Avalon City Council
May 17, 2022

AVALON CITY COUNCIL MEETING
TUESDAY, MAY 17, 2022— 5:00 P.M.
410 AVALON CANYON ROAD
THIS VIRTUAL MEETING IS HELD PURSUANT TO AB 361
AGENDA
In compliance with the Americans with Disability Act! 1 you need special assistance to participate in this meeting. please contact Denise Radde, City Clerk (310) 510-0220. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 35. 102-35.104 ADA Title II). All public records relating to an agenda item on this agenda are available for the public inspection at the time the records are distributed to all, or a majority of all, members of the City Council.Such records shall be available at City Hall located at 410 Avalon Canyon Rd.

Due to health recommendations from the Center for Disease Control and State of CaliforniaDivision of Occupational Safety and Health (Cal/OSHA), and the declared state of emergency wherein social distancing measures have been imposed or recommended, the CITY OFAVALON’S CITY COUNCIL and PLANNING COMMISSION MEETINGS SHALL GENERALLY BE AVAILABLE TO THE PUBLIC REMOTELY. The general public may attend the meeting in the Council Chambers however must adhere to social distancing requirements. The public is encouraged to watch and participate from the safety of their homes while practicing socialdistancing.

Council Chambers are open to a maximum 30 members of the general public. Once the Council Chambers reach maximum occupancy, the general public may participate in Oral Communication and address the City Council on an agenda item in person by waiting in the City Hall Court Yard and entering the Chambers one at a time at the appropriate time. No one will be admitted into the Council Chambers who is ill or exhibiting symptoms of COVID-1 9. Additionally, the general public may participate in Oral Communication and address the City Council on an agenda items by providing comments via Zoom or by sending comments to askcityofavalon.com.

The meeting can be viewed:

On local cable: Catalina Broadband Solutions channel 3
Streaming Online: www.cityofavalon.com/meetinqs *Streaming on Facebook Live: www.facebook.com/CityOfAvalonOfficial Streaming on YouTube: https://youtu.be/K2qp7aWVtBS
To submit comments live using ZOOM, please register in advance for this meeting:
s’neeirv; .., tE?’t/Ij.iC1:1 .vs.37Txh5uPi—lrnS6rp

ZOOM PUBLIC PARTICIPATION
If you wish to speak on any item on the agenda, please register in advance by clicking the following link:
3JTxV
even when submitting this request you will need to use the “raise hand” feature via Zoom during the presentation of that Agenda Item in order to confirm with the City Clerk’s Office that you wishto provide comments.

CITY COUNCIL AGENDA
MAY 17, 2022PAGE 2
1) Join Zoom Meeting via the internet:

Direct URL:
https://uso6web.zoom.us/j/89252239601 ?pwd=aGI4MXJ1 aGpSdXJ4K1 FRVjBjbHZldzO9Meeting ID: 892 5223 9601 During the meeting you will need to use the “raise hand!! button through Zoom at the time the Agenda Item is being presented for City Council consideration. 2) Join Zoom Meeting via Phone Conference (Voice Only):

Phone Number: (346) 248-7799,
Meeting ID: 892 5223 9601
When you would like to comment during the meeting enter *9 on the phone’s key pad to activate the “raise hand” button at the time the Agenda Item is being presented for City Council consideration.

Please note! the City is not responsible for the public’s use of Zoom as it relates to the software, configuration, and setting on a personal device. The public is encouraged to visit the Zoom website for information on use of this software.

CALL TO ORDER! PLEDGE OF ALLEGIANCE I INVOCATION I ROLL CALL

ANNOUNCEMENTS I WRITTEN COMMUNICATIONS

DEPARTMENT HEAD REPORTS

CITY MANAGER REPORT I CITY ATTORNEY REPORT

COUNCILMEMBER REPORTS I MAYOR REPORT

ORAL COMMUNICATION
Members of the public may address the City Council at this time. No action will be taken on nonagenda items at this meeting. Speakers should limit comments to two (2) minutes each.

PRESENTATIONS — 1. Members of the Humane Society will present a gift of appreciation to Will Richards for his improvements to the Pet Cemetery.

2. Finance Director Matthew Baker will provide an overview of Capital Improvement Projects included in the FY 2022-2023 Budget.

CITY COUNCIL AGENDA
MAY 17, 2022
PAGE 3

CONSENT CALENDAR
Minutes
Although the live recording is the official record of public meetings, actions are prepared for the Council’s approval.

Recommended Action
Approve minutes from the May 3, 2022 regular City Council Meeting.

2. Warrants
Expenditures Submitted for Approval
o Warrants in the amount of $753,322.60.
o One payroll in the amount of $193,706.60.
o Five electronic fund transfers totaling $207,319.96.

Recommended Action
Approve the disbursements for April 25, 2022 through May 6, 2022 totaling $1,154,349.16.

3. Findings to Continue to Hold Remote Teleconference/Virtual City Council Meetings Pursuant to Assembly Bill 361
At the November 16, 2021 City Council meeting, the City Council made findings pursuant to Assembly Sill 361 to continue to meet remotely. To continue this practice, it is required, that the City Council determine that the COVID-1 9 state of emergency proclaimed by the Governor still exists and has been considered by the City Council in deciding to continue to have teleconference meetings and that state or local officials have imposed or recommended measures to promote social distancing in connection with COVID-19, and that as
a result of the COVID-19 emergency, meeting in person would present imminent risks to the health or safety of attendees. Because these findings must be made every thirty (30) days, the City Council will have to make these findings at its upcoming June 8, 2022 meeting and thirty (30) days thereafter.

Recommended Action
Determine that the COVID-1 9 state of emergency proclaimed by the Governor still exists and has been considered by the City Council in deciding to continue to have teleconference meetings and that state or local officials have imposed or recommended measures to promote social distancing in connection with COVID-19, and that as a result
of the COVID-19 emergency, meeting in person would present imminent risks to the health or safety of attendees.

4. Federal Grant Policies and Procedures Manual
During the Fiscal Year 2020 Audit, Davis Farr LLP identified the lack of a written policy relative to Federal Awards as required by Uniform Guidance a significant deficiency on internal control over compliance.

Recommended Action
Adopt the Federal Grant Policies and Procedures Manual.

CITY COUNCIL AGENDA
MAY 17, 2022
PAGE 4

5. Avalon Harbor Waste Tank Pump-Out Float Contract Price Increase On July 20, 2021 the City Council directed the City Manager to negotiate a contract for procurement of the assets required with Diversified Composites Inc., to complete the Waste Pump-Out Freshwater Fill-Up Float Replacement Project. Staff were recently notified due to supply chain issues, the cost of materials from Diversified Composites hadincreased.Recommended Action Approve a contract price increase of $37,485.00 for the Waste Pump-Out and Freshwater Fill-Up Float Replacement Project with Diversified Composites Incorporated.

6. Approve the Resolution Supporting Submittal of an Application to the State of California’s State Active Transportation Grant Program Cycle 6
Since 2018, work has proceeded on developing the construction contract documents to implement the reconstruction of the five corners intersection. It is known that existing grant funds are not adequate to complete the project. Another round of State ATP Cyclefunds has been announced.

Recommended Action
(1) Approve the Resolution supporting the ATP Cycle 6 grant application. 2) Approve the submittal of the ATP Cycle 6 grant application for the Five-Corners Project.

7. Approval of an Additional One-Time $50 Commuter Book Subsidy for the Month of June 2022 and Extension of Regular $85 subsidy through December 31, 2022 The City of Avalon annually applies for Proposition A Incentive Funds through the Los Angeles County Metropolitan Transportation Authority (Metro). The City has received $1,000,000 in Proposition A Incentive Funds annually over the last several fiscal years, with $700,000 earmarked for the commuter subsidy program.

Recommended Action
Approve an additional one-time $50 commuter book subsidy for the month of June 2022 and extend the existing regular $85 subsidy through December 31, 2022.

GENERAL BUSINESS

8. Consideration of Transportation Permit— Sara Mintz and Juan Saldana, dba Avalon Local Tour
On May 5, 2022 Sara Mintz and Juan Saldana submitted a Transportation Permit application to perform guided autoette tours. The proposed route includes areas from Pebbly Beach Road, Mt. Ada, Avalon Canyon Road, Wrigley Memorial, Country ClubDrive, Stage Coach Road, Casino Way and Descanso Beach.

Recommended Action
Discuss and provide direction to Staff. If consensus to approve is reached make the affirmative finding that the criteria set forth in Avalon Municipal Code Section 5-14.04 has been meet.

CITY COUNCIL AGENDA
MAY 17, 2022
PAGE 5

ADJOURN

NOTICE OF POSTING
I, Devin Elise Hart. declare that the City Council Agenda for Tuesday, May 17, 2022 was posted on Friday, May 13, 2022 on the City’s website www.cityofavalon.com, and at City Hall, 410 Avalon Canyon Road.

Devin Elise Hart, Administrative Analyst and Deputy City Clerk

CITY OF AVALON CITY COUNCIL
MEETING DATE: May 17, 2022 AGENDA ITEM: 1
ORIGINATING DEP: City Clerk CITY MANAGER:__________
PREPARED BY: Gabrielle Morones, Deputy City Clerk
SUBJECT: City Council Minutes
RECOMMENDED ACTION(S): Approve minutes from the May 3, 2022 Regular City Council Meeting.

REPORT SUMMARY: Although the live recording is the official record of public meetings, minutes are prepared for the Council’s approval.

FISCAL IMPACTS: N/A.

GOAL ALIGNMENT: Not Aligned.

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: N/A.

FOLLOW UP ACTION: File minutes in the City Clerk’s office.

ADVERTISING, NOTICE AND PUBLIC CONTACT: The item was properly listed onthe posted agenda pursuant to the Brown Act.

ATTACHMENTS:
1) May 3, 2022 Regular City Council Minutes

AVALON CITY COUNCIL MEETING ALSO INCLUDED

A MEETING OF THE CITY COUNCIL ACTING AS

THE AVALON MUNICIPAL HOSPITAL BOARD OF TRUSTEES AND

THE HOUSING AUTHORITY
TUESDAY, MAY 3, 2022 — 5:00 P.M.
410 AVALON CANYON ROAD
THIS VIRTUAL MEETING WAS HELD PURSUANT TO AB 361

MINUTES
Due to health recommendations from the Center for Disease Control and State of California Division of Occupational Safety and Health (Cal/OSHA), and the declared state of emergency wherein social distancing measures have been imposed or recommended, the CITY OF AVALON’S CITY COUNCIL and PLANNING COMMISSION MEETINGS SHALL GENERALLY BE AVAILABLE TO THE PUBLIC REMOTELY. The general public may attend the meeting in the Council Chambers however must adhere to social distancing requirements. The public is encouraged to watch and participate from the safety of their homes while practicing social distancing.

Council Chambers are open to a maximum 30 members of the general public. Once the Council Chambers reach maximum occupancy, the general public may participate in Oral Communication and address the City Council on an agenda item in person by waiting in the City Hall Court Yard and entering the Chambers one at a time at the appropriate time. No one will be admitted into the Council Chambers who is ill or exhibiting symptoms of COVID-19. Additionally. the general public may participate in Oral Communication and address the City Council on an agenda items by providing comments via e Comment. Please use the link below to provide comments via e-Comment.CALL TO ORDER-5:01 p.m.

ROLL CALL- Present via Teleconference and In-Person: Mayor Anni Marshall,Councilmembers Cinde Cassidy, Lisa Lavelle. Michael Ponce and Yesenia De La Rosa. Also present: City Manager David Maistros, City Clerk Denise Radde and City Attorney Scoff Campbell. Absent: Deputy City Clerk/Senior Administrative Assistant Gabrielle Morones WRITTEN COMMUNICATIONS-None.

PRESENTATION — Finance Director Matthew Baker provided an overview of the progress of the FY 2021-2022 Budget and draft overview for the FY 2022-2023 Budget.

CONSENT CALENDAR-There were 6 Items on the Consent Calendar. Motion to approve Items #146 made by Michael Ponce, seconded by Lisa Lavefle. (All Ayes)

1. Minutes
Approved minutes from the April 19, 2022 regular City Council Meeting.

2. Warrants
Approved warrants in the amount of $504,142.16, one payroll in the amount of $185,525.77, three electronic fund transfers totaling $70,886.31 for a total disbursement of $760,554.24 for April 11, 2022 through April 22, 2022.

CITY COUNCILIHOSPITAL MINUTES
MAY 3, 2022
PAGE 2

3. Fiscal Year 2021-2022 Third Quarter Treasurer’s Report Adopted Resolution No. SA 22-24 of the City Council of the City of Avalon/Successor Agency to the Avalon Community Improvement Agency adopting the Treasurer’s Investment Report for Fiscal Year 2021/2022 Third Quarter.

4. Findings to Continue to Hold Remote TeleconferenceNirtual City Council Meetings Pursuant to Assembly Bill 361
City Council determined that the COVID-19 state of emergency proclaimed by the Governor still exists and has been considered by the City Council in deciding to continue to have teleconference meetings and that state or local officials have imposed or recommended measures to promote social distancing in connection with COVID-19, and that as a result of the COVID-19 emergency, meeting in person would present imminent risks to the health or safety of attendees.

5. Resolution Adopting Memorandums of Understanding Between the City of Avalon and International Association of Firefighters Local 2295, Management, Confidential/Unrepresented Labor Associations for the Contract Period July 1, 2022 through June 30, 2025Adopted the following Resolutions:
1) Resolution No. 22-25 of the City Council of the City of Avalon approving the Memorandum of Understanding Between the City of Avalon and the International Association of Firefighters Local 2295 effective July 1, 2022 through June 30, 2025. 2) Resolution No. 22-26 of the City Council of the City of Avalon approving the Memorandum of Understanding Between the City of Avalon and theUnrepresented/Confidential Employee Association Effective July 1, 2022 through June 30, 2025.
3) Resolution No. 22-27 of the City Council of the City of Avalon approving the Memorandum of Understanding Between the City of Avalon and the Management Employee Association Effective July 1, 2022 through June 30, 2025. ** The following item on the Consent Calendar was the City Council acting as the Avalon Municipal Hospital Board of Trustees **

6. CEO’s Board Report
Received and filed the following report:

The CEO’s April 2022 Report

GENERAL BUSINESS

7. Transportation Permit Transfer — Island Bikes to Martin Leyva

1. Approved the application for the transfer of a Transportation Permit from Island Bikes to Martin Leyva, permitting 30 electric bicycles for rental and guided tours. 2. Once Mr.

Leyva has secured a business location require him to return to City Council with an operations plan adhering to all conditions set forth in the Avalon Municipal Code and CITY COUNCIL(I-IOSPITALII-1OUSING AUTHORITY MINUTES
MAY 3, 2022
PAGE 3
Resolution 21-07 by no later than April 30, 2024.

Motion to approve made by Cinde Cassidy, seconded by Anni MarshalL (All Ayes) ** The following item of General Business was the City Council acting as the Housing Authority and the City Council.**8. Water Allocation Transfer Request Authorized City Staff to submit a request to Southern California Edison to transfer water allocations from housing prolects no longer being pursued to housing projects at 206 E. Whittley and the City Hall Campus.

Motion to approve made by Michael Ponce, seconded by Cinde Cassidy. (All Ayes) Mayor Marshall adjourned the meeting at 6:30 p.m.

I, Gabrielle Morones, Deputy City Clerk, do hereby certify that the DVD videotape of the Regular City Council Meeting on May 3, 2022, is the official record of the Council Meeting and is on file and maintained in City Hall.

Gabrielle Morones, Deputy City Clerk I Sr. Administrative Assistant

CITY OF AVALON CITY COUNCIL
MEETING DATE: May 17, 2022ORIGINATING DEP: Finance
PREPARED BY: Matthew Baker, Finance Director
AGENDA ITEM: Z
CITY MANAGER:
______
SUBJECT: Warrants
RECOMMENDED ACTION(S): Approve the disbursements for April 25, 2022 through May 6, 2022 totaling $1,154,349.16.

REPORT SUMMARY: These disbursements through May
totaling $753,322.60, one payrofl totaling S193,706.60. andtotaling S207.319.96. 6th are comprised of warrants
other electronic fund transfers

ITEM DESCRIPTION AMOUNT DATE
SF us BANK WARRANTS CK# 34151-34230 $ 753,322.60 05/03/22 PAYROLL 193,706.60 05/06/22EFT - CALPERS MEDICAL 66,007.91 05/03/22EFT - CALPERS UAL 68,73551 05/05/22 EFT -CALPERS RETIREMENT 32,805.08 04/25122
EFT - CALPERS RETIREMENT 38,446.35 05/03/22
‘ EFT - HARBOR/REC CREDIT CARD ANP BANK SERVICE FEES 1,325.11 05/06/22 TOTAL DISBURSEMENTS $ 1154,349.16
GOAL ALIGNMENT: Ongoing meeting of City obligations.

FISCAL IMPACTS; There are sufficient funds available, and the expenditures are included in the FY21-22 Budget.

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION;
FOLLOW UP ACTION: N/A
N/A
ADVERTISING, NOTICE AND PUBLIC CONTACT: Pursuant to the Brown Act.

ATTACHMENTS: Audit Certificate, Warrant List, US Bank Credit Card Details

CITY OF AVALON
APRIL 25, 2022- MAY 6,2022 DISBURSEMENTS
May 17, 2022

ITEM DESCRIPTION AMOUNT DATE
OF US BANK WARRANTS CKU 34151-34230 S 753322.60 05/03/22 PAYROLL 193,70660 05/06/22EFT -CALPERS MEDICAL 66,007.91 05/03/22EFT - CALPERS UAL 68,735.51 05/05/22EFT -CALPERS RETIREMENT 32,805.08 04/25/22 EFT -CALPERS RETIREMENT 38,446.35 05/03/22EFT - HARBOR/REC CREDIT CARD AND BANK SERVICE FEES 1,325.11 05/06/22 TOTAL DISBURSEMENTS $ 1,154,349.16

CERTIFICATE
IN ACCORDANCE WITH SECTION 32702

OF THE GOVERNMENT CODE, I CERTIFY

THAT THE ABOVE DEMANDS ARE ACCURATE

AND THAT FUNDS ARE AVAILABLE FOR
PAYMENT.

APPROVED AND AUDITED THIS
17TH DAY OF MAY 2022 I CERTIFY UNDER PENALTY OF PERJURY

THAT THE FOREGOING IS TRUE AND
CORRECT.

AUDIT COMMITTEE-LISA LAVEL..E EXECUTED THIS 17Th DAy OF MAY 2022AUDIT COMMITTEE - VESENIA DE LA ROSA FINANCE DIRECTOR - MATTHEW BAKER

CITY OF AVALON
APRIL 25, 2022 -MAY 6,2022 DISBURSEMENTS
May 17, 2022
aOFFICE OF PLANNING& RESEARCH

OFFICE OF PLANNING & RESEARCHOFFICE OF PLANNING & RESEARCHMA OIL, INC AL LARSON BOAT SHOP, INC.AMAZON CAPITAL SERVICES, INC.AT & T AVAI.DN ENVIRONMENTAL SVCSAVALON FREIGHT SERVICES, LLCAVALON MOORING & DIVING

BEST, BEST & KRIEGER, LLP

CATALINA BEVERAGE CO

CATALINA BROADBAND SOLUTIONSCATALINA CHAMBER OF COMMERCECATALINA COASTAL TOURS & FISHING

CATALINA ISLAND COMPANYCATALINA ISLANDERCATALINA YAMAHA CO. OF LOS ANGELES SHERIFF’S DEPT.COAST TO COAST SOLUTIONSCONEY ISLAND

DAPEER, ROSENBLIT & LITVAK,LLPDEWEY PEST CONTROL
M.D. DION & SONS. INC.

ENNIS PAINT, INCGARCIA, BETTY JOG RA N GE R

HIGH TIDE TRADERS
HUD INDUSTRIES, INC.

LUPO, KARLAIDR ENVIRONMENTAL SERVICESIMAGE TREND, INC.

ISLAND EXPRESSLOCAL 229S AVALON EIREFIGHTERS UNIDFUKUHARA, VICTOR

MASSEY CONSTRUCTION, LLCMCMASTER-CARRMONTROSE ENVIRONMENTAL SOLUTIONSMORAND, DUDLEY

NAPA AUTO PARTS

SANCHEZ, TIMOTHY

QUADIENT

QUILL CORP
RICOH USA, INC.

RICOH USA, INC.ROSENOW SPEVACEK GROUP, INC
SACRAMENTO METROPOLITAN FIRE 01ST.

