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3. Monitor construction activities on a full-time basis while the contractor or subcontractors are at the project site. It two (2) sets of construction crews are at the project site completing crack sealing, pavement striping or other activities then the Holt Group shall position two (2) personnel at the site to inspect the work completed by each crew. The installation of materials in conformance with the plans and specifications shall be verified.
A detailed construction activity report shall be completed at the end of each day's construction activities. The weather conditions, daily work description, list of construction personnel at the project site, list of equipment at the project site, hours at which construction work commenced and ended, any unusual occurrences, quantities of materials placed at the site, safety issues and similar items are to be included in the construction activity report.
4. Respond to Request for Information (RFI) forms submitted by the contractor. Review RFI responses with the Brawley Public Works Staff prior to forwarding the RFI responses to the contractor.
5. Maintain spreadsheets on the quantity of materials placed in the field. The spreadsheets will be updated each day work occurs at the site. As the contractor's payment compensation is determined by the bid unit price for each unit installed in the field, it is important that the quantity of materials placed be carefully monitored each day by the project Resident Engineering and Construction Management Staff to accurately document and monitor the project construction costs and budget. The Resident Engineering and Construction Management Staff shall meet with the Brawley Public Works Staff on a weekly basis and review the project costs and budget.
6. Review the contractor's weekly work schedule. Ensure that notices to residents, schools, businesses, the fire department, the police department, city hall, the public works department and all others affected by the street maintenance improvements are distributed the week prior to commencing the work effort. Ensure that hard copy notices are distributed to residents and businesses 48 hours befare work commences to restrict parking on streets ready for improvements.
7. Maintain open communication between the residences, businesses, school staff, police department, fire department, city hall,. the public works department and all other agencies during the construction project to answer questions, give updates on scheduling and provide a positive relationship with the public during the street maintenance improvement project.
8. Prior to the commencement of an SS-1H or slurry sealcoat application the Resident Engineering and Construction Management Staff is to ensure all water valve covers, sanitary sewer manholes, gas valve covers, survey covers, and all other utilities are protected with a temporary covering. After the SS-1 H or slurry sealcoat is installed the Resident Engineering and Construction Management Staff is to ensure the utility cover temporary covering is removed and that the utility cover is fully visible.
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9. Review traffic control established by the contractor for each street section to receive maintenance improvements. Enforce that traffic control is maintained during the street improvement project.
10. Review the monthly payment request submitted by the contractor. Review that the monthly payment request is accurate and correct prior to forwarding it to the Brawley Public Works Staff for approval.
11. A final review will be completed at the conclusion of the project construction. The Holt Group will prepare a "punch list" of any remedia! items to be completed by the contractor prior to project acceptance by the City of Brawley.
12. Review change orders submitted by the contractor. Forward reviewed change orders to the Brawley Public Works Department for review and approval. At the conclusion of the project, the preparation of a "balancing change order", to modify the material bid quantity to the actual quantity placed during the construction period is to be prepared. The contractor will be compensated for the actual amount of material installed during the construction project.
It is assumed that the City of Brawley will provide Labor Standards Compliance Monitoring for this project.
The Holt Group proposes to provide Resident Engineering and Construction Management Services for the not to exceed lump sum of $138,600.00. lf questions arise, please contact me. Thank you for the opportunity to submit this proposal to the City of Brawley.
Sincerely,
~ - ,.- ~-k"-H:
Secretary/ CFO
The Holt Group, Inc.
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1 CITY OF BRAWLEY
CONSULTING SERVICES CONTRACT
CONSTRUCTION MANAGEMENT & INSPECTION SERVICES
FOR
SOUTHWEST BRAWLEY STREET
MAINTENANCE IMPROVEMENTS PROJECT PHASE II
1.0 The Parties. This Contract is made by and between the City of Brawley (“City”) and The Holt Group, Inc. (“Consultant”).
2.0 Paragraph Headings and Definitions. Paragraph headings in this Contract are for convenience only and are not to be construed to define, limit, expand, interpret, or amplify the provisions of this Contract. When initially capitalized in this Contract or amendments hereto, the following words or phrases shall have the meanings specified:
2.1 Professional Efforts. Those efforts that a competent, experienced, and prudent Consultant would use to perform and complete the requirements of this Contract on time, exercising the degree of care, competence, and prudence customarily imposed on a Consultant performing similar work in the State of California.
2.2 Contract. This Contract, including all referenced documents, between City and Consultant for the performance of the Work, and any subsequent written modifications or amendments executed by City and Consultant.
2.3 Consultant. The legal entity that executes this Contract with the City to perform the Work.
2.4 Force Majeure. An act of God, or event beyond the control of a party, including an act or omission of government, act or omission of civil or military authority, strike or lockout, act of a public enemy, war, blockade, insurrection, riot, epidemic, landslide, earthquake, fire, storm, lightning, flood, washout, or civil disturbance which could not have been avoided through the exercise of reasonable care and prudence.
2.5 Contract Manager. The title of the person designated by the City to be its representative with authority to act for the City regarding this Contract and the Work of the Consultant.
2.6 Work. All or a part or phase of the obligations undertaken by the Consultant according to the Contract.
3.0 Time of Contract. The Consultant shall perform the services required under this Contract within 120 calendar days from the date of the Contract.
4.0 Scope of Work. The city hereby retains and engages the Consultant, and the Consultant accepts such engagement to Provide Construction Management for the Southwest Brawley Street Maintenance Improvements Project Phase II.
