractor must provide a daily report that includes invoices for labor, materials and equipment costs for the work under the Change Order. The daily report must include: list of names of workers, classifications, and hours worked; description and list of quantities of materials used; type of equipment, size, identification number, and hours of operation, including loading and transportation, if applicable; description of other City authorized services and expenditures in such detail as the City may require. Failure to submit a daily report by the close of the next working day may, at the City’s sole and absolute discretion, waive the Contractor’s rights for that day. (d) It is expressly understood by Contractor that the provisions of this Section 1.10 shall not apply to services specifically set forth in the Scope of Work. Contractor hereby acknowledges that it accepts the risk that the services to be provided pursuant to the Scope of Work may be more costly or time consuming than Contractor anticipates and that Contractor shall not be entitled to additional compensation therefor. City may in its sole and absolute discretion have similar work done by other contractors. (e) 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. 1.12 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 Contractor 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 Thirty Nine Thousand, Three Hundred and Fifty Five Dollars and No Cents ($39,355) (the “Contract Sum”), unless additional compensation is approved pursuant to Section 1.11. 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 E.6.b Packet Pg. 85 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -8- 01247.0001/967162.1 services less the contract retention; (iii) payment for time and materials based upon the Contractor’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 Contractor 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 Contractor is required to attend additional meetings to facilitate such coordination, Contractor shall not be entitled to any additional compensation for attending said meetings. 2.4 Invoices. Each month Contractor 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, Contractor is certifying compliance with all provisions of the Agreement. The invoice shall contain all information specified in Exhibit “C”, and 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. Contractor shall not invoice City for any duplicate services performed by more than one person. City shall, as soon as practicable, independently review each invoice submitted by the Contractor 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 Contractor which are disputed by City, or as provided in Section 7.3, City will cause Contractor to be paid within thirty (30) days of receipt of Contractor’s correct and undisputed invoice; however, Contractor 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 that City does not cause Contractor to be paid within thirty (30) days of receipt of an undisputed and properly submitted invoice, Contractor shall be entitled to the payment of interest to the extent allowed under Public Contract Code Section 20104.50. In the event any charges or expenses are disputed by City, the original invoice shall be returned by City to Contractor, not later than seven (7) days after receipt by the City, for correction and resubmission. Returned invoices shall be accompanied by a document setting forth in writing the reasons why the payment request was rejected. Review and payment by the City of any invoice provided by the Contractor shall not constitute a waiver of any rights or remedies provided herein or any applicable law. E.6.b Packet Pg. 86 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -9- 01247.0001/967162.1 2.5 Waiver. Payment to Contractor for work performed pursuant to this Agreement shall not be deemed to waive any defects in work performed by Contractor. ARTICLE 3. PERFORMANCE SCHEDULE 3.1 Time of Essence. Time is of the essence in the performance of this Agreement. 3.2 Schedule of Performance. Contractor 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 Contractor, 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 Contractor, 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 Contractor 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 Contractor be entitled to recover damages against the City for any delay in the performance of this Agreement, however caused, Contractor’s sole remedy being extension of the Agreement pursuant to this Section. 3.4 Inspection and Final Acceptance. City may inspect and accept or reject any of Contractor’s work under this Agreement, either during performance or when completed. City shall reject or finally accept Contractor’s work within forty-five (45) days after submitted to City. City shall accept work by a timely written acceptance, otherwise work shall be deemed to have been rejected. City’s acceptance shall be conclusive as to such work except with respect to latent defects, fraud and such gross mistakes as to amount to fraud. Acceptance of any work by City shall not constitute a waiver of any of the provisions of this Agreement including, but not limited to, Articles 1 and 5, pertaining to warranty and indemnification and insurance, respectively. E.6.b Packet Pg. 87 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -10- 01247.0001/967162.1 3.5 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 Contractor. The following principals of Contractor (“Principals”) are hereby designated as being the principals and representatives of Contractor authorized to act in its behalf with respect to the work specified herein and make all decisions in connection therewith: Mike Roquet President It is expressly understood that the experience, knowledge, capability and reputation of the foregoing Principals were a substantial inducement for City to enter into this Agreement. Therefore, the Principals shall be responsible during the term of this Agreement for directing all activities of Contractor and devoting sufficient time to personally supervise the services hereunder. All personnel of Contractor, and any authorized agents, shall at all times be under the exclusive direction and control of the Principals. For purposes of this Agreement, the Principals may not be replaced nor may their responsibilities be substantially reduced by Contractor without the express written approval of City. Additionally, Contractor shall make every reasonable effort to maintain the stability and continuity of Contractor’s staff and subcontractors, if any, assigned to perform the services required under this Agreement. Contractor shall notify City of any changes in Contractor’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 Contractor. Contractor 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. Contractor shall not at any time or in any manner represent that Contractor or any of Contractor’s officers, employees, or agents are in any manner officials, officers, employees or agents of City. Neither Contractor, nor any of Contractor’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. Contractor expressly waives any claim Contractor may have to any such rights. E.6.b Packet Pg. 88 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -11- 01247.0001/967162.1 4.3 Contract Officer. The Contract Officer shall be the City Manager or such person as may be designated by the City Manager. It shall be the Contractor’s responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the services and the Contractor 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 Contractor, 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 Contractor’s employees, servants, representatives or agents, or in fixing their number, compensation or hours of service. Contractor 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. Contractor 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 Contractor in its business or otherwise or a joint venturer or a member of any joint enterprise with Contractor. 4.5 Prohibition Against Subcontracting or Assignment. The experience, knowledge, capability and reputation of Contractor, its principals and employees were a substantial inducement for the City to enter into this Agreement. Therefore, Contractor 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. All subcontractors shall obtain, at its or Contractor’s expense, such licenses, permits, registrations and approvals (including from the City) as may be required by law for the performance of any services or work under this Agreement. 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 Contractor, 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 Contractor or any surety of Contractor of any liability hereunder without the express consent of City. ARTICLE 5. INSURANCE, INDEMNIFICATION AND BONDS 5.1 Insurance Coverages. Without limiting Contractor’s indemnification of City, and prior to commencement of any services under this Agreement, Contractor shall obtain, provide and maintain at its own E.6.b Packet Pg. 89 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -12- 01247.0001/967162.1 expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. (a) General liability insurance. Contractor shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $2,000,000 per occurrence, $4,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted. (b) Automobile liability insurance. Contractor shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Contractor arising out of or in connection with Services to be performed under this Agreement, including coverage for any owned, hired, non-owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident. (c) Professional liability (errors & omissions) insurance. Contractor shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement, in the minimum amount of $1,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this Agreement and Contractor agrees to maintain continuous coverage through a period no less than three (3) years after completion of the services required by this Agreement. (d) Workers’ compensation insurance. Contractor shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000). (e) Subcontractors. Contractor 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. (a) Proof of insurance. Contractor shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by City’s Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. City reserves the right to require complete, certified copies of all required insurance policies, at any time. (b) Duration of coverage. Contractor shall procure and maintain for the duration of this Agreement insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Services hereunder by Contractor, its agents, representatives, employees or subcontractors. E.6.b Packet Pg. 90 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -13- 01247.0001/967162.1 (c) Primary/noncontributing. Coverage provided by Contractor shall be primary and any insurance or self-insurance procured or maintained by City shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non- contributory basis for the benefit of City before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured. (d) City’s rights of enforcement. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Contractor or City will withhold amounts sufficient to pay premium from Contractor payments. In the alternative, City may cancel this Agreement. (e) Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or that is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VI (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by the City’s Risk Manager. (f) Waiver of subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Contractor or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Contractor hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subcontractors. (g) Enforcement of contract provisions (non-estoppel). Contractor acknowledges and agrees that any actual or alleged failure on the part of the City to inform Contractor of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. (h) Requirements not limiting. Requirements of specific coverage features or limits contained in this section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Contractor maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. (i) Notice of cancellation. Contractor agrees to oblige its insurance agent or broker and insurers to provide to City with a thirty (30) day notice of cancellation (except for E.6.b Packet Pg. 91 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -14- 01247.0001/967162.1 nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage. (j) Additional insured status. General liability policies shall provide or be endorsed to provide that City and its officers, officials, employees, and agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies. (k) Prohibition of undisclosed coverage limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing. (l) Separation of insureds. A severability of interests provision must apply for all additional insureds ensuring that Contractor’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any cross-liability exclusions. (m) Pass through clause. Contractor agrees to ensure that its subcontractors and any other party involved with the project who is brought onto or involved in the project by Contractor, provide the same minimum insurance coverage and endorsements required of Contractor. Contractor agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Contractor agrees that upon request, all agreements with subcontractors and others engaged in the project will be submitted to City for review. (n) Agency’s right to revise specifications. The City reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving the Contractor ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the Contractor, the City and Contractor may renegotiate Contractor’s compensation. (o) Self-insured retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by City. (p) Timely notice of claims. Contractor shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Contractor’s performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. (q) Additional insurance. Contractor shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. E.6.b Packet Pg. 92 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -15- 01247.0001/967162.1 5.3 Indemnification. To the full extent permitted by law, Contractor 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 Contractor, its officers, employees, agents, subcontractors, or invitees, or any individual or entity for which Contractor is legally liable (“indemnitors”), or arising from Contractor’s or indemnitors’ reckless or willful misconduct, or arising from Contractor’s or indemnitors’ negligent performance of or failure to perform any term, provision, covenant or condition of this Agreement, and in connection therewith: (a) Contractor 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 attorneys’ fees incurred in connection therewith; (b) Contractor 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 Contractor hereunder; and Contractor 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 Contractor 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 Contractor hereunder, Contractor 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 attorneys’ fees. In addition, Contractor agrees to indemnify, defend and hold harmless the Indemnified Parties from, any and all claims and liabilities for any infringement of patent rights, copyrights or trademark on any person or persons in consequence of the use by the Indemnified Parties of articles to be supplied by Contractor under this Agreement, and of which the Contractor is not the patentee or assignee or has not the lawful right to sell the same. Contractor shall incorporate similar indemnity agreements with its subcontractors and if it fails to do so Contractor 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 Contractor in the performance of professional services and work 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, E.6.b Packet Pg. 93 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -16- 01247.0001/967162.1 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 Contractor and shall survive termination of this Agreement. 5.4 Notification of Third-Party Claims. City shall timely notify Contractor of the receipt of any third-party claim relating to the work under this Agreement. City shall be entitled to recover from Contractor its reasonable costs incurred in providing such notification. 5.5 Bonds Concurrently with execution of this Agreement, Contractor shall deliver to the City all of the following bonds if the Contract Sum should exceed $25,000: (a) A performance bond securing the faithful performance of this Agreement, in the form provided by the City Clerk, which secures the faithful performance of this Agreement (“Performance Bond”). (b) A payment bond, securing the payment of all persons furnishing labor and/or materials in connection with the work under this Agreement, in an amount not less than 100% of the total compensation for this Agreement, as stated in Section 2.1. (c) All bonds shall be on the applicable forms provided in Exhibit “A-2” and Exhibit “A-3” attached hereto and made part hereof. The bonds shall each contain the original notarized signature of an authorized officer of the surety and affixed thereto shall be a certified and current copy of his/her power of attorney. The bonds shall be unconditional and remain in force during the entire term of the Agreement until released pursuant to Section 5.8 hereof. 5.6 Sufficiency of Insurer or Surety Insurance and bonds 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’s Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better. If the City determines that the work to be performed under this Agreement creates an increased or decreased risk of loss to the City, the Contractor agrees that the minimum limits of the insurance policies and the bonds may be changed accordingly upon receipt of written notice from the City’s Risk Manager. 5.7 Substitution of Securities. Pursuant to Public Contract Code Section 22300, substitution of eligible equivalent securities for any funds withheld to ensure performance under this Agreement may be permitted at the request and sole expense of Contractor. Alternatively, Contractor may, pursuant to an escrow agreement in a form prescribed by Public Contract Code Section 22300, request payment of retentions funds earned directly to the escrow agent at the sole expense of Contractor. E.6.b Packet Pg. 94 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -17- 01247.0001/967162.1 5.8 Release of Securities. City shall release the performance bond and payment bond when the following have occurred: (a) Contractor has made a written request for release and provided evidence of satisfaction of all other requirements under Article 5 of this Agreement; (b) the work contemplated by this Agreement has been accepted by the City; and (c) after passage of the time within which lien claims are required to be made pursuant to applicable laws; if lien claims have been timely filed, City shall hold the payment bond until such claims have been resolve, Contractor has provided statutory bond, or otherwise as required by applicable law. ARTICLE 6. RECORDS, REPORTS, AND RELEASE OF INFORMATION 6.1 Records. Contractor shall keep, and require subcontractors to keep, such ledgers, books of accounts, invoices, vouchers, canceled checks, reports, studies, certified and accurate copies of payroll records in compliance with all applicable laws, 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 from such records. Such records shall be maintained for a period of 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 Contractor’s business, custody of the books and records may be given to City, and access shall be provided by Contractor’s successor in interest. Notwithstanding the above, the Contractor 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. Contractor 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. Contractor 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, Contractor agrees that if Contractor 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 Contractor is providing design services, the cost of the project being designed, Contractor shall promptly notify the Contract Officer of said fact, circumstance, technique or event and the E.6.b Packet Pg. 95 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -18- 01247.0001/967162.1 estimated increased or decreased cost related thereto and, if Contractor 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”) prepared by Contractor, its employees, subcontractors and agents in the performance of this Agreement shall be the property of City and shall be delivered to City upon request of the Contract Officer or upon the termination of this Agreement, and Contractor 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 Contractor will be at the City’s sole risk and without liability to Contractor, and Contractor’s guarantee and warranties shall not extend to such use, reuse or assignment. Contractor may retain copies of such documents for its own use. Contractor shall have an unrestricted 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 Contractor fails to secure such assignment, Contractor shall indemnify City for all damages resulting therefrom. Moreover, Contractor 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) Information gained or work product produced by Contractor in performance of this Agreement shall be considered confidential, unless such information is in the public domain or already known to Contractor. Contractor shall not release or disclose any such information or work product to persons or entities other than City without prior written authorization from the Contract Officer. (b) Contractor, 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 Contractor gives City notice of such court order or subpoena. (c) If Contractor, or any officer, employee, agent or subcontractor of Contractor, provides any information or work product in violation of this Agreement, then City shall have the right to reimbursement and indemnity from Contractor for any damages, costs and fees, including attorneys’ fees, caused by or incurred as a result of Contractor’s conduct. (d) Contractor shall promptly notify City should Contractor, 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 E.6.b Packet Pg. 96 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -19- 01247.0001/967162.1 there under. City retains the right, but has no obligation, to represent Contractor or be present at any deposition, hearing or similar proceeding. Contractor agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Contractor. 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 Contractor 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. (a) Default; Cure. In the event that Contractor is in default under the terms of this Agreement, the City shall not have any obligation or duty to continue compensating Contractor for any work performed after the date of default. Instead, the City may give notice to Contractor of the default and the reasons for the default. The notice shall include the timeframe in which Contractor 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 Contractor is in default, the City shall hold all invoices and shall proceed with payment on the invoices only when the default is cured. In the alternative, the City may, in its sole discretion, elect to pay some or all of the outstanding invoices during the period of default. If Contractor 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 Contractor’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. (b) Dispute Resolution. This Agreement is subject to the provisions of Article 1.5 (commencing at Section 20104) of Division 2, Part 3 of the California Public Contract Code regarding the resolution of public works claims of less than $375,000. Article 1.5 mandates certain procedures for the filing of claims and supporting documentation by the Contractor, for the response to such claims by the City, for a mandatory meet and confer conference upon the request of the Contractor, for mandatory non-binding mediation in the event litigation is commenced, and for mandatory judicial arbitration upon the failure to resolve the dispute through mediation. This Agreement hereby incorporates the provisions of Article 1.5 as though fully set forth herein. 7.3 Retention of Funds. Contractor hereby authorizes City to deduct from any amount payable to Contractor (whether or not arising out of this Agreement) (i) any amounts the payment of which may be in E.6.b Packet Pg. 97 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -20- 01247.0001/967162.1 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 Contractor’s acts or omissions in performing or failing to perform Contractor’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 Contractor, 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 Contractor 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 Contractor 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, Contractor shall file a claim pursuant to Government Code Sections 905 et seq. and 910 et seq., in order to pursue a legal action under this Agreement. 7.7 Liquidated Damages. Since the determination of actual damages for any delay in performance of this Agreement would be extremely difficult or impractical to determine in the event of a breach of this Agreement, the Contractor and its sureties shall be liable for and shall pay to the City the sum of Five Hundred Dollars ($500) as liquidated damages for each working day of delay in the performance of any service required hereunder, as specified in the Schedule of Performance (Exhibit “D”). The City may withhold from any monies payable on account of services performed by the Contractor any accrued liquidated damages. Pursuant to Government Code Section 4215, E.6.b Packet Pg. 98 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -21- 01247.0001/967162.1 Contractor shall not be assessed liquidated damages for delay in completion of the project when such delay was caused by the failure of the public agency or owner of the utility to provide for removal or relocation of utility facilities. 7.8 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 thirty (30) days’ written notice to Contractor, except that where termination is due to the fault of the Contractor, the period of notice may be such shorter time as may be determined by the Contract Officer. In addition, the Contractor reserves the right to terminate this Contract at any time, with or without cause, upon sixty (60) days’ written notice to City, except that where termination is due to the fault of the City, the period of notice may be such shorter time as the Contractor may determine. Upon receipt of any notice of termination, Contractor shall immediately cease all services hereunder except such as may be specifically approved by the Contract Officer. Except where the Contractor has initiated termination, the Contractor 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 Contractor has initiated termination, the Contractor 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. 7.9 Termination for Default of Contractor. If termination is due to the failure of the Contractor 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 Contractor 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 Contractor for the purpose of set-off or partial payment of the amounts owed the City as previously stated. 7.10 Attorneys’ 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. E.6.b Packet Pg. 99 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -22- 01247.0001/967162.1 7.11 Unfair Business Practices Claims. In entering into this Agreement, Contractor offers and agrees to assign to the City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. § 15) or under the Cartwright Act (Chapter 2, (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, services or materials related to this Agreement. This assignment shall be made and become effective at the time the City renders final payment to the Contractor without further acknowledgment of the Parties. 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 Contractor, 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 Contractor or to its successor, or for breach of any obligation of the terms of this Agreement. 8.1 Conflict of Interest. Contractor 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 Contractor’s performance of services under this Agreement. Contractor 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. Contractor 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. No officer or employee of the City shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which effects his financial interest or the financial interest of any corporation, partnership or association in which he is, directly or indirectly, interested, in violation of any State statute or regulation. The Contractor warrants that it has not paid or given and will not pay or give any third party any money or other consideration for obtaining this Agreement. 8.2 Covenant Against Discrimination. Contractor covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, 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. Contractor 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. E.6.b Packet Pg. 100 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -23- 01247.0001/967162.1 8.3 Unauthorized Aliens. Contractor hereby promises and agrees to comply with all of the provisions of the Federal Immigration and Nationality Act, 8 U.S.C. § 1101 et seq., as amended, and in connection therewith, shall not employ unauthorized aliens as defined therein. Should Contractor 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, Contractor hereby agrees to and shall reimburse City for the cost of all such liabilities or sanctions imposed, together with any and all costs, including attorneys' 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 Road, Grand Terrace, California 92313, and in the case of the Contractor, to the person 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. All correspondence relating to this Agreement shall be serialized consecutively. 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 Contractor 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. E.6.b Packet Pg. 101 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -24- 01247.0001/967162.1 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. Contractor 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. Contractor 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. Contractor 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. Contractor’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] E.6.b Packet Pg. 102 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) -25- 01247.0001/967162.1 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 CONTRACTOR: MIKE ROQUET CONSTRUCTION INC. By: ___________________________________ Name: Mike Roquet Title: President By: ___________________________________ Name: Title: Address: Two corporate officer signatures required when Contractor 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. CONTRACTOR’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 CONTRACTOR’S BUSINESS ENTITY. E.6.b Packet Pg. 103 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) 01247.0001/967162.1 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO On __________, 2024 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. E.6.b Packet Pg. 104 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) 01247.0001/967162.1 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO On __________, 2024 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. E.6.b Packet Pg. 105 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) 01247.0001/967162.1 EXHIBIT “A” SCOPE OF WORK I. Contractor shall perform all of the work and comply with all of the specifications and requirements in the “General Provisions” and “Special Provisions” included in the Bid Documents including any documents or exhibits referenced therein. The Bid Documents shall include, but not be limited to, those bid specifications and documents provided in Exhibit “A-1”. II. Brief description of the work to be performed: Contractor shall provide critical infrastructure improvements following severe storm damage on Vivienda Avenue, caused by flooding and erosion on February 2, 2024. Repairs will include asphalt surface repairs and erosion mitigation measures, to restore road safety and accessibility. III. In addition to the requirements of Section 6.2, during performance of the work, Contractor will keep City apprised of the status of performance by delivering status reports as may be required by City from time to time. IV. All work is subject to review and acceptance by City, and must be revised by Contractor without additional charge to City until found satisfactory and accepted by City. V. Contractor shall provide safe and continuous passage for pedestrian and vehicular traffic in accordance with the Work Area Traffic Control Handbook (“WATCH”), latest edition. E.6.b Packet Pg. 106 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) 01247.0001/967162.1 EXHIBIT “A-1” E.6.b Packet Pg. 107 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) 01247.0001/967162.1 EXHIBIT “B” SPECIAL REQUIREMENTS (Superseding Contract Boilerplate) E.6.b Packet Pg. 108 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) 01247.0001/967162.1 EXHIBIT “C” SCHEDULE OF COMPENSATION I. Consultant shall perform the Services in Exhibit A at the rates specified, ensuring that the total amount, excluding a 10% contingency, will not exceed Thirty Nine Thousand, Three Hundred and Fifty-Five Dollars and No Cents ($39,355) (the “Contract Sum”) II. 