DESCRIPTION

VOID - INCORRECT MAILING ADDRESSVOID - INCORRECT MAILING ADDRESS

VOID - INCORRECT MAILING ADDRESS

FUEL - ALL DEPTS

SERVICE - HARBORSUPPLIES -ALL DEPTSCOMMUNICATIONS
- WWTP
CONTRACT SERVICES, SWEEPER -03/2022

FREIGHT - ALL DEPARTMENTS

SERVICE - HARBOR
LEGAL FEES - 03/2022

SUPPLIES - ALL DEPTSSERVICE - PUBLIC WORKS
TOT - 05/2022
CONTRACT SERVICES, SWEEPER - 03/2022
RENT - 04/2022

ADVERTISING -ALL DEPARTMENTS

SUPPLIES
- GARAGE
RESIDENT DEPUTY - D3/2D22

SUPPLIES - FIRE
SENIOR MEALS - 01-03/2022SERVICE - VEHICLESSERVICE - ALL DEPTS

FUEL- HARBOR

SUPPLIES - STREETS
RETIREE INSURANCE -05/2022

SUPPLIES - STREETSUNIFORMS - HARBOR

SUPPLIES - PUBLIC WORKSSERVICE - RECREATION

HHW DISPOSAL

SOFTWARE LEASE - FIRE

FREIGHTS ADMIN

UNIFORMS -HARBOR

SUPPLIES -GARAGE
SERVICE - HOUSING AUTHORITYSUPPLIES - PUBLIC WORKSCONTRACT SERVICES, MAINTENANCE - 03/2022

RETIREE INSURANCE
- 04/2022

SUPPLIES - GARAGE

SERVICE - RECREATION

POSTAGE REFILLSUPPLIES - ALL DEPTS

COPIER LEASE - PLANNINGVOID - KEYING ERRORSERVICE - SUCCESSOR AGENCY

SERVICE - FIRE
NAME

CHECK DATE

NUMBER ISSUED AMOUNT
34151 04/29/2022 (75.00)34152 04/29/2022 (75.00)34253 04/29/2022 (75.00) 34170 04/29/2022 3,377.61
34171 04/29/2022 133,554.5934172 04/29/2022 310.7834173 04/29/2022 319.36 34174 04/29/2022 140,512.0334175 04/29/2022 957.1234176 04/29/2022 671.00 34177 04/29/2022 21,418.2634178 04/29/2022 742.80
34179 04/29/2022 49.95
34180 04/29/2022 94,417.00
34181 04/29/2022 24,083.3334182 04/29/2022 8,178.0034183 04/29/2022 1,718.37 34184 04/29/2022 22.37
34185 04/29/2022 122,269.02
34186 04/29/2022 339.43
34187 04/29/2022 1,404.0034188 04/29/2022 304.0234189 04/29/2022 818.00 34190 04/29/2022 1,015.00
34191 04/29/2022 176.29
34192 04/29/2022 774.1934193 C4/29/2022 1,211.3834194 04/29/2022 984.50 34195 04/29/2022 8SD.4834196 04/29/2022 315.0034197 04/29/2022 1,450.4134198 04/29/2022 5,820.00 34199 04/29/2022 20.0034200 04/29/2022 500.0034201 04/29/2022 623.09 34202 04/29/2022 790.0034203 04/29/2022 875.37
34204 04/29/2022 128,464.7534205 04/29/2022 634.99
34206 04/29/2022 128.20
34207 04/29/2022 67.0034208 04/29/2022 349.0634203 04/29/2022 814.69 34210 04/29/2022 1,583.8534210 04/29/2022 (1,583.85)
34211 04/29/2022 196.2534212 04/29/2022 1,294.68

CITY OF AVALON
APRIL 25, 2022 -MAY 6, 2022 DISBURSEMENTS
May 17, 2022
CHECK
NUMBER
2ND HALF 04/2022PERMIT FEES -WWTP

SERVICE -HARBOR

PERMIT FEES - WWTP

SERVICE - HARBORSEE ATTACHED DETAIL
CONTRACT SERVICES - 04/2022

COMMUNICATIONS - ALL DEPARTMENTS

SERVICE - HARBORSUPPLIES - WWTPSERVICE - HARBOR

NOTICE OF EXEMPTION

NOTICE OF EXEMPTIONNOTICE OF EXEMPTIONNOTICE OF EXEMPTIONCOPIER LEASE -PLANNING

COPIER LEASE -PLANNING

FUEL - ALL DEPTS
S 7S3,322.60
DATE

ISSUED AMOUNT NAME DESCRIPTION
34213 04/29/2022 889010 SIRIAS CLEANING SERVICE
34214 04/29/2022 58274 SOUTH COAST AQMD34215 04/29/2022 6,00000 SOUTHWEST MARINE RESOURCE, INC. 34216 04/29/2022 1,73800 SWRCB34217 04/29/2022 25656 UNITED SITE SERVICES OF CALIFORNIA34218 04/29/2022 2,40526 CORPORATE PAYMENT SYSTEMS34219 04/29/2022 14,44792 VEGA, EDMUNDO34220 04/29/2022 1,90394 VERIZON WIRELESS34221 04/29/2022 2,61000 WANDA StONE34222 04/29/2022 5,766.85 WESTRIDGE ENVIRONMENTAL GROUP34223 04/29/2022 97S.S1 ZIM’S OF CATALINA34224 04/29/2022 7S0D REGISTRAR-RECORDER/COUNTY CLERK 3422S 04/29/2022 7500 REGISTRAR-RECORDER/COUNTY CLERK34226 04/29/2022 7S0D REGISTRAR-RECORDER/COUNTY CLERK34227 04/29/2022 7S00 REGISTRAR-RECORDER/COUNTY CLERK34228 04/29/2022 95435 RICOH AMERICAS CORP34229 04/29/2322 62950 RICOF- USA, II’,C.34230 05/03/2022 3,26450 AAA OIL, INC

CITY OF AVALON
US BANK CREDIT CARD CHARGES PAID APRIL 29, 2022
May 17, 2022

LAST NAME POST DATE AMT USD VENDOR DESCRIPTION DEPARTMENT GONZALES 4/15/2022 26240 SJR SPEEDY PRINTING COMMUTER SUBSIDY CARDS EINANCE BAKER 3/16/2022 2,142.86 TOW BLAZER FOOD HANDLER SINK RECREATION 2,405.26 CHECK 34218

CITY OF AVALON CITY COUNCIL
MEETING DATE: May 17, 2022 AGENDA ITEM: S
ORIGINATING DEP: City Attorney CITY MANAGER: _______ PREPARED BY: Scott Campbell, City Attorney SUBJECT: Findings to Continue to Hold Remote Teleconference/Virtual City Council Meetings Pursuant to Assembly Bill 361
RECOMMENDED ACTION(S): Determine that the COVID-19 state of emergency proclaimed by the Governor still exists and has been considered by the City Council in deciding to continue to have teleconference meetings and that state or local officials have imposed or recommended measures to promote social distancing in connection with COVID-19, and that as a result of theCOVID-19 emergency, meeting in person would present imminent risks to the health or safetyof attendees.

REPORT SUMMARY: Traditionally, the Brown Act allows for teleconference or virtual meetings,provided that the physical locations of the legislative body’s members joining by teleconferenceare posted on the agenda, that those locations are open to the public and that a quorum of the members is located within its jurisdiction. Newly enacted AB 361 provides an exception to theseprocedures in order to allow for fully virtual meetings during proclaimed emergencies, including the COVID-19 pandemic.

Since March of 2020 and the issuance of Governor Newsom’s Executive Order N-29-20, which suspended portions of the Brown Act relating to teleconferencing, the City Council has had virtual meetings without having to post the location of the legislative body members attending virtually.Most public agencies have been holding public meetings using virtual platforms since this time.

In June of 2021, Governor Newsom issued Executive Order N-08-21, which provided that the exceptions contained in EQ N-29-20 would sunset on September 30, 2021.

On September 10, 2021, the Legislature adopted AB 361, which allows public agencies to hold fully virtual meetings under certain circumstances without the posting of the agenda from each location a legislative body member is attending. Governor Newsom signed the bill into law on September 16, 2021. Because it contained an urgency provision, it took immediate effect.

Specific Findings Required underAB 361
Under AB 361, the City Council can hold virtual meetings without providing notice of the City Council’s teleconference location if the City Council makes the determination that there is a Governor-proclaimed state of emergency, which the City Council will consider in theirdetermination, and one of two secondary criteria listed below exists:

1. State or local officials have imposed or recommended measures to promote social distancing in connection with COVID-19; or
6505900000\345204S1 I

2. The City Council determines that requiring a meeting in person would present an imminent risk to the health or safety of attendees.

COVID-19 continues to present an imminent threat to the health or safety of members of the public, and the Governor’s declaration of a COVID-19 emergency still exists. Although vaccines are now widely available, many people in the State and County are still not fully vaccinated and remain susceptible to infection. The disease can still spread rapidly through person-to-person contact and those in close proximity. Further, more contagious variants of the disease are now present in the State and County, the most predominant of which is a new variant of the Omnicron variant. The County of Los Angeles recently re-instituted some mandates given the rise in cases and deaths nationally. The City’s economy is dependent upon visitors to the island, the presenceof which, increases the likelihood of transmission of the disease. Also, having members of the public attend council meetings at locations where council members are in attendance due to their desire to avoid exposure to COVID-1 9 poses an imminent risk to the health or safety of attendees.

Re-Authorization is Required Within 30 Days
The City Council made the findings listed above at its May 3, 2022 City Council meeting.

Consistent with the provisions of Government Code Section 54953(e), the findings must be madeevery 30 days “after teleconferencing for the first time” under AB 361. Thus, if the City Council desires to continue to meet remotely without having to post the location of each teleconference location, the City Council must again find that the COVID-19 emergency still exists and that one of the two following findings can be made: that state or local officials have imposed or recommended measures to promote social distancing in connection with COVID-19. or, that aresult of the COVID-19 emergency, meeting in person would present imminent risks to the health or safety of attendees. Because these findings must be made every thirty (30) days, the City Council will have to make these findings at its upcoming June 8, 2022 meeting and thirty (30) days thereafter.

It is recommended that the City Council make these findings.

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: The City Council will have to follow the Brown Act provisions that existed prior to the COVID-19 pandemic.

FOLLOW UP ACTION: That the City Council make the findings under AB 361 at its June 8, 2022 City Council meeting.

GOAL ALIGNMENT: N/A
FISCAL IMPACTS: None.

ADVERTISING, NOTICE AND PUBLIC CONTACT: This item was properly listed on the posted agenda pursuant to the Brown Act.

ATTACHMENTS: None.
65059{i(]000\3452048 1.1

CITY OF AVALON CITY COUNCIL
MEETING DATE: May 17, 2022 AGENDA ITEM: ________ ORIGINATING DEP: Finance CITY MANAGER: /9i2ifr( PREPARED BY: Matthew Baker, Finance DirectorSUBJECT: Federal Grant Policies and Procedures Manual RECOMMENDED ACTION(S): Adopt the Federal Grant Policies and Procedures Manual.REPORT SUMMARY: The City of Avalon is required to conduct a Single Audit, a rigorous, organization-wide examination, when it expends S750.000 or more of federal assistance. Theobjective of the Single Audit is to provide assurance to the US federal government as to the management and use of federal grants. The City of Avalon was required to conduct a Single Audit for the fiscal year ended June 30, 2020. The audit was performed by Davis Farr LLP (Davis Fa rr).

As part of its report on internal control over compliance, Davis Farr identified one deficiency that it considered to be a significant deficiency listed below:

The City did not have written policies, procedures, and standards of conduct relative to Federal Awards as required by Uniform Guidance (2 CER 200), Subparts D (Post Federal Award Requirements) and E (Cost Principles).

In response to this deficiency. Management updated its policies, procedures, and standards of conduct to ensure compliance with the Uniform Guidance requirements.

GOAL ALIGNMENT: Fiscal Responsibility.

FISCAL IMPACTS: N/A.

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: Failure to establish written policies and procedures results in the City being non-compliant with the Uniform Guidance referenced above and may result in loss of grant funding.

FOLLOW UP ACTION: Implement City Council direction.

ADVERTISING, NOTICE AND PUBLIC CONTACT: This item was properly listed on the posted agenda pursuant to the Brown Act.

ATTACHMENTS: Federal Grant Policies and Procedures Manual; Single Audit Report on Expenditures of Federal Awards for the Year ended June 30, 2020; Resolution of Adoption Clfl( OF AVALON
Federal Grant Policies and Procedures Manual
Pursuant to Requireiwms in 2 CER Pail 200; Uniform Administrative Requirements. Cost Principles, arid Audit Requirements fOr Federal Aards
These federal n’ant policies and procedures are applicable to all tèderal giants awarded to the (‘it>. All employees vho deal with tèderal grants must be familiar with them arid intist fullyeoniplv with all requirements contained herein.

Introduction
PurposeThis manual sets forth the policies and procedures used by the City of Avalon (the City) to administer federal hinds pursuant to Title 2 of the Code of Federal Regulations (2 CFR) Part 200,which took effect for non-federal entities on December 26, 2014.The manna I contains the internal controls and grant manageme in standards used by the City toensure that all federal finds are lawhiilly expended. It describes in detail or references the C’itv sexisting policies, including procurement. records retention, and travel policies, as they relate to grant management. All emplo>ees of the Cii> who deal with federal funds in any capaci are expected to review this manual to gain thmiliarity and understanding of the City’s rules and practices and to comply with all requirements.
0MB content and content from other federal agencies is identified and tömutted in a box with a light green backdrop. as in the thllow ing important section on internal controls, from 2 CR 200:

Effective l)ate
For awards made prior to December 26. 2014. the uniform requ’wennts töuiid in 34 CFR Parts 74 still apply. For awards made on or alter December 26. 2014. the uniform grant guidance iii 2 CERPail 200 applies. Much of the substance found in the preious 34 CFR Pails 74k now found in 2 CFR Part 200.

Scope
The policies and procedures contained within this manual apply to all federal grants received bythe City and to all enipIoees of the Cliv.

Monitoring for Compliance and Consequences for Non-complianceThe City is responsible for conipking with all requirements of each federal award (2 CFR200.300[h]). Compliance with these policies and procedures is monitored by the City. Failure ofa City employee to comply with an> of these requirements may result in dkciplinar action. up toand including termination.Defmilions Definitions as the’ pertain to federal grants appear in two places: 34 CFR Part 77 - Delinit ions That AppI> to Department Regulations, and 2 CFR Pail 200. Subpart A, which relate to the policiesand procedures in this document. City employees who deal with federal grants must he titmiliarwith the d e finit inns in both.

Two temis used frequently in 2 CER Pail 200 are “state-administered grants” and “direct grants.”“State-administered grains” are those grants that pass through a state agency (i.e.. a pass-throughagency) such as the Calilöniia Department of Transportation (CalTrans). State agencies and the sub grantees must comply with the requirements in 34 CFR Part 76 in addition to the reqtnrements in 2 CFR Pail 200.
2 ‘Direct grants” are those grants that do not pass through another agency such as Calirans and are awarded directly by the federal awarding agency to the grantee organization. The City must comply with the requirements in 34 CER Part 75 in addition to the requirements in 2 CER Part 200. All of the requirements outlined in these polic’ts and procedures apply to both direct szrants and state—administered grants.

The federal provisions contained and referenced in this document appl to all non-federal entities receiving and e\pending federal fonds. A mon-federal entity” as defined in 2 CFR Part 200 means. ‘‘a state, local government, ]ndian tribe, institution of higher education (I I-IF). or nonprofit organization that carries out a federal award as a recipient or sub recipient.” 0MB §200.303 Enternal Controls
The non-Federal entity must:
a) Establish and maintain eflèctive internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the Internal Control Integrated Framework”, issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). bj Comply with Federal statutes, regulations. and the ternm and conditions of the Federal awards.
c) Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations and the terms and conditions of Federal awards.
d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings.

Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state. local, and the non-Federal entity considers sensitive consistent with appileable AFederal, state, local, and tribal laws regarding privacy and obligations of confidentiality. 3 The Government Accountability Office segments internal controls into five standards, and C’iiv staff should consider these five standards whenever managing grants. paitcipating in audits, and making want related decisions.

GAO: Five Internal Control Standanis
1) Control Environment Management and employees should establish and maintain an environment throughout the organization that sets a positive and supportive attitude toward internal control and conscientious management.
2) RiskAssessnientlntemal control should provide for an assessment of the risks the agency faces from both external and internal sources.
3) Control Activilies Internal control activities help ensure that managements directives are carried out. The control activities should be effective and efficient in accomplishing the agenc)s control objectives
4) Information and Conminnication Information should be recorded and communicated to management and others within the entity who need it and in a tönn and ithin a time frame that enables them to carry out their internal control and other responsibilities. 5) Monitoring Internal control monitoring should assess the quality ofpertbrniance over time and ensure that the findings of audits and other reviews are promptly resolved. 4 1. PRINCIPLES OF GRANT MANAGEMENT
The chart below shows the order in which rules are generally in effect when rules at different levelsconflict. such as when a rule in the grant agreement is different or more restrictive than the policy in this manual. In that case, the grant agreement rule trumps.

When the rules are not in conflict, all rules must he followed (resulting in the most restrictive rulebeing the critical compliance threshold). For example. with record retention rules, the longest is the most restrictive period of time. With federal grants. the Office of Management and Budget requires grant documents are retained for at least three \ears from grant closeout or final Rwnia I inquiry. Cit policies requires that to be at least the years. Adherence to the most restrictive rule will serve to meet all other rules.

City staff must read and monitor program and agreement rules closel to enstn’e compliance inthose situations when the fonder’s rule is stricter than City pollex.

Federal Legislation
0MB Rules
Grant Agreement
Requirements
City Policie,
V
Opinions
Effective December 26. 2014. the Office of’ Management and Budget requires compliance with what is called the 0MB Super Circular or Lniforrn Guidance (2 CER 200). This set of rules combined and replaced other previous eirculars. Many of the provisions and requirements are the same as they were previously. but a few siguificant changes and priority areas were made üì thenew guidance. Grants that are signed after that date will be administered under the lie” rules.Cirants that were signed before that date are generally governed by the old rules. ahhoLlgh grantsthat have allocations approved through what 0MB calls “incremental Iuinding” will he subject to 2 CFR 200.
5 Major changes in the ne guidance hiclude an emphasis on the importance of internal controls and an emphasis on the importance of sub-award monitoring. Requirements for this second issue. sub—award monitoring and management. were significantly strengthened and built upon hi the new rules, and the City and oilier entities that sub-award should review past approaches to ensure theymeet new standards. Section VII of this manual includes OMWs revised sub-award standards.Obtaining the Unifoni GuidanceAn electronic copy of the Uniform Guidance can be located by searching online for 2 CFR 200.” A version with an easy-to-use electronic table of contents is available at: inp*w.”v .sJrr Hi IC\ cc libionse/ liile)J .2c tr2niahi(CJp[
6 IL SUMMARY OF FOUR PHASES OF A GRANT
These four sections provide basic descriptions of each phase of a typical grant. Special attention is paid here to the application and pre-award period. The other three phases are summarized in this section and covercd in more detail in the rest of the manual.

I. APPLICATION AND PRE-AWARD ISSUES
To ensure grants received are beneficial to the organization and optimized tbr compliancc. employees responsible ith grant administration “ill communicate with the City Managers officeand Finance Department to anabLe the effect the grant will have on the City.The City ill meet all finder requirements pertaining to signatories on grant agreements.Authorized members of the Cit will he responsible for submitting all proposals directly or approve that process to he carrd otit b another rcpresentatie. Grant negotiation between Hindersand the City will be carrd out b authorized personnel.

Federal Office of Management and Budget rules generally state pre-aard costs are not albwed as direct costs or allowed to meet cost share with federal awards. This federal rule can be modified by agreement with the kinder. for example. hen a kinder allows a 90-day pre-award approvalperiod for specilic costs.

Following is a list of critical issues to consider and in many cases discuss with other City staff when writing or submitting a grant:
• Are there matching or cost share requirements?• Does this grant involve adding staff or expanding work time?• Are there equipment purchases in the grant? o O\’lB generall dethies equipment as single items that costs more than S5.000 and those items must he tracked as inventory.
• Are there special or imnusun I administrative requirements?• Is supplanting prohibited? o Supplanting is hen a state or unit of local government reduces state or local finds for an actiit specifically because federal funds are available (or expected to be available) to fluid the same acti it> and is generallx prohibited. • Are there siun-oti requirenicnts ith state agencles or other ageneics? • What City departments \\ ill be involved and have they been informed?• Are there possible contlicts of interest or procurement issues involved itli the grant. the project or with possible contractors?
• Is this a sole-source contract situation?• Does the giant involve sub-aards or contracts? o Sub—awards vcrsus contractor determination are described in this document tinder the sub—award policies section.
7 Additional issues to consider include:
• What is the amount to he awarded?• What are the stan and end dates?• What expenses does the grant cover?• What documentation is required to support each line item?• Are bids required? • Do we need to create a sub-award agreement or a contract?• What are the terms and conditions and the reporting requirements?• What is the method of pameiit: electronic transfer reimbursement, up-front?

2. BEGINNING FIlE PROJECT
Belo is a list of departments that typically become involved in grants at the Cit’. Personnel from these departments must connect ith the Finance Director at the beginning of the grain to establish an accotinting approach that ill involve the creation ofan account or project code as needed. • Public Works• Harbor Department• Fine Department• Communit\ Service Department • Cit \‘lanagers otlicc
When selling up an electronic sstein to track a grant. it is advisable to confirni the contents to the prouram officer from the funding agenc to receive input and guidance on an tracking and reporting needs. (See section V of this manual for a sketch of a t\pical binder managementapproach.) Additional tbkiers na’ be required for sub-a’vard agreements or to track special issues.such as project evaluation and construction issues.3. PROJECT ADMINISTRATIONThe kes to good grant administration include the following:
• Keep in touch with the fluiding agency.• Meet with project staff and Finance staff reguIarl’. • Keep on track with process objectives and perfOrmance measures. • Collect necessar3 data and complete required evaluation processes.• Maintain conununication ith contractors and collaborative partncr agencies.• Complete all necessary reports (usually quarterly or semi-annually). • Revie expenditures on a monthly basis.• Use a folder to maintain records of grant activities and budget expenditures. 8 4. CLOSEOUT AND POSE-AWARD REQUIREMENTS
Some tèderal grants allow a 90-day period for closeout procedures. which may include completing grant ieports and completing evaluation activities to verilS grant impacts and adherence to measurable outcome objectives. Tbne spent to ensure documentation of all grant issues can savemuch thne later if the grant is reviewed by the funder or is selected for revies during the City’s federally required single audit. Staff members are encouraged to make sure all grant binders and record keepin svsteiiis are complete before considering the grant completed.

Tips fOr closeout procedures include:
• Submit final narrative and financial reports, which are usually due within 90 daxs of the end ofthe grant agreement.
• Describe how objectives and outcomes were met.
• Show all finds were expended on allowed expenditures or report unspent finds.• Make sure the kinder closes out the grant. • Determine if there is inventory from the grant that will need to be tracked based on depreciative •aIue (O\:1l3 states items worth 55.000 must he inventoried at least every two years).
• Analyze whether residual supplies are worth 55.000 or more of total value.• Determine if kinder covers staffing costs during closeout period (sometinies allowed up to 90 days after the want closes),
Possible post—award requirements and issues on federal grants nay include inventory tracking. records retention, property management. and accounting adjustments (which can result in possible repayments).

Tips for post award req uireme its include
• Follow rules that govern the retention or disposal of giant equipment and property. especially fOr any item that vas purchased fOr 55.000 or more. • Retain records in accordance with the most restrictive rules of the finder, the Cit the state. or any other pertinent stakehoer.
• Track and document inventory for items purchased with federal finds (required at least every two sears fOr items worth $5,000).
• Request permission from the finder if intending to selL dispose of: or repurpose equipment purchased with the grant.
• Address aim audit requirements or inquiries.
• Make stire the City can only keep finds that were either I) reinihursed to the Cit For direct cost for the giant project. 2) collected throuch allowable indirect costs. or 3) allowed as income under the terms of the giant.
9 III. FEDERAL SINGLE AUDIT PRINCIPLES
This important section stnTurnrizes requirements of managing federal grant finds, which are regulated b White House Office of Management and Budget fLues. Federall required single audits focus on 13 specific compliance areas. hich are listed here with explanations and in somecases references fhr ftu’ther content. These audits — also called lèderal single audits — are required of all entities that cumulatively spend $750,000 or more in federal ifunds in a fiscal >ear.

The Cit of Avalon has not been required to conduct federal singie audit each year. only duringyears of significant tèderall\ funded grant activity. Single audits iinolve the following 13 compliance topics listed in this chart. with each item summarized helo\\ Federal single audit compliance topics and audit finding categories:
1) Activities allowed or unallowed. allowable costs and cost principles:
2) Cash management;3) Davis Bacon Act:
4) Eligibility;
5) Equipment and real property management:6) Matching. level of eflOrt. earmarking:
7) Period of availability of federal fhnds
8) Procurement and suspension and debarment:
9) Proaram income:
10) Real propert acquisition and relocation assistance:

I) Reporting
12) Sub recipient monitoring: and
13) Special tests and provisions

1. Activities allosed or unallowed, allowable eosts,and cost pnnciples All costs billed to a specific grant should pass the “AARC Test”. • Allowable — Expenditure is in accordance with 0MB rules and other giant rules • Allocable — Expenditure was for the grant project and fits into a budget line item • Reasonable — Expenditure is consistent with market prices • Consistent — Expenditure is consistent ith City policies and past practices It is strongly advised that costs are NOT billed to a federal grant if that costs fails or is in question of thiling any one of these tOur tests. When in doubt it is better to albeate a cost to City discretionary finds if that cost meets Cit principles hut fails or may be in question of failing 0MB rules. grant agreement rules, or thefl ‘piident person” test. 10 In federal grants. it is usually best to manage finds based on the concept. “if it is not documented. it didn’t happen.” Costs may be questionable or not allowed based on the City’s documentation.

A good approach is 10 seek finder consensus if the cost appears valid hut may raise am. questions later. An email that receives a response from the finder is a great way to document that consensus. although such an email does not formally amend the grant agreement.

2. Cash Management
See Section IV of this manual for general concepts and principles of financial management.

3. l)avis Bacon Act
The City contracts with local firms to accomplish compliance with Dais Bacon Act rcquirements when doing construction or renovation projects using federal hinds. The Act requires all laborers and mechanics to be paid prevailing wages and benefits and that the process of confirming that is in accordance with Act standards. As a further reference. Cft staff members can refer to standard Davis Bacon Act guidance documents, such as those published and distributed h the 125 Department of Housing and Urban Development.

4. EligibiliP
Program and financial staff members are responsible for understanding and following eligibility restrictions regarding delivering services. Restricted grant finds will not be used to serve ineligible participants. The i’estrictions usually fOcus on income ofparticipants but can be based on period of unemplo\ ment. age, race, or other factors. Examples of restricted grants used regularl b the Ctx nistly include Hoirsing and Urban Dexekipment giants. such as the Home Investment Partnership Program, and the Community Development Block Grant, Eligibilit restrictions should be stated in the grant agreement. With federal grants. participant eligibility restrictions can also generally he identified by finding that specific tëderal grant at https:’heta.sam.uov/ and reading the “beneficiary eligibility” restrictions section in the grant synopsis.

5. Equipment and RealPropertv Management
The City will track all propert ptwchased with federal rant hinds in accordance with the IhIlon ing policies and concepts:

For federal grants. equipment means tangible personal property (including intOrmation technology systems) having a useful life of more than one year and a per—unit acquisition cost which equals or exceeds the lesser of the capitalization level established by de non-Federal entity tOr financial statement purposes. or S5.000. The Cii) sill track all equipment purchased with federal or flowthrough hinds in accordance with this requirement. which is consistent ith the City’s capitalization threshold of S5.000.
11 The City will not sell or dispose of equipment worth $5,000 purchased with federal grant funds without the approval of the funding organization, as per 0MB requirements. Under 0MB Super Circular rules. “items with a current per unit fair market value of $5.000 or less may be retained. sold or otherwise disposed of with no further obligation to the Federal awarding agenc’ (as per0MB 2 CFR 200.31 3.e.l .).

6. Matching. Levelof Effort, Earmarking
\kith federal grants. matching and cost share vill be calculated and documented in accordance with tCderal rules and additionally accoiding to the grant agrecment rules. For example. tCderal rules allow both cash and in-kind matches (non-cash. such as volunteer work) to be counted toward a match. But many grant agreements allow only cash matches.

Most of the City’s past giants have involved matches that can be met only with cash allocalio ns.

This section also covers tuants that allow both cash and in-kind matches.

Private sector hinders. such as foundations. often allow common sense calculations to he used hen proving the City has met a matching requirement. This intonna) approach is not allowed. however, with federal grants. The Uniform Guidance has requirements fOr calculating and documenting the value of in—kind matches fur facilities. equipment. and volunteers in 2 CER 200.306.

Follo’ving are several examples of federal rules regarding in-kind matches:
a) Volunteers will be valued at the City entry level pay rate for the most similar position. If there is not a similar entry level position. Bureau of Labor Statistics wage data can be usedto identify a lair minimum hourly value fOr that volunteer position (based on the area where the work is performed). The Citys normal fringe can be counted with both methods. The fOllowing infOrmation should be recorded: I) description of duties or work 2) da worked 3) number of hours worked. and 4) sigiiature of the volunteer. Volunteers aged 14 to 17can be valued only at minimum sage. as BLS wage averages do not include those ages. h) City titcility and equipment matching values will he based on the thur depreciation value.

Only City facility space that is used on a regular daily basis can be counted toward a fCdera I match. With fonder approval, a fair rental rate can be used instead for the calculation.

Otherwise. calculating the rate eontctly generally requires a tape measure to determine percentage of floor space. which can then he used to calculate percentage of ment.

Borrowed facilities and equipment can he calculated at a lair documented rental rate.

In summary:
0 Matching and cost share calculations and doctunentation requirements with tCderal grants are highly specific and should he conducted using the 0MB cireulars for guidance. 2) Matching and cost share with private sector ftmnders can sometimes he based on common sense estimates that both the finder and the City agree to. 12 7. Period of Availability of Fedemi Funds
Grant expenses aie almost always allowed only for costs that are incurred during the grant period.

No pre-award or post award costs will be billed to a grant unless it is approved b the funder and specifically allowed in the grant agreement. such as with the following three circumstances:
a) Post award costs for closeout, such as staff time preparing a final report, are sometimes allowed by grant agreement for 90 days after the end of the grant period. b) Specific pre-award costs with federal grants are sometbiies allowed by huinder approval in the u’ant agreement. with 90 days being the tvpleal maximum pre-award period.

8. Pmeurement and Suspension and Debarment
See Section V of this manual.

9. Program Income
The Cliv will comply with federal rules regarding program income with all federal grants and federal flow-through awards. Income generated in regards to private sector contributions (such as foundations and corporations) will be generally considered non-designated income to the City unless the finder specifies otherwise. for example when a foundation grant agreement states income must be used for the purposes of the grant hiinded project.

Below is information on federal rules regarding income, and these paragraphs are summarized from 2 CER 200 (the 0MB Super Circular). Income rules for a specific federal grant may vary by hinder, although they almost always involve the deduction. addition, or used fir match methods described below.

I) 0MB rules encourage non-Federal recipients to earn income to detiay program costs where appropriate. Many fiindcrs. however, in practice pretCr recipients avoki income to avoid the management issues mo Ived.
2) If the Federal awarding agency does not specilS’ how program income is to be used, the deduction method will apply. The three tpes of methods generally used regarding income are as follows:
a. Deduction (aka subtraction). 0rdinaril program income must he deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency atithorizes otherwise, Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the thuds committed to the project.
b. Addition. With prior approval of the Federal awarding agency program income ma’ be added to the Federal award by the Federal agency and the non-Federal entin. The program income must he used for the purposes and under the conditions of the Federal 13 award. Income used in this way is auditable during the grant period. Income that comes in after the close of the grant is not restricted in this manner. c. For cost sharing or matching. With prior approval of the Federal awarding agency. program income ma\ be used to meet the cost sharing or matching requirement of the Federal award.
3) Income after the period of performance. There arc no Federal requirements governing thc disposition of income earned after the end of the period of performance for the Federal award. unless the Federal awarding agency reiIations or the terms and conditions of the Federal award provide otherwise. The Federal awarding agency may negotiate agreements with recipients regarding appropriate uses of income earned after the period of performance as part of the grant closeout process.

10. Real Pmperty Acquisition and Rclocation Assistance
The Cft is occasionally involved in using federal funds for these purposes. The fOllowing explains the topic and shows where to turn fOr guidance:

The Uniform Act, passed by Congress in 1970. is afèderal law that establishes minimum standards for federally funded programs and projects that requhe the acquisition of real property (real estate) or displace persons from their homes, businesses, or harms. The Uniform Act’s protections and assistance apply to the acquisition, rehabilitation. or demolition of real property for federal or tèderallv tiinded projects. 49 CFR 24 is the 0MB circular that explains Uniform Relocation Assistance and Real Propert Acquisition requirements. 1-RD Handbook 1378 provides Department of Housing and Urban Developiiient policy and guidance on hnplementing the 49 (‘FR 24 for HUD Iiinded programs and projects.

11. Reporting
‘Die City will strive to meet all reporting requirements of all finders and to avoid late or inconip lete reports.
0MB rules require federal grants hinders and recipients use the tOllo ing txo documents for reporting purposes. aithotigh flow through grants (such as from a state agenc’.) may use other forms:
fl SF-425 (the Federal Financial Repoit aiso often called the “FFR.” This reports on expend itures.)
2) SF-PPR (the Federal Performance Progress Report. This reports on objectives, outcomes. and program compliance.)
Beond these two standardized federal reports. federal grants sometimes require additional reporting. for example:

I) Suhawards of 525.000 or more must be reported by primary recipnts of federal grants at \vw\\.kr!ov in accordance with the Federal Funding Accountability and liansparency 14 Act. For example. if the City receives a grant directly from a federal hinder and then subaards at or above this threshold to another City or another program partner. the award must be reported within the month follow ng when it as nude. See ww.lrs.aov tbrguidance. The requirements for this reporting process are likeb to increase in the Ijiture when the federal DAJA Act is implemented in 2018 (Data Accountabil itv and Transparency Act of 2014).
2) Some hinders may have a financial allocation office report in addiTion to the SF-424.

The City will complete required grant repoils for state, local, foundation, corporate. or other hinders as required. Most hinders that require reports use a two tiered system similar to that used in federal grants. one report for program mailers, and another for financial activities.12. Subrecipient Monitoring See Section V ofthis manual.

13. Special Tests and Provisions
These are compliance requirement that are unique to each program. flev will generall) he specified in the grant agreement, although federal legislation can also set requirements. Forexample. grants fUnded through the American Recovery and Reinvestment Act (also called the“stimulus package”) required the purchase ofeonstruction and manufactured goods to inert “bus American” proviskws. This was required regardless of wbether that content was included in the arant aczreement.

The City will strive to meet all special provisions of grant hinders, such as those commoni) Ibund in grant agreement “tenris and conditions” sections. City staff must closely read grant agreement documents and requirements to ensure that all grant provisions are followed. 15 IV. FINANCIAL MANAGEMENT PRINCIPLES AND COST

ALLOCATION METHODS
All hinds awarded to the City are maintained in a manner in which desituiated hinds are accounted fur separately and distinctly from other sources of reenue. Expenses are tracked by category and ftinctio n.

The CitVs financial management internal control policies are in place to ensure and safeguard thatall incoming ‘ant funds are used solely For authorized purposes. Revenues and expenses fur each program (such as public works, fire, and police grants) are tracked through separate business units and/or hinds, as appropriate.

The financial management system is used to track actual income. expenditures. and outlays with budgeted items for each grant or sub-award. The Cit) almost always uses the reimbursementmethod as a way to collect funds from the LS Treasury or from state agencies or local governmental entities. In cases when advanced payment is used with governmental wants, the C’a will minimize the time elapsing between transfer of funds and expenditures. The (‘it> illcomply with all grant agreements. such as those specifying hinds must be used within a specific number of days. Foundation and corporate grants are often paid upon acceptance. and the City will manage hinds in those circumstances in accordance with the grant agreement and the hmnder s req uireme nts.

Financial control environment làctors ill meet the follow nit requirements:
• Staff are familiar with policies and procedures
• Management staff demonstrate the importancc ot’inteurity arid ethical alLies • Integrity of financial and operational results take prior’ny over reporting acceptable perlOimancc targets
• Collaboration. communication, and team effort are emphasized • Management is open to employee suggestions to improve productivity. services. compliance, and quality
• Plans and performance are periodically assessed
• Performance tam’gets are realistic and attainable whenever possible • Emplo\ees are giwn the time, took, and resources necessary to accomplish mission and objectives
• Records are maintained in accordance with guidelines issued by state and federal administrative rules and also those set in Section IV of this policy and procedure nlanLmal [raining: Finance staff and department staff working with grants will be:
• Trained in the use of the accounting sxstenl
• Familiar with purchasing policies and procedures
• Trained in the tise ofsystem reports and reporting tools • Familiar with accounting skills
• Familiar with grant management policies and procedures 16 Financial reconciliations will be conducted as follows:
• Ledgers will be reviewed on at least a monthly basis by the department analyst or equivalent staff in charge of the grant
• Whenever possible. staff performing reconciliations will be separate from staff initializing and finalizing transactions
• Reconciling differences, negative balances. and unsupported transactions will be investigated and corrected in a timely manner
• Higher level management will review reconciled ledgers and supporting documentation in a timely manner
• Financial reports will compare budgeted balances with actual financial activity• Staff managing grants will understand the rules associated with diflèrent types of grants (such as federal. state. and foundation grants)
Collections, deposit. and cash find issues will be conducted as follows:
• Collection and deposit functions are segregated from accounting functions whenever possible
• All revenue transactions are recorded promptly. and deposits are made in a timely manner
• All checks received are endorsed before acceptance• Passwords are kept safe. as are access keys to the Citys headquarters and any safe or other location that is financially sensitive
• Accounts receivable billings are issued in a timely manner and are tracked and accounted for responsibly
Payroll finetions will meet the following standards:
• Duties of approving lob actions and approval of time sheets are segregated from the duties of distribution ofpaychecks and the compiling of grant financial reports (orthesefunctions are supervised when segregation is not possible) • Time cards aeeLlrately reflect the actual hours and/or percentages worked, or are reviewed at least every six months and “trued—up on a minimum of an annual basis. • Procedures are implemented to ensure overtime and compensatory time hours worked are appropriate and approved by supervisors
• Time cards are maintained for all personnel working on federally funded grants• Payroll and labor issues are handled in accordance will all relevant laws and requirements ofthe IRS. the Department of Labor, state agencies. and local entities Ceneral cost allocation methods
A cost is allocable to a particular grant or contract if the goods or services involved are able to be directly assigned to the specific grant or contract. Costs that cannot be assigned to a specific program are generally considered as indirect costs and should not be billed to a grant except under the indirect cost line item.
17 Ifan expenditure sole[v benefits one project. it should be charged entirely to that benefiting project.

Hoever. somethnes all expenditure can benefit two or more projects. Organization supplies are an example ofan expense that could potentially benefit more than one project. When this occurs. the expenditure niusi be charged in the same proportions as the benefits on the respective projects.

Any costs allocable to a particular grani agreement may not be shifted to other grants to meet deficiencies caused by overruns (deficits) or other ifind considerations. Costs cannot be shifted toavoid restrictio nS unposed by law or terms of the sponsored agreement or for other reasons of convenience.
0MB circulars provides two methods far allocating all allowable direct cost to two or iore giants.

The Pivpori ionul Buirefit Ride
The proporional benefit rule applies when it is possible to determine the proportional benefit of the cost to each project. The cost is allocated according to tile proportion of benefit provided to each of the projects.

The In! erie/ui ionshi Rule
Tile interrelationsllip rule applies when is not possible to determine the proportional benefit to each project because of the Interrelationsilip of the work involved. The cost is distributed on any reasonable and rational basis because the proportional benefit cannot be identified and applied to tile individual projects.

All expenditure allocations must be done on a rational basis. Prohibited allocation Illethodologies include an nletilodologv based on rotation of budgets. ftindiIlg or available Hinds.

Alwa\s document the allocation nlcthodolog\ . .Allocation methodologies must he documented and auditable. Documentation should include support for tile specific costsallocated and indicate how the allocation nlethodolog is logically related to the cost being allocated. This support should be retained by the departillent and he made available for review. Always reilleinber to docunieni why measures such as lleadcotlnt. square footage or hours directly relate to the benefit received. • Allocate expenditures on a routine basis. Do not wait until the end of the fiscal year or the end of tile grallt year to allocate expenditures.
• Allocation metilodologies silould be reviewed periodically to ensure they are reasonable. Metilodologies based on samplings and surveys should be reviewed andupdated at least 011cc each fiscal year. Changes to the population may signal the need to review the a liocatio Il methodology more frequently. • Allocation methodologies need to be reviewed when the project begins and ends to ensure coinpliane e.

The following are some examples of allocation metilodologies. Other reasonable methodologies call be developed, provided that they meet 0MB allocation principles. • Allocation bascd upon usage: Ike cost of supplies and other costs allocated based upon the quantity used on each project.
18 • Allocation based upon number of hours: The cost of computer equipment allocated based upon the number of hours logged tör each project. • Allocation based upon the number of clients sen-ed: The cost ofsupplles and other costs allocated based upon the number ofclients served. • Allocation based upon ETEs: The cost of renting space allocated based upon the number of FTEs working on each project.

Office of Management and Budget (0MB) circulars establishes principles for determining costs applicable to grants. contracts, and other agreements with educational institutions. As a generalrule, there are four main guidelines to keep in mind when charging expenses to federal grants andcontracts. All expenditures must abide by the following four principles.

All charges must be allowable, allocable, reasonable. and consistently tm’eated.

Allowable
Costs expressly unallowable or mutually agreed to be unallowable shall be identified and excluded from an> billing, claim. application, or proposal related to a sponsored research project.

Federal sponsoring agencies and flow-through agencics use the term “allowable” to meanpermitted as a direct cost under the temis or a specific grant or contract and also allowable under 0MB rules. Expenditures which are generall> allowable for lèderal reimbursement may notnecessarily he permitted under the terms of a specitt grant or contract. In other words. the agreement may restrict be>ond the normal 0MB rules. for example when Ibod or constructio ii costs are prohibited. Costs that are not generally allowable under Iëderal 0MB rules, such asentertainment and find raising. may he allowable through a fotindation or corporate grant.