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. III. The total compensation for the Services shall not exceed the Contract Sum as provided in Section 2.1 of this Agreement. E.6.b Packet Pg. 109 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) 01247.0001/967162.1 EXHIBIT C-1 E.6.b Packet Pg. 110 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) 01247.0001/967162.1 EXHIBIT “D” SCHEDULE OF PERFORMANCE I. Consultant shall commence performance of all Services within 3 business days of this Agreement’s complete execution by the parties. Consultant shall further perform all Services timely in accordance with the schedules to be developed by Consultant and subject to the written approval of the Contract Officer. II.In addition to any other tangible work products required by this Agreement, Consultant shall deliver such tangible work products that the City may require from time to time. III.The Contract Officer may approve extensions for performance of the services in accordance with Section 3.2. IV.The City in its sole discretion may extend the term of this Agreement in writing by two (2) terms of one (1) year each. E.6.b Packet Pg. 111 At t a c h m e n t : M i k e R o q u e t A g r e e m e n t ( V i v i e n d a A v e S t o r m D a m a g e A s p h a l t R e p a i r s ) AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Auditor's Annual Financial Report and Related Documents for the Fiscal Year Ended June 30, 2023 PRESENTED BY: Christine Clayton, Finance Director RECOMMENDATION: Receive and File the Auditor's Annual Financial Report and related documents for the Fiscal Year ended June 30, 2023. 2030 VISION STATEMENT: This staff report supports City Council Goal #1, “Ensuring Our Fiscal Viability” through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations. BACKGROUND: Each year, the City has an independent audit conducted of its financial statements and related internal control procedures. The audit for the fiscal year ended June 30, 2023, has been completed and the Annual Financial Report issued by the City’s auditor, Lance, Soll & Lunghard, LLP. DISCUSSION: One of the key aspects of any annual financial audit is the Independent Auditor’s Report, which is provided on page 1 of the Annual Audit Report (Exhibit A). The Independent Auditor’s Report provides its opinion on whether or not the financial statements fairly present, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information as of the end of the fiscal year, and the respective changes in financial position and cash flows, where applicable, in conformance with Generally Accepted Accounting Principles (GAAP). The resulting “opinion letter” is either Unmodified or modified. The “opinion letter” received by the City for its financial statements for the period ended June 30, 2023, is unmodified, indicating that the financial statements fairly represent the City’s financial position in accordance with GAAP. In addition to the Annual Financial Report, the independent auditor issues other related documents, which are summarized below: • Audit Communication Letter (Exhibit B) E.7 Packet Pg. 112 The audit communications letter discusses the auditor’s responsibilities under Government Auditing Standards and any significant issues encountered during the audit that warrant disclosure. None of the misstatements detected as a result of the audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. The Auditor’s indicated there were no significant difficulties dealing with management in performing and completing their audit. There were no disagreements with management in regard to financial accounting, reporting or auditing that could be material to the financial statements taken as a whole. • Internal Control & Compliance Report (Exhibit C) The Internal Control & Compliance Report identifies any material internal control deficiencies that impact the financial statements. The results of the tests performed by the City auditors did not identify any deficiencies in internal control that are required to be reported under Government Auditing Standards. In addition, the results of the Auditor’s tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. FISCAL IMPACT: There is no fiscal impact associated with the receipt of the Annual Financial Report and related documents for the year ended June 30, 2023. ATTACHMENTS: • City of Grand Terrace ACFR Final 2-26-24 (PDF) • City of Grand Terrace Auditor Communication Letter Final 2-26-24(PDF) • City of Grand Terrace Report on IC Final 2-26-24 (PDF) APPROVALS: Christine Clayton Completed 02/27/2024 4:37 PM Finance Completed 02/27/2024 4:37 PM City Manager Completed 03/07/2024 9:06 AM City Council Pending 03/12/2024 6:00 PM E.7 Packet Pg. 113 CITY OF GRAND TERRACE, CALIFORNIA FOR THE YEAR ENDED JUNE 30, 2023 ANNUAL FINANCIAL REPORT E.7.a Packet Pg. 114 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 )  &,7<2)*5$1'7(55$&(&$/,)251,$  $QQXDO)LQDQFLDO5HSRUW  )RU7KH<HDU(QGHG-XQH  E.7.a Packet Pg. 115 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) THIS PAGE INTENTIONALLY LEFT BLANK E.7.a Packet Pg. 116 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Annual Financial Report For The Year Ended June 30, 2023 Table of Contents Page Number INDEPENDENT AUDITORS’ REPORT .............................................................................................................. 1 MANAGEMENT'S DISCUSSION AND ANALYSIS ............................................................................................. 5 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements: Statement of Net Position ..................................................................................................................... 15 Statement of Activities .......................................................................................................................... 16 Fund Financial Statements: Balance Sheet - Governmental Funds ................................................................................................. 18 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ........................................................................................................... 19 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds .......................................................................................................... 20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities .......................................................................................................................... 21 Statement of Net Position - Proprietary Funds ..................................................................................... 22 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds .......................................................................................................... 23 Statement of Cash Flows - Proprietary Funds ..................................................................................... 25 Statement of Fiduciary Net Position - Fiduciary Funds ........................................................................ 26 Statement of Changes in Fiduciary Net Position - Fiduciary Funds ..................................................... 27 Notes to Financial Statements .............................................................................................................. 29 REQUIRED SUPPLEMENTARY INFORMATION Pension Plan: Schedule of Proportionate Share of the Net Pension Liability — Miscellaneous Cost-Sharing Plan......................................................................................................... 56 Schedule of Plan Contributions — Miscellaneous Cost-Sharing Plan .................................................... 58 OPEB Plan: Schedule of Changes in Total OPEB Liability and Related Ratios .......................................................... 60 E.7.a Packet Pg. 117 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Annual Financial Report For The Year Ended June 30, 2023 Table of Contents Page Number Budgetary Comparison Information: General Fund ........................................................................................................................................ 62 Housing Authority ................................................................................................................................. 63 ARPA .................................................................................................................................................... 64 Notes to Required Supplementary Information ........................................................................................... 65 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Nonmajor Governmental Funds ..................................................................... 66 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds ................................................................... 74 Budgetary Comparison Information – Special Revenue Funds: Street Improvement .............................................................................................................................. 81 Storm Drain Improvement .................................................................................................................... 82 Park Development ................................................................................................................................ 83 AB 3229 COPS ..................................................................................................................................... 84 Air Quality Improvement ....................................................................................................................... 85 State Gas Tax ....................................................................................................................................... 86 Traffic Safety ......................................................................................................................................... 87 Facilities Development ......................................................................................................................... 88 Measure I .............................................................................................................................................. 89 CDBG ................................................................................................................................................... 90 Special Districts Landscape and Lighting ............................................................................................. 91 Spring Mountain Ranch ........................................................................................................................ 92 Senior Bus Program ............................................................................................................................. 93 Public, Educational & Government Access .......................................................................................... 94 Highway Safety Improvement Program ................................................................................................ 95 RMRA ................................................................................................................................................... 96 Budgetary Comparison Information – Capital Project Funds: Capital Improvement - Streets .............................................................................................................. 97 Capital Projects - Parks ........................................................................................................................ 98 Capital Projects – Commerce Way Project .......................................................................................... 99 E.7.a Packet Pg. 118 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Grand Terrace, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter Change in Accounting Principle As described in Note 1 to the financial statements, in 2023, the City adopted new accounting guidance, GASB Statement No. 96, Subscription Based Information Technology Arrangements. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. E.7.a Packet Pg. 119 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison schedules for the General Fund and major special revenue funds, and the required pension and other postemployment benefits schedules, as listed on the table of contents, presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and 2 E.7.a Packet Pg. 120 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining and individual fund financial statements and schedules (supplementary information) are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 15, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance. Brea, California February 15, 2024 3 E.7.a Packet Pg. 121 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) THIS PAGE INTENTIONALLY LEFT BLANK 4 E.7.a Packet Pg. 122 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Management's Discussion and Analysis The following discussion and analysis of the financial performance of the City of Grand Terrace provides an overview of the City's financial activities for the fiscal year ended June 30, 2023. The information presented herein should be considered in conjunction with the City’s financial statements identified in the accompanying table of contents. Financial Highlights  The assets and deferred outflows of resources of the City of Grand Terrace exceeded its liabilities and deferred inflows of resources on June 30, 2023 by $23.2 million (net position).  The City’s net position increased by $2.4 million from the previous fiscal year from $20.8 million to $23.2 million.  As of June 30, 2023, the City of Grand Terrace’s governmental funds had reported combined ending fund balances of $14 million, an increase of $2.3 million from the previous fiscal year. Of this total, approximately $9.4 million, or 67.1% of the total fund balance, are either non-spendable or restricted due to the nature of the restriction.  The total long-term liabilities of the City showed a net increase of about $2.7 million from the prior fiscal year due to the increase in both the City’s OPEB liability and net pension liability. During FY 2022-23, the OPEB obligation of the City increased by about $0.085 million from $1,085,037 to $1,169,969. The City’s Net Pension Liability increased by about $2.5 million from the prior year from $3,416,796 to $5,888,367 in FY 2022-23.  The General Fund had a year-end fund balance of $7.2 million on June 30, 2023. This was a increase of $2.0 million. Using the Accompanying Financial Statements Included in the accompanying report are fund financial statements. For governmental activities, the fund financial statements explain how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City's operations in more detail than the government-wide statements by providing information about the City's most significant funds. Overview of the Financial Statements The annual report consists of four parts - management's discussion and analysis (this section), the basic financial statements, required supplementary information and an optional section that presents combining statements for nonmajor governmental funds. The basic financial statements include two kinds of statements that present different views of the City:  The first two statements are government-wide financial statements that provide both long-term and short-term information about the City's overall financial status.  The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City's operations in more detail than the government-wide statements.  The governmental funds statements explain how general government services like public safety were financed in the short term as well as what remains for future spending.  Proprietary funds statements offer short and long-term financial information about the activities the government operates like a business. 5 E.7.a Packet Pg. 123 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 )  Fiduciary fund statements provide information about the fiduciary relationships - like the agency funds of the City - in which the City acts solely as agent or trustee for the benefit of others, to whom the resources in question belong. The financial statements also include notes that provide additional explanatory information regarding the financial statements, as well as more detailed data. The statements are followed by a section of required supplementary spreadsheets that provide additional financial and budgetary information. Reporting the City as a Whole The accompanying government-wide financial statements include two statements that present financial data for the City as a whole. The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities. The statement of net position includes all of the City’s assets and liabilities, as well as any deferred outflows and inflows. The statement of activities includes all current year revenues and expenses regardless of when cash is received. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. These two statements report the City's net position and changes in net position that transpired during the fiscal year. The City's net position - the difference between assets and liabilities is one way to measure the City's financial health, or financial position. Over time, increases and decreases in the City's net position are one indicator of whether its financial health is improving or deteriorating. Other nonfinancial factors, however, should also be considered such as changes in the City's property tax or sales tax base and the condition of the City's roads, to assess the overall health of the City. The Statement of Net Position and the Statement of Activities are divided into two types of activities:  Governmental activities - Most of the City's basic services such as public safety, public works, community development, and general government are reported here. Sales taxes, property taxes, state subventions, and other revenues finance most of these activities.  Business-type activity - The Waste Water Disposal Fund accounts for the remaining assets and liabilities of the fund that used to account for the provision of waste water disposal services to the residents and businesses within the City of Grand Terrace. The City of Colton/ Colton Utility Authority now provide wastewater disposal services for the City’s residents and businesses. Reporting the City's Most Significant Funds The fund financial statements provide detailed information about the City's most significant funds - not the City as a whole. Some funds are required to be established by State law or by bond covenants. However, the City establishes many other funds to help it control and manage financial resources for particular purposes or to demonstrate that it is meeting oversight responsibilities for using certain taxes, grants, or other money. The City's two types of funds - governmental and proprietary - use different accounting approaches.  Governmental funds - Most of the City's basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances remaining at year end that are available for spending. These funds are reported using the modified accrual accounting method, which measures cash and all other current financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps to determine whether there are greater or fewer financial resources that can be spent in the near future to finance the City's programs. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.  Proprietary funds - When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City's enterprise fund is the same as 6 E.7.a Packet Pg. 124 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) the business-type activities reported in the government-wide statements, but provides more detail and additional information, such as cash flows, for the proprietary fund. The City does not use internal service funds (the other component of proprietary funds) to report activities that provide supplies and services for the City's other programs and activities. Reporting the City's Fiduciary Responsibilities The City is an agent for certain assets held for, and under the control of, other organizations and individuals. These activities are excluded from the City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. Government-wide Financial Statements As noted earlier, net position may serve over time as a useful indicator of a government's financial position. On June 30, 2023 net position for the City of Grand Terrace was $23,207,165; compared to net position of $20,784,578 at June 30, 2022. A summary of the government-wide Statement of Net Position on June 30, 2023 and June 30, 2022 are as follows: Table 1 Net Position 2023 2022 2023 2022 2023 2022 Current and other assets 16,349,186$ 14,404,877$ 1,634,002$ 1,601,952$ 17,983,188$ 16,006,829$ Capital assets, net 8,794,930 9,430,923 4,265,418 4,353,988 13,060,348 13,784,911 Total assets 25,144,116 23,835,800 5,899,420 5,955,940 31,043,536 29,791,740 Deferred Outflows Pension & OPEB 2,693,884 1,277,145 - - 2,693,884 1,277,145 Other liabilities 1,343,178 992,855 6,875 6,875 1,350,053 999,730 Long-term liabilities 7,310,224 4,634,186 - - 7,310,224 4,634,186 Total liabilities 8,653,402 5,627,041 6,875 6,875 8,660,277 5,633,916 Deferred inflows Pension & OPEB 1,869,978 4,650,391 - - 1,869,978 4,650,391 Invested in capital assets, net of debt 8,675,572 9,430,923 4,265,418 4,353,988 12,940,990 13,784,911 Restricted 8,014,295 7,802,125 - - 8,014,295 7,802,125 Unrestricted 624,753 (2,397,535) 1,627,127 1,595,077 2,251,880 (802,458) Total net assets 17,314,620$ 14,835,513$ 5,892,545$ 5,949,065$ 23,207,165$ 20,784,578$ Governmental Activities Business-type Activities Total $12,940,990 (55.7%) of the net position reflects the City's net investment in capital assets. Since these assets are used to provide services to the citizens, they are not available for future spending. An additional $8,014,295 (34.5%) represents resources that are subject to external restrictions on how they may be used. The unrestricted net position resulted in a positive amount of $2,251,880 (9.7%). The City’s net position increased by $2,422,587 from $20,784,578 in FY 2021-22 to $23,207,165 during FY 2022-23. 7 E.7.a Packet Pg. 125 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) A summary of the government-wide Statement of Activities for the year ended June 30, 2023 and 2022 are as follows: Table 2 Changes in Net Position 2023 2022 2023 2022 2023 2022 Revenues and transfers Program revenues: Charges for services 1,087,928$ 1,083,343$ -$ -$ 1,087,928$ 1,083,343$ Operating contributions and grants 2,141,595 2,013,294 - - 2,141,595 2,013,294 Capital contributions and grants 730,607 575,003 - - 730,607 575,003 General revenues: Property tax 4,488,805 4,636,258 - - 4,488,805 4,636,258 Sales tax 1,441,471 1,185,907 - - 1,441,471 1,185,907 Motor vehicle in lieu 13,471 14,324 - - 13,471 14,324 Other taxes 735,273 689,378 - - 735,273 689,378 Use of money & property 612,200 336,993 32,050 (9,675) 644,250 327,318 Other revenues 1,242,785 914,079 - - 1,242,785 914,079 Total revenues and transfers 12,494,135 11,448,579 32,050 (9,675) 12,526,185 11,438,904 Expenses General government 1,514,961 3,793,461 - - 1,514,961 3,793,461 Public safety 2,809,402 2,750,710 - - 2,809,402 2,750,710 Public works 4,878,395 2,310,331 - - 4,878,395 2,310,331 Economic development 5,876 73,425 - - 5,876 73,425 Cultural and recreation 806,394 2,028,296 - - 806,394 2,028,296 Waste water disposal - - 88,570 88,570 88,570 88,570 Total Expenses 10,015,028 10,956,223 88,570 88,570 10,103,598 11,044,793 Change in net position 2,479,107 492,356 (56,520) (98,245) 2,422,587 394,111 Beginning net position 14,835,513 14,353,444 5,949,065 6,047,310 20,784,578 20,400,754 Restatement of Net Position - (10,287) - - - (10,287) Ending net position 17,314,620$ 14,835,513$ 5,892,545$ 5,949,065$ 23,207,165$ 20,784,578$ Governmental Activities Business-type Activities Total The increase or decrease in net position can provide an indication as to whether the overall financial position of the City improved or worsened during the year. The total net position of the City on June 30, 2023 increased by $2,422,587 or 10.4% compared to the net position of the City at the end of FY 2021-2022. Taken separately, the net position of governmental activities increased by $2,479,107, while the net position of business-type activities decreased by $56,520. Total expenses of $10,103,598 were offset by total revenues of $12,526,185. In the Statement of Activities, expenditures do not include the cost of assets capitalized during the year or payments made on principal of outstanding debt. Depreciation is shown for governmental funds on this table, but the expense is not recorded in each individual fund. After the deduction of capitalized assets, the next largest component in changes to net position is the actual increase or decrease in fund balances resulting from operations. For governmental funds there was a net increase of $2,264,278. Of this amount, a net increase of $170,444 is attributable to the nonmajor funds, a net increase of $22,988 to the Housing Authority, a net increase of $106,990 to the American Recovery Plan Act Fund with the difference being a net increase to the General Fund of $1,963,856. Governmental Activities The following table shows the cost of each of the City’s major programs and their net cost after subtracting fees and other direct revenue generated by the activities. The net cost reflects the financial burden that was placed on the City taxpayers by each of the programs. 8 E.7.a Packet Pg. 126 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Net Cost of Governmental Activities Total Cost of Services Net Cost of Services Total Cost of Services Net Cost of Services General government 1,514,961$ (488,129)$ 3,793,461$ 3,582,866$ Public safety 2,809,402 2,557,601 2,750,710 2,486,045 Public works 4,878,395 3,257,943 2,310,331 (784,736) Economic development 5,876 5,876 73,425 73,104 Cultural and recreation 806,394 721,607 2,028,296 1,917,340 Total 10,015,028$ 6,054,898$ 10,956,223$ 7,274,619$ 2023 2022 This table shows the cost of all governmental activities this year was $10,015,028. General tax dollars paid for approximately 60.4 percent of this cost. Fees, grants and contributions and fund balances at the beginning of the fiscal year funded the balance of the cost of governmental activities. Revenues by Source - Governmental Activities $12,494,135 9 E.7.a Packet Pg. 127 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Expenses by Function - Governmental Activities - $10,015,028 Business-Type Activity In March 2014, the cities of Grand Terrace and Colton entered into sewer services and lease agreements for fifty (50) years. These agreements extricated Grand Terrace from the wastewater collection business. In accordance with the Sewer Services Agreement with the City of Colton/ Colton Utility Authority, the provision of sewer services for the City’s residents and businesses are no longer being directly provided by the City of Grand Terrace. Hence, the City of Grand Terrace no longer receives sewer services revenues from the City’s residents and businesses. Likewise, sewer- services related expenditures are also no longer being incurred and recorded in the City’s Waste Water Disposal Fund. The following were the only financial- related activities recorded in the City’s Waste Water Disposal Fund during FY 2022-23:  Annual depreciation amounting to $88,570 of all wastewater sewer capital assets which are still owned by the City; and Expenses and Program Revenues – Business-type Activities 10 E.7.a Packet Pg. 128 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Major Funds As noted earlier, the City uses fund accounting to provide proper financial management of the City's resources and to demonstrate compliance with finance-related legal requirements. Major Governmental Funds: The General Fund is the main operating fund of the City. At the end of FY 2022-23, the fund balance of the General Fund increased by $1,963,856 from a fund balance of $5,255,401 on June 30, 2022 to $7,219,257 at June 30, 2023. Total fund balance in all Governmental Funds was $13,962,184. The General Fund Revenues and Expenditures are shown below: Increase (Decrease) in 2022-2023 2021-2022 Fund Balance Revenues 9,314,126$ 8,326,241$ 987,885$ Expenditures (7,353,143) (6,623,771) (729,372) Other Sources (Uses)2,873 (147,766) 150,639 Net Change in Fund Balance 1,963,856 1,554,704 409,152 Beginning Fund Balance 5,255,401 3,710,984 1,544,417 Restatements - (10,287) 10,287 Ending Fund Balance 7,219,257$ 5,255,401$ 1,963,856$ The significant highlights in activities - revenues and expenditures of the City's General Fund from the prior year are as follows:  General Fund expenditures and transfers out were exceeded by revenues by $1,963,856. Total General Fund revenues increased by $987,885 or 11.8 percent from FY 2021-22.  Property taxes decreased by 3.2 percent from $4,636,258 to $4,486,157, a difference of about $150,101.  Gross Sales tax increased by $255,565 from $1,185,907 to $1,441,471 compared to the previous fiscal year.  Charges for service, including licenses and permits in FY 2022-23 increased by 30.7 percent from $1,201,527 to $1,570,988. The revenues belonging to this category which include Franchise Fees, Business License Tax, Dog License, Engineering Fees, Public Works Permits, Construction Permits, Building Safety Plan Review, Environmental Assessment Reports & Sports League Fees Surcharge were consistent with the previous year.  Fines and forfeitures received during FY 2022-23 decreased by $27,813 or 30 percent from $73,254 during FY 2021-22 to $45,441, during FY 2022-23. The increase in this category resulted from increases and decreases from the collections of the various categories.  The overall operating expenditures of the General Fund increased by about 11 percent over the prior year from $6,623,771 to $7,353,143. The increase of $729,372 between FY 2021-22 and FY 2022-23 was due to a combination of increased expenditures in some functional categories of government and decreased expenditures in other functional categories of government.  