Allocable:

A cost is allocable to a particular grant or contract if the goods or services involved are able to be directly assigned to the specific grant or contract.

To determine if an expenditure is allocable, ask yourself the following qtiestions:

Is it incurred solely to advance the work tinder the grant?

2. Does it benefit both the sponsored agreement and other work of the Cit. in proportions that can be approximated through the usc of reasonable methods?

3. Is it necessary to the overall operation of the institutlon and, in light of sponsored research rules and regulations. is it deemed to be assignable in pail to a sponsored project? Reasonable
A cost n-ia’ be considered reasonable if the nature of the goods or services, and the price paid for the goods or services. reflects the action that a prudent person would have taken given the prevailing circtnwstances at the tinie the decision to hcur the cost was made.

To determine whether an expenditui-e is reasonable, ask yourself the following questions:
19 I. Is the cost a type generally recognized as necessary for the operation of the institution or the performance of the sponsored agreement?

2. Does incurring this expenditure violate the restraints or requirements imposed by such thctors as arm’s-length bargaining, Federal and State laws and regulations, and sponsoredagreement terms and conditions?

3. Have the individuals incurring this cost acted with due prudence (discretion and good sense) in the circumstances? Have they considered their responsibilities to the organization, its employees, its students, the Federal Government, and the public at large?

4. Were the actions that were taken in respect to incurring the cost consistent with established institutional policies and practices applicable to the woi’k of the institution, including sponsored agreements?
Consistently TreatedAll costs incurred for the same purpose, in like circumstances. must be treated uniformly either as direct costs or as facilities and administrative costs (indirect costs). Since certain costs. such as salaries of administrative and clerical staff and office supplies, are normally treated as facilities and administrative costs, these costs cannot be charged directly to federal grants or contracts tnilcssthe circumstances related to a particular project are clearly dillèrent from the normal operations oFthe institution. 20 V. CITY POLICIES AND GUDANCE

1. CONFLTCT OF INTEREST
The City has a pohcv governing Employee Conduct and a Conflict of Interest Policy included in its Personncl Rules and Reaulations linked here:luipiw w w cit , i:Iucom tHe1oraue3 I X4/5220/9185:l’ciNonne I Rules a ad Re cu Lihns

2. EMPLOYEE PROTECTION POLICY
If any officer or employee reasonahh believes that some policy. practice, or activit\ of the C’itv ofAvalon is in violation of law, a written complaint must be filed by that employee withthe Human Resources Department. It will be the intent of’ City officers and employees to adhere to all laws and regulations that apply to the organization. and the underlying purposeof this potic is to support thc organization’s goal of legal compliance. The support of allemploees is necessary to achieving compliance with laws and regulations.

An employee is protected from retaliation only if the eniplovee bruigs the alleged iuiaw lii I activit. policy, or practice to the attention of the City and provides the City with a reasonableopportunity to incstigatc and colTect the alleged improper activity. The protection described below is only available to employees that comply with this requirement.

The City ofAvalon will not retaliate against an employee who hi good làith has made a protestor raised a complaint against some practice of the City. or of another individual or entit\ with whom the City has a business relationship. on the basis of a reasonable belief that the practice is in violation of law, or a clear mandate of public polic’.

The Cm will not retalhtc against emplo’ees who disclose or threaten to disclose to a supervisor or a public hod’.. any activity. policy, or practice of the City that the emploeereasonably believes is in violation ofa law, or a rule. or regulation mandated pursuant to lawor is in violation of a clear mandate of public policy concerning the health. safety. wellàre. orprotect ion ofthe en ironn’r nt.

3. MANDATORY DISCLOSURES
As per the 0MB Uniform Giudance (2 CFR 200). the Cirx ofAvalon mtmst disclose. in a timely manner, in writing to the Federal awarding agency or pass-through enzirc all violations of’ Federal criminal law involving fraud. bribery, or gratuity violations potentially affecting theFederal award. Non-Federal entities. including PVCC. that have received a Federal award including the term and condition outlined in Appendix Xl l—Award Term and Condition forRecipient Integrity and Perfomiancc Matters are required to report certain civiL criminaL or administrative proceedings to SAM. Failure to make required disclosures can result iu any of the rcniedies described in 200,338 Remedies for noncompliance, including suspension or debarment.
21 4. CRANT DOCUMENTATION
Cit administrators and employees will generally track and monitor grant actishy through the use of either a physical project binder, the electronic equivalent of that, or a combination of the two methods.

This binder based system allows staff to identify what has been completed and what needs tohe acconiphshed regarding both program and financial activity. The system is also extremelyeffective in demonstrating tu’ant compliance and communicating with funders and auditors. A tpical binder table of contents may include some or all of the items below Grant managersare encouraged to share the system of tracking with the liuider’s prorarn officer to obtain input and consensus on tracking methods. Below k a sample table ot’contents:

RFP and proposal guidelines
• The proposal and submission fhri,,s
• The award letter (Giant Award Notice or “GAN”)• The grant agreement and budget o Make sure to check the “terms and conditions”
Giant agreement amendments, budget revisions, and other amendments • Contracts• Reports (generally conducted quarterly or semi-annually) o N arrative, documents completion of program activitieso Financial, documents budget expenditureso ESRS reports document sub-awards of 525.000 or more • Supply and inventory
• ProcLirement and contractor selection• Personnel time and effort worksheets• Evaluation forms and data • Correspondence
o Letters from hindero Relevant emails
• Other necessary sections

5. DOCUMENT I RECORDS RETENTION
The Cir ofAvalon has extensive record retention requirements. For successifil grains. ecords. including applications. grant agreements. program rules, regulations and proceduies. eports to Ilinding agencies. correspondence. audit records, and coiipletion records, are required to beretained in the office for two years and in the records center until after the finding agency auditor minimum of five years. 22 0MB §200.334 Retention requirtments for icon1s.

Financial records, supporting documents. statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the date ofsubmission of the final expenditure report or, lbr Federal awards that are renewed quarterly or annually. from the date of the submission of the quarterly or annual financial report. respectively, as reported to the Federal awarding agency or pass-through entity ‘ni the case of a sub recipient. Federal awarding agencies and pass-through entities must not impose any otherrecord retention requirements upon non-Federal entities. The only exceptions are the following:

I) lfany litigation, claim, or audit is started before the expiration ofthe 3-year period. the records must be retained until all litigation. claims, or audit findings involving the records have been resolved and final action taken.
2) When tile non-Federal entity is notified in writing by the Federal awarding agency. cognant agency for audit, oversight agency for audit. coiant agency ibr indirect costs. or pass-through entity to extend the retention period. lt 3) Records for real property and equipment acquired with Federal kids must be retained for 3 ears after final disposition.
4) When records are translèn’ed to or maintained by the Federal awarding agency or pass through entity. the 3-year retention requirement is not applicable to the non-Federal entity.
5) Records for program income transactions after the period of performance. In some cases recipients must report program income after the period of performance. Where there is such a requirement, the retention period for the records pertaining to the earningof the program income starts from the end of the non- Federal entits fiscal year inwhich the program income is earned. 6) Indirect cost rate proposals and cost allocations plans. This paragraph applies to the following types of documents and their supporting records: indirect cost rate computations or proposals. cost allocation plans, and any similar accountingcomputations of the rate at which a particular group of costs is chargeable (such ascomputer usage chargeback rates or composite fringe benefit rates). 7) Ifsuhtniitedfiw negotiation. If the proposal. plan, or other computation is required to be submitted to the Federal Government (or to the pass-through entity) to form the basisfor negotiation of the rate, then the 3-year retention period for its supporting recordsstarts from the date ofsuch submission. 8) If not submitted for negotiation. If the proposal, plan. or other computation Ls not required to be submitted to the Federal Government (or to the pass-through entity) for negotiation purposes, then the 3-year retention period (Or the proposal plan. or computation and its supporting records starts from the end of the fiscal year (or otheraccounting period) covered by the proposal. plan. or other computation. 23 6. EQUIPMENT AND REAL PROPERTY MANAGEMENT
The City will track all properly purchased with federal grant hinds in accordance with the following policies and concepts:For federal grants. equipment means tangible personal property (including införmatio n technology systems) having a usehil life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federalentity for financial statement purposes. or $5,000. The Cit3. will track all equipment purchasedwith federal or flow—through hinds in accordance with this requirement. Tracking will occur atthe department level using the “Inventory tracking form” located tinder “Forms.” Per 2 CFR200.313, items worth $5.000 or more that are purchased with federal or flow-through hinds must be inventoried even’ two years.

The City will not sell or dispose of equipment worth $5.000 purchased with federal grant hinds without the approval of the finding organization, as per 0MB requirements. Under 0MBSuper Circular rules, “items with a current per unit ihir market value of $5.000 or less may beretained, sold or otherwise disposed of with no hirther obligation to the Federal awardingagency” (as per 0MB 2 CFR 200.31 3.e. I

7. LEFTOVER FEDERALLY-FUNDED SUPPLIES
“Supplies” in this context refers to expendable materials and supplies including equipmentwith an original useful life ofone year or less or an original unit cost of less than $5,000.

If there is a residual inventory of unused supplies exceeding $5.000 in total aggregate valueupon termination or completion of the project or program. the grantee may i’etain the suppliesfor use on federally and non-federally sponsored activities with approval of the hinder.However, as per 0MB rules, finding organizations are required to negotiate residual supply issues (in excess of $5,000) to determine whether the City should keep the supplies, return those. pass them to another organization, or provide reimbursement to the federal government for its share. Therefore. if more than $5.000 in residual supplies remain at the end of the grant, it is advised the federal or pass-through agency be contacted for disposition instructions. If supplies with an aggregate value of $5,000 or less are leftover, the City may retain the suppliesfor use on federal or non-federal sponsored activities at its discretion.

8. PROCUREMENT AND CONTRACTING
Procurement requirements can best be met by reviewing and following the following rules:

I) City of Avalon comprehensive procurement rules, which are summarized in this manual and available in hill in the Municipal Code at Title 3 Chapter 3-4:htipecode3o0.comiAV4th4.’ 2) 0MB procui’ement rules, which are included in this manual3) Any additional procurement rules, such as those that show up in grant agreements or are required by specific hinders.
24 0MB procurement rules and rules at other levels, such as the State In addition to being consistent Wall Avalon procurement policies. purchases using federal and state funds should also be reviewed to ensure they are consistent with 0MB procurement requirements and any special rules imposed by other agencies, such as those at the state level. Federal purchasing requirements are reprinted from the 0MB Super Circular (2 CFR200) below. Federal departments also sometinies have an attachment to the common rules, and those sections ill usually alsoaddress procurement. Department of Homeland Security grants. for example, are generally subject to44 CFR 13.36.
0MB Procurement Standards (from 2 CFR 200.318 through 200.327, includes “professional service cost requirements” from 2 CFR 200.459)
§ 200.318 General procurement standards.
a) The non-Federal entity must have and use documented procurement procedures, consistent with State. locaL and tribal laws and regulations and the standards of this section. for the acquisition of property or services required ullder a Federal award or suhaward. The nonFederal entity’s documented procurement procedures must conform to the procurement standards identified in § 200.317 through 200.327.
5) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. c) (I) The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee. officer, or agent may participate in the selection.award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict ofinterest. Such aconflict of interest would arise when the employee, oilier.or agent. any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the non-Federal entity may neither solicit nor accept gratuities, favors, or anything of nionetaty value from contractors or parties to subcontraets.However, non-Federal entities may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nomnial value. The standards of conduct must provide fOr disciplinary actions to he applied for viulations of such standards by officers, empb3’ee. or agents ofthe non-Federal entity.
(2) Ifthe non-Federal entity has a parent, affiliate. or subsidiary organvittion that is not a state, local government, or Indian tribe, the non-Federal entity must also maintain written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest means that because of relationships with a parent company, affiliate, or subsidiary organization, the non-Federal entit is unable or appears to be unable to he impartial in conducting a procurement action involving a related organization. 25 d) The non-Federal entity’s procedures must avoid acquisition of unnecessary or duplicative items. Consideration shoui he given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will he made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach.
e) To foster greater economy and efficiency, and in accordance with efforts to promote cost eltèctive use of shared services across the Federal government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. f) The non-Federal entity is encouraged to use Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs.

The non-Federal entity is encouraged to use value engineering clauses in contracts for construction projects of sufficient se to offer reasonable opportunities for cost reductions.

Value engineering is a systematic and creative analysis of each contract item or tusk to ensure that its essential function is provided at the overall lower cost. h) The non-Federal entity must award contracts only to responsible contractors possessing the ability to pertbrm successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. See also §200.21 2 Suspension and debarment. i) The non-Federal entity must maintain records suffic lent to detail the history of procurement.

These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
j) (I) The non-Federal entity may use a time and materials type contract only after a determination that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. Time and materials type contract means a contract whose cost to a non-Federal entity is the sum of
(i) The actual cost of materials; and
(ii) Direct labor hours charged at fixed hourly rates that reflect wages, general administrative expenses, and profit. (2) Since this formula generates an open-ended contract price, a time-and-materials contract provides no positive profit incentive to the contractor for cost control or labor efficiency. Therefore, each contract must set a ceiling price that the contractor exceeds at its own risk.

Further, the non-Federal entity awarding such a contract must assert a high degree of oversight hi order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls.
26 k) The non-Federal entity alone must be responsible, in accordance with good administrative practice and sound business judgment, for the senlenient of all contractual and administrative issues arising out of procurements. These issues include, hut are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the non-Federal entityof any contractual responsibilities under its contracts. The Federal awarding agency will not substitute its judgment for that ofthe non-Federal entity unless the matter is primarily a Federal I concern. Violations oflaw will be referred to the local, state, or Federal authority having proper jurisdiction.
§ 206.319 Competition.
a) All procurement transactions must be conducted hi a manner providing hill and open competition consistent with the standards ofthis section and §200.320. b) In order to ensure objective contractor perlbrmance and eliminate unfair competitive advantage, contractors that develop or draft specifications. requirements, statements of work.or invitations for bids or requests for proposals must he excluded from competing for such procurements. Sonic of the situations considered to be restrictive of competition include butare not limited to:

I) Placing unreasonable requirements on firms in order for them to qualif’ to do business; 2) Requiring unnecessary experience and excessive bonding:
3) Nonconipetitive pricing practices between firms or between affiliated companies; 4) Noncompetitive contracts to consultants that are on retainer con racts; 5) Organizational conflicts of interest;
6) Specil5ing oni a “brand name” product instead of allowing “an equar product to be red and describing the performance or other relevant requirements of the procurement and 7) Any arbitrary action in the procurement process.
c) The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state. local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statuteexpress’ mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting fOr architectural and engineering (AlE) services, geographiclocation may he a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size ofthe project. to compete fOr the contract. d) The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations:
27 I) Incorporate a clear and accurate description of the technical requfrements for the material, product, or service to be procured. Such description must not, in competitiveprocurements. contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the materiaL product or service to beprocured and, when necessary. must set forth those minimum essential characteristicsand standards to which it must conform if it is to satisfr its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical oruneconomical to make a clear and accurate description of the technical requirements, a “brand name or equivalent” description may be used as a means to define theperformance or other salient requirements of procurement. The specific features of thenamed brand which must be met by offers must be clearly stated; and 2) ldentif’ all requirements which the oflèrors must fulfill and all other factors to he used in evaluating bids or proposals.
e) The non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used hi acquiring goods and services are current and include enougi qualified sources to ensure maximum open and free competition. Also. the non-Federal entity must notpreclude potential bidders from qualif’ing during the solicitation period. 0 Noncompetitive procurements can only be awarded in accordance with § 200.320(c).§ 200.320 Methods of pmcurement to he followed.

The non-Federal entity must have and use documented procurement procedures. consistent with the standards of this section and § 200.317, 200.318. and 200.319 fOr any of the following methods of procurement used for the acquisition of property or services required under a Federalaward or sub-award. a) Informal pmcurement methods. When the value ofthe procurement lOr property or services under a Federal award does not exceed the simplified acquisition threshold (SAT). as defined in § 200.1, or a lower threshold established by a non-Federal entityc fOrmal procurement methods are not required. The non-Federal entity may use informal procurement methods toexpedite the completion of its transactions and minimize the associated administrative burdenand cost. The informal methods used for procurement of property or services at or below the SAT include:

I) Aficro-pureha sex — i. Distribution. The acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshokl (See thedefinition of micro-purchase in § 200.1). To the maximum extent practicable. the non-Federal entity should distribute micro-purchases equitably amongqualified stqpliers. ii. Micro-purthase analTls. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used fOr 28 n*ro-purchases if procedures are documented and appioved by the nonFederal entity. iii. Miem-puithase thresholds. The non-Federal entity is responsible lbr determining and documenting an appropriate micro-purchase threshold based on internal controls. an evaluation of risk, and its documented procurement procedures. The micro-purchase threshold used by the non-Federal entity must be authorized or not prohibited under State. local, or tribal laws or reuulations.

Non-Federal entities may establish a threshold higher than the Federal thresholdestablished in the Federal Acquisition Regulations (FAR) in accordance with paragraphs (a)(l )(iv) and (v) ofthis section.
iv. Non-Federal entity increase to the mien-purchase threshold up to $50,000.

Non-Federal entities may establish a threshold higher than the micro-purchase threshold identified in the FAR in accordance with the requirements of this section. The non-Federal entity may self-certii’ a threshold tip to $50,000 on an annual basis and must maintain documentation to he made available to the Federal awarding agency and auditors in accordance with § 200.334. The self- certification mast include ajustification., clear identification of the threshold. and supporting doctunentation of any of the following:

A. A qualification as a low-risk auditee. in accordance with the criteria in § 200.520 for the most recent audit;
B. An annual internal institutional risk assessment to identi1c mitigate, and manage fwianeial risks: or,
C. For public institutions, a higher threshold consistent with State law v. Non-Federal entity increase to the micro-purchase threshold over $50,000.

Micro-purchase thresholds higher than $50,000 must be approved by the cognizant agency ihr indirect costs. The non-federal entity mast submit a request with the requirements included in paragraph (a)(1)(iv) of this section.

The increased threshold is valid until there is a change in status in which the justification was approved.
2) Small purchases — i. Small purthase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchaseprocedures are used. price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.
ii. Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its doctunented procurement procedures which must not exceed the threshold established in the FAR. When applicable.a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State. local, or tribal laws or regulations. b) Formal procurement methods. When the value of the procurement for property or services tinder a Federal financial assistance award exceeds the SAT, or a lower threshold established 29 by a non-Federal entity. formal procurement methods are required. Formal procureirnt methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following tOrnul methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshoki the non-Federal entity determines to be appropriate:

I) Sealed bids. A procurement method in which bids are publicly solicited and a firm Iked-price contract (lump suni or unit price) is awarded to the responsible bidder whose hid. conforming with all the material terms and conditions of the invitation fOr bids, is the lowest in price. The sealed bids method is the preferred method forprocuring construction, if the conditions. i. In order for sealed bidding to be feasible, the following conditions should he present:

A. A complete, adequate. and realistic specification or purchase description is available:

B. Iwo or more responsible bidders are willing and able to compete effectively for the business; and
C. The procurement lends itself to a firm fixed price contract and the selection ofthe successful bidder can be nude principally on the basisof price. ii. If sealed bids are used, the following requirements app’:

A. Bids must be solicited horn an adequate number of qualified sources. providing them suflic lent response lime prior to the date set for opening the bids, for locaL and tribal governments, the invitation for bids must be publicly advertised;
B. The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for thebidder to properly respond:

C. All bids will be opened at the time and place prescribed in the invitat io ii for bids, and for local and tribal governments, the bids must be opened publicly;
D. A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents. Iàctors such as discotmts. transportation cost, and life c•cle costs must be considered in determining which bid is lowest. Paymentdiscounts will oniy be used to determine the low hid when prior experience indicates that such discounts are usually taken advantage ot 3 and
E. Any or all bids may he rejected if there is a sound documented reason. 30 2) Proposals. A procurement method in which either a fixed price or cost-reitnbursement type contract is awarded. Proposals are generally used when conditions are notappropriate lbr the use of sealed bids. They are awarded in accordance with the following requirements:
i. Requests for proposals must be publicized and identi& all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests tbr proposalsmust be considered to the maxiniurn extent practical; ii. The non-Federal entity must have a wTitten method for conducting technica I evaluations ofthe proposals received and making selections:
iii. Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the non-Federal entity, with price and other factors considered;and iv. The non-Federal entity may use competitive proposal procedures for qualificatio ns-based procurement of architectural/engineering (A/F) professional services whereby oltirror’s qualifications are evaluated and themost qualified offeror is selected, subject to negotiation of fair and reasonablecompensation. The method, where price is not used as a selection factor, canonly be used in procurement of A/F professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort.
c) Noncompetitive pmcurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply:
1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(l) of this section); 2) The item is available only from a single source;
3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation;
4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federalentity; or 5) After solicitation of a number of sources. competition is determined inadequate. § 200.321 Contracting iith small and minority businesses,Mnmen’s business enterprises, and labor surplus area finns. a) The non-Federal entity must take all necessary affirmative steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. b) Affirmative steps must include:
1) Placing qualified small and minority businesses and women’s business enterprises on solicitation lists;
2) Assuring that small and minority businesses, and women’s business enterprises are solicited whenever they are potential sources;
31 3) Dividing total requirements. when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses, and women’s businessenterprises; 4) Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses, and women’s business enterprises; 5) Using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department ofCommerce: and
6) Requiring the prime contractor, if subcontracts are to be let, to take the affirnutive steps listed in paragraphs (b)(l) through (5) of this section. § 260322 Domestic preferences for procurements.a) As appropriate and to the extent consistent with law, the non-Federal entity should, to the greatest extent practicable under a Federal award, provide a preference für the purchase,acquisition, or use of goods. products. or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manuthctured products). The requirements of this section must be included in all subawards including all contracts and purchase orders für work or products under this award.
h) For purposes ofthis section:
1) “Produced in the United States” means, für iron and steel products, that all manufacturing processes. from the initial melting stage through the application of coatings, occurred in the United States.
2) “Manufactured products” means items and construction materials composed in whole or in part of non-ferrous metals such as aluminum; plastics and polymer-based products such aspolyvinyl chloride pipe; aggregates such as concrete: glass, including optical fiber; and lumber.
§ 200.323 Procurement of recovered materials.

A non-Federal entity that is a state agency or agency of a political subdivision of a state and its contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by theResource Conservation and Recovery Act. The requirements of Section 6002 include procuringonly items designated in guidelines ofthe Environmental Protection Agency (EPA) at 40 CFR part L 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds$10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000;procuring solid waste management services in a manner that maximizes energy and resourcerecovery: and establishing an affirmative procurement program für procurement of recoveredmaterials identified hi the EPA guidelines. § 200.324 Contract cost and price.a) The non-Federal entity must perfhrm a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contractmodifications. The method and degree of analysis is dependent on the facts surrounding the 32 ML particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. b) The non-Federal entity must negotiate profit as a separate element ofthe price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration must be given to the complexity of thework to be performed, the risk borne by the contractor, the contractors investment, the amountofsubcontracting, the quality of its record of past perlbrmance. and industiy profit rates in the surrounding geographical area for similar work.
c) Costs or prices based on estimated costs fOr contracts under the Federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would beallowable for the non-Federal entity under subpart E of this part. The non-Federal entity may relèrence its own cost principles that comply with the Federal cost principles. d) The cost plus a percentage of cost and percentage ofconstruction cost methods of contracting must not be used.
§ 200.325 Federal avrnrding agency or pass-through entity wview.a) The non-Federal entity must make available, upon request of the Federal awarding agency or pass-through entity, technical specifications on proposed procurements where the Federal awarding agency or pass-through entity believes such review is needed to ensure that the itemor service specified is the one being proposed lOr acquisition. This review generally will take place prior to the time the specification is incorporated into a solicitation document. However. if the non-Federal entity desires to have the review accomplished after a solicitation has been developed, the Federal awarding agency or pass-through entity may still review the specifications, with such review usually limited to the technical aspects of the proposedpurchase. b) The non-Federal entity must make available upon request, for the Federal awarding agency or pass-through entity pre-procurement review, procurement documents, such as requests fOrproposals or invitations for bids, or independent cost estimates, when:

I) The non-Federal entits procurement procedures or operation fails to comply with the procurement standards in this part;
2) The procurement is expected to exceed the Simplified Acquisition Threshold and is to be awarded without competition or only one bid or ofl’er is received in response to a solicitation;
3) The procurement, which is expected to exceed the Simplified Acquisition Threshold, specifies a “brand name” product;
4) The proposed contract is more than the Simplified Acquisition Threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement; or 5) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the Simplified Acquisition Threshold. 33 1) The non-Federal entity may request that its procurement system be reviewed by the Federal awarding agency or pass-through entity to determine whether its system meets these standards in order for ‘as system to be certified. Generally, these reviews must occur where there is continuous high-dollar finding, and third-party contracts are awarded on a regularbasis:
2) The non-Federal emily may self-certify its procurement system. Such self-certification mast not limit the Federal awarding agency’s right to survey the system, Under a selfcertification procedure, the Federal awarding agency may rely on written assurances from the non-Federal enliiy that it is complying with these standards. The non-Federal entity rntLct cite specific policies, procedures. regulations, or standards as being fri compliance with these requirements and have its system available for review. § 200.326 Bonding reguirements.
c) The non-Federal e t7!isVexempt from the pre-procurement review in paragraph (b) of this section if the Federal awarding agency or pass-through entity determines that its procurementsystems comply with the standards of this part. c) A payment bond on the part of the contractor for 100 percent ofthe contract price. A “payment bond” is one executed hi connection with a contract to assure pant as required by law of all persons suppMng labor and material hi the execution of the work provided for iii thecontract.

For construction or fhcilit) huprovement contracts or sub contracts exceeding the Simplificd Acquisition Threshold, the Federal awarding agency or pass-through entity may accept the bonding policy and requirements of the non-Federal entity provided that the Federal awarding agency or pass-through entity has made a determination that the Federal interest is adequately protected. If such a determination has not been made. the minimum requirements must be asfollows:
a) A bid guarantee from each bidder equivalent to five percent of the bid price. The “bid guarantee” must consist of a finn commitment such as a hid bond, certified check, or othernegotiable instrument accompanying a bid as assurance that the bidder wilL upon acceptanceofthe bid. execute such contractual documents as may be required within the time specified. b) A performance bond on the part of the contractor for 100 percent of the contract price. A veromlance bond” is one executed in connection with a contract to secure liilfillment ofall the contractors requirements under such contract.
2 CFR § 200.327 - Contract provisions.

The non-Federal entity’s contracts must contain the applicable provisions described hi appendix II to this part.
§ 200.459 Professional service costs.
34 a) Costs of piolèssional and consultant services rendered by persons who are members of a particular profession or possess a special skill, and who are not officers or employees of the non-Federal entity, are allowable, subject to paragraphs (b) and (c) of this section when reasonable in relation to the services rendered and when not contingent upon recovery of thecosts from the Federal Government. In addition, legal and related services are limited under § 200.43 5.
b) In determining the allowability of costs in a particular case, no single factor or any special combination of factors is necessarily determinative. However, the following factors are relevant:

I) The nature and scope of the service rendeitd in relation to the service required. 2) The necessit of contracting for the service, considering the non-Federal entity’s capability in the particular area.
3) The past pattern ofsuch costs, particularly in the years prior to Federal awards. 4) The impact of Federal awards on the non-Federal entits business (Le.. what new problems have arisen).
5) Whether the proportion of Federal work to the non-Federal entits total business is such as to influence the jion-Federal entity in favor of incurring the cost particularly where the services rendered are not of a continuing nature and have little relationship to work tinder Federal awards.
6) Whether the service can be perlhrmed more economically by direct employment rather than contracting.
7) The qualifications of the individual or concern rendering the service and the customary tees charged. especlally on non-federally fhnded activities. 8) Adequacy of the contracttl agreement for the service (e.g., description of the service, estimate of time required, rate of compensation. and termination provisions). c) In addition to the Iàctors in paragraph (b) ofthis section, to he allowable, retainer lees mast be supported by evidence of hona tide services available or rendered.

9. DEBARMENT AND SUSPENSION OF CONTRACTORSThe Cit of Avalon ill compl with federal requirements detailed in 0MB 2 CFR 180 regarding debarment and suspension ofcontractors. Simply stated, this 0MB circular prohibits contractingwith deban’ed and suspended vendors hen making “covered transactions” and requires the Cityto check those contractors betbre entering into a contract. Covered transactions generally meanthose that are I) für goods or services of $25,000 or more. 2) those that reqture federal agencyconsent, and 3) those für audit services.The most common way to check contractors and to document that checking process is to use the wehsite below. This website allows the creation of pdf that can be printed for City records. As isusually the case, “if’ it is not documented, it didn’t happen.” 35 a) Covered transactions under this part — app lies: in I) The contract is awarded by a participant in a nonprocurement transaction that is covered under § 180.210. and the amount of the contract is expected to equal or exceed $25,000. 2) The contract requires the consent of an official of a Federal agency. In that case. the contract, regardless of the amount. always is a covered transaction, and it does not maner ho atarded it. For example, it could be a subcontract awarded by a contractor at a tierbelow a nonprocurement transaction, as shown in the appendix to this part. 3) The contract is for Federally-required audit services. 4 I) It is awarded by a participant in a procurement transaction under a nonprocure ment transaction of a Federal agency that extends the coverage of paragraph (b)(l) olthis sectionto additional tiers of contracts (see the diagram in the appendix to this part showing thatoptional lower tier coverage); and 2) The value of the subcontract is expected to equal or exceed S25,000. § 180.300 -What must I do before I enter into a covered transaction with another person at the next loner tier?
When you enter into a covered transaction with another person at the next lower tier, you must verilS’ that the person with whom you intend to do business is not excluded or disqualified. Youdo this by:
a) Checking SAM Exclusions: or
b) Collecting a certiltation from that person; or
c) Adding a clause or condition to the covered transaction with that person. 0MB 2 CFR 180 is available at the link below. Ibis section takes a question and answer format. and two ofthe more important questions are stated directly below the link:
https:1’”\ isii qrn2H]1c FR—2() I 2—tit 1e2—vol I /CE R—20 2—title2—vo II —pail I 80§ 180.220 Arc any preurement contracts included as covered transactions? 1) Do not include any procurement contracts awarded directly by a Federal agency: but 2) Do include some procurement contracts awarded by non-Federal participants nonprocureme ni covered transactions.
hI Specifically, a contract tör goods or services is a covered transaction if any of the following c) A subcontract also is a covered transaction if -
36 10. CONTRAC[ CONTENT REQUIREMENTS
The rules detailed below are in eflêct for contract frmnded with federal grants and flowthro ugh ants and are in addition to the Citys standard contracting rules. The Office of ManagementBudget Super Circular contains requirements for contracts in Appendix II. These requirements are summarized below, and this quick list can be used by City staff menthers to identiI issues that must be addressed in a specific contract. The frill content of 0MB 2 CFR 200 Attachment II follows this quick list.

At a Glance: Summary ofOMB Required Content in Contracts A) Contracts in excess of $150,000 mist address administrative, contractual, or legal remedies in instances vhere contractors violate or breach contract terms. and provide for such sanctions and penalties as appropriate
B) All contracts in excess of $ 10.000 must address termination for cause and for convenience h the non-Federal entity including the manner by which it will be effectedand the basis for settlement.

C) Equal Employment Opportunity content is required in all contracts.

D) Davis Bacon Act requirements apply to construction and renovation contracts of $2,000 or more.

F) Contract nork hours and safetvstandards apply to all contracts in excess of$ 100,000 that involve the employment ofniechanics or laborers.

F) Rights to Inventions content Ls required when applicable in contracts and “funding ameernents.

G) Clean Air Act. Contracts and subgrants of amounts in excess of$150.000 must contain a provision that requires the non-Federal award to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act F-I) Debamwnt and Suspension checking is required as per 2 CFR 180, hich is summarized in this manual above. No inclusion in the contract is required. but City stall members must check contractors and document that procedure when spending $25,000 or niore.

I) Byrd Anti-Iobbying Amendment (31 U.S.C. 1352) Contractors that apply or bid for an award exceeding $100,000 must file the required certification.

J) See §200.322 Procurement of recovered materials
37 Following are the complete contract provision requirements from the 0MB Super Circular:

Appendix II to Part 200 - Contract Provisions for Non-Federal Entity Contracts Under Federal Awards
In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable.

A) Contracts for more than the simplified acquisition threshold, which is the inflation adjusted amount determined by the Civilian Agency Acquisition Council and the Defense AcquisitionRegulations Council (Councils) as authorized by 41 U.S.C. 1908. must address administrative,contractual or legal remedies in instances where contractors violate or breach contract terms,and provide for such sanctions and penalties as appropriate.

B) All contracts in excess of$10,000 must address termination for cause and for convenience by the non-Federal entity including the manner by which it will be effected and the basis lOr settlement.

C) Equal Employment Opportunity. Except as otherwise provided tinder 41 CFR Part 60. all contracts that meet the definition of”tèderally assisted construction contract” in 41 CFR Part60-1.3 must include the equal opportunity clause provided under 41 CFR 60-1.4(b), inaccordance with Executive Order 11246, “Equal Employment Opportunity” (30 FR 12319, 12935, 3 CFR Part, 1964-1965 Comp., p. 339), as amended by Executive Order 11375, “Amending Executive Order 11246 Relating to Equal Employment Opportunity,” and implementing regulations at 41 CFR part 60. lDfliee of Federal Contract Compliance Programs. Equal Employment Opportunity, Department of Labor.” ) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141- 3 144, and 3146-3 148) as supplemented by Department of Labor regulations (29 CER PartS. ‘Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to paywages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance withthe Copeland “Anti-Kickback” Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ‘Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States’). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any 38 means, any person eploç&d in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency.

E) Contract Work Hours and Safety Standards Act (40 U.S.C. 370 1-3708). Where applicable, all contracts awarded by the non-Federal entit in excess of’S 100,000 that involve the employmentof mechanics or laborers must include a provision for compliance with 40 U.S.C. 3702 and 3704. as supplemented by Department of Labor regulations (29 CFR Part 5). Under 40 U.S.C. 3702 of the Act. each contractor must be required to compute the wages of every nchanicand laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissib Ic provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C. 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surrowidings or tinder working conditions which are unsanitary hazardous or dangerous. These requirements do not apply tothe purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.

F) Rights to Inventions Made Under a Contract or Aweement. If the Federal award meets the definition of”hinding agreement” under 37 CFR § 401.2 (a) and the recipient or subrecipient wishes to enter into a contract with a small business finn or nonprofit organation regarding the substitution of parties. assignment or performance of experimental, developmentaL or research work wider that “Ilnid ing agreement,” the recipient or subrecipient must comply with the requirements of37 CFR Part 401, ‘Rights to Inventions Made by Nonprofit Organizations and Small Business Finus Under Government Grants, Contracts and Cooperative Agreements,” and any implementing regulations issued by the awarding agency.

G) Clean Air Act (42 U.S.C. 7401-7671 q.) and the Federal Water Pollution Control Act (33 U.S.C. 1251- t 387). as amended - Contracts and subgrants of amounts in excess of SI 50.000 must contain a provision that requires the non-Federal award to agree to comply with all applicable standards, orders or regulations issued pusuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251-1387). Violations must be reported to the Federal a\Narding agency and the Regional Office ofthe EnvironmentalProtection Agency (EPA).

H) Debarment and Suspension (Executive Orders 12549 and 12689) - A contract award (see 2 CFR 180.220) must not be made to parties listed on the governmentwide exclusions in the System for Award Management (SAM), in accordance with the 0MB guidelines at 2 CFR 180that implement Executive Orders 12549(3 CFR part 1986 Conip.. p. 189) and 12689(3 CFR part 1989 Comp., p. 235). ‘Vebarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended. or otherwise excluded by agencies, as well as parties declared ineligible tinder statutory or regulatory authority other than Executive Order 12549.

I) Bwd Anti-Lobbying Amendment (31 U.S.C. 1352)-Contractors that apply orbid for an award exceeding $100,000 must file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated fluids to pay any person or organization for 39 influencing or attempting to influence an officer or eniplowe of any agency, a member of Congress, officer or ernpkwee of Congress, or an employee of a member of Congress iiiconnection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disckse any lobbying with non-Federal finds that takes place in connection with obtainhig any Federal award. Such discbsures are lörwarded from tier to tier up to the non-Federal award.

J) See § 200.323.

K) See200.2I6.

L) See § 200.322.
40 11. CREDIT CARD POLICIES
All use of credit cards when incurring expenses related to grant ‘. ill conform to the Citvs standard policies linked here:
lntp: v u \\ cii .o a lon.eom/l1 lestoraac!3 I 82/320 I /Ci’cd it (aid Policy 21) %.pd I’

12. TRAVEL AND MEALS
All 1rant—related travel and meal expenses vill conform to the City’s standard policies as outlined in the Personnel Rules and Regulations.

13. SUBAWARDING POLICIES
The City ofAvalon is responsible fOr financial and programmatic monitoring ofsubrecipients. ‘11w City u ill use a subaward agreement. reporting. site visits, regular contact, or other means topro’.kle reasonable assurance that subrecipients administer a’.ards in compliance with laws. 0MB requirements, and grant requirements.

At a Glance: Subaiard Monitoring Categories
I) Analysis ofthe subrecipient’s ability to manage the grant 2) Creation of an adequate subaward agreement3) Adherence to reporting requirements to the finder and perhaps at www.frs.gov. and4) Ongoing monitoring of the subaward.

The Cit of’ Avalon will ensure the follo’. ing items are appropriately addressed ‘.‘.hen making subasards:

I) Determining whether the relationsh is a subaward or a contract ‘.vilI be based on 0MB defwitbns in 2 CFR 200.330 (sumnurized below) and will he clear]’. identified in City ofAvalon agreements. (Contracts are generally for purchase of goods and services, whilesubawards generally involve program control at the suhawardee level.) 2) Subaward reporting and monitoring will meet 0MB requirements in 2 [‘FR 200.331 (reprinted below) including appropriate navigation of the following issues:
a. Reporting of required information items to hinder (a list is in 2 CFR 200.33 1)b. Reporting of first-tier subawards of $25,000 or more at fsrs.gov (the federal suhaward reporting website): this is required of all priman recipients receiving federal funds andmust be completed within the month following the month when the subaward was made(as per 0MB 2 CFR 170) c. Cor’ect use of indirect cost rates (the Super Circular states a federally negotiated indirect cost rate will be honored unless renegotiated using a prescribed process.) d. Correct completion of closeout procedurese. Other requirements detailed below in 2 CFR 200.33 1 41 The City of A•aIon is responsible for ensuring that subrecipients are in conipliancc itli the requirements of appropriate standards for good business practices. including maintaining adequate internal controls and verilSing completion of federal single audits when those are required. 0MB Requirements Pertaining to Subainls
§ 200.331 Subitcipient and contractor determinations.

The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient. and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. TherefOre, a pass-through entity must make case-by-case deterniinat ionswhether each agreement it makes tOr the disbursement of Federal program funds casts the party receiving the thnds in the role of a subrecipient or a contractor. The Federal awarding agency maysupply and require recipients to compb with additional guidance to support these determinationsprovided such guidance does not conflict with this section. a) Subrecipients. A subaxvard is fOr the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. See definition for Subaward in § 200.1 of this part. Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non-Federal entity:
1) Detennhies who is eligible to receive what Federal assistance; 2) Has its perfOrmance measured in relation to whether objectives of a Federal program were met:
3) Has responsibility for programmatic decision-making; 4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and
5) In accordance with its agreement. uses the Federal hinds to carry out a program fOr a public purpose specifd in authorizing statute, as opposed to providing goods orservices for the benefit of the pass-through entity. b) Contractors. A contract is fOr the purpose of obtaining goods and services for the non-Federal entity’s own use and creates a procurement relationship with the contractor. See the definition of contract in § 2001 of this part. Characteristics indicative of a procurement relationship between the non-Federal entity and a contractor are when the contractor:

I) Provides the goods and services within normal business operations; 2) Provides similar goods or services to many different purchasers:
3) Normally operates in a competitive environment:
4) Provides goods or services that are ancillary to the operation of the Federal program; and
5) Is not subject to compliance requirements of the Federal program as a rcsult of the agreement, though similar requirements may apply for other reasons. c) Use ofjudgment in making detennination. In detemiining whether an agreement between a pass-through entity and another non-Federal entity casts the latter as a subrecipient or a 42 & _s
contractor, the substance ofthe relationship is more important than the tôrm ofthe agreement.

All of the characteristies listed above nny not be present in all cases, and the pass-through entity must use judgment in classifying each agreement as a subaward or a procurementcontract. § 200.332 Requirements for pass-through entities.

All pass—through entities must:
a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following intbrmation at the tine of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of j,this infbrmation is not available, the pass-through entity must provide the best infonmtionavailable to describe the Federal award and subaward. Required information inclLides:

I) Federal award identification.

I. Subrecipient name (whieh must match the name associated with its unique entity identifier):
ii. Suhrccipient’s unique entity identifier;
iii. Federal Award Identification Number (FAIN);
iv, Federal Award Date (see the definition of Federal award date in § 200.1 ofthis pail) of’ award to the recipient by the Federal agency; v, Suhaward Period of Performance Start and End Date:
vi. Subaward Budget Period Start and End Date;
viL Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient;
viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation;
ix. Total Amount of the Federal Award committed to the subrecipient by the passthrough entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA):
xi. Name ofFederal awarding agency, pass-through entity, and contact inlbrmation for awarding official of the Pass-through entity:
xii. Assistance I.istings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance ListingsNiuther at time of disbursement; xiii. Identification of whether the award is R&D: and
xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.
2) All requirements imposed by the pass-through entiw on the subrecipient so that the Federal award is ILsed in accordance with Federal statutes, regulations and the terms and conditions ofthe Federal award:
3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awardingagency including identification of any required financial and performance reports:
43 -
T4)
i.