There was decreased spending in the following functions during FY 2022-23 compared to FY 2021-22 General Government category by $27,916, and the Cultural & Recreation category by $94,842. However, there was increased spending during FY 2022-23 in the following functions of government over the prior fiscal year– Capital Outlay increased by $326,219, Public Works by $400,602, Debt Service by $60,767 and Public Safety increased by $64,542. 11 E.7.a Packet Pg. 129 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 )  Of the total $7,353,143 in General Fund operating expenditures, total general government expenditures represented 27.7 percent, public works expenditures represented 20.6 percent, public safety expenditures represented 35.4 percent, cultural & recreation represented 10.3 percent, capital outlay represented 5.3 percent and debt service represented 0.8 percent. Other major governmental funds include the Housing Authority Fund and the American Recovery Plan Act Fund. The fund balance of the Housing Authority Fund increased by $22,988 during FY 2022-23. This fund accounts for the housing assets because of the dissolution of the community redevelopment agency of the City. The fund balance of the American Recovery Plan Act Fund increased by $106,990 due revenues exceeding expenditures including interest earned of $50,185 during FY2022-23. Nonmajor Funds The Nonmajor funds, as listed in the table of contents of this report, include Gas Tax, Measure I, the Capital Improvement Funds, and most of the special revenue funds. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the City. In these cases, the City has a fiduciary responsibility and is acting as trustee. The Statement of Fiduciary Net Position included in the Basic Financial Statements, separately reports all the City’s fiduciary activities. The City’s fiduciary activities are reported in separate statements of fiduciary net position and statement of changes in fiduciary net position (Private Purpose Trust Fund- Successor Agency of the Former RDA only). Fiduciary funds are not reflected in the government- wide financial statements because the resources of those funds are not available to support the City’s own programs. However, the City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. Capital Assets As of June 30, 2023, the City had invested $13,060,348 in a broad range of capital assets, including buildings, parks and park improvements, computer and maintenance equipment, vehicles, sewer collection systems, streets, sidewalks and storm drains. The City is exempt by provisions of Governmental Accounting Standards Board (GASB) Statement No. 34 from including the valuation of old City infrastructure prior to the implementation of GASB Statement No. 34. Capital Assets (Net of depreciation/amortization) 2023 2022 2023 2022 2023 2022 Land 2,194,955$ 2,332,847$ -$ -$ 2,194,955$ 2,332,847$ Buildings 1,569,078 1,872,355 - - 1,569,078 1,872,355 Improvements 1,899,310 2,036,331 54,786 63,214 1,954,096 2,099,545 Equipment 361,283 387,775 - - 361,283 387,775 Vehicles 104,087 19,407 - - 104,087 19,407 Infrastructure 1,507,476 1,777,308 - - 1,507,476 1,777,308 Subscription assets 150,471 - - - 150,471 - Sewer mains - - 2,283,369 2,328,070 2,283,369 2,328,070 Sewer laterals - - 1,160,761 1,181,771 1,160,761 1,181,771 Sewer manholes - - 766,502 780,933 766,502 780,933 Construction in progress 1,008,270 1,004,900 - - 1,008,270 1,004,900 8,794,930$ 9,430,923$ 4,265,418$ 4,353,988$ 13,060,348$ 13,784,911$ Governmental Activities Business-type activities Total 12 E.7.a Packet Pg. 130 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Long-Term Debt At the end FY 2022-23, the City had debt outstanding of $7,310,224. The City’s net pension liability increased by $2,471,571 from $3,416,796 in the prior fiscal year to $5,888,367 at the end of June 30, 2023. The City’s other post- employment benefits (OPEB) obligations increased by $84,932 from $1,085,037 at the end of FY 2021-22 to $1,169,969 at the end of FY 2022-23. The City’s liability for long-term compensated absences increased by $177 compared to the prior fiscal year from $132,353 to $132,530 at the end of June 30, 2023. Additional information on the City’s long-term debt can be found in the notes to the accompanying financial statements. Outstanding Debt Governmental Activities 2023 2022 Increase (Decrease) Total OPEB obligation 1,169,969$ 1,085,037$ 84,932$ Net pension liability 5,888,367 3,416,796 2,471,571 Suscription payable 119,358 - 119,358 Compensated absences 132,530 99,265 33,265 Total Outstanding Debt 7,310,224$ 4,601,098$ 2,709,126$ Economic Factors and Outlook for Future Years The City of Grand Terrace fiscal position in 2022-23 is sustainable and the city maintains funds in a reserve account that is the equivalent of two months of expenses), allowing the city to post its sixth consecutive year of economic growth based on; fiscal responsibility; development of needed infrastructure; adequate public safety and a diligent strategy for economic independence. The $105,000,000 interchange project, which started construction in 2017 and was completed in 2020. The project leads to the heart of the city, creating a magnificent entrance to the City and its current and future commercial corridor. The completed interchange was designed to increase circulation by 30%, allowing over 40,000 cars per day to easily access Barton Rd. The increased circulation capacity enhances the City’s appeal to retailers as a vibrant commercial corridor between the two main metropolises of Riverside and San Bernardino. The completion of the Barton Rd Interchange is integral to the City of Grand Terrace’s Economic strategy. The economic prosperity of the City is linked directly to infrastructure. The interchange project leads to the heart of our economy with over 50% of all sales taxes generated in the City, coming from business on or adjacent to Barton Rd adjacent to the interchange. It is estimated that build out of businesses on Barton Rd within the next five years will lead to doubling of sales tax that is currently generated. Yet, during this same period, the completion of the interchange project will solidify the submittal of the 132-acre Gateway Specific Plan project, which is a mixed-use master plan project adjacent to the freeway with the ability to deliver a minimum of over $800,000 in property taxes to the City. While the City’s core revenue sources are steady, the City will receive an additional boost in property tax because of private transactions, leading to increase tax rolls. In addition, the Successor Agency of the Community Redevelopment Agency was dissolved in March of 2022 which will lead to an increase in property tax revenues as well. The City continues to see additional revenues materialize for Restricted/Special Purpose Funds allocated to it, after approval of the City’s Last and Final ROPS. The City will use these funds to continue to advance its long- term economic strategy with funds earmarked infrastructure, economic development, and elimination of 13 E.7.a Packet Pg. 131 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) blight. A significant amount of the funds will be used for infrastructure and economic development. SB-1 (Road Repair & Rehab Program) will allow the City to accelerate the repair of the City’s aging road infrastructure. The City has a successful track record of leveraging small amounts of general fund proceeds to go after grant programs to help build infrastructure. With the completion of the Interchange project, and the $300,000 Mount Vernon Avenue safety improvement program will enhance intersections for 5 major intersections in the City, four of which lead to most of our residential developments. We believe the improvements to these intersections will contribute to the growth and increase of property values. Finally, to balance out the City’s goal of economic growth for our entire community, staff is anticipating a major role for the City’s Housing Successor Agency in the coming years, as the City moves to promote economic development and housing for all. The Housing Successor Agency has over $1,400,000 in cash, in addition to assets, which will allow it to carry out the agency’s policies. Requests for Information This financial report is designed to provide a general overview of the City’s finances for all those with interest in the government’s finances. Questions concerning any of the information provided in this report, or requests for additional information, should be addressed to the City Clerk, City of Grand Terrace, 22795 Barton Road, Grand Terrace, California 92313, or call (909) 954-5200. 14 E.7.a Packet Pg. 132 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Statement of Net Position Governmental Business-Type Activities Activities Total Assets: Cash and investments 13,345,175$ 1,634,002$ 14,979,177$ Receivables: Accounts 130,458 - 130,458 Notes and loans 1,612,653 - 1,612,653 Accrued interest 24,163 - 24,163 Prepaid costs 302,564 - 302,564 Due from other governments 791,852 - 791,852 Land held for resale 142,321 - 142,321 Capital assets not being depreciated 3,203,225 - 3,203,225 Capital assets, net of depreciation/amortization 5,591,705 4,265,418 9,857,123 Total Assets 25,144,116 5,899,420 31,043,536 Deferred Outflows of Resources: Deferred pension related items 2,484,222 - 2,484,222 Deferred OPEB related items 209,662 - 209,662 Total Deferred Outflows of Resources 2,693,884 - 2,693,884 Liabilities: Accounts payable 467,407 - 467,407 Accrued liabilities 31,561 - 31,561 Deposits payable 844,210 6,875 851,085 Noncurrent liabilities: Due within one year Compensated absences 33,133 - 33,133 Subscription payable 77,577 - 77,577 Due in more than one year Compensated absences 99,397 - 99,397 Subscription payable 41,781 - 41,781 Total OPEB liability 1,169,969 - 1,169,969 Net pension liability 5,888,367 - 5,888,367 Total Liabilities 8,653,402 6,875 8,660,277 Deferred Inflows of Resources: Deferred pension related items 1,078,817 - 1,078,817 Deferred OPEB related items 791,161 - 791,161 Total Deferred Inflows of Resources 1,869,978 - 1,869,978 Net Position: Net Investment in capital assets 8,675,572 4,265,418 12,940,990 Restricted for: Community development projects 3,441,551 - 3,441,551 Public safety 140,840 - 140,840 Public works 3,374,167 - 3,374,167 Infrastructure projects 1,057,737 - 1,057,737 Unrestricted (Deficit)624,753 1,627,127 2,251,880 Total Net Position 17,314,620$ 5,892,545$ 23,207,165$ June 30, 2023 Primary Government See Notes to Financial Statements.15 E.7.a Packet Pg. 133 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Statement of Activities For theYear Ended June 30, 2023 Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government 1,514,961$ 433,975$ 1,569,115$ -$ Public safety 2,809,402 84,609 167,192 - Economic development 5,876 - - - Cultural and recreation 806,394 84,787 - - Public works 4,878,395 484,557 405,288 730,607 Total Governmental Activities 10,015,028 1,087,928 2,141,595 730,607 Business-Type Activities: Waste Water Disposal 88,570 - - - Total Business-Type Activities 88,570 - - - Total Primary Government 10,103,598$ 1,087,928$ 2,141,595$ 730,607$ General Revenues: Taxes: Property taxes, levied for general purpose Sales taxes Franchise taxes Business licenses taxes Motor vehicle in lieu - unrestricted Use of money and property Other Total General Revenues Change in Net Position Net Position at Beginning of Year Net Position at End of Year Program Revenues See Notes to Financial Statements.16 E.7.a Packet Pg. 134 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Primary Government Governmental Business-Type Activities Activities Total 488,129$ -$ 488,129$ (2,557,601) - (2,557,601) (5,876) - (5,876) (721,607) - (721,607) (3,257,943) - (3,257,943) (6,054,898) - (6,054,898) - (88,570) (88,570) - (88,570) (88,570) (6,054,898) (88,570) (6,143,468) 4,488,805 - 4,488,805 1,441,471 - 1,441,471 633,302 - 633,302 101,971 - 101,971 13,471 - 13,471 612,200 32,050 644,250 1,242,785 - 1,242,785 8,534,005 32,050 8,566,055 2,479,107 (56,520) 2,422,587 14,835,513 5,949,065 20,784,578 17,314,620$ 5,892,545$ 23,207,165$ Net (Expenses) Revenues and Changes in Net Position See Notes to Financial Statements.17 E.7.a Packet Pg. 135 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Balance Sheet Governmental Funds June 30, 2023 Other Total Governmental Governmental General Funds Funds Assets: Cash and investments 6,279,925$ 1,370,522$ 920,955$ 4,773,773$ 13,345,175$ Receivables: Accrued revenue 129,961 - - 497 130,458 Notes and loans receivable 1,037,523 575,130 - - 1,612,653 Interest receivable 24,163 - - - 24,163 Prepaid costs 245,759 - 56,805 - 302,564 Due from other funds 232,150 - - 36,000 268,150 Due from other governments 399,790 - - 392,062 791,852 Advances to other funds - 168,205 - - 168,205 Land held for resale 142,321 - - - 142,321 Total Assets 8,491,592$ 2,113,857$ 977,760$ 5,202,332$ 16,785,541$ Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficit): Liabilities: Accounts payable 253,336$ -$ 122,054$ 92,017$ 467,407$ Accrued liabilities 31,561 - - - 31,561 Due to other funds - - - 268,150 268,150 Advances from other funds 168,205 - - - 168,205 Deposits payable 819,233 - - 24,977 844,210 Total Liabilities 1,272,335 - 122,054 385,144 1,779,533 Deferred Inflows of Resources: Unavailable revenues - 61,130 747,544 235,150 1,043,824 Total Deferred Inflows of Resources - 61,130 747,544 235,150 1,043,824 Fund Balances: Nonspendable: Prepaid costs 245,759 - - - 245,759 Notes and loans 1,037,523 - - - 1,037,523 Land held for resale 142,321 - - - 142,321 Restricted for: Community development projects - 2,052,727 - 1,388,824 3,441,551 Public safety - - 108,162 32,678 140,840 Public works - - - 3,374,167 3,374,167 Infrastructure projects 1,057,737 - - - 1,057,737 Committed to: Committed to contingencies 1,505,025 - - - 1,505,025 Committed to equipment replacement 851,603 - - - 851,603 Committed to community services 5,800 - - - 5,800 Assigned to: Debt service 94,000 - - - 94,000 Continuing appropriations 50,000 - - - 50,000 Unassigned 2,229,489 - - (213,631) 2,015,858 Total Fund Balances 7,219,257 2,052,727 108,162 4,582,038 13,962,184 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 8,491,592$ 2,113,857$ 977,760$ 5,202,332$ 16,785,541$ ARPA Housing Authority Special Revenue Funds See Notes to Financial Statements.18 E.7.a Packet Pg. 136 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position June 30, 2023 Fund balances of governmental funds 13,962,184$ Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity. Capital assets 21,793,727$ Accumulated depreciation/amortization (12,998,797) 8,794,930 Deferred outflows of resources reported for government-wide statements are as follows: Pension related items: Pension contributions made subsequent to the measurement date 683,993 Difference between expected and actual experience 118,250 Change in assumptions 603,386 Differences between projected and actual investment earnings 1,078,593 2,484,222 OPEB related items: Change in assumptions 151,165 Difference between expected and actual liability 58,497 209,662 Compensated absences that have not been included in the governmental activities (132,530) Governmental funds report all OPEB contributions as expenditures, however in the statement of net position, the excess of the total OPEB liability over the plan fiduciary net position is reported as a net OPEB liability. (1,169,969) Governmental funds report all pension contributions as expenditures, however, in the statement of net position, the excess of the plan proportionate share of the total pension liability over the proportionate share of the plan fiduciary net position is reported as a net pension liability.(5,888,367) Long-term liabilities that have not been included in the governmental activity Subscription payable (41,781) Deferred inflows of resources reported for government-wide statements are as follows: Pension related items: Difference between expected and actual experience (79,199) Differences between employers contributions and proportionate share of contributions (369,200) Adjustment due to difference in proportions (630,418) (1,078,817) OPEB related items: Difference between expected and actual liability (352,059) Change in assumptions (439,102) (791,161) Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity.1,043,824 Net Position of Governmental Activities 17,392,197$ See Notes to Financial Statements.19 E.7.a Packet Pg. 137 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Statements of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year Ended June 30, 2023 Other Total Governmental Governmental General Funds Funds Revenues: Taxes 5,870,302$ -$ -$ 59,974$ 5,930,276$ Intergovernmental 47,305 - 2,262,816 1,359,367 3,669,488 Charges for services 1,570,988 - - 61,611 1,632,599 Use of money and property 441,743 28,864 50,185 91,408 612,200 Fines and forfeitures 45,441 - - 15,164 60,605 Miscellaneous 1,338,347 - - 16,474 1,354,821 Total Revenues 9,314,126 28,864 2,313,001 1,603,998 13,259,989 Expenditures: Current: General government 2,035,308 - - - 2,035,308 Public safety 2,602,563 - - 165,856 2,768,419 Public works 1,512,782 - 1,814,169 1,059,902 4,386,853 Economic development - 5,876 - - 5,876 Cultural and recreation 753,762 - 211,450 205,454 1,170,666 Capital outlay: Project improvement costs 387,961 - 180,392 201,260 769,613 Debt service: Principal retirement 60,767 - - - 60,767 Total Expenditures 7,353,143 5,876 2,206,011 1,632,472 11,197,502 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,960,983 22,988 106,990 (28,474) 2,062,487 Other Financing Sources (Uses): Transfers in 50,000 - - 859,918 909,918 Transfers out (248,918) - - (661,000) (909,918) Subscriptions issued 201,791 - - - 201,791 Total Other Financing Sources (Uses) 2,873 - - 198,918 201,791 Net Change in Fund Balances 1,963,856 22,988 106,990 170,444 2,264,278 Fund Balances, Beginning of Year 5,255,401 2,029,739 1,172 4,411,594 11,697,906 Fund Balances, End of Year 7,219,257$ 2,052,727$ 108,162$ 4,582,038$ 13,962,184$ ARPA Housing Authority Special Revenue Funds See Notes to Financial Statements.20 E.7.a Packet Pg. 138 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For theYear Ended June 30, 2023 Net change in fund balances - total governmental funds 2,264,278$ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation/amortization expense or are allocated to the appropriate functional expense when the cost is below the capitalization threshold. The activity is reconciled as follows: Cost of assets capitalized 811,943$ Depreciation/amortization expense (871,480) Disposal of capital assets (576,456) (635,993) Governmental funds report capital outlays as expenditures. However, in the statement Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Subscription issued (180,125) Subscription repayments 60,767 (119,358) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Change in compensated absences payable (177) Governmental funds report all contributions in relation to the actuarially determined contribution for OPEB as expenditures, however in the statement of activities only the annual OPEB cost is an expense.(38,252) Pension expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.1,678,901 Revenues reported as unavailable revenue in the governmental funds and recognized in in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity.(670,292) Change in Net Position of Governmental Activities 2,479,107$ See Notes to Financial Statements.21 E.7.a Packet Pg. 139 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Statement of Net Position Proprietary Funds June 30, 2023 Assets: Current: Cash and investments 1,634,002$ Total Current Assets 1,634,002 Noncurrent: Capital assets - net of accumulated depreciation 4,265,418 Total Noncurrent Assets 4,265,418 Total Assets 5,899,420 Liabilities: Deposits payable 6,875 Total Liabilities 6,875 Net Position: Invested in capital assets 4,265,418 Unrestricted 1,627,127 Total Net Position 5,892,545$ Business-Type Activities Waste Water Disposal See Notes to Financial Statements.22 E.7.a Packet Pg. 140 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds For the Year Ended June 30, 2023 Operating Expenses: Depreciation expense 88,570$ Total Operating Expenses 88,570 Operating Income (Loss)(88,570) Nonoperating Revenues (Expenses): Interest revenue 32,050 Total Nonoperating Revenues (Expenses)32,050 Changes in Net Position (56,520) Net Position: Beginning of Fiscal Year 5,949,065 End of Fiscal Year 5,892,545$ Business-Type Activities Waste Water Disposal See Notes to Financial Statements.23 E.7.a Packet Pg. 141 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) THIS PAGE INTENTIONALLY LEFT BLANK 24 E.7.a Packet Pg. 142 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2023 Cash Flows from Investing Activities: Investment earnings 32,050$ Net Cash Provided (Used) by Investing Activities 32,050 Net Increase (Decrease) in Cash and Cash Equivalents 32,050 Cash and Cash Equivalents at Beginning of Year 1,601,952 Cash and Cash Equivalents at End of Year 1,634,002$ Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss)(88,570)$ Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation 88,570 Total Adjustments 88,570 Net Cash Provided (Used) by Operating Activities -$ Business-Type Activities Waste Water Disposal See Notes to Financial Statements.25 E.7.a Packet Pg. 143 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Statement of Fiduciary Net Position Fiduciary Funds June 30, 2023 Total Assets -$ Total Liabilities - Total Net Position -$ Private- Purpose Trust Fund Successor Agency Private Purpose Trust Fund See Notes to Financial Statements.26 E.7.a Packet Pg. 144 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Statement of Changes in Fiduciary Net Position Fiduciary Funds For the Year ended June 30, 2023 Additions: Investment earnings 1,351$ Contributions from City 4,000 Total Additions 5,351 Deductions: Administrative expenses 1,352 Total Deductions 1,352 Changes in Net Position 3,999 Net Position - Beginning of the Year (3,999) Net Position - End of the Year -$ Private- Purpose Trust Fund Successor Agency Private Purpose Trust Fund See Notes to Financial Statements.27 E.7.a Packet Pg. 145 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) THIS PAGE INTENTIONALLY LEFT BLANK 28 E.7.a Packet Pg. 146 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of Entity The City of Grand Terrace (City) was incorporated in November 1978 under the General Laws of the State of California. The City operates under a Council-Manager form of government and provides the following services: public safety (law enforcement), highways and streets, cultural and recreational activities, public improvements, planning and zoning, building and safety, low and moderate income housing programs, and general administrative services. As required by generally accepted accounting principles, the financial statements of the City of Grand Terrace include the financial activities of the City (the primary government), and the City of Grand Terrace Public Financing Authority (the Authority). This blended component unit is discussed below and is included in the reporting entity because of the significance of its operation and financial relationship with the City. The Authority is legally separate from the City. However, the City of Grand Terrace’s elected officials have a continuing full or partial accountability for fiscal matters of the Authority. The financial reporting entity consists of: 1) the City, 2) organizations for which the City is financially accountable, and 3) organizations for which the nature and significance of their relationship with the City are such that exclusions would cause the City’s financial statements to be misleading or incomplete. An organization is fiscally dependent on the primary government if it is unable to adopt a budget, levy taxes or set rates or charges, or issue bonded debt without approval by the primary government. In a blended presentation, component unit balances and transactions are reported in a manner similar to the balances and transactions of the City. Component units are presented on a blended basis when the component unit’s governing body is substantially the same as the City’s or the component unit provides services almost entirely to the City. The following component units of the City have been included in the financial reporting entity as blended component units. City of Grand Terrace Public Financing Authority The Grand Terrace Public Financing Authority (the Authority) was established on July 16, 1991, pursuant to a Joint Powers Agreement between the City of Grand Terrace and the former Community Redevelopment Agency of the City of Grand Terrace. The Authority was created to facilitate financing of public capital improvements benefiting the City and the former RDA. The City Council also acts as the governing body of the Authority. The Authority’s activities are blended with those of the City. Separate financial statements are not prepared for the Grand Terrace Public Financing Authority. There are several other governmental agencies, including the County of San Bernardino, school districts, and others, providing services within the City of Grand Terrace. Those agencies have independently elected governing boards other than the City Council of the City of Grand Terrace and no financial accountability to the City of Grand Terrace. Consequently, financial information for these agencies is not included within this financial report. B. Government-Wide and Fund Financial Statements The government-wide financial statements include a statement of net position and a statement of activities. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. Certain eliminations have been made as prescribed by GASB Statement No. 34 in regard to interfund activities, payables, and receivables. All internal balances in the statement of net position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. 29 E.7.a Packet Pg. 147 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions, including special assessments, that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenue are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the cash flows. Accordingly, all of the City's assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying statement of net position. The statement of activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The types of transactions reported as program revenues for the City are reported in three categories: 1) charges for services, 2) operating grants and contributions, and 3) capital grants and contributions. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified-accrual basis of accounting. Under the modified-accrual basis of accounting, revenues are recognized in these funds when susceptible to accrual (i.e., when they are both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers property taxes collected after year-end as available, if they are collected within 60 days of the end of the current fiscal period. Other revenue susceptible to accrual includes sales tax, state gasoline taxes, investment income, and certain other intergovernmental revenues. Expenditures in the governmental funds are generally recognized in the accounting period in which the related fund liability is incurred, if measurable, except for unmatured principal and interest on general long-term debt, as well as compensated absences and claims and judgments, which are recognized when due. The City reports the following major governmental funds:  The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.  The Housing Authority Fund accounts for the housing assets transferred from the former redevelopment agency and Low and Moderate housing activities of the City. The fund activities are restricted for the same purposes as the former Low and Moderate Income Housing Fund of the Agency.  The ARPA Fund accounts for activity of federal funding under American Rescue Plan Act which is used to address ongoing COVID-19 public health crisis. The City reports the following major proprietary fund:  The Waste Water Disposal Fund is used to account for the remaining assets and liabilities of the fund that used to account for the provision of waste water disposal services to the residences and businesses of the City. Currently, a Sewer Services Agreement is in place between the City of Colton/Colton Utility Authority and the City of Grand Terrace for the provision of waste-water disposal services by the City of Colton to residents and businesses of the City of Grand Terrace. 30 E.7.a Packet Pg. 148 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Additionally, the City reports the following fund types:  Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes.  Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by the proprietary funds).  Permanent Fund accounts for resources that are legally restricted, to the extent that only earnings, and not principal, may be used for purposes that support the City’s program.  The Private Purpose Trust Fund is used to account for the resources, obligations, and activities of the Successor Agency of the Redevelopment Agency of the City of Grand Terrace as directed by the Oversight Board to settle the affairs of the dissolved agency (see Note 12). As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the government's proprietary funds functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. D. Other Accounting Policies 1. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." 2. Cash and Cash Equivalents For the purpose of the statement of cash flows, the City considers cash and cash equivalents as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City follows the practice of pooling cash and investments of all funds. Since cash and investments are pooled, the City utilizes the assumption that the cash and investments in the Enterprise Fund are cash and cash equivalents. 3. Investments The City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. 4. Property Held for Resale Property held for resale is recorded at the lower of cost or net realizable value. 31 E.7.a Packet Pg. 149 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 5. Compensated Absences The short-term portion is determined to be the amount due to employees for future absences which is attributable to services already rendered and which is expected to be paid during the next fiscal year. The total amount of liability for compensated absences is segregated between short-term and long-term as indicated above and both portions are reflected in the government-wide statements. Vacation pay is payable to employees at the time a vacation is taken or upon termination of employment. Normally, an employee cannot accrue more than two times his regular annual entitlement. Sick leave is payable when an employee is unable to work because of illness. Upon termination, regular employees with 5 years continuous service will be paid 40% for any unused sick leave. 6. Capital Assets Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), and lease and subscription assets are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than or equal to $5,000 (amount not rounded) and an estimated useful life of at least two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated Capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value at the time of acquisition by the City. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Capital asset of the primary government, as well as the component units, are depreciated/amortized using the straight-line method over the following estimated useful lives. Assets Years Buildings 50 Machinery & Equipment 5-15 Vehicles 6-15 Improvements other than buildings 15-20 Infrastructure 20-30 Sewer Lines 90 Right-of-use subscription assets Shorter of the assets useful life or the subscription term 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenditures. 32 E.7.a Packet Pg. 150 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 8. Net Pension Liability For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pension, and pension expense, information about the fiduciary net position and additions to/deletions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS website under Forms and Publications. GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2021 Measurement date June 30, 2022 Measurement Period July 1, 2021 to June 30, 2022 9. Other Post-Employment Benefits (OPEB) Liability For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB and OPEB expense have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2021 Measurement Date June 30, 2023 Measurement Period July 1, 2022 to June 30, 2023 10. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position and the governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City only has two items that qualifies for reporting in this category. Deferred outflows relating to the net pension obligation and deferred outflows related to OPEB liability reported in the government-wide statement of net position. These outflows are the results of contributions made after the measurement period, which are expensed in the following year, and of adjustments due to difference in proportions, change in assumptions, and difference between actual contributions made and the proportionate share of the risk pool’s total contributions. These amounts are deferred and amortized over the expected average remaining service lifetime. In addition to liabilities, the Statement of Net Position and the Governmental Balance Sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has three items, one of which, arises only under the modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenue from intergovernmental revenues. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The other items are deferred pension related items and deferred OPEB related items. 33 E.7.a Packet Pg. 151 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Gains and losses related to changes in total pension or OPEB liability and their related fiduciary net position are recognized in pension or OPEB expense, respectively, systematically over time. Amounts are first recognized in pension or OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pension or OPEB and are recognized in future pension and OPEB expense, respectively. The recognition period differs depending on the source of the gain or loss: 11. Subscription-Based Information Technology Arrangements The City is a subscriber for a noncancellable subscription of information technology services. The City recognizes a subscription liability and an intangible right-to-use subscription asset (subscription asset) in the government-wide financial statements. The City recognizes subscription liabilities with an initial, individual value of $5,000 or more. At the commencement of a subscription, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for subscription payments made at or before the subscription commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a straight-line basis over its useful life. Key estimates and judgments related to subscriptions include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) lease term, and (3) subscription payments.  The City uses the interest rate charged by the vendor as the discount rate. When the interest rate charged by the vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for subscriptions.  The subscription term includes the noncancellable period of the subscription. Subscription payments included in the measurement of the subscription liability are composed of fixed payments that the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a remeasurement of its subscriptions and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability. Subscription assets are reported with other capital assets and subscription liabilities are reported with long-term debt on the statement of net position. Net difference between projected and actual earning on pension or OPEB plan investments 5 years All plans All other amounts are amortized over the expected average remaining service lifetime (EARSL) of the respective plan. At June 30, 2023, EARLS were: 5.7 years 3.7 years OPEB plan Pension Miscellaneous – Cost Sharing Plan 34 E.7.a Packet Pg. 152 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 12. Net Position Flow Assumption Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. 13. Fund Balance Flow Assumptions Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 14. Fund Balance Policies The City implemented GASB Statement No. 54, “Fund Balance Reporting and Governmental Fund Type Definitions”. This statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government’s fund balance more transparent. The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:  Non-spendable – amounts that are not in a spendable form (such as inventory) or are required to be maintained intact.  Restricted – amounts constrained to specific purposes by their providers (such as grantors, bondholders and higher levels of government), through constitutional provisions or by enabling legislation.  Committed – amounts constrained to specific purposes determined by a formal action of the City Council, the government's highest level of decision-making authority.  Assigned – amounts the City intends to use for a specific purpose; intent can be expressed by City Council or by an official or body to which the City Council delegates the authority. By resolution, the Council has authorized the City Manager and/or Finance Director to assign fund balance.  Unassigned – amounts that are for any purpose; positive amounts are reported only in the general fund. The City Council, as the City's highest level of decision-making authority, may commit fund balance for specific purposes pursuant to constraints imposed by formal actions taken such as an ordinance or resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use through the same type of formal action taken to establish the commitment. City Council action to commit fund balance needs to occur within the fiscal reporting period; however, the amount can be determined subsequently. 15. Property Tax Property tax revenue is recognized on the modified accrual basis, that is, in the fiscal year for which the taxes have been levied provided they become available. Available means when due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The County of San Bernardino collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January proceeding the fiscal year for which the taxes are levied. 35 E.7.a Packet Pg. 153 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Taxes are levied on both real and personal property as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent, if unpaid, on August 31. 16. Use of Estimates The financial statements have been prepared in accordance with generally accepted accounting principles accepted in the United States of America and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. 17. New GASB Pronouncements The following Government Accounting Standards Board (GASB) pronouncements were effective for and/or early implemented for the fiscal year ended June 30, 2023: a. GASB Statement No. 91, Conduit Debt Obligations The requirements of this Statement will improve financial reporting by eliminating the existing option for issuers to report conduit debt obligations as their own liabilities, thereby ending significant diversity in practice. The clarified definition will resolve stakeholders’ uncertainty as to whether a given financing is, in fact, a conduit debt obligation. Requiring issuers to recognize liabilities associated with additional commitments extended by issuers and to recognize assets and deferred inflows of resources related to certain arrangements associated with conduit debt obligations also will eliminate diversity, thereby improving comparability in reporting by issuers. Revised disclosure requirements will provide financial statement users with better information regarding the commitments issuers extend and the likelihood that they will fulfill those commitments. That information will inform users of the potential impact of such commitments on the financial resources of issuers and help users assess issuers’ roles in conduit debt obligations. b. GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements The requirements of this Statement will improve financial reporting by establishing the definitions of PPPs and APAs and providing uniform guidance on accounting and financial reporting for transactions that meet those definitions. That uniform guidance will provide more relevant and reliable information for financial statement users and create greater consistency in practice. This Statement will enhance the decision usefulness of a government’s financial statements by requiring governments to report assets and liabilities related to PPPs consistently and disclose important information about PPP transactions. The required disclosures will allow users to understand the scale and important aspects of a government’s PPPs and evaluate a government’s future obligations and assets resulting from PPPs. c. GASB Statement No. 96, Subscription-Based Information Technology Arrangements The requirements of this Statement will improve financial reporting by establishing a definition for subscription- based information technology arrangements (SBITAs) and providing uniform guidance for accounting and financial reporting for transactions that meet that definition. That definition and uniform guidance will result in greater consistency in practice. Establishing the capitalization criteria for implementation costs also will reduce diversity and improve comparability in financial reporting by governments. This Statement also will enhance the relevance and reliability of a government’s financial statements by requiring a government to report a subscription asset and subscription liability for a SBITA and to disclose essential information about the arrangement. The disclosures will allow users to understand the scale and important aspects of a government’s SBITA activities and evaluate a government’s obligations and assets resulting from SBITAs. 36 E.7.a Packet Pg. 154 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) d. GASB Statement No. 100, Accounting Changes and Error Corrections The requirements of this Statement will improve the clarity of the accounting and financial reporting requirements for accounting changes and error corrections, which will result in greater consistency in application in practice. In turn, more understandable, reliable, relevant, consistent, and comparable information will be provided to financial statement users for making decisions or assessing accountability. In addition, the display and note disclosure requirements will result in more consistent, decision useful, understandable, and comprehensive information for users about accounting changes and error corrections. NOTE 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Deficit Fund Balances As of June 30, 2023, the following funds have deficit fund balances: These deficits will be funded by future revenues or transfers from other funds. Budget The Cal Recycle Grant Fund, Emergency Management Preparation Grant, Enhanced Infrastructure Financing District Fund, National Opioid Settlement Grant and Barton/Colton Bridge Fund and Dog Park Endowment Fund did not adopt a budget for fiscal year 2022-23 and therefore budgetary comparison information is not presented. NOTE 3: CASH AND INVESTMENTS Cash and investments as of June 30, 2023, are classified in the accompanying financial statements as follows: Cash and investments as of June 30, 2023, consist of the following: Fund Name Fund Type Deficit CDBG Non-major Special Revenue Fund 46,070$ Senior Bus Program Non-major Special Revenue Fund 20,372 Highway Safety Improvement Program Non-major Special Revenue Fund68,018 Emergency Management Preparation Grant Non-major Special Revenue Fund 7,291 Enhanced Infrastructure Financing District Non-major Special Revenue Fund 46,560 Barton/Colton Bridge Non-major Capital Project Fund 25,320 Statement of Net Position Cash and investments 14,979,177$ Total cash and investments 14,979,177$ Cash on hand 1,750$ Deposits with financial institutions 5,569,036 Investments 9,408,391 Total cash and investments 14,979,177$ 37 E.7.a Packet Pg. 155 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 3: CASH AND INVESTMENTS (CONTINUED) Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy. Authorized Investment Type Maximum Maturity Maximum Percentage of Portfolio Maximum Investment in One Issuer U.S. Treasury Obligations 5 years None None Repurchase Agreements 6 years None None Certificates of Deposit 7 years None None Passbook Savings Accounts 8 years 30%None Securities Issued by Federal Agencies N/A None None Local Agency Investment Fund (LAIF) N/A None 50,000,000$ Mutual Funds N/A 20%None Pools and other Investment Structures N/A None None Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations are presented below. Authorized Investment Type Amount 12 Months or Less 1 to 3 years Certificates of Deposit 1,963,159$ 982,648$ 980,511$ Local Agency Investment Fund (LAIF) 3,030,808 3,030,808 - Local Gov. Invest. Pool (CAMP)4,337,990 4,337,990 - First American Treasury 1,221 1,221 - Held by Trustee: Money Market Mutual Funds 75,213 75,213 - Total 9,408,391$ 8,427,880$ 980,511$ Remaining Investment Maturity 38 E.7.a Packet Pg. 156 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 3: CASH AND INVESTMENTS (CONTINUED) Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Information about the minimum rating required by the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each type of investment held by the City can be found below. Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. During the fiscal year ended June 30, 2023, the City did not hold any investments in any one issuer (other than Mutual Funds and External Investment Pools) that represent 5% or more of total City’s investments. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure deposits by pledging first deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2023, the City had deposits with financial institutions in excess of federal depository insurance limits of $7,203,299. Investments in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Authorized Investment Type Amount Minimum Legal Rating Actual Rating Money Market Mutual Fund 75,213$ N/A N/A Certificates of Deposit 1,963,159 N/A N/A Local Agency Investment Fund (LAIF)3,030,808 N/A N/A Local Gov. Invest. Pool (CAMP)4,337,990 N/A N/A First American Treasury 1,221 N/A N/A Total 9,408,391$ 39 E.7.a Packet Pg. 157 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 3: CASH AND INVESTMENTS (CONTINUED) LAIF has reported to its participating agencies that, as of June 30, 2023, the carrying amount (at amortized cost) of the Pool was $179,160,181,982 and the estimated fair value of the Pool was $176,442,053,163. The City’s proportionate share of the Pool’s market value (as determined by LAIF) as of June 30, 2023, was $3,030,808. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities. Local Government Investment Pool The City is a voluntary participant in the Local Government Investment Pool, “CAMP” (California Asset Management Program). CAMP is a California Joint Powers Authority, established to provide public agencies with professional investment services, and is directed by a Board of Trustees, which is made up of experienced local government finance directors and treasurers. The CAMP Pool is a permitted investment for all local agencies under California Government Code Section 53601(p). The City reports its share in the investment pool at the estimated fair market value. As of June 30, 2023, the City’s share of the Pool (as determined by CAMP) is $4,337,990. Included in the CAMP’s investment portfolio are U.S. treasury notes, bonds, bills or certificates of indebtedness or other obligations of the United States, federal agency or U.S. government-sponsored enterprise obligations, participations or other instruments, repurchase agreements, bills of exchange or time drafts, negotiable certificates of deposits, commercial paper of prime quality of the highest ranking or of the highest letter and number rating. Pooled Cash The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by outside fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated to the various funds based on the cash balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund. Fair Value Measurement and Application The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of June 30, 2023: Total 1 2 3 Uncategorized Investments: Local Government Investment Pool 4,337,990$ -$ -$ -$ 4,337,990$ First American Treasury 1,221 - 1,221 - - Certificates of Deposit 1,963,159 - 1,963,159 - - Local Agency Investment Fund 3,030,808 - - - 3,030,808 9,333,178 - 1,964,380 - 7,368,798 Investments with Fiscal Agents: Money Market Funds 75,213 - - - 75,213 Total Investments 9,408,391$ -$ 1,964,380$ -$ 7,444,011$ Level Investment Type 40 E.7.a Packet Pg. 158 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 4: INTERFUND RECEIVABLE, PAYABLE AND TRANSFERS The composition of interfund balances at June 30, 2023, is as follows: Due to/from other funds: (1) The General Fund advanced funds to the Highway Safety Improvement Program Fund, Enhanced Infrastructure Financing District, COVID-19 Emergency Fund, and the Barton/Colton Bridge Fund to cover deficit cash balances. (2) The Street Improvement, Storm Drain Improvement Fund, Park Development Fund, Street Improvement Fund and Facilities Development Fund advanced funds of $9,000 each to the Enhanced Infrastructure Financing District Fund to cover expenditures. Advances from/to other funds: In April 1980, the Community Redevelopment Agency (CRA) entered into a pass-through agreement with the City, which was found to be in noncompliance with State statutes. The misallocated tax increment was being treated as an advance payable to the former Community Redevelopment Agency from the General Fund. Upon the dissolution of the Redevelopment Agency, the advance receivable was transferred to the Housing Authority and the Successor Agency and is shown as an advance to other funds in the Housing Authority in the amount of $168,205. The advance is to be repaid as funds are available. Interfund Transfers: (1) Transfers in the amount of $193,444 were made from the General Fund to the State Gas Tax Fund for franchise sweep fees and pavement impact fees. Transfers in the amount of $55,474 were made to the Senior Bus Program Fund for additional funding. (2) Transfers in the amount of $600,000 were made to the Capital Improvement – Streets Fund for the Traffic Signal Modification Project on Barton Road and Preston Street. Transfers in the amount of $11,000 were made to the Senior Bus Program Fund for additional funding. Transfers of $50,000 were made from the Spring Mountain Ranch for operating costs reimbursements to the general fund. Receivable Fund Payable Fund Amount General Fund Nonmajor Governmental Funds (1) 232,150$ Nonmajor Governmental Funds Nonmajor Governmental Funds (2) 36,000 268,150$ Receivable Fund Payable Fund Amount Housing Authority General Fund 168,205$ Fund Receiving Transfers Fund Making Transfers Amount Nonmajor Governmental Funds General Fund (1) 248,918$ Nonmajor Governmental Funds Nonmajor Governmental Funds (2) 661,000 909,918$ 41 E.7.a Packet Pg. 159 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 5: CAPITAL ASSETS Capital assets activity for the year ended June 30, 2023, was as follows: Depreciation/amortization expense was charged to functions of the primary government as follows: Beginning Ending Balance Additions Deletions Balance Governmental Activities: Capital assets, not being depreciated/amortized: Land 2,332,847$ -$ 137,892$ 2,194,955$ Construction-in-progress 1,004,900 26,870 23,500 1,008,270 Total Capital Assets, Not Being Depreciated/Amortized 3,337,747 26,870 161,392 3,203,225 Capital assets, being depreciated/amortized: Buildings 5,620,293 211,450 1,146,938 4,684,805 Machinery and Equipment 1,378,846 72,173 15,500 1,435,519 Vehicles 582,109 159,981 30,772 711,318 Improvements other than buildings 6,454,358 139,678 - 6,594,036 Infrastructure 4,963,033 - - 4,963,033 Subscription asset - 201,791 - 201,791 Total Capital Assets, Being Depreciated/amortized 18,998,639 785,073 1,193,210 18,590,502 Less accumulated depreciation/amortization: Buildings 3,747,938 145,935 778,146 3,115,727 Machinery and Equipment 991,071 83,165 - 1,074,236 Vehicles 562,702 44,529 - 607,231 Improvements other than buildings 4,418,027 276,699 - 4,694,726 Infrastructure 3,185,725 269,832 - 3,455,557 Subscription asset - 51,320 - 51,320 Total Accumulated Depreciation/amortization 12,905,463 871,480 778,146 12,998,797 Total Capital Assets, Being Depreciated/amortized, Net 6,093,176 (86,407) 415,064 5,591,705 Governmental Activities Capital Assets, Net 9,430,923$ (59,537)$ 576,456$ 8,794,930$ Governmental Activities General Government 151,239$ Public Safety 40,983 Public Works 339,992 Cultural and recreation 339,266 Total depreciation/amortization expense 871,480$ 42 E.7.a Packet Pg. 160 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 5: CAPITAL ASSETS (CONTINUED) NOTE 6: COMPENSATED ABSENCES Compensated absences activity for the year ended June 30, 2023, was as follows: Beginning Ending Due Within Balance Additions Deletions Balance One Year Compensated Absences 132,353$ 132,755$ 132,578$ 132,530$ 33,133$ The City’s policies relating to compensated absences are described in Note 1 of the Notes to Financial Statements. The liability will be paid in future years as it becomes due from the General Fund. NOTE 7: PENSION PLAN Plan Description The City contributes to the California Public Employees Retirement System (PERS), a cost sharing multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of PERS’ annual financial report may be obtained from their executive office: 400 “P” Street, Sacramento, California 95814. Benefits Provided CalPERS provides service retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. Beginning Ending Balance Additions Deletions Balance Business-type Activities: Capital assets, being depreciated: Sewer mains 4,023,128$ -$ -$ 4,023,128$ Laterals 1,890,944 - - 1,890,944 Manholes 1,298,760 - - 1,298,760 Improvements 202,274 - - 202,274 Total Capital Assets, Being Depreciated 7,415,106 - - 7,415,106 Less accumulated depreciation: Sewer mains 1,695,058 44,701 - 1,739,759 Laterals 709,173 21,010 - 730,183 Manholes 517,827 14,431 - 532,258 Improvements 139,060 8,428 - 147,488 Total Accumulated Depreciation 3,061,118 88,570 - 3,149,688 Business-type Activities Capital Assets, Net 4,353,988$ (88,570)$ -$ 4,265,418$ 43 E.7.a Packet Pg. 161 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 7: PENSION PLAN (CONTINUED) Below is the summary of the plans’ provisions and benefits in effect at June 30, 2023, for which the City of Grand Terrace has contracted: Active plan members 13 Retirees 53 Total 66 Contribution Description Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS’ annual actuarial valuation process. The actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2023, the employer contributions recognized as a reduction to the net pension liability was $625,266. Pension Liabilities, Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions As of June 30, 2023, the City reported net pension liabilities for its proportionate shares of the net pension liability of $5,888,367. Tier 1 *Tier 2 *PEPRA Hire date Prior to December 13, 2012 December 13, 2012 but prior to January 1, 2013 January 1, 2013 and after Benefit formula 2.7% @ 55 2% @ 60 2% @ 62 Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age minimum 50 yrs minimum 50 yrs minimum 52 yrs Monthly benefits, as a % of eligible compensation 2% - 2.7%, 50 yrs - 63+ yrs, respectively 1.092% - 2.418%, 50 yrs - 63+ yrs, respectively 1.000% - 2.500%, 52 yrs - 67+ yrs, respectively Required employee contribution rates 7.960%6.930%6.750% Required employer contribution rates 14.030%8.630%7.470% *Closed to new entrants Miscellaneous Cost-Sharing Plans 44 E.7.a Packet Pg. 162 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 7: PENSION PLAN (CONTINUED) The City’s net pension liability is measured as the proportionate share of the net pension liability. The net pension liability is measured as of June 30, 2022, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability as of June 30, 2021 and 2022 was as follows: Proportions as a percentage of the CalPERS risk pool: For the year ended June 30, 2023, the City recognized a total pension expense of $1,678,901. At June 30, 2023, the City reported deferred outflows and deferred inflows of resources related to pensions as follows: $683,993 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows: Proportion - June 30, 2021 0.06318% Proportion - June 30, 2022 0.05098% Change - Increase (Decrease) -0.01220% Deferred Outflows Deferred Inflows of Resources of Resources Contributions subsequent to the measurement date 683,993$ -$ Changes of assumptions 603,386 - Differences between expected and actual experience 118,250 79,199 Net difference between projected and actual earnings on pension plan investments 1,078,593 - Differences between actual vs. proportionate share of contribution - 369,200 Change in employer proportion - 630,418 Total 2,484,222$ 1,078,817$ Deferred Outflows/(Inflows) Fiscal year ended June 30, of Resources 2024 (55,732)$ 2025 44,291 2026 73,149 2027 659,704 Total 721,412$ 45 E.7.a Packet Pg. 163 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 7: PENSION PLAN (CONTINUED) Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ended June 30, 2022, the total pension liability was determined by rolling forward the June 30, 2021 total pension liability. The June 30, 2022 total pension liability was based on the following actuarial methods and assumptions: Change of Assumptions - During measurement period 2022, the discount rate was reduced from 7.15% to 6.90%, inflation was reduced from 2.50% to 2.30%, and demographic assumptions were changed in accordance with the 2021 CALPERS Experience study. Discount Rate - The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Long-Term Expected Rate of Return - The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical and forecasted information for all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short - term and long - term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions: Discount Rate Inflation Payroll Growth Mortality Post Retirement Benefit Increase 2.30% Miscellaneous Plan (1) June 30, 2021 June 30, 2022 Entry-Age Normal Cost Method 6.90% (2)The mortality table used was developed based on the CalPERS' specific data. The table includes 15 years of projected mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on the table, please refer to the CalPERS December 2017 experience study report (based on CalPERS demographic data from 1997-2015) available on CalPERS' website. Varies by Entry Age and Service Derived using CalPERS Membership Data for all Funds (2) Contract cost of living adjustment (COLA) up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies (1) Actuarial assumptions are the same for all benefit tiers (Classic Tier I, Classic Tier II, and PEPRA) 46 E.7.a Packet Pg. 164 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 7: PENSION PLAN (CONTINUED) The expected rate of return was then set equivalent to the single equivalent rate calculated and adjusted to account for assumed administrative expenses. The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the City’s proportionate share of the net pension liability, calculated using the discount rate of 6.90%, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower 5.90% or 1-percentage-point higher 7.90% than the current rate: Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS’ website for additional information. Subsequent Events - On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021. On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial Assumed Asset Asset Class Allocation Real Return 1, 2 Global equity-cap-weighted 30.00%4.54% Global equity-non-cap-weighted 12.00%3.84% Private equity 13.00%7.28% Treasury 5.00%0.27% Mortgage-backed securities 5.00%0.50% Investment grade corporates 10.00%1.56% High yield 5.00%2.27% Emerging market debt 5.00%2.48% Private debt 5.00%3.57% Real assets 15.00%3.21% Leverage -5.00% -0.59% 1 An expected inflation of 2.30% used for this period. 