W
An approved lèderally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists. the passthrough entity must detenuinc the appropriate rate in collaboration with the subrecipient, which is either:A. The negotiated indirect cost rate between the pass-through entity and the subrecipient; which can be based on a prior negotiated rate between a differentWEE and the same subrecipient. if basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so;
B. The de minim is indirect cost rate.
ii. The pass-through entity mist not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with § 200.405(d). 5) A requirement that the subrecipient permit the pass-through emit) and auditors to have access to the subrecipients records and financial statements as necessary for the passthrough entity to meet the requirements of this part; and 6) Appropriate terms and conditions concerning closeout of the subaward. b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations. and the terms and conditions of the subaward for purposes ofdetermining the appropriate subrecipient monitoring described in parauraphs (d) and (e) ofthis sectiort which may include consideration of such lictors as:
1) The suhrecipients prior experience with the same or similar subawards:
2) The results of previous audits including whether or not the subrecipient receives a Single , Audit in accordance with Subpart F of this part. and the extent to which the same or similar subaward has been audited as a major program;
3) Whether the subrecipient has new personnel or new or substantially changed systems; and4) The extent and results ofFederal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208.
d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for I
authorized purposes, in compliance with Federal statutes, regulations. and the terms andconditions of the subaward: and that subaward performance goals are achieved. Pass-through entity monitoring ofthe subrecipient must include:
1) Reviewing financial and performance reports required by the pass-through entity. 2) Following-up and ensuring that the subrecipient takes thnelv and appropriate action on all deliciencies pertaining to the Federal award provided to the subrecipient from the passthrough entity detected through audits, on-site reviews, and Written confrnntion from the 44 subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward.
3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. 4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient hasa current Single Audit report posted in the Federal Audit Clearinghouse and has nototherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient’s cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisionsrelated to cross-cutting findings in accordance with section § 200.51 3(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specift requirements. to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward.
e) Depending upon the pass-through entity’s assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful forthe pass-through entity to ensure proper accountability and compliance with programrequirements and achievement of performance goals:

I) Providing subrecipients with training and technical assistance on program-related matters; and
2) Performing on-site reviews of the subreeipicnt’s program operations:3) Arranging for agreed-upon-procedures engagements as described in § 200.425. f) VeriI3’ that every subrecipient is audited as required by Subpart F of this part when it is expected that the subreeipient’s Federal awards expended during the respective fiscal yearequaled or exceeded the threshold set forth in § 200.501.Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records. h) Consider taking enforcement action against noncompliant subrecipients as described in §200.339 ofthis part and in program regulations.
45 14. TIME AND EFFORT REPORTING
At a Glance: Salary Allocation DocumentationThe City of Avalon will follow 0MB Super Circular provisions regarding tracking and allocating staff time and effort to grants when billing to federal and flow through grants. Themethod used must be “supported by a system of internal control which provides reasonableassurance that the charges are accurate, allowable, and properly allocated.” The 0MB guidelines further state that “budget estimates (i.e., estimates deterniined before the services are perfonned) alone do not qualil’ as support for charges to Federal awards.” Recordsmust “reasonably reflect the total activity for which the employee is compensated.”To meet 0MB salary allocation and documentation requirements a City staff member and/or aknowledgeable supervisors will use one ofthree methods (or an alternative method approved bya finder) to ensure accuracy in allocating and documenting time and efl’ort:
1) An alter-the-fact bimonthly time sheet is prepared that allocates all work by either hours or percentage. (A sample time sheet and a time cerflication is provided near the end ofthis manual.) 2) Semi-annual certificates are prepared. (This is the method generally used when an employee works fill time on one lèderally funded grant program.) 3) An analysis of an employee’s work ebb and flow is conducted either every quarter or every six months (based on input from a finding source) to identify consistency withestimates and budgets and documented with a sied after-the-tact certification.

Employees arc encouraged, but not required, to keep work journals, notes, and calendars to aid in the preparation of accurate time reports.

Previous 0MB circulars called this issue “time and effort reporting.” and in the Super Circular contcnt was replaced and modified under. “Standards for Documentation of Personnel Expenses.” [he frill section follows:
0MB § 200.430 (i) Standards for Documentation of Penonnel Expenses 1) Charges to Federal awards fur salaries and wages must be based on records that accurately reflect the work perfOrmed. These records must:
i. Be supported by a system ofinternal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated:
ii. Be incorporated into the official records of the non-Federal entity; iii. Reasonably reflect the total activity for which the employee is compensated by the nonFederal entity, not exceeding 100% of compensated activities (for IHE. this per the IRE’s definition of IBS);
46 iv. Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidlary records as definedin the non-Federal entitys written policy; v. Comply with the established accounting policies and practices ofthe non-Federal entity (See paragraph (h)( 1)01) above for treatment of incidental work for IHEs.); and vi. [Reserved]
vii. Support the distribution ofthe employees salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal awardand non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or anunallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e.. estimates determined before the services are performed) alone do not qualify as support fOr charges to Federal awards, but may be used for interimaccounting puiposes, provided that:

A. The system fOr establishing the estimates produces reasonable approximations of the activity actually perfonned:

B. Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identifd and entered into the recordsin a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and C. The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amountcharged to the Federal award is accurate, allowable, and properh’ allocated. ix. Because practices vary as to the activity constituting a fiñl workload (for IHEs, IRS). l records may reflect categories of activities expressed as a percentage distribution of total activities.
x. it is recognized that tcaching. research, service, and administration are often inextricably intermingled in an academic setting. When recording salaries and wages charged to Federal awards lOr IHEs. a precise assessment of factors that contribute tocosts is therefore not always lëasible. nor is it expected. 2) For records which meet the standards required in paragraph (i)(1) ofthis section, the nonFederal entity will not be required to provide additional support or documentation for the work performed. other than that referenced hi paragraph (iX3) ofthis section. 3) In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt emploees, in addition to the supporting documentation described in this section, must also be supportedby records indicating the total number of hours worked each day. 4) Salaries and wages of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner as salaries and wages claimed for reimbursement from Federal awards.
47 For states, heal governments and Indian tribes, substitute processes or systems lbr allocating salaries and wages to Federal awards nay be used in place of or in addition to the records described in paragraph (1) if approved by the cognizant agency for indirect cost. Such syste ins nu include, but nrc not limited to. random moment sampling. “rolling” time studies, case counts, or other quantifiable measures of work performed. i. Substitute systems which use sampling methods (primarily lbr Temporary Assistance for Needy Families (TANF). the Supplemental Nutrition Assistance Program (SNAP), Medicaid. and other public assistance programs) must meet acceptable statistical sampling standards including:

A. The sampling universe must include all ofthe employees whose salaries and wages are to be allocated based on sample results except as provided in paragraph (i)(5)(iii) of this section;
B. The entire time period involved must be covered by the sample: and C. The results must he statistically valid and applied to the period being sampled.
ii. Allocating charges for the sampled employees supervisors. clerical and support staffs, based on the resuhs ofthe sampled emplo)ces, will be acceptable. iii. Less than full compliance with the statistical sampling standards noted in subsection (5W) may be accepted by the cognizant agency for indirect costs if it concludes that the amounts to be allocated to Federal awards will be minimal, or if it concludes that the system proposed by the non-Federal entity will result in lofler costs to Federal awards than a system which complies with the standards. 6) Cowiizant agencies for indirect costs are encouraged to approve alternative proposals based on outcomes and milestones for program perfbniiance where these are clearly documented. Where approved by the Federal cognizant agency for indirect costs, these plans are acceptable as an alternative to the requirements of paragraph (i)( I) of this section. 7) For Federal awards of similar purpose activity or instances of approved blended funding, a non-Federal entity may submit performance plans that incorporate funds from multiple Federal awards and account for their combined use based on perforniance-oriented metrics, provided that such plans are approved ñi advance by all involved Federal aardhig agencies. In these instances, the non-Federal entity must submit a request for waiver of the requirements based on documentation that describes the method of charging costs. relates the charging of costs to the speeffic activity that is applicable to all lund sources, and is based on quantifiable measuresofthe activity in relation to time charged. 8) For a non-Federal entity where the records do not meet the standards described in this section.

Ihe Federal Government may require personnel activity reports, including prescribed certifications, or equivalent documentation that support the records as required in this section. 48 15. SUPPLANTING
Definition of supplement, not supplantThe concepts of •‘no supplanting” or “supplement. not supplant” are requirements common to ninny tèderallv funded law enforcement grant progranis and proarams with some other hinders.such as the Department of Education. The tenn supplant means to replace. so no supplantingsituations means all costs billed to the grant shouki he ne costs. Supplanting is not prohibited under 0MB rLIles. or even addressed in the Super Circular. It is common and allosahle in construction projects. tor example. to bill a permanent staff person to a federally funded grant.

There is no single version of supplanting rules. Rather. the vording of the provision varies dependhig on 1) the statute that contains it 2) the request for proposal used by the finder, or 3) thegrant agreement authorizing finding,Although the definition may change from slattile to statute, supplement. not supplant provisions generally require grantees use state or local finds t’or all services required by state law, state rule,or local policy and prohibit those finds from being diverted for other purposes when federal hindsare available. Federal finds must supplement—add toprograms and services offered with stateand local hinds. Federal hinds are not permitted to he used to supplant the state and local hinds used to offer those programs and services.Enhancing, expanding, or extending required activities If federal Rinds are used to enhance or expand a state mandate or local board policy, then the federal supplementary activities must be separately identified and clearly distinguishable from those activities identified as necessary for ‘unplernenting the state mandate or local hoard policy as outlined in the huiplementation plan. Good documentation can be the proof that this is not asupplanting situation, The Cii) of Avalon must generall\ he able to doctnient a clear plan for meeting the mandated requirement and another plan for providing supplementary activities from federal finds in addition to the mandated requirement.

Presumptions of supplanting
There are no comimn scenarios in which a finding agency ill presume supplanting hasoccurred. In both cases, once the presumption of supplanting has been made. it is the City of Avalons responsibilit to rebut the presumption. Preferably, the City ofAvalon will budget and expend federal dollars so as to a\oid any of the fo[b ing two presumptions entirel).

I ) Providing services required under slate or local Ian. An services that an entity is required to provide under state law, local polic\ or policy at another level must he provided using statc or local hinds.
2) Providing sonic services as 1/lose pi’oi’ided iii prior ivan u/il; s/ale or local finn/s. If state or local hinds were used in the prior year to provide services, and those services are provided again in the current year, the funder may presume a supplanting situation has occurred if the state orlocal hinds are replaced by federal finds. Even in cases where a budget shortfall is anticipated. the entity may not plan to use federal hinds to cover a shortage of state or local hinds. 49 Supplanting issues regarding personnel
Navigating supplanting issues with staffing expenses is extremely common in law enforcement grants. which ahiiost always prohibit using hinds for existing expenses. A common approach withmany DOJ giants is to allow overtime to he billed to the grant but not a portion of the core salary, unless that expense is for new staff members.

It is useful to consider whether the employee is paid with hard money” or “soft money.” The first category is when the employee is paid with stable hinds, such as state allocations. Staff members who have been maintained through the use ofCitv discretionary funds should also be considered paid through “hard money.” Grants that restrict supplanting should generally not be used to cover existing salaries paid through hard money (see transfer of duties method helo for exceptions).The latter category, soft money. is when the cmploee is paid with grant funds that may disappear after the grant is completed. The person may be laid off if other hinds are not allocated or received.

Grants that prohibit sLipplanting can be used to hind this situation.

It is sometimes possible to shift a percentage of the duties of an emploxee to an assistant or othcr Cay personnel. This can free up a portion of that emplo>ees time to he billed to a nonsupplant inggrant. For example. thirty percent ofan employee’s duties may be shifted. and then that portion oftime can he hilled to the non-supplanting grant. This shift must be well documented. The City ofAvalon’s policies allo approal ofa temporary amendment to ajob description for this purpose.

16. INDIRECT COSTS
A 0MB Super Circular provision allows non-federal entities that have never had an indirect costrate to charge a 10 percent de ininiinis rate, and the City qualifies fOr this provision. Indirect costs are thcility and administrative costs that cannot he easily tracked or allocated for a project. TheCity of Avalon has never had a rate, so if hinders allos. a 10 percent rate can he charged on tëderal and flo -through grants.

Below is 0MB guidance from the Super Circular and also a statement from the 0MB Frequently Asked Questions guidance regarding applicahilit of this provision fOr municipalities. such as theCity ofAvalon.§ 200.414 Indirect (F&A) costs 1) In addition to the procedures outlined in the appendices in paragraph (e of this section. any nonFederal entity that does not have a current negotiated (including provisional) rate, except for those non-Federal entitles described in appendix VII to this part, paragraph D. I .b, irny elect to charge a de mininiis ‘ate of 10% of modified total direct costs (MTDC) which may be used indefinitely. No documentation is required to justit’ the 10% de minimis indirect cost rate. As described in §200.403, costs must he consistently charged ase’aher indirect or direct costs. but may not be doublecharged or inconsistently charged as both. If chosen, this methodology once elected must be usedconsistently fOr all Federal awards until such time as a non-Federal entity chooses to negotiate for a rate, which the non-Federal entity may appi to do at any time. 50 Fmm the 0MB online guidance
COFAR Frequently Asked Questions
200.414 .414-1 Be Nlinimis Rate and Govemnients
Is the 10 percent de rnhiirnis rate for new organizations which have never negotiated an IDC rate at 200.414 (1) available to governmental organizations or tribal government entities which have never negotiated an IDC rate?
Yes. Provision of the 10 percent de minimis indirect cost rate is conditioned on the non- Federalentity meeting the requirements speci&d at 200.414 (1). These include limiting availability to organizations that have never received a negotiated indirect cost rate, except for those described in Appendix VII of Part 200, paragraph (D)( )(h) “governmental department or agency unit that receives more than $35 million in direct Federal funding must submit its indirect cost rate proposal State and local government departments that have never negotiated indirect cost rateswith the Federal government and receive less than $35 million in direct Federal lhnding per year may use the 10% de minimi.s indirect cost rate, and must keep the documentation of this decision on file. Federally recognized Indian tribes that have never negotiated an indirect cost rate with the Federal government may also use the 10% and must keep the documentation of this decision onfile. 51 CITY OF AVALON
Avalon, California
Single Audit Report on Expenditures
of Federal Awards
Year ended June 30, 2020

CITY OF AVALON
Single Audit report on Expenditures of Federal Awards
Year ended June 30, 2020

TABLE OF CONTENTS
Pace
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 1 Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 3
Schedule of Expenditures of Federal Awards 6Notes to the Schedule of Expenditures of Federal Awards 7Schedule of Findings and Questioned Costs 8 Status of Prior Audit Findings 12
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CL
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I::)\fIS iat r 18201 \,in1 kci,ncm Aw,iu I Suit, OuIII,.tivCA0)6I2 CRiiFiEt) uBLc ACtOUN1.rS \lci;rrv.194..12020) 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
Indenendent Auditor’s ReDort
City Council
City of Avalon, California
We have audited, in accordance with the auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits cDntained in Government Auditing Standards issued by the Comptroller General of the United States, thefinancial statements of the governmental activities, the business-type activities, each majorfund, and the aggregate remaining fund information of the City of Avalon, as of and for the year ended June 30, 2020, and the related notes to the financial statements, whichcollectively comprise the City of Avalon’s basic financial statements, and have issued our report thereon dated January 15, 2021.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City ofAvalon’s internal control over financial reporting (internal control) to determine the 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 onthe effectiveness of the City of Avalon’s internal control. Accordingly, we do not express anopinion on the effectiveness of City of Avalon’s internal control.

A deficiency in internal control exists when the design or operation of a control does notallow management or employees, in the normal course of performing their assignedfunctions, 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 significantdeficiency is defined to be a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention bythose 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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. 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. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and questions costs as items 2020-001 and 2020-002,that we consider to be significant deficiencies. 1 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Avalon’s financialstatements are free from material misstatement, we performed tests of its compliance withcertain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financialstatement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that arerequired to be reported under Government Auditing Standards.

City’s Response to the Finding
The City of Avalon’s response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The City of Avalon response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

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 of Avalon’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.
ç LLP
Irvine, California
January 15, 2021
2 ______ ‘t” __________ __ .:4—
I:a/SFj” i’ 230! Dupont Dike I Suite
CCRTIFIED PUBLIC ACCOUNTANTS Mon: 94’147.L2010 (Ix 9492633520 Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
Independent Auditor’s Report
City CouncilCity of Avalon, California
Report on Compliance for Each Major Federal ProgramWe have audited the City of Avalon’s compliance with the types of compliance requirements described in the 0MB Compliance Supplement that could have a direct and material effecton each or the City of Avalon’s major federal programs for the year ended June 30, 2020.

The City of Avalon’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City of Avalon’s major federal programs based on our audit of the types or compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable tofinancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (Uniform Guidance). Those standards and Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance aboutwhether noncompliance with the types of compliance requirements referred to above thatcould have a direct and material effect on a major federal program occurred, An audit includes examining, on a test basis, evidence about the City or Avalon’s compliance with those requirements and performing such other procedures as we considered necessary inthe circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance foreach major federal program. However, our audit does not provide a legal determination of the City of Avalon’s compliance
3 Opinion on Each Major Federal Program
In our opinion, the City of Avalon complied, in all material respects, with the types ofcompliance requirements referred to above that could have a direct and material effect oneach of its major federal programs for the year ended June 30, 2020.Other Matters The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with the Uniform Guidance and which are describedin. the accompanying schedule of findings and questioned costs as item 2020-003 Our opinion on each major federal program is not modified with respect to these matters.

The City of Avalon’s response to the noncompliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The City of Avalaon’s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Report on Internal Control Over ComplianceManagement of the City of Avalon is responsible for establishing and maintaining effectiveinternal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City ofAvalon’s internal control over compliance with the types of requirements that could have adirect and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internalcontrol over compliance in accordance with Uniform Guidance, but not for the purpose ofexpressing an opinion on the effectiveness of internal control over compliance. Accordingly,we do not express an opinion on the effectiveness of the City of Avalon’s internal controlover compliance.A deficiency in internal control over compliance exists when the design or operation of acontrol 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 weaknessin internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that materialnoncompliance with a type of compliance requirement of a federal program will not beprevented, 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 with a type of compliance requirement of a federal program that is lesssevere 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 first paragraph of this section and was not designed to identify all deficiencies ininternal control over compliance that might be material weaknesses or significant deficiencies. We identified one deficiency in internal control over compliance, 2020-003, thatwe consider to be a significant deficiency.

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 4 the requirements of Uniform Guidance. Accordingly, this report is not suitable for any other purpose.Report on Schedule of Expenditures of Federal Awards Required by Uniform Guidance
We have audited the financial statements of the City of Avalon as of and for the year ended June 30, 2020, and have issued our report thereon dated January 15, 2021 which contained an unmodified opinion on those financial statements Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the financial statements.

Such information is the responsibility of management and was derived from and relatesdirectly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in theaudit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used toprepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditure of federal awards is fairly stated in all material respects in relation to the financial statements as a whole. ç LU’
Irvine, California
January 15, 2021
5 CITY OF AVALON
Schedule of Expenditures of Federal Awards
Year ended June 30, 2020
Federal
Domestic Program
Federal Grantor / Pass -Through Assistance Identification Program Grantor! Program J Cluster Title Number Number Expenditures U.S. Department of transportationPassed through the Los Angeles County Metropolitan Transporation Authority:

Cabrillo Mole Ferry Terminal Revitalization Project 20.205 CA70-X017-D0 $ 2,486,886 Cabrillo Mole Ferry Boat Terminal 20.205 CA-201912100 161,547 Totai Highway Planning and Construction Cluster 2,648,433 Total US. Department of Transportation 2,648,433
Total Expenditures of Federal Awards $ 2,648,433
See accompanying notes to Schedule of Expenditures of Federal Awards 6 CITY OF AVALON
Notes to the Schedule of Expenditures of Federal Awards Year ended June 30, 2020
(1) Summary of Significant Accounting Policies ADDlicable to the Schedule of Exoenditures of Federal Awards(a) Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activity of the City of Avalon (City) under programs of the federal government for the year ended June 30, 2020. The information in this Schedule is presented in accordance with the requirements of Title 2 US. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards. Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net assets or cash flows of the City. The City did not use the 100k de minimis indirect cost rate as covered in section 200414 of the UniformGuidance. (b) Summary of Significant Accounting Policies
Expenditures reported on the Schedule are reported on the modified-accrual basis of accounting for those grants that were recorded in governmental funds, and on theaccrual basis of accounting for those grants that were recorded in proprietary funds.

Such expenditures for part of the year are recognized following the cost principles contained in 0MB Circular 87, Cost Principles for State, Local, and Indian Tribal Governments, and for part of the year contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Pass-through entity identifying numbers are presented where available. 7 CITY OF AVALON
Schedule of Findings and Questioned Costs
Year ended June 30, 2020
Section I — Summary of Auditor’s Results
Financial Statements:

Type of auditor’s report issued: Unmodified
Internal control over financial reporting:• Material weakness(es) identified? No • Significant deficiency(ies) identified not
Considered to be material weaknesses? Yes, 2020-001, 2020-002 Noncompliance material to financial
statements noted? No
Federal Awards:

Internal control over major programs:• Material weakness(es) identified? No • Significant deficiency(ies) identified not
Considered to be material weaknesses? Yes, 2020-003
Type of auditor’s report issued on compliance
for major programs: UnmodifiedAny audit findings disclosed that are required to be reported in accordance with Uniform
Guidance? No
Identification of major programs:

CFDA Number(s) Name of Federal Program or Cluster

20.205 Highway Planning and Construction Cluster
Dollar threshold used to distinguish between
Type A and Type B programs: $750,000
Auditee qualified as a low-risk auditee? No
8 CITY OF AVALON
Schedule of Findings and Questioned Costs
(Continued)
Section II — Findings Relating to the Basic Financial Statements Reported in Accordance with Government Auditing Standards
There were three findings noted during the year under audit that is required to be reported in accordance with GAGAS.

Reference Number: 2020-001
Adjustments Detected During the Audit
As a result of audit procedures and the City’s review of financial information for the fiscal year ended June 30, 2020, there were fifteen material and immaterial audit adjustments. The auditing standards acknowledge that the auditor should not be part of the City’s system of internal control because adjusting material transactions in the financial statements creates an independence threat and reduces auditor transparency. An important element of controls over financial reporting is for management to identify adjustments necessary for financial statements to be fairly stated.Recommendation We recommend that management prepare and post all adjustments to the accounting records prior to the start of the audit. When this is not possible, management should identify and communicateto the auditors the potential areas of adjustment that may need to be addressed during the audit process. This will help to reduce the risk of material misstatement.

ManaQement’s Comments Regarding Corrective Actions Planned Management agrees with this finding and will work to ensure future adjustments are reflected in the accounting records prior to the start of the audit, or when this is not possible, that the potential areas of adjustment are identified and communicated to the auditors. 9 CITY OF AVALON
Schedule of Findings and Questioned Costs
(Continued)
Reference Number: 2020-002
Information Technology
We noted the City does not have documented policies and procedures related to IT LogicalSecurity, IT environmental controls, IT network management and data back-up frequencies.Additionally, we noted the potential for increased risks due to the Finance Director having the capability of administering logical access within the SunGard accounting system and that the maximum password age setting of 365 days is too long.

RecommendationWe recommend policies and procedures be put in place surrounding IT Logical Security, IT environmental controls, IT network management and data back-up frequencies. We recommend the Finance Director solely approves access for the SunGard users and changing maximum password age settings, where security is a concern to between 30 and 90 days and when securityis not a concern to between 120 and 180 days.

Management’s Comments Regarding Corrective Actions Planned Management agrees with this findcng and will establish policies and procedures to address the finding.
10 CITY OF AVALON
Schedule of Findings and Questioned Costs
(Continued)
Section III — Federal Award Findings and Ouestioned Costs Reference Number: 2020-003
Purchasing Policy
Criteria
Uniform Guidance requires nonfederal entities that receive federal awards to establish writtenpolicies, procedures, or standards of conduct for the following sections:
- Financial management (2 CFR 200.302)- Payment (2 CFR 200.305) - General procurement standards (2 CFR 200.318)- Competition (2 CFR 200.319) - Methods of procurement to be followed (2 CER 200.320)- Compensation — personal services (2 CER 200.430) - Travel costs (2 CFR 200.474)
Condition
The City did not have written policies, procedures, and standards of conduct relative to Federal Awards as required by Uniform Guidance (2 CFR 200), Subparts D (Post Federal Award Requirements) and F (Cost Principles).

Cause
The City has not updated their policy in a timely manner.

Effect
Failure to establish written policies and procedures results in the City being non-compliant with theUniform Guidance referenced above and may result in loss of grant funding.

Recommendation
We recommend the City update its policies and procedures for compliance the Uniform Guidance compliance requirements mentioned above.

Management’s Comments Regarding Corrective Actions Planned The City will update its written policies, procedures, and standards of conduct to ensure compliance with the Uniform Guidance requirements.
11 CITY OF AVALON
Summary Schedule of Prior Audit Findings
Year ended June 30, 2020
Status of Prior Year Audit Findings:

There were four audit findings identified in the prior year audit report requiring follow up. 2019-001: Audit Adjustments
As a result of audit procedures and the City’s review of financial information for the fiscalyear ended June 30, 2019, there were sixteen material and immaterial audit adjustments.

The auditing standards acknowledge that the auditor should not be part of the City’s system of internal control because adjusting material transactions in the financial statements creates an independence threat and reduces auditor transparency, An important element ofcontrols over financial reporting s for management to identify adjustments necessary for financial statements to be fairly stated.

Recommendation
We recommend that management prepare and post all adjustments to the accounting records prior to the start of the audit. When this is not possible, management shouldidentify and communicate to the auditors the potential areas of adjustment that may need to be addressed during the audit process. This will help to reduce the risk of material misstatement.

Management ResponseManagement agrees with this finding and will work to ensure future adjustments are reflected in the accounting records prior to the start of the audit, or when this is notpossible, that the potential areas of adjustment are identified and communicated to the auditors.

Status
Material and immaterial adjustments were detected during the audit for fiscal year June 30,2020 and, as such, this finding is not considered cleared. 12 CITY OF AVALON
Summary Schedule of Prior Audit Findings
(Continued)
2019-002; controls over Strengthening Internal Controls During our testing of internal controls surrounding cash receipts, cash disbursements, andpayroll, we noted the following:
• For cash receipts, the individual responsible for the collection of customer payments has the ability to modify customer data. We also noted that the individual whoprepares the bank deposits and collects cash receipts has the ability to post receipts to the general ledger.
• For cash disbursements, we noted that access to the vendor database was not restricted and accounts payable personnel had the ability to add new vendors without review.
• For payroll, we noted that the employees that process payroll have the ability to add employees to the payroll system.

Recommendations
To ensure proper segregation of duties, we recommend the following:
• The individual responsible for cash receipts should be prohibited from access to the customer database. In addition, the person responsible for the collection of payments should be prohibited from posting these transactions to the general ledger. • The ability to add, delete or modify vendor data should be segregated from accounts payable personnel.
• The ability to add employees should be segregated from those that process payroll.

Management’s ResnonseManagement agrees with this finding and has already taken steps to ensure proper segregation of duties. Individuals responsible for cash receipts no longer have system access to post transactions to the general ledger. The Finance Director is currently working with software vendors to implement similar segregations of duties for accounts payable and payroll processes.Status
This finding is considered cleared.
13 CITY OF AVALON
Summary Schedule of Prior Audit Findings
(Continued)
201g-003: Waste Disposal Post Closure Trust
During our review of the trust used to account for funds for closure and post closure costs for the landfill, we noted there was no investment policy or guidance provided to the thirdparty trustee on how to invest the City’s funds.

Recommendation
The California Government Code Section 53601 allows monies held by a trustee and pledged to an obligation of the City to be invested in accordance with the trust agreement,however the trust agreement of the City is vague in regard to how the funds should beinvested and any limits imposed on ft.

We recommend the City establish an investment policy as to how the funds should be invested and any limits imposed by the City. The investment policy should be provided to the trustee. In addition, the City should monitor the investments on a periodic basis to ensure compliance with the City’s investment policy.

Management’s ResponseManagement agrees with this finding and will establish an investment policy specific to its trust accounts. Management will provide the policy to its trustee and monitor investment activity for compliance.Status
This finding is considered cleared.
14 CITY OF AVALON
Summary Schedule of Prior Audit Findings
(Continued)
2019-004: Information Technology
We noted the City does not have documented policies and procedures related to IT LogicalSecurity, IT environmental controls, IT network management and data back-up frequencies.

Additionally, we noted the potential for increased risks due to the Finance Director having the capability of administering logical access within the SunGard accounting system andthat the maximum password age setting of 365 days is too long.

Recommendation
We recommend policies and procedures be put in place surrounding IT Loqical Security, ITenvironmental controls, IT network management and data back-up frequencies. We recommend the Finance Director solely approves access for the SunGard users and changing maximum password age settings, where security is a concern to between 30 and 90 days and when security is not a concern to between 120 and 180 days.

Management’s ResponseManagement agrees with this finding and will establish policies and procedures to address the finding.

Status
Management has not implemented the corrective action plan as noted and, as such, this finding is not cleared.
15 RESOLUTEON NO.

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF AVALON/SUCCESSOR AGENCY TO THE AVALON

COMMUNITY IMPROVEMENT AGENCY ADOPTING THE FEDERAL

GRANT POLICIES AND PROCEDURE MANUAL
The Cit Council of the City of Avalon does determine, find and resolve as follows:

Section 1. Federal Grant Policies and Procedurcs Manual is hereby adopied and approved.

PASSED, APPROVED AND ADOPTED this 17th day of May, 2022.

Ann H. Marshall - Mayor
ATTEST:

Gabrielle Morones. Deputy Cit Clerk

CITY OF AVALON CITY COUNCIL
MEETING DATE: May 17, 2022 AGENDA ITEM: 5
ORIGINATING DEP: Public Works CITY MANAGER: _______ PREPARED BY: Robert Greenlaw, Public Works Director SUBJECT: Avalon Harbor Waste Tank Pump-Out Float Contract Price Increase
RECOMMENDED ACTION(S): Approve a contract price increase of $37,485.00 for the WastePump-Out and Freshwater Fill-Up Float Replacement Project with Diversified Composites Incorporated.

REPORT SUMMARY: On April 2, 2019, the City Council accepted a grant award from the California Division of Boating and Waterways to renovate the existing harbor waste tank pumpout and water fill-up facility located adjacent to the fuel dock in Avalon Harbor. Staff was notified the grant was awarded in the amount of $196,200, with a $67300 required match.

The total project is budgeted at S273,500 (Capital Improvement Project #207013/Budget Account #10470-6648).

On July 20, 2021 the City Council directed the City Manager to negotiate a contract for procurement of the assets required with Diversified Composites Inc., to complete the Waste Pump-Out Freshwater Fill-Up Float Replacement Project. The contract negotiations were approved for a not to exceed sum of $135,000.

On September21, 2021, the item returned to the City Council as the total contract sum approvedon July 20, 2021 did not include sales tax. The City Council authorized an increase of $13,500 in the contract sum to cover sales tax portion of the agreement.

On March 15, 2022, the City Council designated KECO, Inc., as a sole source vendor and authorized procurement, per the City’s purchasing policy, of two peristaltic pumps. two water supply stanchions, and a pump alarm system from KECO Pump & Equipment that meet the specifications for the Harbor Waste Pump-Out Dock, for a total not to exceed $56,440.

Before a contract with Diversified Composites was executed, Staff were recently notified due to supply chain issues, the cost of materials had increased by $37,348.00.

With the change in cost of materials provided by Diversified Composites, the total project is still projected to close within the total approved budget allocation.GOAL ALIGNMENT: Infrastructure reliability and safety.

FISCAL IMPACTS: Additional cost of $37,485 applied towards Capital Improvement Project #207013/Budget Account #10470-6648.

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: The Waste Tank Pump-Out and Freshwater Water Fill-Up Float Replacement Project will not be constructed, and the grant agreement will be terminated.

FOLLOW UP ACTION: Execute procurement contract.

ADVERTISING, NOTICE AND PUBLIC CONTACT: This item was properly listed on the posted agenda pursuant to the Brown Act.

ATTACHMENTS:

1. Proposal from Diversified Composites Incorporated

2. March 15, 2022— Staff Report

3. March 15, 2022— Minutes

4. September 21, 2021 — Staff Report

5. September21, 2021 — Minutes

6. July 20, 2021 — Staff Report7. July 20, 2021 — Minutes Diversified Composites
1517 W lS Street Long Beach, Ca. 90813 Phone 562-366-9698 EmaiI:dcomp3 I 5(d2aol. corn
May 2, 2022
City of Avalondo Orne CarstarphenocarstarphenCäcFtyofavaIon.com Re: Float Replacement Project Proposal
Section 2.1 A : Diversified Composites Inc would like to fabricate the Pump out Float As per drawings Provided.

Dennis Choate President, 1517W. 15th Street, Long Beach, Ca. 90813Email: dcomp3l5@aoLcom Shop Phone #562-366-9698Dennis’ Phone #562-489-6183

2.1 B: Float to be Constructed per Drawings Submitted

2.1 C: Float per Supplied Drawings and 90 Day Delivery
The time for city Installations will Add to the Delivery Date.

F.O.B 1517W 15th St., LB., Ca. 90813

2.1 D: Price of Float - less Installations, Plumbing & Electrical $ 169,000.00
Sales
Tax $ 17,322.50
*Total $ 186,322.50*
Terms: Deposit: $ 60,000.00
Bottom/Sides: $40,000.00
Bottom/Sides Laminate: $40,000.00Deck Attachment: $46,322.50 = $ 186,322.50

2.1 E: Additional Insurance to be Paid By Buyer
Thank you,
Dennis Choate
*This Proposal is effective until May 20, 2022*

CITY OF AVALON CITY COUNCIL
MEETING DATE: March 15, 2022 AGENDA ITEM:

ORIGINATING DEP: Public Works CITY MANAGER:

PREPARED BY: Jamie Hmielak, Maintenance Superintendent
SUBJECT: Designate KECO, Inc. as a Sole Source Vendor and Authorize Purchase of Pumps & Water Supply Stanchions for the Harbor Waste Pump-Out Dock
RECOMMENDED ACTION(S): Designate KECO, Inc. as a sole source vendor and authorizeprocurement, per the City’s purchasing policy, of two peristaltic pumps, two water supply stanchions, and a pump alarm system from KECO Pump & Equipment that meets thespecifications for the Harbor Waste Pump-Out Dock, for a total not to exceed $56,440.

REPORT SUMMARY: On April 2, 2019, the City Council accepted a funding award from the Department of Boating and Waterways to support the replacement of the Harbor Waste PumpOut Dock. The total grant award was $196,200. The dock float, waste tank pumps, and water filling equipment would be included within the scope of the grant agreement.

On November 10, 2020 City Council authorized the solicitation of a request for bids toconstruct the complete Waste Pump-Out Dock. No bids were received by the publisheddeadline, therefore, on July 20, 2021, City Council authorized the City Manager to negotiate a contract for procurement of the dock float. It was understood that the supplies & equipment for the dock would be purchased & installed by City Staff per the City’s procurement policy.

According to the AMC Sec.3-4.111(b) Sole Source Vendors, When there is only one sourcethat provides the necessary services, goods and equipment to ensure compatibility with existing City services, goods or equipment, or the services, goods or equipment are proprietary in nature, the City may procure the goods or services from the sole source.” KECO. Inc. dba Keco Pump & Equipment is the sole provider of KECO pumps and parts.

While Keco does work with authorized representatives, all purchases are made directly through Keco. City Staff requests KECO, Inc. be designated a sole source vendor.

The total expenditure is comprised of three elements, with the majority of this expenditure are the peristaltic pumps, which total $47,500. This type of pump is required for this applicationdue to several factors. They are more environmentally safe for our harbor since they are not prone to leaks. They are also much more efficient, and have very low maintenance costs compared to other style of pumps. Finally, these pumps are able to handle various fluids &debris that are often found in marine holding tanks whereas other pumps cannot handle these items.

The other two elements of the expenditure are two water supply stanchions totaling approximately $8500 and a tank alert system totaling approximately $440.

Staff is requesting authorization to procure the peristaltic pumps, water supply stanchions, and alarm system from KECO Pump & Equipment for an amount not to exceed $56,440.

FISCAL IMPACTS: Total expenditure is not to exceed $56,440 which is included in the grant that was previously awarded totaling $196,200. This will be applied towards CIP project code207013 (account 10470-6648).

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: Project will be further delayed searching for other equipment that is likely not available due to specific pump requirements as previously mentioned.

FOLLOW UP ACTION: Complete the equipment procurement following the City’s purchasing policy.

ADVERTISING, NOTICE AND PUBLIC CONTACT: Pursuant to the Brown ActATTACHMENTS: Equipment quotes & sole source letter from KECO.

CITY COUNCILIHOSPITAL MINUTES
MARCH 15, 2022
PAGE 2

3. Findings to Continue to Hold Remote TeleconferenceNirtual City Council Meetings Pursuant to Assembly Bill 361Determined that the COVID-19 state of emergency proclaimed by the Governor still exists and has been considered by the City Council in deciding to continue tohave teleconference meetings and that state or local officials have imposed or recommended measures to promote social distancing in connection with COVID 19, and that as a result of the COVID-19 emergency, meeting in person would present imminent risks to the health or safety of attendees.

4. Adopt an Ordinance Amending Chapter 9-1.01 of Title 9, Planning and Zoning, of the Avalon Municipal Code Relating to Planning Commission Membership Adopted Ordinance 1205-22 of the City of Avalon Amending Title 9, Chapter 9,Article 1 of the Avalon Municipal Code, Relating to the Appointment of Planning Commissioners.

5. City Renewal of General Services Agreement with Los Angeles County Adopted Resolution No. 22-19 of the City Council of the City of Avalon Authorizing the City Manager to Execute the General Services Agreement with the County of Los Angeles for the Period from July 1, 2022 through June 30,2027.

7. Designate KECO, Inc. as a Sole Source Vendor and Authorize Purchase of Pumps & Water Supply Stanchions for the Harbor Waste Pump-Out Dock Designated KECO, Inc. as a sole source vendor and authorized procurement,per the City’s purchasing policy, of two peristaltic pumps, two water supply stanchions, and a pump alarm system from KECO Pump & Equipment that meets the specifications for the Harbor Waste Pump-Out Dock, for a total not to exceed $56,440.
** The following item on the Consent Calendar was the City Council acting as the Avalon Municipal Hospital Board of Trustees **

9. CEO’s Board Report and CFO’s Monthly Narrative Analysis Received and filed the reports:
• The CEO’s February 2022 Report
• The CEO’s January 2022 Report

PULLED ITEMS

6. Amendment to the Per Capita Parks Improvement: Front Street Shade Structure Authorized the amendment to the Per Capita Parks Improvement scope of work.

Motion to approve made by Anni Marshall, seconded by Michael Ponce.(All Ayes)

CITY OF AVALON CITY COUNCIL
MEETING DATE: September 21, 2021 AGENDA ITEM:

ORIGINATING DEP: Public Works CITY MANAGER: /)&?
PREPARED BY: Robert Greenlaw, Director of Public Works
SUBJECT: Authorize an Increase in the Contract Sum for the Avalon Harbor Waste Tank Pump-Out and Freshwater Fill-Up Float Project RECOMMENDED ACTION(S): Authorize an increase of $13,500 in the contract sum for the Avalon Harbor Waste Tank Pump-Out and Freshwater Fill-Up Float Project to cover sales tax portion of the agreement from the Harbor Fund 10470-6648.

REPORT SUMMARY: On July 20, 2021 the City Council directed the City Manager to negotiate a contract for procurement of the assets required to complete the Waste Pump-Out Freshwater Fill-Up Float Replacement Project. The contract negotiations were approved for a not to exceed sum of $135,000.

A contract was negotiated with Diversified Composites in Long Beach, a regional vendor that specializes in the types of fabrication work needed for this project, for $135,000. Upon review of the contract terms, it was discovered that the bid did not account for sales tax. The City Manager now seeks authorization to increase the contract sum by $1 3,500 to cover the allocation of sales tax associated with the agreement.

The total project is budgeted at $273,500 (Capital Improvement Project #207013/Budget Account #10470-6648). With the addition of sales tax to the total project budget, the project is still projected to close within the total approved budget allocation.

The City submitted a grant application in 2017 to the California Division of Boating and Waterways to renovate the existing harbor waste tank pump-out and water fill-up facility located adjacent to the fuel pier in Avalon Harbor. Staff was notified the grant was awarded in theamount of $196,200, with a S67,300 required match.

The Avalon City Council accepted the grant on April 2, 2019 and budgeted the required match of $67,300 to account 10470-6648. Staff, utilizing our on-call engineering firm ESG Engineering, designed the plans for the float, associated equipment and the landside improvements to support the new float.

City Council authorized the solicitation of a request for bids at the November 10, 2020 City Council meeting. During that time another surge of Covid-1 9 impacted City operations and work on capital projects were either stopped or slowed due to personnel reductions and implementation of fiscal conervation measures. As a result the REP was delayed in being solicited.

The project was solicited on June 28, 2021 and Staff made contact with vendors that previously stated that they were interested in the project.

No proposals were received from interested vendors by the REP deadline. During the July 20, 2021 City Council meeting the City Council made the finding that pursuant to Public Contract Code 20166, no bids were received by the specified deadline and the City Council can dispense with any further public bidding for the procurement. Additionally, the City Council made thefinding that the City would not gain a competitive advantage by further bidding and Staff could contract for the work more economically or efficiently by negotiations pursuant to Avalon Municipal Code Sections 3-4.111(c) and 3-4.206 (e).