2 Figures are based on the 2021 Asset Liability Management study Discount Rate Current Discount Rate -1 Percent Discount Rate +1 Percent (5.90%) (6.90%) (7.90%) Proportionate share of net pension liability/(asset) 8,532,548$ 5,888,367$ 3,712,863$ 47 E.7.a Packet Pg. 165 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 7: PENSION PLAN (CONTINUED) reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date. NOTE 8: OTHER POSTEMPLOYMENT BENEFITS Plan Description The City provides a medical plan coverage for retirees. This coverage is available for employees who satisfy the requirements for retirement under the California Public Employees Retirement System (PERS), which is age 50 or older with at least five years of State or public agency service. Medical plan benefits are provided through PERS, as permitted by the Public Employees’ Medical and Hospital and Care Act (PEMHCA). As a PEMHCA employer, the City has elected the unequal contribution method, where the contribution will be increased annually over twenty years until it reaches the same employer contribution as active employee medical plan coverage. Contributions The contribution requirements of plan members and the City are established and may be amended by the City Council. Currently, contributions are not required from plan members. The City is funding the Other-Post Employment Benefits plan on a pay-as-you-go basis. For fiscal year ended June 30, 2023, the City paid $70,598 in retiree health benefits. Employees Covered At June 30, 2023, the measurement date, the following numbers of participants were covered by the benefit terms: Covered participant counts were available to the actuary for the June 30, 2021 actuarial valuation but not as of June 30, 2023 measurement date. Total OPEB Liability The City's total OPEB liability was measured as of June 30, 2023 for the measurement period July 1, 2022 through June 30, 2023. The total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation dated June 30, 2021, based on the following actuarial assumptions: Discount Rate 3.86% Inflation 2.30% Investment Rate of Return N/A Mortality Rate Healthcare Trend Rate Actuarial Assumptions Based on 2021 Getzen model that reflects actual premium increases through 2023, followed by 5.50% non-Medicare / 5.30% Medicare in 2023, decreasing gradually to an ultimate rate of 4.04% in 2075 Number of Covered Participants Inactive members currently receiving benefits 8 Inactive members entitled to but not yet receiving benefits 17 Active members 14 Total 39 48 E.7.a Packet Pg. 166 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 8: OTHER POSTEMPLOYMENT BENEFITS (CONTINUED) Change of Assumptions For the measurement date June 30, 2023, the discount rate increased from 3.69% to 3.86%. Discount Rate The discount rate used to measure the total OPEB liability was 3.86%. Changes in the Total OPEB Liability. The changes in the total OPEB liability for the plan are as follows: Sensitivity of the total OPEB liability to changes in the discount rate The following presents the total OPEB liability of the City, as well as the City’s total OPEB liability would be if it were calculated using a discount rate that is one percentage point higher or one percentage point lower than the current discount rate, for the measurement period June 30, 2023: Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point higher or one percentage point lower than the current healthcare cost trend rates: OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB. Total OPEB Liability Balance at June 30, 2021 1,085,037$ Changes in Total OPEB Liability Service cost 52,849 Interest on total OPEB liability 40,640 Changes of benefit terms 97,786 Changes of assumptions (24,225) Differences between expected and (8,394) actual experience Benefit payments (73,724) Net changes during 2021-22 84,932 Balance at June 30, 2022 1,169,969$ 1% Decrease Current Rate 1% Increase (2.86%) (3.86%) (4.86%) Total OPEB Liability 1,324,100$ 1,169,969$ 1,041,552$ Discount Rate 1% Decrease Current Rate 1% Increase Total OPEB Liability 1,005,479$ 1,169,969$ 1,373,583$ Healthcare Trend Rate 49 E.7.a Packet Pg. 167 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 8: OTHER POSTEMPLOYMENT BENEFITS (CONTINUED) For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $38,252. At June 30, 2023, the City's deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Difference between Expected and Actual Experience 58,497$ 352,059$ Change in Assumptions 151,165 439,102 Total 209,662$ 791,161$ Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: NOTE 9: SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS Subscription-Based Information Technology Arrangements The City implemented GASB Statement No. 96 in the fiscal year ended June 30, 2023. The primary objective of this statement is to enhance the relevance and consistency of information about governments' subscription based-information technology arrangements (SBITAs) activities. This statement establishes a single model for SBITAs accounting based on the principle that SBITAs are financings of the right to use an underlying asset. Under this Statement, a subscriber is required to recognize a subscription liability and an intangible right-to-use subscription asset. The City has entered into various SBITAs as the subscriber for the use of software services. An initial subscription liability was recorded in the amount of $201,791 during the current fiscal year. The terms of these subscriptions range from 1 to 3 years. As of June 30, 2023, the total value of the subscription liability was $119,358. The subscriptions have interest rates ranging from 2.19% to 2.85%. Information on the subscription assets as of June 30, 2023 are as follows: Deferred Outflows/(Inflows) Fiscal year ended June 30, of Resources 2024 (77,018)$ 2025 (84,708) 2026 (84,708) 2027 (89,620) 2028 (118,176) Thereafter (127,269) Total (581,499)$ Subscription Type Amount of SBITA Capital Assets Accumulated Amortization Software as a service 201,791$ 51,320$ Governmental Activities 50 E.7.a Packet Pg. 168 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 9: SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED) The future principal and interest subscription payments as of June 30, 2023, were as follows: NOTE 10: RISK MANAGEMENT The City is a member of the California Joint Powers Insurance Authority (the "Authority"). The following joint venture disclosures are made in compliance with GASB Code Section J50.103: A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City of Grand Terrace is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 124 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee. B. Primary Self-Insurance Programs of the Authority Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool. Primary Liability Program Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses have a sub-limit of $50 million per occurrence. The coverage structure includes retained risk that is pooled among members, reinsurance, and excess insurance. More detailed information about the various layers of coverage is available on the following website: https://cjpia.org/protection/coverage-programs Fiscal Year Ending June 30, Amount of SBITA Capital Assets Accumulated Amortization 2024 77,577$ 2,987$ 2025 41,781 984 119,358$ 3,971$ Governmental Activities 51 E.7.a Packet Pg. 169 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 10: RISK MANAGEMENT (CONTINUED) Primary Workers’ Compensation Programs Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2022-23 the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased as part of a reinsurance policy, and Employer’s Liability losses from $5 million to $10 million are pooled among members. C. Purchased Insurance Pollution Liability Insurance The City of Grand Terrace participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Grand Terrace. Coverage is on a claim’s made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million. Property Insurance The City of Grand Terrace participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Grand Terrace property is currently insured according to a schedule of covered property submitted by the City of Grand Terrace to the Authority. City of Grand Terrace property currently has all-risk property insurance protection in the amount of $19,821,245. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible. Crime Insurance The City of Grand Terrace purchases crime insurance coverage in the amount of “Non Participant” with a “Non Participant” deductible. The fidelity coverage is provided through the Authority. D. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2022-23. 52 E.7.a Packet Pg. 170 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 11: COMMITMENTS AND CONTINGENCIES As of June 30, 2023, in the opinion of the City Administration and its legal counsel, there are no outstanding matters, which would have a material effect on the financial position of the City. The following material construction commitments existed at June 30, 2023: Project Name Contract Amount Expenditures to date as of June 30, 2022 Remaining Commitments Pavement Rehabilitation Project 1,958,000$ $ 1,712,636 245,364$ Blue Mountain Trail 162,568 34,490 128,078 NOTE 12: PROPOSITION 218 Proposition 218, which was approved by the voters in November 1996, will regulate the City's ability to impose, increase and extend taxes, assessments and fees. Any new, increased, or extended taxes, assessments, and fees subject to the provisions of Proposition 218 require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments, and fees are subject to the voter initiative process and may be rescinded in the future by the voters. NOTE 13: SUCCESSOR AGENCY PRIVATE-PURPOSE TRUST FUND TO THE FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Grand Terrace that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private purpose trust fund) in the financial statements of the City. Per Resolution No. 2022-23, of the California Department of Finance dated March 11, 2023, the City received the final resolution of dissolution for the Successor Agency. The Oversight Board verified all outstanding transactions have been completed and the Successor Agency is now closed. 53 E.7.a Packet Pg. 171 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 14: SALES TAX SHARING AGREEMENT The City has entered into a tax abatement agreement with a local business. The abatement may be granted to any business located in or promising to relocate in the City. For the Fiscal Year ended June 30, 2023, the City has not made any payments. The City has a sales tax sharing agreement between a restaurant in which the City agreed to waive $35,000 of building permit fees and also agreed to provide financial assistance by making payments to the business of sales tax revenue paid by the business collected in the amount of $8,300 per year for five years for a maximum total of $41,500 or until the business’ sales exceed $1.6 million per year, whichever occurs first. The tax sharing agreement was to generate sales tax revenues including new employment opportunities for the City. NOTE 15: FUND BALANCE AND NET POSITION A. Net investment in capital assets The breakdown for net investment in capital assets for the year ended June 30, 2023 is as follows: NOTE 16: SUBSEQUENT EVENTS The City evaluated subsequent events for recognition and disclosure through February 15, 2024, the date on which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2023, that required recognition or disclosure in these financial statements. Governmental Activities Capital assets, net of accumulated depreciation/amortization 8,794,930$ Less: Subscriptions payable (119,358) Net investment in capital assets 8,675,572$ 54 E.7.a Packet Pg. 172 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) THIS PAGE INTENTIONALLY LEFT BLANK 55 E.7.a Packet Pg. 173 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Miscellaneous Cost-Sharing Plan Schedule of Proportionate Share of the Net Pension Liability As of June 30, for the Last Ten Fiscal Years (1) Fiscal Year 2015 2016 2017 2018 Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 Miscellaneous Plan Proportion of the Net Pension Liability 0.05190% 0.05638% 0.05243%0.05107% Proportionate Share of the Net Pension Liability 3,229,236$ 3,870,057$ 4,536,720$ 5,064,768$ Covered Payroll 1,413,685$ 1,452,613$ 1,335,625$ 1,540,292$ Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll 228.43% 266.42% 339.67% 328.82% Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 78.40% 79.82% 75.87% 73.31% Notes to Schedule: Benefit Changes: No changes in benefits. Changes of Assumptions: There were no changes in assumptions. (1) Historical information is required only for measurement for which GASB Statement No. 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown. 56 E.7.a Packet Pg. 174 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) 2019 2020 2021 2022 2023 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 0.05077% 0.05018% 0.04931% 0.06318% 0.05098% 4,891,935$ 5,141,928$ 5,365,454$ 3,416,796$ 5,888,367$ 1,352,434$ 1,382,907$ 1,347,989$ 1,120,557$ 1,093,543$ 361.71% 371.82% 398.03% 304.92% 538.47% 75.26% 75.26% 75.26%88.29%76.68% 57 E.7.a Packet Pg. 175 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Schedule of Plan Contributions 2015 2016 2017 2018 Miscellaneous Plan Actuarially Determined Contribution 159,393$ 116,663$ 424,915$ 391,538$ Contribution in Relation to the Actuarially Determined Contribution (159,393) (116,663) (424,915) (391,538) Contribution Deficiency (Excess)-$ -$ -$ -$ Covered Payroll 1,452,613$ 1,335,625$ 1,540,292$ 1,352,434$ Contributions as a Percentage of Covered Payroll 10.97%8.73% 27.59% 28.95% Note to Schedule: Valuation Date:June 30, 2021 Methods and assumptions used to determine contribution rates: Actuarial Cost Method Amortization method Level percentage of payroll Assets valuation method Market value Discount rate Inflation 2.30% Projected salary increases Varies by entry age and service Miscellaneous Cost-Sharing Plan As of June 30, for the Last Ten Fiscal Years (1) Entry age normal 6.90% (net of administrative expenses) (1) Historical information is required only for measurement for which GASB Statement No. 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown. 58 E.7.a Packet Pg. 176 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) 2019 2020 2021 2022 2023 383,835$ 383,360$ 576,539$ 625,266$ 683,993$ (383,835) (383,360) (576,539) (625,266) (683,993) -$ -$ -$ -$ -$ 1,382,907$ 1,347,989$ 1,120,557$ 1,093,543$ 1,238,975$ 27.76% 28.44% 51.45% 57.18% 55.21% 59 E.7.a Packet Pg. 177 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Schedule of Changes in Total OPEB Liability and Related Ratios As of June 30, for the Last Ten Fiscal Years (1) 2018 2019 2020 Total OPEB Liability Service cost 169,316$ 107,552$ 110,779$ Interest on the total OPEB liability 51,629 48,506 50,131 Actual and expected experience difference - - 119,429 Changes in assumptions (45,427) 62,620 121,299 Changes in benefit terms (259,790) - - Benefit payments (45,629) (39,770) (46,213) Net Change in Total OPEB Liability (129,901) 178,908 355,425 Total OPEB liability - beginning 1,295,632 1,165,731 1,344,639 Total OPEB Liability - Ending 1,165,731$ 1,344,639$ 1,700,064$ Covered-Employee Payroll 866,196$ 1,575,073$ 1,300,021$ Total OPEB Liability as a Percentage of Covered-Employee Payroll 135% 85% 131% Notes to Schedule: None (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. Changes in assumptions:The discount rate changed from 3.69% to 3.86% based on updated 20-year municipal bond rates in fiscal year ended 6/30/2022. 60 E.7.a Packet Pg. 178 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) 2021 2022 2023 147,070$ 169,184$ 52,849$ 44,484 40,289 40,640 (601) (459,592) (8,394) 136,171 (558,553) (24,225) - - 97,786 (62,881) (70,598) (73,724) 264,243 (879,270) 84,932 1,700,064 1,964,307 1,085,037 1,964,307$ 1,085,037$ 1,169,969$ 1,076,159$ 768,207$ 720,675$ 183% 141%162% 61 E.7.a Packet Pg. 179 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparision Schedule General Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 5,255,401$ 5,255,401$ 5,255,401$ -$ Resources (Inflows): Taxes 5,606,695 5,606,695 5,870,302 263,607 Intergovernmental 60,500 60,500 47,305 (13,195) Charges for services 1,478,400 1,478,400 1,570,988 92,588 Use of money and property 403,009 403,009 441,743 38,734 Fines and forfeitures 66,000 66,000 45,441 (20,559) Miscellaneous 39,010 39,010 1,338,347 1,299,337 Transfers in 30,000 30,000 50,000 20,000 Subscriptions issued - - 201,791 201,791 Amounts Available for Appropriations 12,939,015 12,939,015 14,821,318 1,882,303 Charges to Appropriations (Outflow): General government 2,298,601 2,311,601 2,035,308 276,293 Public safety 2,573,496 2,573,496 2,602,563 (29,067) Cultural and recreation 1,085,108 1,085,108 753,762 331,346 Public works 1,521,735 1,647,935 1,512,782 135,153 Capital outlay 63,700 63,700 387,961 (324,261) Debt service: Principal retirement - - 60,767 (60,767) Transfers out 110,700 257,700 248,918 8,782 Total Charges to Appropriations 7,653,340 7,939,540 7,602,061 337,479 Budgetary Fund Balance, June 30 5,285,675$ 4,999,475$ 7,219,257$ 2,219,782$ See Notes to Required Supplementary Information.62 E.7.a Packet Pg. 180 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Housing Authority For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,029,739$ 2,029,739$ 2,029,739$ -$ Resources (Inflows): Intergovernmental 65,000 65,000 - (65,000) Use of money and property - - 28,864 28,864 Amounts Available for Appropriations 2,094,739 2,094,739 2,058,603 (36,136) Charges to Appropriations (Outflow): Economic development 32,789 32,789 5,876 26,913 Total Charges to Appropriations 32,789 32,789 5,876 26,913 Budgetary Fund Balance, June 30 2,061,950$ 2,061,950$ 2,052,727$ (9,223)$ See Notes to Required Supplementary Information.63 E.7.a Packet Pg. 181 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule ARPA For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,172$ 1,172$ 1,172$ -$ Resources (Inflows): Intergovernmental 1,505,180 3,010,360 2,262,816 (747,544) Use of money and property - - 50,185 50,185 Amounts Available for Appropriation 1,506,352 3,011,532 2,314,173 (697,359) Charges to Appropriation (Outflow): Parks and recreation 200,000 200,000 211,450 (11,450) Public works 2,550,000 2,550,000 1,814,169 735,831 Capital outlay 82,000 242,000 180,392 61,608 Total Charges to Appropriations 2,832,000 2,992,000 2,206,011 785,989 Budgetary Fund Balance, June 30 (1,325,648)$ 19,532$ 108,162$ 88,630$ See Notes to Financial Statements.64 E.7.a Packet Pg. 182 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e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a Packet Pg. 183 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments 730,407$ 298,000$ 95,537$ 25,120$ Receivables: Accounts Receivable - - - - Due from other governments - - - 86,215 Due from other funds 9,000 9,000 9,000 - Total Assets 739,407$ 307,000$ 104,537$ 111,335$ Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable -$ -$ -$ -$ Refundable Deposits 4,663 - - - Due to other funds - - - - Total Liabilities 4,663 - - - Deferred Inflows of Resources: Unavailable revenues - 1,886 65,169 86,215 Total Deferred Inflows of Resources - 1,886 65,169 86,215 Fund Balances (Deficit): Restricted for: Community development projects - - 39,368 - Public safety - - - 25,120 Public works 734,744 305,114 - - Unassigned - - - - Total Fund Balances (Deficit)734,744 305,114 39,368 25,120 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 739,407$ 307,000$ 104,537$ 111,335$ Street Improvement Storm Drain Improvement Park Development Ab 3229 Cops Special Revenue Funds 66 E.7.a Packet Pg. 184 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments Receivables: Accounts Receivable Due from other governments Due from other funds Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Refundable Deposits Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficit): Restricted for: Community development projects Public safety Public works Unassigned Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Continued) 73,395$ 170,215$ 24,312$ 182,555$ - - - - 4,350 29,486 1,637 - - - - 9,000 77,745$ 199,701$ 25,949$ 191,555$ -$ 21,502$ -$ -$ - - - - - - - - - 21,502 - - 4,350 - - - 4,350 - - - - - - 191,555 - - - - 73,395 178,199 25,949 - - - - - 73,395 178,199 25,949 191,555 77,745$ 199,701$ 25,949$ 191,555$ Air Quality Improvement State Gas Tax Facilities Development Traffic Safety Special Revenue Funds 67 E.7.a Packet Pg. 185 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments Receivables: Accounts Receivable Due from other governments Due from other funds Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Refundable Deposits Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficit): Restricted for: Community development projects Public safety Public works Unassigned Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances 400,287$ -$ 147,650$ 999,831$ - - - - 56,704 65,258 155 - - - - - 456,991$ 65,258$ 147,805$ 999,831$ 8,412$ 19,748$ 350$ -$ - - - - - 51,014 - - 8,412 70,762 350 - - 40,566 - - - 40,566 - - - - - 999,831 - - - - 448,579 - 147,455 - - (46,070) - - 448,579 (46,070) 147,455 999,831 456,991$ 65,258$ 147,805$ 999,831$ Measure I CDBG Special Districts Landscape & Lighting Spring Mountain Ranch Special Revenue Funds 68 E.7.a Packet Pg. 186 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments Receivables: Accounts Receivable Due from other governments Due from other funds Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Refundable Deposits Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficit): Restricted for: Community development projects Public safety Public works Unassigned Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Continued) 21,680$ -$ 136,593$ -$ - - 497 - - 95,129 - 1,734 - - - - 21,680$ 95,129$ 137,090$ 1,734$ -$ 9,449$ 700$ 875$ - - - - - 69,088 - 68,877 - 78,537 700 69,752 - 36,964 - - - 36,964 - - 21,680 - 136,390 - - - - - - - - - - (20,372) - (68,018) 21,680 (20,372) 136,390 (68,018) 21,680$ 95,129$ 137,090$ 1,734$ Public, Educational & Government Access Cal Recycle Grant Senior Bus Program Highway Safety Improvement Program Special Revenue Funds 69 E.7.a Packet Pg. 187 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments Receivables: Accounts Receivable Due from other governments Due from other funds Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Refundable Deposits Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficit): Restricted for: Community development projects Public safety Public works Unassigned Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances -$ -$ 528,342$ 7,558$ - - - - - - 51,394 - - - - - -$ -$ 579,736$ 7,558$ -$ -$ -$ -$ - - - - 7,291 46,560 - - 7,291 46,560 - - - - - - - - - - - - - - - - - 7,558 - - 579,736 - (7,291) (46,560) - - (7,291) (46,560) 579,736 7,558 -$ -$ 579,736$ 7,558$ RMRA National Opioid Settlement Enhanced Infrastructure Financing District Emergency Management Preparation Grant Special Revenue Fund 70 E.7.a Packet Pg. 188 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments Receivables: Accounts Receivable Due from other governments Due from other funds Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Refundable Deposits Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficit): Restricted for: Community development projects Public safety Public works Unassigned Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Continued) 37,406$ -$ 45,438$ 829,133$ - - - - - - - - - - - - 37,406$ -$ 45,438$ 829,133$ -$ -$ 30,981$ -$ - - - - - 25,320 - - - 25,320 30,981 - - - - - - - - - - - - - - - - - 37,406 - 14,457 829,133 - (25,320) - - 37,406 (25,320) 14,457 829,133 37,406$ -$ 45,438$ 829,133$ Capital Projects - Commerce Way Project Capital Project - Parks Capital Improvement- Streets Barton / Colton Bridge Capital Projects Funds 71 E.7.a Packet Pg. 189 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments Receivables: Accounts Receivable Due from other governments Due from other funds Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Refundable Deposits Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficit): Restricted for: Community development projects Public safety Public works Unassigned Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances Permanent Fund 20,314$ 4,773,773$ - 497 - 392,062 - 36,000 20,314$ 5,202,332$ -$ 92,017$ 20,314 24,977 - 268,150 20,314 385,144 - 235,150 - 235,150 - 1,388,824 - 32,678 - 3,374,167 - (213,631) - 4,582,038 20,314$ 5,202,332$ Dog Park Endowment fund Total Governmental Funds 72 E.7.a Packet Pg. 190 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) THIS PAGE INTENTIONALLY LEFT BLANK 73 E.7.a Packet Pg. 191 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Taxes -$ -$ -$ -$ Intergovernmental - - - 165,306 Charges for services 60,228 - 272 - Use of money and property 13,566 6,228 1,842 1,200 Fines and forfeitures - - - - Miscellaneous - - - - Total Revenues 73,794 6,228 2,114 166,506 Expenditures: Current: Public safety - - - 165,856 Cultural and recreation - - - - Public works - - - - Capital outlay - - - - Total Expenditures - - - 165,856 Excess (Deficiency) of Revenues Over (Under) Expenditures 73,794 6,228 2,114 650 Other Financing Sources (Uses): Transfers in - - - - Transfers out - - - - Total Other Financing Sources (Uses)- - - - Net Change in Fund Balances 73,794 6,228 2,114 650 Fund Balances (Deficit), Beginning of Year 660,950 298,886 37,254 24,470 Fund Balances (Deficit), End of Year 734,744$ 305,114$ 39,368$ 25,120$ Ab 3229 Cops Street Improvement Storm Drain Improvement Park Development Special Revenue Funds 74 E.7.a Packet Pg. 192 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Taxes Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Total Revenues Expenditures: Current: Public safety Cultural and recreation Public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year (Continued) Traffic Safety -$ -$ -$ -$ 61,944 338,455 - - - - - 1,111 780 1,672 433 3,720 - - 6,984 - - - - - 62,724 340,127 7,417 4,831 - - - - - - - 3,999 - 297,360 - - - - - - - 297,360 - 3,999 62,724 42,767 7,417 832 - 193,444 - - (11,000) (35,000) - - (11,000) 158,444 - - 51,724 201,211 7,417 832 21,671 (23,012) 18,532 190,723 73,395$ 178,199$ 25,949$ 191,555$ State Gas Tax Facilities Development Air Quality Improvement Special Revenue Funds 75 E.7.a Packet Pg. 193 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Taxes Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Total Revenues Expenditures: Current: Public safety Cultural and recreation Public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year Measure I -$ -$ 59,974$ -$ 343,344 56,845 - - - - - - 11,226 (391) 2,771 21,694 - - 622 - - - - - 354,570 56,454 63,367 21,694 - - - - - 28,486 - - 79,672 46,284 27,885 - - - - - 79,672 74,770 27,885 - 274,898 (18,316) 35,482 21,694 - - - - (250,000) - - (50,000) (250,000) - - (50,000) 24,898 (18,316) 35,482 (28,306) 423,681 (27,754) 111,973 1,028,137 448,579$ (46,070)$ 147,455$ 999,831$ CDBG Special Districts Landscape & Lighting Spring Mountain Ranch Special Revenue Funds 76 E.7.a Packet Pg. 194 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Taxes Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Total Revenues Expenditures: Current: Public safety Cultural and recreation Public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year (Continued) -$ -$ -$ -$ - 58,166 - 42,010 - - - - 437 (368) 2,744 (1,570) - - - - - - 16,474 - 437 57,798 19,218 40,440 - - - - 2 172,967 - - 163 - 9,085 - - - 3,889 875 165 172,967 12,974 875 272 (115,169) 6,244 39,565 - 66,474 - - - - - - - 66,474 - - 272 (48,695) 6,244 39,565 21,408 28,323 130,146 (107,583) 21,680$ (20,372)$ 136,390$ (68,018)$ Highway Safety Improvement Program Cal Recycle Grant Senior Bus Program Public, Educational & Government Access Special Revenue Funds 77 E.7.a Packet Pg. 195 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Taxes Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Total Revenues Expenditures: Current: Public safety Cultural and recreation Public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year -$ -$ -$ -$ - - 293,297 - - - - - (134) (192) 14,635 - - - - 7,558 - - - - (134) (192) 307,932 7,558 - - - - - - - - - - - - - - - - - - - - (134) (192) 307,932 7,558 - - - - - - (315,000) - - - (315,000) - (134) (192) (7,068) 7,558 (7,157) (46,368) 586,804 - (7,291)$ (46,560)$ 579,736$ 7,558$ Emergency Management Preparation Grant RMRA Enhanced Infrastructure Financing District National Opioid Settlement Special Revenue Fund 78 E.7.a Packet Pg. 196 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Taxes Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Total Revenues Expenditures: Current: Public safety Cultural and recreation Public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year (Continued) -$ -$ -$ -$ - - - - - - - - (8,440) (461) 2,472 17,544 - - - - - - - - (8,440) (461) 2,472 17,544 - - - - - - - - 599,453 - - - - - 196,496 - 599,453 - 196,496 - (607,893) (461) (194,024) 17,544 600,000 - - - - - - - 600,000 - - - (7,893) (461) (194,024) 17,544 45,299 (24,859) 208,481 811,589 37,406$ (25,320)$ 14,457$ 829,133$ Capital Improvement- Streets Barton / Colton Bridge Capital Projects - Commerce Way Project Capital Project - Parks Capital Projects Funds 79 E.7.a Packet Pg. 197 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Taxes Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Total Revenues Expenditures: Current: Public safety Cultural and recreation Public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year Permanent Fund -$ 59,974$ - 1,359,367 - 61,611 - 91,408 - 15,164 - 16,474 - 1,603,998 - 165,856 - 205,454 - 1,059,902 - 201,260 - 1,632,472 - (28,474) - 859,918 - (661,000) - 198,918 - 170,444 - 4,411,594 -$ 4,582,038$ Total Governmental Funds Dog Park Endowment fund 80 E.7.a Packet Pg. 198 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Street Improvement For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 660,950$ 660,950$ 660,950$ -$ Resources (Inflows): Charges for services 86,000 86,000 60,228 (25,772) Use of money and property 2,000 2,000 13,566 11,566 Amounts Available for Appropriations 748,950 748,950 734,744 (14,206) Budgetary Fund Balance, June 30 748,950$ 748,950$ 734,744$ (14,206)$ 81 E.7.a Packet Pg. 199 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Storm Drain Improvement For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 298,886$ 298,886$ 298,886$ -$ Resources (Inflows): Use of money and property 800 800 6,228 5,428 Amounts Available for Appropriations 299,686 299,686 305,114 5,428 Budgetary Fund Balance, June 30 299,686$ 299,686$ 305,114$ 5,428$ 82 E.7.a Packet Pg. 200 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Park Development For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 37,254$ 37,254$ 37,254$ -$ Resources (Inflows): Charges for services - - 272 272 Use of money and property 800 800 1,842 1,042 Amounts Available for Appropriations 38,054 38,054 39,368 1,314 Budgetary Fund Balance, June 30 38,054$ 38,054$ 39,368$ 1,314$ 83 E.7.a Packet Pg. 201 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule AB 3229 COPS For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 24,470$ 24,470$ 24,470$ -$ Resources (Inflows): Intergovernmental 165,000 165,000 165,306 306 Use of money and property - - 1,200 1,200 Amounts Available for Appropriations 189,470 189,470 190,976 1,506 Charges to Appropriations (Outflow): Public safety 160,550 160,550 165,856 (5,306) Total Charges to Appropriations 160,550 160,550 165,856 (5,306) Budgetary Fund Balance, June 30 28,920$ 28,920$ 25,120$ (3,800)$ 84 E.7.a Packet Pg. 202 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Air Quality Improvement For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 21,671$ 21,671$ 21,671$ -$ Resources (Inflows): Intergovernmental 16,400 16,400 61,944 45,544 Use of money and property - - 780 780 Amounts Available for Appropriations 38,071 38,071 84,395 46,324 Charges to Appropriations (Outflow): Transfers out - 11,000 11,000 - Total Charges to Appropriations - 11,000 11,000 - Budgetary Fund Balance, June 30 38,071$ 27,071$ 73,395$ 46,324$ 85 E.7.a Packet Pg. 203 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule State Gas Tax For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance (Deficit), July 1 (23,012)$ (23,012)$ (23,012)$ -$ Resources (Inflows): Intergovernmental 367,300 367,300 338,455 (28,845) Use of money and property 400 400 1,672 1,272 Transfers in 70,000 110,000 193,444 83,444 Amounts Available for Appropriations 414,688 454,688 510,559 55,871 Charges to Appropriations (Outflow): Public works 363,414 403,414 297,360 106,054 Transfers out - 35,000 35,000 - Total Charges to Appropriations 363,414 438,414 332,360 106,054 Budgetary Fund Balance (Deficit), June 30 51,274$ 16,274$ 178,199$ 161,925$ 86 E.7.a Packet Pg. 204 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Traffic Safety For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 18,532$ 18,532$ 18,532$ -$ Resources (Inflows): Use of money and property - - 433 433 Fines and forfeitures 4,500 4,500 6,984 2,484 Amounts Available for Appropriations 23,032 23,032 25,949 2,917 Charges to Appropriations (Outflow): Public safety 4,000 4,000 - 4,000 Total Charges to Appropriations 4,000 4,000 - 4,000 Budgetary Fund Balance, June 30 19,032$ 19,032$ 25,949$ 6,917$ 87 E.7.a Packet Pg. 205 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Facilities Development For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 190,723$ 190,723$ 190,723$ -$ Resources (Inflows): Charges for services 20,000 20,000 1,111 (18,889) Use of money and property 600 600 3,720 3,120 Amounts Available for Appropriations 211,323 211,323 195,554 (15,769) Charges to Appropriation (Outflow): Cultural and recreation - - 3,999 (3,999) Total Charges to Appropriations - - 3,999 (3,999) Budgetary Fund Balance, June 30 211,323$ 211,323$ 191,555$ (19,768)$ 88 E.7.a Packet Pg. 206 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Measure I For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 423,681$ 423,681$ 423,681$ -$ Resources (Inflows): Intergovernmental 300,000 300,000 343,344 43,344 Use of money and property 400 400 11,226 10,826 Amounts Available for Appropriations 724,081 724,081 778,251 54,170 Charges to Appropriations (Outflow): Public works 79,272 79,272 79,672 (400) Capital outlay 40,000 40,000 - 40,000 Transfers out - 250,000 250,000 - Total Charges to Appropriations 119,272 369,272 329,672 39,600 Budgetary Fund Balance, June 30 604,809$ 354,809$ 448,579$ 93,770$ 89 E.7.a Packet Pg. 207 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule CDBG For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance (Deficit), July 1 (27,754)$ (27,754)$ (27,754)$ -$ Resources (Inflows): Intergovernmental 60,140 185,150 56,845 (128,305) Use of money and property - - (391) (391) Amounts Available for Appropriations 32,386 157,396 28,700 (128,696) Charges to Appropriations (Outflow): Parks and recreation - 125,010 28,486 96,524 Public works 60,140 60,140 46,284 13,856 Total Charges to Appropriations 60,140 185,150 74,770 110,380 Budgetary Fund Balance (Deficit), June 30 (27,754)$ (27,754)$ (46,070)$ (18,316)$ 90 E.7.a Packet Pg. 208 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Special Districts Landscape & Lighting For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 111,973$ 111,973$ 111,973$ -$ Resources (Inflows): Taxes 57,325 57,325 59,974 2,649 Use of money and property - - 2,771 2,771 Fines and forfeitures - - 622 622 Amounts Available for Appropriations 169,298 169,298 175,340 6,042 Charges to Appropriations (Outflow): Public works 56,238 56,238 27,885 28,353 Total Charges to Appropriations 56,238 56,238 27,885 28,353 Budgetary Fund Balance, June 30 113,060$ 113,060$ 147,455$ 34,395$ 91 E.7.a Packet Pg. 209 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Spring Mountain Ranch For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,028,137$ 1,028,137$ 1,028,137$ -$ Resources (Inflows): Licenses and permits 50,000 50,000 - (50,000) Use of money and property 2,000 2,000 21,694 19,694 Amounts Available for Appropriations 1,080,137 1,080,137 1,049,831 (30,306) Charges to Appropriation (Outflow): Transfers out 50,000 50,000 50,000 - Total Charges to Appropriations 50,000 50,000 50,000 - Budgetary Fund Balance, June 30 1,030,137$ 1,030,137$ 999,831$ (30,306)$ 92 E.7.a Packet Pg. 210 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Senior Bus Program For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 28,323$ 28,323$ 28,323$ -$ Resources (Inflows): Intergovernmental 138,965 298,965 58,166 (240,799) Charges for services 3,000 3,000 - (3,000) Use of money and property - - (368) (368) Transfers in 10,700 128,700 66,474 (62,226) Amounts Available for Appropriations 180,988 458,988 152,595 (306,393) Charges to Appropriation (Outflow): Cultural and recreation 146,825 424,825 172,967 251,858 Total Charges to Appropriations 146,825 424,825 172,967 251,858 Budgetary Fund Balance (Deficit), June 30 34,163$ 34,163$ (20,372)$ (54,535)$ 93 E.7.a Packet Pg. 211 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Public, Educational & Government Access For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 130,146$ 130,146$ 130,146$ -$ Resources (Inflows): Use of money and property 300 300 2,744 2,444 Miscellaneous 19,000 19,000 16,474 (2,526) Amounts Available for Appropriations 149,446 149,446 149,364 (82) Charges to Appropriation (Outflow): Public works - - 9,085 (9,085) Capital outlay 19,300 19,300 3,889 15,411 Total Charges to Appropriations 19,300 19,300 12,974 6,326 Budgetary Fund Balance, June 30 130,146$ 130,146$ 136,390$ 6,244$ 94 E.7.a Packet Pg. 212 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule Highway Safety Improvement Program For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance (Deficit), July 1 (107,583)$ (107,583)$ (107,583)$ -$ Resources (Inflows): Intergovernmental 44,000 44,000 42,010 (1,990) Use of money and property - - (1,570) (1,570) Amounts Available for Appropriations (63,583) (63,583) (67,143) (3,560) Charges to Appropriation (Outflow): Capital outlay 44,000 44,000 875 43,125 Total Charges to Appropriations 44,000 44,000 875 43,125 Budgetary Fund Balance (Deficit), June 30 (107,583)$ (107,583)$ (68,018)$ 39,565$ 95 E.7.a Packet Pg. 213 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparison Schedule RMRA For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 586,804$ 586,804$ 586,804$ -$ Resources (Inflows): Intergovernmental 282,600 282,600 293,297 10,697 Use of money and property - - 14,635 14,635 Amounts Available for Appropriation 869,404 869,404 894,736 25,332 Charges to Appropriation (Outflow): Transfers out - 342,000 315,000 27,000 Total Charges to Appropriations - 342,000 315,000 27,000 Budgetary Fund Balance, June 30 869,404$ 527,404$ 579,736$ 52,332$ 96 E.7.a Packet Pg. 214 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparision Schedule Capital Improvement- Streets For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 45,299$ 45,299$ 45,299$ -$ Resources (Inflows): Use of money and property - - (8,440) (8,440) Transfers in - 627,000 600,000 (27,000) Amounts Available for Appropriations 45,299 672,299 636,859 (35,440) Charges to Appropriations (Outflow): Public works - 627,000 599,453 27,547 Total Charges to Appropriations - 627,000 599,453 27,547 Budgetary Fund Balance, June 30 45,299$ 45,299$ 37,406$ (7,893)$ 97 E.7.a Packet Pg. 215 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparision Schedule Capital Projects - Parks For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 208,481$ 208,481$ 208,481$ -$ Resources (Inflows): Charges for services 1,589,952 1,589,952 - (1,589,952) Use of money and property - - 2,472 2,472 Amounts Available for Appropriations 1,798,433 1,798,433 210,953 (1,587,480) Charges to Appropriation (Outflow): Capital outlay 1,804,606 1,877,482 196,496 1,680,986 Total Charges to Appropriations 1,804,606 1,877,482 196,496 1,680,986 Budgetary Fund Balance, June 30 (6,173)$ (79,049)$ 14,457$ 93,506$ 98 E.7.a Packet Pg. 216 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE Budgetary Comparision Schedule Capital Projects - Commerce Way Project For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 811,589$ 811,589$ 811,589$ -$ Resources (Inflows): Use of money and property - - 17,544 17,544 Amounts Available for Appropriations 811,589 811,589 829,133 17,544 Charges to Appropriation (Outflow): Capital outlay 839,594 839,594 - 839,594 Total Charges to Appropriations 839,594 839,594 - 839,594 Budgetary Fund Balance, June 30 (28,005)$ (28,005)$ 829,133$ 857,138$ 99 E.7.a Packet Pg. 217 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) THIS PAGE INTENTIONALLY LEFT BLANK 100 E.7.a Packet Pg. 218 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A C F R F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 )   1611 E. Fourth Street, Suite 200 Santa Ana, CA 92701 (714) 569-1000 203 N. Brea Blvd, Suite 203 Brea, CA 92821 (714) 672-0022 21 Waterway Avenue, Suite 30089 The Woodlands, TX 77380 (936) 828-4587 2151 River Plaza Dr., Suite 150 Sacramento, CA 95833  (916) 503-9691 24422 Avenida de la Carlota, Suite 275 Laguna Hills, CA 92653 (949) 829-8299 www.lslcpas.com February 15, 2024 To the Honorable Mayor and Members of the City Council City of Grand Terrace, California We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Grand Terrace, California (the “City”) for the year ended June 30, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards (and, if applicable, Government Auditing Standards) as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated April 25, 2023. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Matters Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 1 to the financial statements, the City changed accounting policies related to subscription-based information technology arrangements by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 96, in fiscal year 2022-2023. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were: Management’s estimates of the net pension liability and net other postemployment benefits liability are based on actuarial valuation estimates. We evaluated the methods, assumptions, and data used to develop the actuarial valuation estimates in determining that they are reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The E.7.b Packet Pg. 219 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A u d i t o r C o m m u n i c a t i o n L e t t e r F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. The uncorrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in our judgment, such uncorrected misstatements are immaterial to the financial statements under audit. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated February 15, 2024. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management’s discussion and analysis, the budgetary comparison schedules for the General Fund and the major special revenue funds, and the required pension and other postemployment benefits schedules, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual fund financial statements and schedules which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. E.7.b Packet Pg. 220 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A u d i t o r C o m m u n i c a t i o n L e t t e r F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Future GASB Pronouncements The following Government Accounting Standards Board (GASB) pronouncements will be effective for the following fiscal years’ audits and should be reviewed for proper implementation by management: Fiscal Year 2023-2024 GASB Statement No. 99, Omnibus 2022. Fiscal Year 2024-2025 GASB Statement No. 101, Compensated Absences. Future Projects Comprehensive Project, Financial Reporting Model. Comprehensive Project, Revenue and Expense Recognition. Major Project, Going Concern Uncertainties and Severe Financial Stress. Major Project, Infrastructure Assets. Practice Issue, Classification of Nonfinancial Assets. Practice Issue, Risks and Uncertainties Disclosures. Pre-Agenda Research Activities, Subsequent Events. Restriction on Use This information is intended solely for the information and use of City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Brea, California E.7.b Packet Pg. 221 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A u d i t o r C o m m u n i c a t i o n L e t t e r F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Summary of Unadjusted Audit Differences Name of Governmental Unit: City of Grand Terrace Date of Combined Balance Sheet: June 30, 2023 Opinion Unit, Fund Type or Fund: All Unadjusted Audit Differences Cause Cash market value adjustment missed adjustment 16,328$ Cumulative effect (before effect of prior year differences) 16,328 Cumulative effect (after effect of prior year differences) 16,328$ Current Year Over (Under) Revenues and Expenditures/Expenses and Changes in Fund Balance/Equity   E.7.b Packet Pg. 222 At t a c h m e n t : C i t y o f G r a n d T e r r a c e A u d i t o r C o m m u n i c a t i o n L e t t e r F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 )   1611 E. Fourth Street, Suite 200 Santa Ana, CA 92701 (714) 569-1000 203 N. Brea Blvd, Suite 203 Brea, CA 92821 (714) 672-0022 21 Waterway Avenue, Suite 30089 The Woodlands, TX 77380 (936) 828-4587 2151 River Plaza Dr., Suite 150 Sacramento, CA 95833  (916) 503-9691 24422 Avenida de la Carlota, Suite 275 Laguna Hills, CA 92653 (949) 829-8299 www.lslcpas.com INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council City of Grand Terrace, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Grand Terrace, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated February 15, 2024. Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. E.7.c Packet Pg. 223 At t a c h m e n t : C i t y o f G r a n d T e r r a c e R e p o r t o n I C F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Brea, California February 15, 2024 E.7.c Packet Pg. 224 At t a c h m e n t : C i t y o f G r a n d T e r r a c e R e p o r t o n I C F i n a l 2 - 2 6 - 2 4 ( A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) AGENDA REPORT MEETING DATE: March 12, 2024 Council & Housing Authority Item TITLE: Housing Successor Agency Annual Financial Report for the Year Ended June 30, 2023 PRESENTED BY: Christine Clayton, Finance Director RECOMMENDATION: Receive and file the Auditor's Annual Financial Report and related document for the City's Housing Successor Agency. 2030 VISION STATEMENT: This staff report supports Goal #1, Ensuring Our Fiscal Viability” through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations. BACKGROUND: Each year, the City has an independent audit conducted of its financial statements and related internal control procedures, included in this is the Audit of the City’s Housing Successor Agency. The audit for the Housing Successor Agency for the fiscal year ended June 30, 2023, has been completed and the Annual Financial Report issued by the City’s auditor, Lance, Soll & Lunghard, LLP. DISCUSSION: One of the key aspects of any annual financial audit is the Independent Auditor’s Report, which is provided on page 1 of the Annual Audit Report (Exhibit A). The Independent Auditor’s Report provides its opinion on whether or not the financial statements fairly represent, in all material respects, the respective financial position of the governmental activities, and the major fund, as of the end of the fiscal year, and the respective changes in financial position and cash flows, where applicable, in conformance with Generally Accepted Accounting Principles (GAAP). The resulting “opinion letter” is either unmodified or modified. The “opinion letter” received by the City for its Housing Successor Agency financial statements for the period ended June 30, 2023, is unmodified, indicating that the financial statements fairly represent the City’s financial position in accordance with GAAP. In addition to the Annual Financial Report, the independent auditor issued the related document, which is summarized below: • Internal Control & Compliance Report (Exhibit B) The Internal Control & Compliance Report identifies any material internal control E.8 Packet Pg. 225 deficiencies that impact the financial statements. The results of the tests performed by the City auditors did not identify any deficiencies in internal control that are required to be reported under Government Auditing Standards. In addition, the results of the Auditor’s tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. FISCAL IMPACT: There is no fiscal impact associated with the receipt of the Annual Financial Report and related documents for the year ended June 30, 2023. ATTACHMENTS: • Grand Terrace Housing Successor Agency FS Final 12-22-23 (PDF) APPROVALS: Christine Clayton Completed 02/27/2024 4:36 PM Finance Completed 02/27/2024 4:36 PM City Manager Completed 03/07/2024 9:04 AM City Council Pending 03/12/2024 6:00 PM E.8 Packet Pg. 226 GRAND TERRACE HOUSING SUCCESSOR AGENCY GRAND TERRACE, CALIFORNIA JUNE 30, 2023 FINANCIAL STATEMENTS E.8.a Packet Pg. 227 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r GRAND TERRACE HOUSING SUCCESSOR AGENCY GRAND TERRACE, CALIFORNIA FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2023 E.8.a Packet Pg. 228 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r GRAND TERRACE HOUSING SUCCESSOR AGENCY GRAND TERRACE, CALIFORNIA Financial Statements For the Year Ended June 30, 2023 Table of Contents Page Number Independent Auditors’ Report ...................................................................................................................................... 1 Independent Auditors’ Report on Compliance with Applicable Requirement and on Internal Control Over Compliance ....................................................................................... 4 Basic Financial Statements Statement of Net Position and Governmental Fund Balance Sheet ..................................................................... 7 Statement of Activities and Governmental Statement of Revenues, Expenditures and Changes in Fund Balance ....................................................................................................... 8 Notes to Financial Statements ................................................................................................................................. 9 Required Supplementary Information Budgetary Comparison Schedule ........................................................................................................................ 12 Other Information Computation of Housing Successor Excess/Surplus ........................................................................................... 13 E.8.a Packet Pg. 229 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r 1611 E. Fourth Street, Suite 200 Santa Ana, CA 92701 (714) 569-1000 203 N. Brea Blvd, Suite 203 Brea, CA 92821 (714) 672-0022 21 Waterway Avenue, Suite 30089 The Woodlands, TX 77380 (936) 828-4587 2151 River Plaza Dr., Suite 150 Sacramento, CA 95833  (916) 503-9691 24422 Avenida de la Carlota, Suite 275 Laguna Hills, CA 92653 (949) 829-8299 www.lslcpas.com INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Report on the Financial Statements Opinions We have audited the accompanying financial statements of the of the governmental activities, and the major governmental fund of the Grand Terrace Housing Successor, (the Housing Successor), a special revenue fund of the City of Grand Terrace, California, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Housing Successor’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, and the major governmental fund of the Grand Terrace Housing Successor as of June 30, 2023, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS), the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the State Controller’s Minimum Audit Standards for California Special Districts. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Housing Successor and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter As discussed in Note 1, the financial statements present the financial position of only the Housing Successor, and do not present, or purport to present fairly, the financial position of the City as of June 30, 2023, in accordance with accounting principle generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. E.8.a Packet Pg. 230 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r To the Honorable Mayor and Members of the City Council City of Grand Terrace, California In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Housing Successor’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Housing Successor’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Housing Successor’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Other Reporting Responsibilities Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison schedule as listed on the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial 2 E.8.a Packet Pg. 231 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r To the Honorable Mayor and Members of the City Council City of Grand Terrace, California statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has omitted the management’s discussion and analysis, that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Housing Successor’s basic financial statements. The computation of the Housing Successors Excess/Surplus (supplementary information) is presented for the purpose of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 13, 2023, on our consideration of the Housing Successor’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Housing Successor’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Housing Successor’s internal control over financial reporting and compliance. Brea, California December 13, 2023 3 E.8.a Packet Pg. 232 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r 1611 E. Fourth Street, Suite 200 Santa Ana, CA 92701 (714) 569-1000 203 N. Brea Blvd, Suite 203 Brea, CA 92821 (714) 672-0022 21 Waterway Avenue, Suite 30089 The Woodlands, TX 77380 (936) 828-4587 2151 River Plaza Dr., Suite 150 Sacramento, CA 95833  (916) 503-9691 24422 Avenida de la Carlota, Suite 275 Laguna Hills, CA 92653 (949) 829-8299 www.lslcpas.com INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE ON COMPLIANCE WITH APPLICABLE REQUIREMENT AND ON INTERNAL CONTROL OVER COMPLIANCE To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Report on Compliance for Housing Successor Opinion We have audited the City of Grand Terrace Housing Successor (the Housing Successor’s), compliance with the types of compliance requirements described in the California Health and Safety Code section applicable to California Housing Successor Agencies for the year ended June 30, 2023. In our opinion, the Housing Successor complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its Housing Successor for the year ended June 30, 2023. Basis for Opinion We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of California Health and Safety Code sections applicable to California Housing Successor Agencies. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the Housing Successor and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit does not provide a legal determination of the Housing Successor’s compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts applicable to the Housing Successor programs. E.8.a Packet Pg. 233 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above, whether due to fraud or error, and express an opinion on the Housing Successor’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the California Health and Safety Code sections applicable to California Housing Successor Agencies will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Housing Successor’s compliance with the requirements of the government program as a whole. In performing an audit in accordance with GAAS, Government Auditing Standards, and California Health and Safety Code sections applicable to California Housing Successor Agencies, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the Housing Successor’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.  Obtain an understanding of the Housing Successor’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with California Health and Safety Code sections applicable to California Housing Successor Agencies, but not for the purpose of expressing an opinion on the effectiveness of the Housing Successor’s internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on Internal Control over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be a material weakness, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that have not been identified. 5 E.8.a Packet Pg. 234 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r To the Honorable Mayor and Members of the City Council City of Grand Terrace, California Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the California Health and Safety Code sections applicable to California Housing Successor Agencies. Accordingly, this report is not suitable for any other purpose. Report on Excess/Surplus Calculation We have audited the financial statements of the governmental activities of the Grand Terrace Housing Successor, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Housing Successor’s basic financial statements. We issued our report thereon dated December 13, 2023, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying report on excess/surplus calculation is presented for purposes of additional analysis as required by the California Health and Safety Code sections applicable to California Housing Successor Agencies and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the report on excess/surplus calculation is fairly stated in all material respects in relation to the basic financial statements as a whole. Brea, California December 13, 2023 6 E.8.a Packet Pg. 235 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r GRAND TERRACE HOUSING SUCCESSOR AGENCY Statement of Net Position and Governmental Fund Balance Sheet June 30, 2023 Reclassifications Governmental and Statement of Fund Eliminations Net Position Assets: Cash and investments 1,370,522$ -$ 1,370,522$ Receivables: Notes and loans 575,130 - 575,130 Advances to City 168,205 - 168,205 Total Assets 2,113,857 - 2,113,857 Liabilities, Deferred Inflows of Resources, and Fund Balance: Deferred Inflows of Resources: Unavailable revenues 61,130 (61,130) - Total Deferred Inflows of Resources 61,130 (61,130) - Fund Balance/Net Position: Fund Balance Restricted for: Low and moderate housing activities 2,052,727 (2,052,727) - Total Fund Balance 2,052,727 (2,052,727) - Total Liabilities, Deferred Inflows of Resources and Fund Balance 2,113,857$ Net Position Restricted for: Low and moderate housing activities 2,052,727 2,113,857 Total Net Position 61,130$ 2,113,857$ See Notes to Financial Statements.7 E.8.a Packet Pg. 236 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r GRAND TERRACE HOUSING SUCCESSOR AGENCY Statement of Activities and Governmental Statement of Revenues, Expenditures and Changes in Fund Balance Year Ended June 30, 2023 Reclassifications Governmental and Statement of Fund Eliminations Activities Revenues: Use of money and property 27,294$ 318$ 27,612$ Total Revenues 27,294 318 27,612 Expenditures: Current: Community development 5,876 - 5,876 Total Expenditures 5,876 - 5,876 Net Change in Fund Balance/Net Position 21,418 318 21,736 Fund Balance/Net Position: Beginning of Year 2,031,309 60,812 2,092,121 End of Year 2,052,727$ 61,130$ 2,113,857$ See Notes to Financial Statements.8 E.8.a Packet Pg. 237 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r GRAND TERRACE HOUSING SUCCESSOR AGENCY Notes to the Financial Statements For the Year Ended June 30, 2023 I. SIGNIFICANT ACCOUNTING POLICIES NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of the Reporting Entity The accompanying financial statements present only the Housing Successor Agency Special Revenue Fund of the City of Grand Terrace, California and do not include any other funds of the City. The City's basic financial statements are available at City Hall. On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (the Bill) that provides for the dissolution of all redevelopment agencies in the State of California. The Bill impacted the reporting entity of the City of Grand Terrace that previously had reported a redevelopment agency within the report of the City as a blended component unit. On January 10, 2012, and in accordance with California Health and Safety Code Section 34176, the City Council as part of City resolution number CC-2012-06, elected to retain the housing assets and function of the former redevelopment agency. The City continues to report the housing assets and functions in the government special revenue fund designated City Housing Successor. The attached basic financial statements contain information relative only to the Grand Terrace Housing Successor Agency Fund (the Housing Successor). B. Government-Wide and Fund Financial Statements The government-wide financial statements (Statement of Net position and Statement of Activities) report information on all activities of the Housing Successor. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for the governmental special revenue fund. C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. When both restricted and unrestricted resources are available for use, it is the Housing Successor’s policy to use restricted resources first, and then unrestricted resources as they are needed. 9 E.8.a Packet Pg. 238 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r GRAND TERRACE HOUSING SUCCESSOR AGENCY Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Budget Budget for the Housing Successor Fund is adopted on a basis substantially consistent with accounting principles generally accepted in the United States of America. Accordingly, actual revenues and expenditures can be compared with related budget amounts without any significant reconciling items. E. Deferred Inflow of Resources The balance sheet of the governmental fund is reporting deferred inflows of resources. This separate financial statement element represents an acquisition of net position or fund balance that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The Housing Successor has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from long-term loans. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. F. Fund Balance and Net Position Fund Balance The Housing Successor’s fund balances are classified on the governmental fund balance sheet among the following categories: Nonspendable Fund Balance - This includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted Fund Balance - This includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation. Committed Fund Balance - This includes amounts that can be used only for the specific purposes determined by a formal action of the city council. Assigned Fund Balance - This includes amounts that are designated by the City Council for specific purposes. Unassigned Fund Balance - This is the residual classification that includes all spendable amounts not contained in the other classifications. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, the Housing Successor’s policy is to apply restricted fund balance first. When expenditure is incurred for purposes for which committed, assigned or unassigned fund balances are available, the Housing Successor’s policy is to apply committed fund balance first, then assigned fund balance, and finally unassigned fund balance. Net Position The net position reported on the Statement of Net Position in the government-wide financial statements consists of the following three categories: Invested in capital assets - This amount consists of capital assets, net of accumulated depreciation. Restricted Net Position - This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. 10 E.8.a Packet Pg. 239 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r GRAND TERRACE HOUSING SUCCESSOR AGENCY Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Unrestricted Net Position - This amount is all net position that do not meet the definition of “investment in capital assets” or “restricted net position”. NOTE 2: CASH AND INVESTMENTS The City of Grand Terrace maintains a cash and investment pool that is available for use for all funds. Each fund type’s position in the pool is reported on the combined balance sheet as cash and investments. The Housing Successor Agency pooled cash and investments as of June 30, 2023, was $1,370,522 Information regarding the authorized types of deposits and investments, the type of risks (i.e. credit, interest rate, custodial, etc.) and other disclosures associated with the City's pooled cash and investments is included in the City's basic financial statements, which are available at City Hall. NOTE 3: NOTES AND LOANS RECEIVABLE The Low and Moderate Housing Fund of the City’s former redevelopment agency issued first time homebuyer and rehabilitation second trust loans with interest rates ranging from zero to 3%. The loan balances are due upon the sale of the properties. Interest of $18,590 has accrued on the loans for a total of $575,130. NOTE 4: ADVANCES TO CITY In previous years, the Low and Moderate Housing Fund of the City’s former redevelopment agency advanced funds in the amount $168,205 to the City’s General Fund. On June 22, 2010, the City adopted Resolution 2010-15, in which the cumulative interagency borrowings were memorialized and which set forth a repayment plan by the City to the former Agency subject to available funds. NOTE 5: INSURANCE The Housing Successor Agency participates in the self-insurance programs of the City of Grand Terrace. Disclosures relating to the self-insurance programs can be found in the City’s Comprehensive Annual Financial Report. 