GOAL ALIGNMENT: Infrastructure reliability and safety.

FISCAL IMPACTS: The required match of $67,300 has been budgeted to account #10470- 6648. Staff time on the construction of the project will count towards the City’s in-kind match.CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: The Waste Tank Pump-Out and Freshwater Eill-Up Float Replacement Project will not be constructed, and the grant agreement will be terminated.

FOLLOW UP ACTION: Execute revised procurement contract.

ADVERTISING, NOTICE AND PUBLIC CONTACT: This item was properly listed on the posted agenda pursuant to the Brown Act.

ATTACHMENTS:
- July 20, 2021 Staff Report- July 20, 2021 Memo re: Supplemental Information for Staff Report- Minutes from July 20, 2021

CITY COUNCILIHOSPITAL BOARD OF TRUSTEES MINUTES
SEPTEMBER 21, 2021
PAGE 2

1. Minutes
Approved minutes from the August 31, 2021 Special City Council Meeting.

2. Warrants
Approved warrants in the amount of $535,507.31, one payroll in the amount of $203,451.95, two electronic fund transfers totaling $38,821.88 for a total expenditure of $777,781.14 for August 23, 2021 through September 3, 2021.

3. Information Technology Policy
Adopted the City of Avalon Information Technology (IT) Policy.

4. Contract for Townsend Public Affairs
Authorized the City Manager to execute a contract with TPA for grant management and legislative advocacy for a three-year term, with two additional one year renewal terms, at the cost of $5,000 per month for a total annual cost of $60,000.

5. Adopting 2019 California Fire Code Title 24, Part 9 and 2020 LA County Fire Code Title 32
Adopted Ordinance No. 1201-21 of the City Council of the City of Avalon amending Article 1 of Chapter 3 of Title 4 of the Avalon Municipal Code adopting the 2019 edition of the California Fire Code, also known as Part 9 of Title 24 of the California Code of Regulations as amended by Title 32 of the LA County Fire Code.

6. Contract Amendment with Transportation Concepts Approving Use of Transportation Concepts Mechanics to Maintain Public Transit Vehicles Authorized the City Manager to approve an amendment to the contract allowing:

A. Transportation Concepts to perform maintenance on the City’s transit vehicles using Transportation Concepts mechanics on City facilities: and B. Require Transportation Concepts to provide and maintain Certificate of Insurance that includes a Blanket Waiver of Subrogation for Workers Compensation.

7. Authorize an Increase in the Contract Sum for the Avalon Harbor Waste Tank Pump-Out and Freshwater Fill-Up Float Proiect
Authorized an increase of $13500 in the contract sum for the Avalon Harbor Waste Tank Pump-Out and Freshwater Fill-Up Float Project to cover sales tax portion of the agreement from the Harbor Fund 10470-6648.

8. League of California Cities Annual Conference Voting Opportunities Authorized the appointed voting delegate at the League of California Cities Annual Conference to approve the proposed bylaw amendments and resolutions.

CITY OF AVALON CITY COUNCIL
MEETING DATE: July 20, 2021 AGENDA ITEM:

ORIGINATING DEP: Public Works CITY MANAGER:

PREPARED BY:

SUBJECT:

Robert Greenlaw, Director of Public Works
Award Procurement Contract for Avalon Harbor Waste Tank Pump Out and Freshwater Fill-Up Float Project
RECOMMENDED ACTION(S): Award the procurement contract for the Waste Pump-Out and Freshwater Fill-Up Float Replacement Project to the proposer that meets the best competitive value requirements that were stipulated in the Request for Proposals issued June 28, 2021 REPORT SUMMARY: The City submitted a grant application in 2017 to the California Division of Boating and Waterways to renovate the existing harbor waste tank pump-out and water fill-up facility located adjacent to the fuel pier in Avalon Harbor. Staff was notified the grant was awarded in the amount of $196,200, with a $67,300 required match.

The Avalon City Council accepted the grant on April 2, 2019 and budgeted the required match of $67,300 to account 10470-6648. Staff1 utilizing our on-call engineering firm ESG Engineering, designed the plans for the float, associated equipment and the landside improvements to support the new float.

City Council authorized the solicitation of a request for bids at the November 10, 2020 CityCouncil meeting. During that time another surge of Covid-19 impacted City operations and work on capital projects were either stopped or slowed due to personnel reductions and implementation of fiscal conservation measures. As a result the RFP was delayed in being solicited.

The project was solicited finally on June 28, 2021 and Staff made contact with vendors that previously stated that they were interested in the project. It is important to note that this procurement is a highly specialized type of work that will fabricate a float to the City’s specifications — with likely a small group of bidders that have proven experience and expertise to complete the specified product in the relatively quick time frame. Additionally, the vendor must coordinate with City Staff during the production to facilitate work that City Staff is scheduled to complete before the float is enclosed.

These conditions are not
therefore based on AMC
‘Best Competitive Value”
but is not limited to, price,
The City published the
well suited to a “Lowest Bidder” type of procurement. The award is Section 3-4.106(c) - “Best Competitive Value”. Under this section, means a value determined by evaluation of criteria that may include, features, functions, lifecycle costs, experience, and past performance. requirements for proposers that defined the terms, conditions and specifications for services, supplies and equipment required by the City and the award is based on the requirements in the solicitation.

The project was solicited through Public Purchase which is the City’s usual resource to solicit for bids or proposals on a nationwide basis. The results of the solicitation are due after the deadline of this staff report so supplemental information will be provided prior to the City Council meeting, including a financial analysis and bid tabulation.

GOAL ALIGNMENT: Infrastructure reliability and safety.

FISCAL IMPACTS: The required match of $67300 has been budgeted to account #10470- 6648. Staff time on the construction of the project will count towards the City’s in-kind match.

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: The Waste Tank Pump-Out and Freshwater Fill-Up Float Replacement Project will not be constructed, and the grant agreement will be terminated.

FOLLOW UP ACTION: Execute procurement contract.

ADVERTISING, NOTICE AND PUBLIC CONTACT: This item was properly listed on the posted agenda pursuant to the Brown Act.

ATTACHMENTS: Bid summary and funding analysis under separate cover.

CITY COUNCIL MINUTES
JULY 20, 2021
PAGE 2

GENERAL BUSINESS

3. First Reading of an Ordinance Establishing Procedures for Expediting Permit Processing for Electric Vehicle Charging StationsIntroduced and waived all readings of an ordinance of the City Council of the City of Avalon, adding Chapter 4 to Title 4 of the Avalon Municipal Code relating to an expedited, streamlined permitting process for electric vehicle charging stations.

Motion to approve made by Lisa Lavelle, seconded by Michael Ponce. (All Ayes)

4. First Reading of an Ordinance of the City of Avalon Amending Title 5, Chapter 5, Article 11 and Title 5, Chapter 5, Article 14 of the Avalon Municipal Code, Banning Commercial Operation of Personal Assistive Mobility Devices,Electrically Motorized Boards, Low-Speed Vehicles and Motorized Scooters in Avalon
Introduced and waived all readings of an ordinance of the City of Avalon amending Title 5, Chapter 5, Article 11 and Title 5, Chapter 5, Article 14 of the Avalon Municipal Code banning commercial operation of personal assistive mobility devices, electrically motorized boards, motorized scooters and Segways in Avalon.Motion to approve made by Michael Ponce, seconded by Yesenia De La Rosa. (All Ayes)

5. Award Procurement Contract for Avalon Harbor Waste Tank Pump-Out and Freshwater Fill-Up Float Project
Recommended Action
City Council:
1) Made the finding that pursuant to Public Contract Code 20166, that no bids were received by the specified deadline and the City Council can dispensewith any further public bidding for the procurement. 2) Made the finding that the city would not gain a competitive advantage by further bidding and can contract for the work more economically or efficiently by negotiations pursuant to Avalon Municipal Code Sections 3-4.111(c) and3-4.206 (e). 3) Directed the City manager to negotiate a contract for the procurement not to exceed S135,000.

Motion made by Michael Ponce, seconded by Anni Marshall. (All Ayes) CLOSED SESSION - 6:35 — 7:01 p.m.

Following the appropriate announcement of the Closed Session items the City Council went into Closed Session to discuss the following:

CITY OF AVALON CITY COUNCIL
MEETING DATE: May 17, 2022 AGENDA ITEM: ________ ORIGINATING DEP: Administration CITY MANAGER: 13U4/-t PREPARED BY: Audra McDonald, Administrative Analyst
SUBJECT: Approve the Resolution Supporting Submittal of an Application to the State of California’s State Active Transportation Grant Program Cycle 6
RECOMMENDED ACTION(S): (1) Approve the Resolution supporting the ATP Cycle 6 grant application. 2) Approve the submittal of the ATP Cycle 6 grant application for the Five-Corners Project.REPORT SUMMARY: Since 2018, work has proceeded on developing the construction contract documents to implement the reconstruction of the five corners intersection including the roadway segments of Tremont Avenue and Avalon Canyon Road in the near vicinity of the intersection.

The project proposes to construct new permanent sidewalks, median safety islands, traffic calming (mini-roundabouts) and lighting in order to provide safer operations for all users. The total project is .25 miles in length.The existing grant funding for the project is Local Transportation Funds via Los Angeles County Metropolitan Transportation Authority. Total grant funds:
• $1736424.00 Metro LTF• $ 485,204.00 City of Avalon Match• $2,221,628.00 Total Grants It is known that existing grant funds are not adequate to complete the project. City staff has applied in prior State ATP Cycles for additional funds without success.

Another round of State ATP Cycle funds has been announced and staff feels that the City will have a stronger application now that an Active Transportation Plan has been adopted by the City Council.GOAL ALIGNMENT: City Infrastructure: Roadways, ADA Improvements, And Pedestrian Improvements.

FISCAL IMPACTS: Project 180003 is included in the 2021-22 budget under Page 10 of theCapital Improvement Program. An additional financial analysis will be included if the applicationis awarded.

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: Critical infrastructure will continue to be deficient and the possibility of additional grant funds may be lost.

FOLLOW UP ACTION: Prepare grant application, obtain letters of support, and submit application by due date.

ADVERTISING, NOTICE AND PUBLIC CONTACT: This item was properly listed on the posted agenda pursuant to the Brown Act.

ATTACHMENTS: Resolution
RESOLUTION NO.____________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AVALON SUPPORTING THE APPLICATION TO THE STATE OF CALIFORNIA’S STATE ACTIVE TRANSPORTAION GRANT PROGRAM CYCLE 6
WHEREAS, the City Council of the City of Avalon will apply for grant funding from the State of California Department of Transportation through the State ActiveTransportation Program to construct pedestrian, traffic calming and bicycle projects located at the area known as “Five-Corner’ in the City of Avalon; and WHEREAS, the City of Avalon’s application through the State Active Transportation Program will be critical to assist in the completion of the project.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Avalon as follows:

1. The City Manager or designee is authorized to sign required grant application documents.

2. The City Manager or designee is authorized to submit the application to the California State Active Transportation Grant Program.

Passed, Approved and Adopted on the 171b day of May, 2022.I, the undersigned, hereby that the foregoing Resolution Number was duly adopted by the City Council of the City of Avalon following a roll call vote:

Ayes:

Noes:

Absent:

Ann H. Marshall. Mayor
Attest:

Gabrielle Morones, Deputy City Clerk

CITY OF AVALON CITY COUNCIL
MEETING DATE: May 17, 2022 AGENDA ITEM: 1
ORIGINATING DEP: Finance CITY MANAGER: aM
PREPARED BY: Matthew Baker, Finance Director
Audra McDonald, Administrative Analyst
SUBJECT: Approval of an Additional One-Time $50 Commuter Book Subsidy for the Month of June 2022 and Extension of Regular $85 subsidythrough December 31, 2022 RECOMMENDED ACTION(S): Approve an additional one-time $50 commuter book subsidy for the month of June 2022 and extend the existing regular $85 subsidy through December 31, 2022.

REPORT SUMMARY: The City of Avalon annually applies for Proposition A Incentive Funds through the Los Angeles County Metropolitan Transportation Authority (Metro). The City has received $1,000,000 in Proposition A Incentive Funds annually over the last several fiscal years, with $700,000 earmarked for the commuter subsidy program, and $300,000 earmarked for the City’s land transit system. In addition to these annual funds, the City received an additional$364,878 in Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) funds through the Proposition A Incentive Program. These CRRSAA Funds must be spent in thecurrent fiscal year for the City’s commuter or land transit programs and cannot be used for capital improvements.

Prior to the pandemic. from July 2016 through February 2020, the City subsidized approximately 800 commuter books per month. In response to the initial pandemic-related restrictions on non essential travel, subsidized commuter book activity decreased to approximately 300 books per month from the period of March 2020 through May 2020. From June 2020 through December 2021, commuter activity was down approximately 25% from pre-pandemic levels, with the City subsidized approximately 600 commuter books per month. As a result of the CRRSAA Funds and the decreased commuter activity, Staff recommended increasing the regular commuter booksubsidy from $70 to $85 to offset the impact of operator fare increases to residents and anadditional one-time $100 subsidy for the month of January 2022 in order to fully utilize these funds. City Council approved Staff recommendations at the December 7, 2021 City Council Meeting.

During the month of January 2022, the City subsidized 2,340 commuter books totaling $435,734in subsidy expenditures. As a result of the additional one-time $100 subsidy, commuter book purchases decreased to approximately 300 books per month for February 2022 through April 2022. Through April 2022, the City has spent $804,987 on the commuter subsidy program with a further $259,891 available to spend over the last two months of the fiscal year. Staff recommends offering an additional one-time $50 subsidy for the month of June 2022 in order to fully utilize awarded funds in the current fiscal year. It is difficult to assess the increased subsidy’s impact on resident commuter demand and it is possible that the increased subsidy could resultin the subsidy costs exceeding available funds, requiring General Fund reserves to cover any excess amounts. Staff does not anticipate this scenario at the proposed subsidy level butexpenditures would exceed available funds by approximately $100 thousand if subsidizedcommuter book sales matched January 2022 levels.Staff will continue to monitor activity to assess whether the increased subsidy amount issustainable based on commuter activity and recommends extending the current regular subsidyamount of $85 per commuter book through December 2022. Staff will also continue to work with Metro to identify any additional pandemic-related assistance eligible for assignment under theProposition A Incentive Program in future fiscal years.

GOAL ALIGNMENT: Not aligned
FISCAL IMPACTS: No impact unless resident commuter demand exceeds estimates which could then result in a required subsidy from the General Fund for amounts in excess of Proposition A Incentive Funds.

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: The City will not be ableto utilize CRRSAA Funds that are required to be spent in the current fiscal year.

FOLLOW UP ACTION: Notify Catalina Express of Council Action.

ADVERTISING, NOTICE AND PUBLIC CONTACT: This item was properly listed on the posted agenda pursuant to the Brown Act.ATTACHMENTS: N/A

CITY OF AVALON CITY COUNCIL
MEETING DATE: May 17, 2022 AGENDA ITEM: 3
ORIGINATING DEP: Administration CITY MANAGER2LL
PREPARED BY: Devin Hart, Administrative Analyst
SUBJECT: Consideration of Transportation Permit— Sara Mintz and Juan Saldana, dba Avalon Local Tour
RECOMMENDED ACTION: Discuss and provide direction to Staff. If consensus to approve is reached make the affirmative finding that the criteria set forth in Avalon Municipal Code Section 5-14.04 has been meet.

REPORT SUMMARY: On May 5, 2022 Sara Mintz and Juan Saldana, dba Avalon Local Tour, submitted a Transportation Permit application to the City of Avalon to perform guided autoette tours.

The proposed route includes areas from Pebbly Beach Road, Mt. Ada, Avalon Canyon Road, Wrigley Memorial, Country Club Drive, Stage Coach Road, Casino Way and Descanso Beach.

It is stated in the application that the business wilt operate year-round, from 8:00 a.m. to 8 p.m. daily. The business will not have a brick-and-mortar location and be web based. Customer’s utilizing the service will be picked-up and dropped off at prearranged locations — such as hotels. vacation rentals, etc. The operation plan includes use of two golf carts — One existing residential permit, and the other a new commercial permit. The commercial permit is pending approval from the vehicle hearing officer. Upon approval, the commercially permitted vehicle will have off street overnight parking.

Avalon Municipal Code Section (AMC) 5-14.04 requires a hearing before the City Council to determine whether a transportation permit should be approved. Per the AMC Sec. 5-14.04 (b) Permits: Applications: Requirements.*
(b) The Council may grant a permit upon the proposed terms or upon terms other than those proposed. The Council shall make the initial permit grant, and the Vehicle Clerk may thereafter renew a permit if he is able to make affirmative findings based on the criteria set forth below. If the Vehicle Clerk is unable to make the affirmative findings, he shall so advise the permit holder and set a hearing date before the Vehicle Hearing Officer, whose decision on the renewal shall be appealable to the City Council in accordance with the procedures set forth in Title 1, Chapter 4.:
(1) The applicant has presented facts demonstrating a necessity for the requested vehicle(s).
(2) The requested vehicle(s) is appropriate for the intended use and necessaiy, for the proper functioning of the applicant’s enterprise; (3) The requested vehicle(s) will not have a deleterious impact on traffic congestion, traffic safety, noise or air pollution;
(4) In view of the size and nature of the streets of the City and the character of the City itself the requested vehicle(s) will not have a deleterious impact on the pub/ic health, safety, and we/fare;
(5) There is no more suitable alternative vehicle than the vehicle(s) requested by the applicant that can satisfy its requirements.
(6) In the case of renewal only, the requested vehicle has been used and continues to be used in accordance with the terms and conditions of the permit.

At this time, two similar golf cart tour business are in possession of transportation permits — You be Driven and Catalina Guided Golf Cart Tours. These two operations have had negligible impacts to traffic and/or congestion. No accidents or incidents resulting from the business have been reported to the City.

If approved by the City Council, the applicant must additionally meet the following conditions before a permit may be issued:
• Provide written permission from the Catalina Island Company to operate on private roads,
• Agree to limit pick up and drop off locations to hotels, rental units, or requested locations not to include the Cabrillo Mole, and
• Provide proof of insurance per the Avalon Municipal Code.

Upon renewal each year the Vehicle Clerk will evaluate if the business model has adversely added to the traffic, safety, and congestion in Avalon.

FISCAL IMPACTS: Potential for nominal additional revenue to the City through taxes.

CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: N/A
FOLLOW UP ACTION: Implement City Council direction.

ADVERTISING, NOTICE AND PUBLIC CONTACT: Pursuant to the Brown Act.

ATTACHMENTS:

1. Transportation application
City of Avalon
Application
For
Transportation Permit
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Date of Incorporation - Place of Tncorporation ______ Address of Business Corporate Officers:

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Assignment:

Applicant agrees not to assign permit, (if granted), in any manner whatsoever, in whole or in part, without prior written permission of the Avalon City Council. Any attempted assignment in violation of this SectionS shall be deemed void with no force or effect.

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Proposed Dates/Hours of Operation:

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Describe routes (attach map if necessary
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If my Permit is Granted;
I agree to provide liability insurance naming the City of Avalon as co-insured ri the amountsspecified in the Avalon Municipal Code and keep such policy in force and effect during the entire term of the permit. Such policies of insurance shall contain provisions which prohibit modification, cancellation or lapse without thirty (30) days prior written notice to the City of Avalon.

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I agree to hold harmless, indemnify and dcfcnd the City of Avalon, its officers and employees from and against any and all claims, actions, damages, liabilities, expenses and judgments (including reasonable attorney’s fees) arising out ofur relaung to the business Or dcttvlties wh:ch I conduct pursuant so this permit.

Applicant nateJc2
Date Received 5/fl!L0
Council Action________
Permie Application Fee Paid
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Insurance
City Mgr:

AVALON LOCAL TOUR
Catalina’s Premier Golf Cart Experience
Explore Catalina Island Local Style. Providing visitors of Avalon a cherished golf can experience and keep them coming back time after time.

Travel through the extraordinary small town ofAvalon, California. Enjoy the fresh ocean air as we cruise along the coastline of Pebbly Beach. We will share the beautiful nature, fun ocean facts, stuniiing vistas, and rich history of Santa Catalina Island.

Frequently our guests experience golf cart rides sold out, and are in search of other options. Avalon local tour is the solution. Another outlet to serve visitors on our beautiful island and alleviate the stress of locking in a golf cart.

We will be completely mobile and web based. Conveniently picking up, and dropping off from guests desired location; anywhere in Avalon.

At this time, we are seeking two transportation permits. We will be securing off street parking at ‘9/’? F/Jc &iiyn4’for one vehicle and our personal vehicle for the second.

Prices will be equal to tours alike to not under-cut any other businesses.

Price: $275 for a two hour tourHours of operation: 8 am — 8 pinAvalon Local tour route will start cruising down pebbly beach road, up and over Mt Ada.

Continuing up Avalon Canyon road to the Wrigley Mausoleum. The second portion willfollow up and around Country Club drive to the famous Stage Coach Road, downChimes Tower, finishing with a lovely drive down Casino Way to Descanso Beach Club.