11 E.8.a Packet Pg. 240 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r GRAND TERRACE HOUSING SUCCESSOR AGENCY Budgetary Comparison Schedule Governmental Fund Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,031,309$ 2,031,309$ 2,031,309$ -$ Resources (Inflows): Use of money and property 300 300 27,294 26,994 Amounts Available for Appropriations 2,031,609 2,031,609 2,058,603 26,994 Charges to Appropriations (Outflow): Community development 32,789 32,789 5,876 26,913 Total Charges to Appropriations 32,789 32,789 5,876 26,913 Budgetary Fund Balance, June 30 1,998,820$ 1,998,820$ 2,052,727$ 53,907$ 12 E.8.a Packet Pg. 241 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r CITY OF GRAND TERRACE HOUSING SUCCESSOR Computation of Housing Successor Excess/Surplus (HSC 34176.1) Opening Fund Balance 2,031,309$ 2,052,727$ Less Unavailable Amounts: Advances to City (168,205)$ (168,205)$ Loans receivable (514,000) (514,000) (682,205) (682,205) Available Housing Successor Funds 1,349,104 1,370,522 Limitation (greater of $1,000,000 or four years deposits) Aggregate amount deposited for last four years: 2022 - 2023 -$ 27,294$ 2021 - 2022 22,730 22,730 2020 - 2021 2,150 2,150 2019 - 2020 14,206 14,206 2018 - 2019 6,676 - Total 45,762$ 66,380$ Base Limitation 1,000,000$ 1,000,000$ Greater amount 1,000,000 1,000,000 Computed Excess/Surplus 349,104$ 370,522$ * *Please note:In accordance with HSC34176.1(d)If a housing successor has an excess surplus, the housing successor shall encumber the excess surplus for the purposes described in paragraph (3)of subdivision (a)or transfer the funds pursuant to paragraph (2)of subdivision (c) within three fiscal years.If the housing successor fails to comply with this subdivision, the housing successor, within 90 days of the end of the third fiscal year, shall transfer any excess surplus to the Department of Housing and Community Development for expenditure pursuant to the Multifamily Housing Program or the Joe Serna, Jr. Farmworker Housing Grant Program.For purposes of this subdivision, "excess surplus" shall mean an unencumbered amount in the account that exceeds the greater of one million dollars ($1,000,000)or the aggregate amount deposited into the account during the housing successor's preceding four fiscal years, whichever is greater. Low and Moderate All Project Area July 1, 2023 Low and Moderate All Project Area July 1, 2022 Housing Funds Housing Funds 13 E.8.a Packet Pg. 242 At t a c h m e n t : G r a n d T e r r a c e H o u s i n g S u c c e s s o r A g e n c y F S F i n a l 1 2 - 2 2 - 2 3 ( H o u s i n g S u c c e s s o r A g e n c y A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Measure I Fund Annual Financial & Compliance Report for the Year Ended June 30, 2023 PRESENTED BY: Christine Clayton, Finance Director RECOMMENDATION: Receive and file the Auditor's Annual Financial & Compliance Report and related document for the City's Measure I Fund. 2030 VISION STATEMENT: This staff report supports Goal #1, Ensuring Our Fiscal Viability” through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations. BACKGROUND: Each year, the City has an independent audit conducted of its financial statements and related internal control procedures, included in this is the Audit of the City’s Measure I Fund. Measure I is the half-cent sales tax collected throughout San Bernardino County for transportation improvements. The audit for the Measure I Fund for the fiscal year ended June 30, 2023 has been completed and the Annual Financial Report issued by the Measure I Fund Auditor, Conrad. DISCUSSION: One of the key aspects of any annual financial audit is the Independent Auditor’s Report, which is provided on page 1 of the Annual Audit Report (Exhibit A). The Independent Auditor’s Report provides its opinion on whether or not the financial statements fairly present, in all material respects, the respective financial position of the governmental activities, and the major fund, as of the end of the fiscal year, and the respective changes in financial position and cash flows, where applicable, in conformance with Generally Accepted Accounting Principles (GAAP). The resulting “opinion letter” is either unmodified or modified. The “opinion letter” received by the City for its Measure I Fund financial statements for the period ended June 30, 2023 is unmodified, indicating that the financial statements fairly represent the City’s financial position in accordance with GAAP. In addition to the Annual Financial Report, the independent auditor issued the related document, which is included in the Report and is summarized below: E.9 Packet Pg. 243 • Internal Control & Compliance Report The Internal Control & Compliance Report identifies any material internal control deficiencies that impact the financial statements. The results of the tests performed by the City auditors did not identify any deficiencies in internal control that are required to be reported under Government Auditing Standards. In addition, the results of the Auditor’s tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. FISCAL IMPACT: There is no fiscal impact associated with the receipt of the Annual Financial Report and related documents for the Measure I Fund for the year ended June 30, 2023. ATTACHMENTS: • City of Grand Terrace Measure I Report (PDF) APPROVALS: Christine Clayton Completed 02/27/2024 4:35 PM Finance Completed 02/27/2024 4:35 PM City Manager Completed 03/07/2024 9:00 AM City Council Pending 03/12/2024 6:00 PM E.9 Packet Pg. 244 CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Financial Statements Fiscal Year Ended June 30, 2023 E.9.a Packet Pg. 245 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Fiscal Year Ended June 30, 2023 TABLE OF CONTENTS Page Independent Auditor’s Report 1 Financial Statements: Balance Sheets 4 Statement of Revenues, Expenditures and Changes in Fund Balance 5 Notes to Financial Statements 6 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance – 2023 Budget and Actual 13 Other Information: Program Status: Comparison of 5 Year Plan Project Budget to Current Year Expenditures 15 Maintenance of Effort: Comparison of Base Level Amount to Annual Expenditures 16 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Schedule of Findings and Responses Summary Schedule of Prior Audit Findings 17 19 20 E.9.a Packet Pg. 246 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) 1 __________________________________________________________________________________________________________________________________________________________________________________ 23161 Lake Center Drive, Suite 200, Lake Forest, CA 92630 ■ T: (949) 552-7700 ■ www.conradllp.com Board of Directors San Bernardino County Transportation Authority San Bernardino, California INDEPENDENT AUDITOR’S REPORT Opinion We have audited the accompanying financial statements of the Measure I Fund of the City of Grand Terrace, California (“City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Measure I Fund of the City, as of June 30, 2023, and the respective changes in financial position of the Measure I Fund of the City for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities of the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matters As discussed in Note 1, the financial statements present only the Measure I Fund of the City and do not purport to, and do not present fairly, the financial position of the City as of June 30, 2023, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. E.9.a Packet Pg. 247 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Board of Directors San Bernardino County Transportation Authority San Bernardino, California 2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Measure I Fund of the City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the E.9.a Packet Pg. 248 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Board of Directors San Bernardino County Transportation Authority San Bernardino, California 3 information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on financial statements of the Measure I Fund of the City. The Program Status: Comparison of 5 Year Plan Project Budget to Current Year Expenditures listed as Other Information in the table of contents, are presented for purposes of additional analysis and are not a required part of the financial statements. The other information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 11, 2023 on our consideration of the City’s internal control over financial reporting for the Measure I Fund and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance, and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Lake Forest, California December 11, 2023 E.9.a Packet Pg. 249 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Cash and investments (Note 3)400,287$ Taxes Receivable (Note 4)56,704 Total assets 456,991$ Liabilities: Accounts payable 8,412$ Fund balance - restricted 448,579 Liabilities and fund balance 456,991$ Liabilities and Fund Balance CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Balance Sheets June 30, 2023 Assets See accompanying notes to financial statements 4 E.9.a Packet Pg. 250 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Revenues: Measure I sales tax 343,344$ Investment income 10,900 Unrealized loss in inevestments (172) Total revenues 354,072 Expenditures: Construction, maintenance, and engineering 46,672 Total expenditures 46,672 Excess/(deficiency) of revenues over/(under) expenditures 307,400 Other Financing Sources (Uses) Transfers to City of Grand Terrace (Note 6)(283,000) Net change in fund balance 24,400 Fund balance at beginning of year 424,179 Fund balance at end of year 448,579$ Fiscal Years Ended June 30, 2023 CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Statement of Revenues, Expenditures, and Changes in Fund Balance See accompanying notes to financial statements 5 E.9.a Packet Pg. 251 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Notes to Financial Statements Fiscal Year Ended June 30, 2023 6 (1) General Information Reporting Entity The financial statements are intended to reflect the financial position and changes in financial position of the Measure I Fund of the City of Grand Terrace, California (City) only. Accordingly, the financial statements do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2023, and the changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Measure I Measure I is the half-cent sales tax collected throughout San Bernardino County for transportation improvements. In 2004, San Bernardino County voters approved the extension of the Measure I sales tax through 2040. See Note 5 for a detailed description of the Measure. (2) Summary of Significant Accounting Policies The accounting policies of the Measure I Fund of the City conform to accounting policies generally accepted in the United States of America. The following is a summary of significant accounting policies. Fund Accounting The accounts of the City are organized on the basis of funds. A fund is defined as an independent fiscal and accounting entity wherein operations of each fund are accounted for in a separate set of self-balancing accounts that record resources, related benefits, and equity, segregated for the purpose of carrying out specific activities. The City accounts for the Measure I activities within its Measure I Special Revenue Fund. Special revenue funds are used to account for the proceeds of revenue sources that are restricted or committed to expenditure for specified purposes. Measurement Focus and Basis of Accounting The special revenue funds of the City are accounted for using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, revenues are available if they are collected within 60 days of the end of the fiscal period. Expenditures generally are recorded when a liability is incurred. Operating statements of governmental funds present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current resources. E.9.a Packet Pg. 252 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Notes to Financial Statements Fiscal Year Ended June 30, 2023 7 (2) Summary of Significant Accounting Policies (Continued) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates. Revenue Recognition Recognition of revenues arising from nonexchange transactions, which include revenues from taxes, certain grants, and contributions, is based on the primary characteristic from which the revenues are received by the City. For the City, funds received under Measure I possess the characteristic of a voluntary nonexchange transaction similar to a grant. Revenues under Measure I are recognized in the period when all eligibility requirements have been met. Deferred Inflows of Resources Deferred inflows of resources-unavailable revenues represents revenues earned during the period but unavailable to liquidate current liabilities. These amounts are deferred and recognized in the period that the amounts become available. Deferred inflows of resources in the financial statements represent amounts due from other governments at year-end, and not collected with a timeframe to finance current year expenditures. Fund Balance The components of the fund balances of governmental funds reflect the component classifications described below.  Nonspendable Fund Balance – includes amounts that cannot be spent because they are either (a) not in spendable form, or (b) legally or contractually required to be maintained intact.  Restricted Fund Balance – includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation.  Committed Fund Balance – includes amounts that can be used only for the specific purposes determined by a formal action of the City. E.9.a Packet Pg. 253 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Notes to Financial Statements Fiscal Year Ended June 30, 2023 8 (2) Summary of Significant Accounting Policies (Continued)  Assigned Fund Balance – includes amounts that are intended to be used by the City for specific purposes, but do not meet the criteria to be classified as restricted or committed.  Unassigned Fund Balance – includes any deficit fund balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. When restricted and unrestricted resources are available for expenditure for the same purpose, the City expends restricted resources before unrestricted resources. Within unrestricted resources, the fund balance is depleted in the order of committed, assigned, and unassigned. Maintenance of Effort In accordance with California Public Utilities Code 190300 and Ordinance No. 04-01 of the San Bernardino County Transportation Authority (SBCTA), Local Street Program funds shall not be used to supplant existing local discretionary funds being used for street and highway purposes. The maintenance of effort (MOE) base year level was determined based upon the discretionary General Fund expenditures for transportation-related construction and maintenance activities in fiscal year 2008/2009. The MOE base year level as approved by the SBCTA Board of Directors shall remain in effect until the expiration of Measure I 2010-2040. General Fund expenditures in excess of the MOE base year level will carry over to subsequent fiscal years and can be applied in a future year to offset the amount the local agency may need to meet the MOE requirement. The City’s determined MOE base level is $115,156. (3) Cash and Investments Cash and investments are pooled by the City to facilitate cash management and maximize investment opportunities and yields. Investment income resulting from this pooling is allocated to the respective funds including the Measure I Fund based upon the average cash balance. The investment policies and the risks related to cash and investments, applicable to the Measure I Fund, are those of the City and are disclosed in the City’s basic financial statements. The City’s basic financial statements can be obtained at City Hall. E.9.a Packet Pg. 254 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Notes to Financial Statements Fiscal Year Ended June 30, 2023 9 (3) Cash and Investments (Continued) The Measure I Fund’s cash and investments are reported at fair value. The fair value measurements are based on the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Measure I Fund’s deposits and withdrawals in the City Investment Pool are made on the basis of $1 and not fair value. Accordingly, the Measure I Fund’s investment in the City Investment Pool is measured based on uncategorized inputs not defined as Level 1, Level 2, or Level 3. The Measure I Fund’s cash and investments as of June 30, 2023 was $400,287. (4) Taxes Receivable Taxes receivable in the amount of $56,704 represent the Measure I sales tax receipts received from SBCTA after June 30, 2023. (5) Measure I Fund The California State Legislature authorized county transportation authorities to enact local option sales tax measures for transportation improvements in the late 1980s, under provisions of Division 19 (commencing with Section 180000) of the Public Utilities Code. In November 1989, San Bernardino County voters approved passage of Measure I, authorizing SBCTA to impose a half-cent retail transactions and use tax applicable in the incorporated and unincorporated areas of the County of San Bernardino for the 20-year period between April 1, 1990 and March 31, 2010. SBCTA is authorized to administer the programs described in the Measure. Early in the second decade of Measure I, it became apparent that continuation of the half cent sales tax would be critical to maintaining funding for transportation in San Bernardino County. SBCTA member jurisdictions and transportation stakeholders worked to identify transportation needs, and an expenditure plan was developed to serve as a basis for the renewal of Measure I. Ordinance No. 04-01 was placed before voters in November 2004, and Measure I was renewed. The new Measure I extends the half cent sales tax for 30 years, from April 1, 2010 through March 31, 2040. The new Measure is referred to as Measure I 2010-2040 to distinguish it from the first Measure I. Revenue from the tax can only be used for transportation improvement and traffic management programs authorized in the Expenditure Plan. E.9.a Packet Pg. 255 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Notes to Financial Statements Fiscal Year Ended June 30, 2023 10 (5) Measure I Fund (Continued) Measure I 2010-2040 has a return-to-source provision that states that funds shall be allocated to subareas in accordance with the actual revenue collected in each subarea. After deduction of required Board of Equalization fees and authorized administrative costs, revenues generated in each subarea are to be expended on projects of direct benefit to that subarea. Revenues are accounted for separately for each subarea and then allocated to specified project categories in each subarea. These project categories are termed “programs” in the Strategic Plan. Decisions on how revenues are expended within the subareas are made by the SBCTA Board of Directors based upon recommendations of local subarea representatives. Other than the projects identified in the Cajon Pass Expenditure Plan, revenues generated within a subarea can be expended outside of that subarea only upon approval of two-thirds (2/3) of the jurisdictions within the affected subarea. A proportional share of projected state and federal transportation funds is to be reserved for use solely within the Valley subarea and individual Mountain/Desert (Colorado River, Morongo Basin, Mountains, North Desert and Victor Valley) subareas. In the San Bernardino Valley subarea, Measure I 2010-2040 contains the following programs:  Freeway Program  Freeway Interchange Program  Major Street Program  Local Street Program  Metrolink/Rail Program  Express Bus/Bus Rapid Transit Program  Senior and Disabled Transit Program  Traffic Management Systems Program In each of the Mountain/Desert subareas, Measure I 2010-2040 contains the following programs:  Local Street Program  Major Local Highway Program  Senior and Disabled Transit Program E.9.a Packet Pg. 256 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Notes to Financial Statements Fiscal Year Ended June 30, 2023 11 (6) Transfers to the City of Grand Terrace During the year ended June 30, 2023, $283,000 was transferred to the City which represents activity related to the Measure I general street maintenance activities and the pavement management program in accordance with the City’s Measure I Five Year Capital Improvement Plan. (7) Restrictions Funds received pursuant to the Measure I Ordinance 04-01 and the Expenditure Plan, adopted by SBCTA relating to the expenditure of Measure I revenue may only be used for transportation improvement and traffic management programs authorized in the Measure I Five Year Capital Improvement Program. (8) Contingencies See the City’s basic financial statements for disclosures related to contingencies including those relating to various legal actions, administrative proceedings, or claims in the ordinary course of operations. (9) Budgetary Data The City adopts an annual budget on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the fund level. E.9.a Packet Pg. 257 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) 12 Required Supplementary Information E.9.a Packet Pg. 258 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Variance From Final Budget Favorable Original Final Actual (Unfavorable) Revenues: Measure I sales tax 300,000$ 300,000$ 343,344$ 43,344$ Investment income 400 400 10,900 10,500 Unrealized loss in investments - - (172) (172) Total revenues 300,400 300,400 354,072 53,672 Expenditures: Construction, maintenance, and engineering 86,272 86,272 46,672 39,600 Total expenditures 86,272 86,272 46,672 39,600 Excess/(deficiency) of revenues over/(under) expenditures 214,128 214,128 307,400 93,272 Other Financing Sources (Uses) Transfers to City of Grand Terrace 33,000 283,000 283,000 - Net change in fund balance 181,128$ (68,872)$ 24,400 93,272$ Fund balance at beginning of year 424,179 Fund balance at end of year 448,579$ Budget CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Fiscal Year Ended June 30, 2023 13 E.9.a Packet Pg. 259 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) 14 Other Information E.9.a Packet Pg. 260 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Local Projects 5-Year Plan Project Estimate Current Fiscal Year Expenditures (Over)/Under Estimate Tree Trimming Program 334,734$ 46,672$ 288,062$ Total Measure I Fund Expenditures 46,672$ Measure I Fund Transfers to City of Grand Terrace 283,000 Total 329,672$ The Measure I Five Year Capital Improvement Plan for local streets was adopted by Council Resolution No. 2022-45. Of the funds allocated under the Measure I Five Year Capital Improvement Plan, the following programs were affected during the current fiscal year: CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Program Status: Comparison of 5 Year Plan Project Budget to Current Year Expenditures Fiscal Year Ended June 30, 2023 15 E.9.a Packet Pg. 261 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Fiscal Year Ending June 30, General Fund Street and Highway Funds Base Level Amount Excess/ (Deficiency) Cumulative Excess/ (Deficiency) 2010 40,142$ (115,156)$ (75,014)$ (75,014)$ 2011 160,298 (115,156) 45,142 (29,872) 2012 72,664 (115,156) (42,492) (72,364) 2013 89,957 (115,156) (25,199) (97,563) 2014 99,332 (115,156) (15,824) (113,387) 2015 91,999 (115,156) (23,157) (136,544) 2016 116,749 (115,156) 1,593 (134,951) 2017 148,773 (115,156) 33,617 (101,334) 2018 206,192 (115,156) 91,036 (10,298) 2019 208,718 (115,156) 93,562 83,264 2020 151,991 (115,156) 36,835 120,099 2021 118,280 (115,156) 3,124 123,223 2022 137,766 (115,156) 22,610 145,833 The maintenance of effort base level amount was determined based upon fiscal year 2008/09 spending levels. Excess/(deficient) amounts are carried forward in accordance with the Measure I Strategic Plan. Actual amounts expended in relation to the base level amount in each year subsequent to the base year are as follows: CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Maintenance of Effort: Comparison of Base Level Amount to Annual Expenditures Fiscal Year Ended June 30, 2023 16 E.9.a Packet Pg. 262 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) 17 __________________________________________________________________________________________________________________________________________________________________________________ 23161 Lake Center Drive, Suite 200, Lake Forest, CA 92630 ■ T: (949) 552-7700 ■ www.conradllp.com Board of Directors San Bernardino County Transportation Authority San Bernardino, California INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Measure I Fund of the City of Grand Terrace, California (“City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, and have issued our report thereon dated December 11, 2023. Our report included an emphasis of matter stating that the financial statements of the Measure I Funds do not purport to, and do not, present fairly the financial position of the City as of June 30, 2023. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. E.9.a Packet Pg. 263 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) Board of Directors San Bernardino County Transportation Authority San Bernardino, California 18 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the financial statements of the Measure I Fund of the City are free from material misstatement, we performed tests of its compliance with requirements described in Measure I Ordinance (the “Ordinance”) as specified in the agreement between the City and San Bernardino County Transportation Authority (“SBCTA”) and certain provisions of laws, regulations, contracts, and grant agreements, including requirements of the Ordinance as specified in the agreement between the City and San Bernardino County Transportation Authority (“SBCTA”), noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards, including the requirements of the Ordinance as specified in the agreement between the City and SBCTA. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Lake Forest, California December 11, 2023 E.9.a Packet Pg. 264 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Schedule of Findings and Responses Fiscal Year Ended June 30, 2023 19 2023‐01 Bank Reconciliations Significant Weakness Criteria: Management is responsible for ensuring financial activity is recorded accurately and on a timely basis. Bank reconciliations should be performed monthly, reviewed and approved in a timely manner. Condition: During procedures over cash and investments, we noted the City’s bank reconciliation for June 2023 was not prepared until September 2023. Cause: The City did not perform a timely bank reconciliation due to the City having three staff in their finance division and conflicting priorities. Effect: The bank reconciliation was not reviewed and approved until September 2023. Recommendation: We recommend that the City review the timing of its reconciliation procedures. View of Responsible Officials: Staff will review the bank statements immediately upon receiving them and complete the bank reconciliations in a timely manner. E.9.a Packet Pg. 265 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) CITY OF GRAND TERRACE, CALIFORNIA Measure I Fund Summary Schedule of Prior Audit Findings Fiscal Year Ended June 30, 2023 20 None reported. E.9.a Packet Pg. 266 At t a c h m e n t : C i t y o f G r a n d T e r r a c e M e a s u r e I R e p o r t ( M e a s u r e I F u n d A n n u a l F i n a n c i a l R e p o r t f o r t h e Y e a r E n d e d J u n e 3 0 , 2 0 2 3 ) AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Introduction and First Reading by Title Only, with Further Reading Waived an Ordinance Amending Title 18 (Zoning) of the Grand Terrace Municipal Code to Amend an Existing Municipal Code Section Specifying the Design Standards for New and Existing Trash Enclosures. This Ordinance Will Not be Enforced Retroactively and Apply Only to New Buildings and Existing Buildings Undergoing Alterations Where a Building Permit is Required Per CA Building Code [A] 105.1 with Alterations Encompassing 50% or More of the Existing Total Building Area. PRESENTED BY: Luis Gardea, Building Official RECOMMENDATION: Introduction and First Reading by title only, with further reading waived, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE, CALIFORNIA, AMENDING SECTIONS 18.10.090, 18.33.050, 18.36.060, 18.39.060, 18.40.060, AND 18.56.080 OF TITLE 18 (ZONING) OF THE GRAND TERRACE MUNICIPAL CODE, TO ESTABLISH DESIGN STANDARDS FOR TRASH ENCLOSURES" 2030 VISION STATEMENT: This item supports Goal #3 to develop proactive economic development plan to attract new businesses and to prepare for development by updating zoning and development codes. BACKGROUND: The City of Grand Terrace Zoning Code does not currently state any specific design requirements for trash enclosures in multi-family and non-residential properties. As a result, there are multiple unsecured multi-family and non-residential trash enclosures that are overwhelmed with illegal dumping and unpermitted occupancy by homeless people. Unsecured trash enclosures pose a threat to the health and safety of the public, as illegal dumping can have significant negative economic and environmental impacts on the City, new businesses, and local residents. In addition to significant clean-up costs, illegal dumping can have negative polluting effects upon the environment, contribute to blight, attract vermin, and create a public nuisance. Additionally, trash enclosures are unfit for human habitation. F.10 Packet Pg. 267 DISCUSSION: Staff requests that the City Council hold a public hearing, and introduce for first reading, with further reading waived, an ordinance updating the City’s existing trash enclosure requirements to include specific design standards for newly built multi-family and non- residential buildings. The design standards shall follow the City’s objective design standards (ODS) and include the following requirements: • Lockable front facing decorative metal doors and side door • A decorative metal cover with screening to prevent illegal dumping • Built of decorative material as permitted by the City’s ODS • The enclosure shall follow current California Building Code accessibility requirements as stated in Chapter 11B • A drain shall be installed and connected directly into the City’s wastewater system This ordinance shall not apply retroactively, but would apply to existing multi-family and non-residential properties where alterations are performed to a building that encompasses at least fifty percent or more of the total existing building area. SAFETY IMPACT: The proposed ordinance will significantly decrease the likelihood of illegal entry within trash enclosures and prevent the likelihood of any trash fires caused by the illegal occupancy of enclosures. Additionally, it will prevent any child related injuries or deaths by making the enclosures difficult for climbing and falling. ENVIRONMENTAL REVIEW: No environmental impact ECONOMIC IMPACT: The proposed ordinance will significantly reduce the overall illegal dumping costs to businesses and multi-family complexes. RECOMMENDATION: Based upon the foregoing, Staff, therefore, recommends that the City Council hold a public hearing, with further reading waived, to adopt an ordinance amending Title 18 (Zoning) of the Grand Terrace Municipal Code for trash enclosures. ATTACHMENTS: F.10 Packet Pg. 268 • (GT) Draft Ordinance Amending Design Standards for Trash Enclosures(966945.2) (DOCX) APPROVALS: Luis Gardea Completed 03/04/2024 11:43 AM City Attorney Completed 03/06/2024 11:45 AM City Manager Completed 03/07/2024 9:13 AM City Council Pending 03/12/2024 6:00 PM F.10 Packet Pg. 269 01247.0001/966945.2 ORDINANCE NO. ___ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND TERRACE, CALIFORNIA, AMENDING SECTIONS 18.10.090, 18.33.050, 18.36.060, 18.39.060, 18.40.060, AND 18.56.080 OF TITLE 18 (ZONING) OF THE GRAND TERRACE MUNICIPAL CODE, TO ESTABLISH DESIGN STANDARDS FOR TRASH ENCLOSURES WHEREAS, the City of Grand Terrace has adopted regulations throughout Title 18 of the Grand Terrace Municipal Code, which do not set forth any specific requirements for trash enclosures within multi-family and non-residential properties; and WHEREAS, because there are not uniform design requirements, many trash enclosures within multi-family and non-residential properties throughout the City are unsecured, overwhelmed with illegal dumping, and facilitate unpermitted occupancy by homeless individuals; and WHEREAS, unsecured trash enclosures pose a threat to the health and safety of the public, as illegal dumping can have significant negative economic and environmental impacts on the City, new businesses, and local residents. In addition to significant clean- up costs, illegal dumping can have negative polluting effects upon the environment, contribute to blight, attract vermin, and create a public nuisance. Additionally, trash enclosures are unfit for human habitation; and WHEREAS, establishing design standards for trash enclosures would significantly decrease the likelihood of illegal entry within trash enclosures and prevent the likelihood of any trash fires caused by the illegal occupancy of enclosures. Additionally, it will prevent any child related injuries or deaths by making the enclosures difficult for climbing and falling; and WHEREAS, the City Council now desires to update city-wide trash enclosure requirements to include specific design standards for newly built and existing trash enclosures. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE DOES ORDAIN AS FOLLOWS: SECTION 1. The Recitals set forth above are incorporated herein by this reference. SECTION 2. Section 18.10.090(C)(12) (Storage and Trash Areas) of Chapter 18.10 (Residential Districts) of Title 18 (Zoning) is hereby amended and shall now read in its entirety as follows (added language is shown in bold italics; deleted language is shown in strikethrough): F.10.a Packet Pg. 270 At t a c h m e n t : ( G T ) D r a f t O r d i n a n c e A m e n d i n g D e s i g n S t a n d a r d s f o r T r a s h E n c l o s u r e s ( 9 6 6 9 4 5 . 2 ) ( A d o p t i o n o f a n A m e n d m e n t t o t h e E x i s t i n g 01247.0001/966945.2 “12. Storage and Trash Areas. All storage and trash areas shall be located within enclosed areas completely screened from public view. The enclosure shall follow current California Building Code accessibility requirements, as amended from time to time. A drain shall be installed and connected directly into the City’s wastewater system, with approval from the City’s Engineer. The storage and trash enclosure shall contain lockable front facing decorative metal doors and a side door, and a decorative metal roof or cover with screening to prevent illegal dumping. All decorative material shall be compliant with the City’s objective design standards. Common storage and trash areas shall be within 200 feet of the dwelling served.” Except as expressly modified herein, the remainder of Section 18.10.090 shall remain unchanged and in full force and effect. SECTION 3. Section 18.33.050 (Storage and trash facilities) of Chapter 18.33 (C2 General Business District) of Title 18 (Zoning) is hereby amended and shall now read in its entirety as follows (added language is shown in bold italics; deleted language is shown in strikethrough): “18.33.050 Storage and trash facilities. All storage of cartons, containers and trash in the C2 district shall be shielded from view within a building or within an area enclosed by a wall not less than six feet in height, and shall not be located within 40 feet of any district zoned for residential use. The enclosure shall follow current California Building Code accessibility requirements, as amended from time to time. A drain shall be installed and connected directly into the City’s wastewater system, with approval from the City’s Engineer. The storage and trash enclosure shall contain lockable front facing decorative metal doors and a side door, and a decorative metal roof or cover with screening to prevent illegal dumping. All decorative material shall be compliant with the City’s objective design standards. If unroofed, no such area shall be located within 40 feet of any district zoned for residential use.” SECTION 4. Section 18.36.060 (Storage and trash facilities) of Chapter 18.36 (CM Commercial Manufacturing District) of Title 18 (Zoning) is hereby amended and shall now read in its entirety as follows (added language is shown in bold italics; deleted language is shown in strikethrough): “18.36.060 Storage and trash facilities. A. Permitted outdoor storage shall be set back 25 feet when adjacent to residential properties. B. When permissible outdoor storage is utilized, such storage shall be visually screened from all adjacent building sites, public view, and public streets and alleys by a solid decorative masonry wall of a height sufficient to screen all F.10.a Packet Pg. 271 At t a c h m e n t : ( G T ) D r a f t O r d i n a n c e A m e n d i n g D e s i g n S t a n d a r d s f o r T r a s h E n c l o s u r e s ( 9 6 6 9 4 5 . 2 ) ( A d o p t i o n o f a n A m e n d m e n t t o t h e E x i s t i n g 01247.0001/966945.2 materials stored outdoors, but not less than six feet in height, or by a building. C. The screening herein required shall be established at or before the time any area is used for outdoor storage. D. Where topographical conditions or existing structures are such that strict compliance with the requirements of this section would not be necessary to accomplish the purposes of this section, the Planning Commission may waive compliance with all or part of such requirements. E. Trash enclosures shall be required. Trash enclosures shall be screened by a six-foot-high decorative block wall. with metal gates. Metal gates shall be attached to metal posts. The enclosure shall follow current California Building Code accessibility requirements, as amended from time to time. A drain shall be installed and connected directly into the City’s wastewater system, with approval from the City’s Engineer. The storage and trash enclosure shall contain lockable front facing decorative metal doors and a side door, and a decorative metal roof or cover with screening to prevent illegal dumping. All decorative material shall be compliant with the City’s objective design standards.” SECTION 5. Section 18.39.060 (Storage and trash facilities) of Chapter 18.39 (MR Restricted Manufacturing District) of Title 18 (Zoning) is hereby amended and shall now read in its entirety as follows (added language is shown in bold italics; deleted language is shown in strikethrough): “18.39.060 Storage and trash facilities. A. Permitted outdoor storage shall be set back 25 feet when adjacent to residential properties. B. When permissible outdoor storage is utilized, such storage shall be visually screened from all adjacent building sites, public view, and public streets and alleys by a solid decorative masonry wall of a height sufficient to screen all materials stored outdoors, but not less than six feet in height, or by a building. C. The screening herein required shall be established at or before the time any area is used for outdoor storage. D. Where topographical conditions or existing structures are such that strict compliance with the requirements of this section would not be necessary F.10.a Packet Pg. 272 At t a c h m e n t : ( G T ) D r a f t O r d i n a n c e A m e n d i n g D e s i g n S t a n d a r d s f o r T r a s h E n c l o s u r e s ( 9 6 6 9 4 5 . 2 ) ( A d o p t i o n o f a n A m e n d m e n t t o t h e E x i s t i n g 01247.0001/966945.2 to accomplish the purposes of this section, the Planning Commission may waive compliance with all or part of such requirements. E. Trash enclosures shall be required. Trash enclosures shall be screened by a six-foot-high decorative block wall. with metal gates. Metal gates shall be attached to metal posts. The enclosure shall follow current California Building Code accessibility requirements, as amended from time to time. A drain shall be installed and connected directly into the City’s wastewater system, with approval from the City’s Engineer. The storage and trash enclosure shall contain lockable front facing decorative metal doors and a side door, and a decorative metal roof or cover with screening to prevent illegal dumping. All decorative material shall be compliant with the City’s objective design standards.” SECTION 6. Section 18.40.060 (Storage and trash facilities) of Chapter 18.40 (M2 Industrial District) of Title 18 (Zoning) is hereby amended and shall now read in its entirety as follows (added language is shown in bold italics; deleted language is shown in strikethrough): “18.40.060 Storage and trash facilities. A. Permitted outdoor storage shall be set back 25 feet when adjacent to residential properties. B. When permissible outdoor storage is utilized, such storage shall be visually screened from all adjacent building sites, public view, and public streets and alleys by a solid decorative masonry wall of a height sufficient to screen all materials stored outdoors, but not less than six feet in height, or by a building. C. The screening herein required shall be established at or before the time any area is used for outdoor storage. D. Where topographical conditions or existing structures are such that strict compliance with the requirements of this section would not be necessary to accomplish the purposes of this section, the Planning Commission may waive compliance with all or part of such requirements. E. Trash enclosures shall be required. Trash enclosures shall be screened by a six-foot-high decorative block wall. with metal gates. Metal gates shall be attached to metal posts. The enclosure shall follow current California Building Code accessibility requirements, as amended from time to time. A drain shall be installed and connected directly into the City’s wastewater system, with approval from the City’s Engineer. The storage and trash enclosure shall contain lockable F.10.a Packet Pg. 273 At t a c h m e n t : ( G T ) D r a f t O r d i n a n c e A m e n d i n g D e s i g n S t a n d a r d s f o r T r a s h E n c l o s u r e s ( 9 6 6 9 4 5 . 2 ) ( A d o p t i o n o f a n A m e n d m e n t t o t h e E x i s t i n g 01247.0001/966945.2 front facing decorative metal doors and a side door, and a decorative metal roof or cover with screening to prevent illegal dumping. All decorative material shall be compliant with the City’s objective design standards.” SECTION 7. Section 18.56.080 (Screening and trash enclosures) of Chapter 18.56 (AG-2 Agricultural Overlay District) of Title 18 (Zoning) is hereby amended and shall now read in its entirety as follows (added language is shown in bold italics; deleted language is shown in strikethrough): “18.56.080 Screening and trash enclosures. A. Trash storage areas shall be enclosed by a wall not less than six feet in height, and shall not be located within 40 feet of any district zoned for residential use. If unroofed, no such area shall be located within 40 feet of any district zoned for residential use. The enclosure shall follow current California Building Code accessibility requirements, as amended from time to time. A drain shall be installed and connected directly into the City’s wastewater system, with approval from the City’s Engineer. The storage and trash enclosure shall contain lockable front facing decorative metal doors and a side door, and a decorative metal roof or cover with screening to prevent illegal dumping. All decorative material shall be compliant with the City’s objective design standards B. All outdoor animal uses and/or animal enclosures shall be screened in a manner determined by the City Council in consideration of the type of animals being kept.” SECTION 8. APPLICABILITY. This Ordinance shall not apply retroactively. It shall apply only to all applications for new buildings, and existing buildings undergoing alterations where a building permit is required pursuant to California Building Code [A] 105.1, with alterations encompassing 50% or more of the existing total building area. SECTION 9. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this ordinance or the application thereof to any person or place, 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 remainder of this ordinance. The City Council hereby declares that it would have adopted this ordinance, and each and every section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. SECTION 10. EFFECTIVE DATE. This ordinance shall be effective on the thirtieth (30th) day after the day of its adoption. F.10.a Packet Pg. 274 At t a c h m e n t : ( G T ) D r a f t O r d i n a n c e A m e n d i n g D e s i g n S t a n d a r d s f o r T r a s h E n c l o s u r e s ( 9 6 6 9 4 5 . 2 ) ( A d o p t i o n o f a n A m e n d m e n t t o t h e E x i s t i n g 01247.0001/966945.2 SECTION 11. CERTIFICATION. The City Clerk shall certify to the adoption of this Ordinance and cause the same to be published as required by law. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Grand Terrace at a regular meeting held on the ___ day of _______________ 2024. _____________________________ Bill Hussey Mayor ATTEST: ____________________________ Debra Thomas City Clerk APPROVED AS TO FORM: ____________________________ Adrian R. Guerra City Attorney F.10.a Packet Pg. 275 At t a c h m e n t : ( G T ) D r a f t O r d i n a n c e A m e n d i n g D e s i g n S t a n d a r d s f o r T r a s h E n c l o s u r e s ( 9 6 6 9 4 5 . 2 ) ( A d o p t i o n o f a n A m e n d m e n t t o t h e E x i s t i n g AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Community Benefit Fund Grant Award to the Terrace View Elementary PTA in the Amount of $2,000 PRESENTED BY: Christine Clayton, Finance Director RECOMMENDATION: Approve the Community Benefit Fund grant application from the Terrace View Elementary PTA in the amount of $2,000 to support the 6th Grade Science Camp 2030 VISION STATEMENT: This staff report supports the following City Council Goals: • Goal #1 - Ensure Our Fiscal Viability, through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations; and • Goal #4 – Develop and Implement Successful Partnerships through productive collaboration with community groups, youth programs and senior organizations. BACKGROUND: In past fiscal years, the City Council has approved the use of funds for the establishment of the Community Benefits Fund Grant Program. The purpose of the Community Benefits Fund Grant Program is to provide funding for local youth programs, community events, community fee waivers, and be used as an economic development tool for small business development in the City. For Fiscal Year 2023-24, the City Council has approved the use of $20,000 toward community benefit funded programs and activities. Various youth and senior program activities have benefited from the Community Benefits Fund including the Foundation of Grand Terrace, the REC Center, several youth sports leagues, and the Friends of the Grand Terrace Library. Attachment A provides a summary of awarded grants by fiscal year and the recipients of said grants awarded in each fiscal year. DISCUSSION: I. Application received from the Terrace View Elementary PTA) H.11 Packet Pg. 276 The PTA’s mission is to improve the lives of our students by supporting art, science and technology programs to enhance their academic and overall performance. To have fun too. Below summarizes the current application submitted by the Foundation: Project Title: 6th Grade Science Camp Project Activity: During the four days of camp, students will learn about botany, geology, astronomy, energy and conservation in an outdoor setting. Public Purpose: This activity is for the sole purpose of the youths that reside within our city limits and attend our community elementary. It also helps a few parents who have requested a need for payment assistance for camp. Amount Requested: $2,000 Utilization of Funds: The funds will be used to cover the cost of camp for students. It will cover the fee of $350 per student which pays for the cost of camp for the allotted days and contributes to the cost of CJUSD bus drivers and buses that will transport the students and teachers to and from the school to camp and back. RECOMMENDATION: Staff recommends that the City Council: 1. Approve the Community Benefit Fund grant application in the amount of $2,000 to the Terrace View Elementary PTA for the 6th grade Science Camp held April 2, 2024, through April 5, 2024. Upon City Council approval, the applicant will comply with the following, if they have not already done so: 1. Issue the City of Grand Terrace an invoice for the grant amount including receipts. H.11 Packet Pg. 277 2. Ensure that the City is mentioned/included as a sponsor in any material advertising the activity or event. 3. Complete a W-9 form for reporting purposes. Attached is the application received from the Terrace View Elementary PTA. FISCAL IMPACT: Funds in the amount of $20,000.00 have been approved for the program and established in the Community Benefits Fund (Fund 61). If approved, the table below will show the balances of each category remaining in the fund: FY2023-24 Community Benefits Fund Fund No. Acct. No. Account Title Approved Budget Awarded Grants Balance as of Feb- 2024 Proposed Grant Awards Revised Balance 61 461- 100 Youth/School Programs $10,000 $5,040 $4,960 ($2,000) $2,960 61 461- 200 Service Organizations $10,000 $5,310 $4,690 $0 $4,690 TOTAL $20,000 $10,350 $9,650 ($2,000) $7,650 ATTACHMENTS: • CBF - Terrace View Elementary (PDF) • Community Benefits Fund Award History - Mar (PDF) APPROVALS: Christine Clayton Completed 03/04/2024 9:06 AM Finance Completed 03/04/2024 9:06 AM City Manager Completed 03/07/2024 9:12 AM City Council Pending 03/12/2024 6:00 PM H.11 Packet Pg. 278 H.11.a Packet Pg. 279 At t a c h m e n t : C B F - T e r r a c e V i e w E l e m e n t a r y ( C B F - 6 T h G r a d e S c i e n c e C a m p ) H.11.a Packet Pg. 280 At t a c h m e n t : C B F - T e r r a c e V i e w E l e m e n t a r y ( C B F - 6 T h G r a d e S c i e n c e C a m p ) Title 2015-16 2016-17 2017-18 2018-19 2019-20 2021-22 2022-23 2023-24 TOTAL 2023-24 TOTAL TO DATE Proposed in Mar-2024 REVISED YOUTH / SCHOOL ORGANIZATIONS Grand Terrace Community Basketball 1,136$ -$ -$ 1,450$ -$ -$ 2,586$ -$ 2,586$ Grand Terrace High School Football Boosters - - - 2,000 2,000 - 4,000 - 4,000 Grand Terrace High School Legacy Regiment Boosters - - - 2,000 - - 2,000 2,000 Grand Terrace High School Boys Basketball - - - - 2,000 - 1,040 3,040 - 3,040 Grand Terrace High School Titan Wrestling Team - - - - 1,997 - 2,000 3,997 - 3,997 Grand Terrace High School Cheer Booster Club - - - - - - - 2,000 2,000 - 2,000 Grand Terrace Little League 2,000 - 2,000 - - - 4,000 - 4,000 Grand Terrace Youth Football & Cheer - 4,000 2,000 - - - 2,000 8,000 - 8,000 Terrace View Elementary PTA 1,000 671 1,517 700 - 1,805 1,725 - 7,418 2,000 9,418 4,136$ 4,671$ 5,517$ 6,150$ 5,997$ 1,805$ 3,725$ 5,040$ 37,041$ 2,000$ 39,041$ NON-PROFIT / SERVICE ORGANIZATIONS American Cancer Society -$ -$ 2,000$ -$ -$ -$ 2,000$ -$ 2,000$ Drug Alternative Program - 2,000 - - - - 2,000 - 2,000 Foundation of Grand Terrace 2,350 2,000 1,830 - - 2,000 2,000 2,000 12,180 12,180 Friends of Grand Terrace Library 3,750 2,000 2,000 4,000 - - 11,750 - 11,750 Grand Terrace Lions Club - 620 - - - - 620 - 620 Sheriff’s Central Station Explorer Program - - - 2,000 - - 2,000 - 2,000 The REC Center 2,187 310 - 3,100 - - 5,597 - 5,597 Grand Terrace Cars & Coffee - - - - - 2,000 2,000 1,000 5,000 - 5,000 Christ the Redeemer Catholic Church - - - - - - 310 310 620 620 Grand Terrace Living Word Foursquare Church - - - - - - 2,000 - 2,000 2,000 New City Church - - - - - - - 2,000 2,000 2,000 Family Service Association - - - - 2,000 - - - 2,000 - 2,000 8,287$ 6,930$ 5,830$ 9,100$ 2,000$ 4,000$ 6,310$ 5,310$ $47,767 -$ 47,767$ TOTAL 12,423$ 11,601$ 11,347$ 15,250$ 7,997$ 5,805$ 10,035$ 10,350$ 84,808$ 2,000$ 86,808$ City of Grand Terrace Community Benefit Grant Awards GRANT AWARD HISTORY as of February 29, 2024 and Approved & Proposed Applications for March 2024 H.11.b Packet Pg. 281 At t a c h m e n t : C o m m u n i t y B e n e f i t s F u n d A w a r d H i s t o r y - M a r ( C B F - 6 T h G r a d e S c i e n c e C a m p ) AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Design Selection for New All-Electric Senior Bus PRESENTED BY: Judith Garcia, Management Analyst RECOMMENDATION: Propose CITY COUNCIL BE GIVEN THE OPPORTUNITY TO SELECT ONE OF THE FOUR DESIGNS PRESENTED FOR THE NEW SENIOR BUS 2030 VISION STATEMENT: This staff report supports Goal # 5, engage in proactive communication. BACKGROUND: Over the past few years, the City of Grand Terrace has pursued two grants (Volkswagen Environmental Mitigation Trust and Omnitrans/Green Commuter) to replace the Blue Mountain Silver Liner Bus. Currently, the City operates one gasoline- powered bus driven by one bus driver to transport seniors around the City. There was interest in replacing the existing bus with an electric-powered bus. On January 25, 2022, the Council approved proceeding with the selection of the Volkswagen Environmental Mitigation Trust Grant for the purchase of an electric bus. DISCUSSION: On February 5, 2024, following a year of manufacturing, Phoenix Motorcars Inc. delivered a new electric bus designed for senior transportation. This bus can accommodate up to 15 passengers, including the driver. To support its operation, the city has installed an electric vehicle (EV) charging station in the maintenance yard dedicated to the bus. The funding for this charging station came from the Omnitrans grant. Additionally, our staff has prepared four design drafts for the Council's review. These designs will serve as the basis for official design renders, to be created by a vehicle wrap specialist once the council selects the preferred design. FISCAL IMPACT: No fiscal impact. APPROVALS: Judith Garcia Completed 02/15/2024 9:14 AM Shanita Tillman Completed 02/15/2024 12:01 PM Finance Completed 02/21/2024 7:23 AM City Manager Completed 02/22/2024 2:55 PM City Council Pending 03/12/2024 6:00 PM H.12 Packet Pg. 282 AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: Mayor's Appointments to Boards, Commissions, and Committees PRESENTED BY: Debra Thomas, City Clerk RECOMMENDATION: Mayor to Appoint Representatives to the various Boards, Commissions, and Committees for Council Approval. 2030 VISION STATEMENT: This staff report supports all adopted Goals of the City Council’s 2030 Vision and supports all adopted Core Values. BACKGROUND: The City of Grand Terrace has the opportunity to participate on various boards, commissions, and committees as a member of various municipal organizations and associations. Historically, these assignments are reviewed every two years following the regular municipal elections date, or as necessary. DISCUSSION: On March 6, 2024, Council Member Sylvia Rodriguez-Robles officially submitted her resignation from the City Council. With this resignation comes two (2) vacancies to the Boards, Committees and Commissions as follows: • Board Member to the San Bernardino County Transportation Authority/San Bernardino Council of Governments • Alternate Committee Member to the Colton Joint Unified School District Community Cabinet State law provides under Government Code Section 40605 states: In general law cities where the office of mayor is an elective office pursuant to Article 5 (commencing with Section 34900) of Chapter 7 of Part 1 of Division 2 of Title 4, the mayor, with the approval of the city council, shall make all appointments to boards, commissions, and committees unless otherwise specifically provided by statute. At this time, Staff recommends that, subject to the advice and consent of the City H.13 Packet Pg. 283 Council, the Mayor appoint representatives to fill the Board Member position to the San Bernardino County Transportation Authority/San Bernardino Council of Governments and the position of Alternate Committee Member to the Colton Joint Unified School District Community Cabinet and any additional alternate positions that may arise due to the appointments. FISCAL IMPACT: None. ATTACHMENTS: • 2023-2024 Council Appointments Boards, Commissions & Committees#2 (DOC) APPROVALS: Debra Thomas Completed 03/06/2024 1:40 PM City Manager Completed 03/07/2024 8:57 AM City Council Pending 03/12/2024 6:00 PM H.13 Packet Pg. 284 COUNCIL LIAISON TO BOARDS, COMMISSIONS, AND COMMITTEES 2023 - 2024 1 Revised 03/06/2024 08/02/201 8 COMMITTEE BOARD MEMBER ALTERNATE MEETING DAY & TIME Omnitrans Board of Directors 1700 5th St San Bernardino, CA 92411 700-yes Hussey Wilson 1st Wednesday of Month 8:00 a.m. DIRECTOR ALTERNATE California Joint Powers Insurance Authority (CJPIA) 8081 Moody Street La Palma, CA 90623 Wilson Hussey Annual Meeting: TBD VOTING DELEGATE ALTERNATE League of California Cities/Inland Empire Division 1400 K Street Sacramento, CA 95814 Open Open Division Meeting (Meets Quarterly - TBD) Annual Meeting TBD COMMUNITY CABINET MEMBER ALTERNATE Colton Joint Unified School District Community Cabinet 1212 Valencia Drive Colton, CA 92324 Allen ***VACANT*** 2nd Wednesday of Each Month 10:00 a.m. Joe Baca Middle School 1640 S. Lilac Ave. Bloomington, CA 92316 VOTING DELEGATE ALTERNATE Southern California Association of Governments General Assembly (SCAG) 1170 West 3rd Street, Suite 140 San Bernardino, CA 92410 Wilson Hussey Annual Meeting Usually May or June TBD H.13.a Packet Pg. 285 At t a c h m e n t : 2 0 2 3 - 2 0 2 4 C o u n c i l A p p o i n t m e n t s B o a r d s , C o m m i s s i o n s & C o m m i t t e e s # 2 ( A p p o i n t m e n t s t o COUNCIL LIAISON TO BOARDS, COMMISSIONS, AND COMMITTEES 2023 - 2024 2 Revised 03/06/2024 08/02/201 8 COMMITTEE BOARD MEMBER ALTERNATE MEETING DAY & TIME San Bernardino County Transportation Authority 1170 W. 3rd Street, 2nd Floor San Bernardino, CA 92410 700-yes ***VACANT*** Hussey 1st Wednesday of Month 10:00 a.m. Santa Fe Depot-SBCTA Lobby 1st Floor 1170 W. 3rd Street San Bernardino, CA 92410 CITY REPRESENTATIVE ALTERNATE San Bernardino County Solid Waste Task Force Solid Waste Management Division-Conf. Rm A 222 W. Hospitality Lane, 2nd Floor San Bernardino, CA 92415 Allen Henderson Bi-Annually (Every 6 months) CY 2021 starts with April 21, 2021 Meeting H.13.a Packet Pg. 286 At t a c h m e n t : 2 0 2 3 - 2 0 2 4 C o u n c i l A p p o i n t m e n t s B o a r d s , C o m m i s s i o n s & C o m m i t t e e s # 2 ( A p p o i n t m e n t s t o COUNCIL LIAISON TO BOARDS, COMMISSIONS, AND COMMITTEES 2023 - 2024 3 Revised 03/06/2024 08/02/201 8 DELEGATE ALTERNATE Mayor Bill Hussey 1 3 Mayor Pro Tem Doug Wilson 3 1 VACANT 1 1 Council Member Jeff Allen 1 0 Council Member Henderson 0 1 H.13.a Packet Pg. 287 At t a c h m e n t : 2 0 2 3 - 2 0 2 4 C o u n c i l A p p o i n t m e n t s B o a r d s , C o m m i s s i o n s & C o m m i t t e e s # 2 ( A p p o i n t m e n t s t o AGENDA REPORT MEETING DATE: March 12, 2024 Council Item TITLE: 2023-24 Mid-Year and Year-End Budget Review PRESENTED BY: Christine Clayton, Finance Director RECOMMENDATION: Receive and file the FY2023-24 Mid-Year and Year-End Report. 2030 VISION STATEMENT: This staff report supports City Council Goal #1, “Ensure Our Fiscal Viability,” through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations. BACKGROUND: The purpose of the Mid-Year Budget Review is to provide the City Council with the following information: 1. Budget-to-actual results through the first half of the fiscal year; 2. Projections for a balanced budget at fiscal year-end; and 3. Any proposed budget adjustments/recommendations for consideration, if any. The Mid-Year Budget Review for Fiscal Year (FY) 2023-24 focuses on the City’s General Fund. DISCUSSION: FY 2023-24 as of December 31, 2023 Operating Revenues As of December 31, 2023, which represents 50% of the fiscal year, the General Fund operating revenues received were $3,395,377, or 43.1% of the approved budget of $7,886,852. There is a timing difference for revenues such as property taxes and sales tax. Property tax is received in two large sums in December and the other in April. Sales tax payments are two month behind. Operating Expenditures As of December 31, 2023, which represents 50% of the fiscal year, the General Fund operating expenditures were $3,491,299, which represents 43.6 of the approved H.14 Packet Pg. 288 expenditures of $7,998,760. This figure includes expenditures that were carried over from the prior fiscal year. Both Revenue and Expenditures are 43% of the budget. Operating Expenditures match Revenues at mid-year and are consistent with the approved budget. FY 2023-24 Year-end Projections Projected Revenues For this fiscal year, total revenues are projected at $8,406,428, this shows a surplus result of $539,576 against the annual budget of $7,866,852. The resulting increase is primarily from the following: 1. Property Tax: Increased $183,983. 2. Sales Tax: Increased $129,000. 3. Use of Money & Property: Increased by $263,724 due to the interest earned on investments accounts. 4. Increases and decreases in various revenues make up the difference. As a result of all the variances listed above, the net result is an increase in General Fund revenues resulting in a projected surplus of $539K. Projected Expenditures Expenditures at June 30th are projected at $8,381,242. If expenditures continue at the same rate then year-end expenditures will be $6,982,598. City staff is proposing additional expenditures of $382,482 in year-end expense to bring expenditures to $8,381,242 vs. approved expenditures of $7,998,760. This overage is due in large part to the Mt. Vernon Slope stabilization soil survey, initial master stormwater runoff management plans, and miscellaneous capital expenditures. The projected General Fund revenues of $8,406,428 and the projected expenditures of $8,381,242 will balance allocations for additional proposed expenditures and will retain an additional General Fund reserves of $25,186. Expenditures including the proposed expenditures are still lower than the projected revenues. Below is the projected 2023-24 year-end revenue and expense statement for the General Fund. Table 1 City of Grand Terrace FY 2023-24 General Fund Financial Report Year-end Projection H.14 Packet Pg. 289 Approved Budget Dec YTD Actuals Year-end Projection 2022-23 Actuals Year-end vs. Appr Budget REVENUES Property Tax 4,640,463 1,678,468 4,824,446 4,426,184 183,983 Franchise Fees 650,000 192,050 706,945 596,217 56,945 Sales Tax 1,234,000 441,071 1,363,000 1,441,471 129,000 License, Fees & Permits 654,870 405,395 618,141 768,355 (36,729) Charges for Services 161,500 107,652 138,311 219,886 (23,189) Fines & Forfeitures 37,800 26,528 37,496 51,209 (304) Miscellaneous 26,710 6,873 18,389 14,422 (8,321) Use of Money & Property 34,660 201,524 298,384 110,417 263,724 Intergovernmental Rev/Grants 58,500 17,467 32,967 33,834 (25,533) Proceeds from Sale of Property 0 0 0 1,304,058 0 Transfers In 50,000 0 50,000 50,000 0 Waste Water Receipts 318,349 318,349 318,349 318,349 0 OPERATING REVENUES 7,866,852 3,395,377 8,406,428 9,334,185 539,576 EXPENDITURES City Council 10-110 123,708 48,354 112,016 101,185 11,692 City Manager City Manager 10-120 525,530 212,977 601,078 464,316 (75,548) Information Tech. 10-380 128,000 65,021 125,984 123,454 2,016 Senior Citizens Prgm 10-805 43,885 22,471 50,108 40,970 (6,223) Emergency Oper. 10-808 17,000 11,975 24,817 9,245 (7,817) 714,415 312,444 801,987 637,985 (87,572) City Clerk City Clerk 10-125 283,686 132,668 298,361 260,650 (14,675) Hist. & Cult. Comm. 10-804 2,000 2,635 3,513 1,385 (1,513) 285,686 135,303 301,874 262,035 (16,188) City Attorney 10-160 185,000 60,841 184,341 179,266 659 Finance 10-140 561,493 211,601 582,220 527,295 (20,727) Planning & Dev. Svcs Building & Safety 10-172 301,357 119,686 314,276 248,178 (12,919) Community Events 10-180 0 0 0 0 0 Code Enforcement 10-185 238,479 103,300 354,171 223,251 (115,692) Enforcement Prgm 10-187 80,450 35,788 65,418 72,914 15,032 Community Dev. 10-370 408,414 104,719 316,025 251,345 92,389 Planning Comm. 10-801 16,007 702 10,385 5,804 5,622 1,044,707 364,195 1,060,275 801,492 (15,568) H.14 Packet Pg. 290 City of Grand Terrace FY 2023-24 General Fund Financial Report Year-end Projection Approved Budget Dec YTD Actuals Year-end Projection 2022-23 Actuals Year-end vs. Appr Budget Public Works Public Works 10-175 681,603 243,247 864,885 505,431 (183,282) Facilities Maint. 10-195 75,800 37,942 137,738 116,150 (61,938) Parks Maint. 10-450 560,342 320,223 593,227 388,639 (32,885) NPDES 10-625 73,440 15,899 68,618 30,169 4,822 Storm Drain Maint. 10-631 21,450 21,984 123,611 140,638 (102,161) 1,412,635 639,295 1,788,079 1,181,027 (375,444) Law Enforcement 10-410 2,655,500 1,206,210 2,656,003 2,417,818 (503) Non-Departmental Non-Departmental 10-190 1,016,565 513,056 895,397 1,041,450 121,168 Transfers Out 10-199 40,500 0 40,500 153,444 0 Overhead Alloc. 10-999 (41,450) 0 (41,450) 43,524 0 1,015,615 513,056 894,447 1,238,418 121,168 TOTAL EXPENDITURES 7,998,760 3,491,299 8,381,242 7,346,521 (382,482) REVENUE & EXPENSE SUMMARY REVENUES 7,866,852 3,395,377 8,406,428 8,326,772 539,576 EXPENDITURES (7,998,760) (3,491,299) (8,381,242) (7,346,521) (382,482) NET (131,908) (95,922) 25,186 980,251 157,094 REVENUE & EXPENSE VARIANCE REVENUE OVERAGE 539,576 LESS: EXPENDITURE OVERAGE (382,482) NET 157,094 FISCAL IMPACT: There is no fiscal impact to receiving and filing this report. APPROVALS: Christine Clayton Completed 03/01/2024 2:45 PM H.14 Packet Pg. 291 Finance Completed 03/01/2024 2:46 PM City Manager Completed 03/07/2024 9:10 AM City Council Pending 03/12/2024 6:00 PM H.14 Packet Pg. 292