4.1 Details of the Scope of Work are contained in the Proposal to provide Construction Management and Inspection Services for the Southwest Brawley Street Maintenance Project Phase II dated January 13, 2026, attached herewith as Exhibit A and made a part hereof by this reference.
5.0 Manner of Compensation. For the performance of services rendered under this Contract, the City will pay the Consultant a fee based on the following, subject to the limitation of the maximum expenditure provided herein:
5.1 Maximum Fee. The maximum fee under this Contract is One Hundred Thirty-Eight Thousand Six Hundred Dollars ($138,600.00) without prior express written consent of the City. If the consultant anticipates the need for services in excess of the amount, the City shall be notified immediately in writing. Details of the Fee Proposal are included as part of Exhibit A.
5.2 Extra Work. Consultant shall not perform extra work of any kind without prior express written consent of City. 5d.2
2 6.0 Payment
The city shall pay the consultant for services rendered by the consultant hereunder based on a monthly invoice for the period ending on the final day of the month. The city shall pay each invoice within 30 days after receipt. Invoices shall include, the project description, the description and breakdown of costs, the month such costs were incurred, total expenses billed to date, invoice number, and invoice date. All invoices shall be sent to the City. Attention: Romualdo Medina. See Section 22.2, “Notice and Communications”.
6.1 Compensation. Monthly progress payments shall be billed and based on work completed. The progress of the work and payment due shall be recorded on a Progress Payment Form, the appearance of which will be approved by the City. See Exhibit B for a sample of a typical invoice.
6.2 Billing Dispute. In the event the City disputes the amount of an invoice, it shall notify the Consultant within 20 days of receipt of the invoice and otherwise timely pay any undisputed portion of the invoice.
7.0 Records and Audits
7.1 Books and Records. Consultant shall maintain all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services, or expenditures and disbursements charged to City.
7.2 Audit. The city may perform an audit of the time-based and reimbursable expense costs of any given Work Order.
The city shall not have access to the Consultant’s composition of fixed overhead rates or lump sums, the financial makeup of payroll burdens, or any costs expressed as a percentage of direct labor costs.
7.3 Document Retention. Consultant shall maintain all above documents and records, which demonstrate performance under this Contract for a minimum of three years, or for any longer period required by law, from the date of termination or completion of this Contract.
8.0 Control of Work.
Consultant shall report on all Work performed for City through City’s Contract Manager and any designated representatives.
Consultant shall comply with any coordination and completion criteria specified by City, and shall diligently prosecute each phase of the Work.
9.0 Ownership of Documents
9.1 Documents. Original project documents, including reproducible record prints of drawings, calculations, estimates, designs, specifications, field notes, and data prepared in the course of performing the Work, with the exception of those standard details and specifications regularly used by the Consultant in its normal course of business shall upon payment of all amounts rightfully owed by the City to the Consultant herein become the property of City. All final reports, including reconnaissance reports, pre-feasibility reports, and feasibility reports, shall be the property of the City. The consultant may retain copies of the said documents and reports. Any reuse or modification of such Documents for purposes other than those intended herein shall be provided at the City’s sole risk and without liability to the Consultant.
9.2 Confidentiality. In performing services under this Contract, the Consultant will gain access to proprietary information concerning the City’s business and operations. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and data either created by or provided to the Consultant in connection with the performance of this Contract shall be held confidential by the Consultant. Consultant shall not, without the prior written consent of City, use such materials for any purposes other than the performance of the work under this Contract. Nor shall such materials be disclosed to any person or entity not connected with the performance of the work under this Contract. Nothing furnished to Consultant, which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use the City’s name or insignia, photographs relating to the project for which Consultant’s services are rendered, or any publicity pertaining to the Consultant’s services under this Contract in any magazine, trade paper, newspaper, television or radio production or other similar media without the prior written consent of City.
It is hereby agreed that the following information is not considered to be confidential under this Agreement:
a. Information already in the public domain:
b. Information disclosed to Consultant by a third party who is not under a confidentiality obligation:
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3 c. Information developed by or in the custody of Consultant before entering into this Agreement. d. Information developed by the Consultant through its work with other clients; and e. Information required to be disclosed by law or regulation includes, but is not limited to, subpoena, court order, or administrative order.
10.0 Duties of Consultant
10.1 Degree of Care. In the performance of its services hereunder, Consultant shall exercise that degree of skill and judgment commensurate with that which is normally exercised by recognized professional Consultants in the same discipline, with respect to services of a similar nature, in accordance with all applicable rules, laws and regulations at the same time and in the same locality.
10.2 Licenses. Consultant represents to City that it has all licenses, permits, qualifications, insurance, and approvals of whatsoever nature, which are legally required of Consultant to practice its profession.
Consultant represents to City that Consultant shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Contract, any licenses, permits, insurance, and approvals which are legally required of Consultant to practice its profession.
10.3 Correction of Improper Services. Consultant shall perform or correct any portions of the work not performed in accordance with the standard of care specified herein if the Consultant is notified in writing of nonconformity within a reasonable time after discovery by City of the nonconforming service.
The consultant shall perform the remedial services at no additional cost to the City.
11.0 Suspension
The city may, upon 10 calendar days written notice, direct the Consultant to suspend performance on any or all of the services under the Contract for a specified period of time. If any suspension is not occasioned by the fault of Consultant, this Contract may be supplemented to compensate Consultant for extra costs incurred due to the suspension, provided that any claim for adjustment is supported by appropriate cost documentation, subject to audit, and asserted within twenty days after the date City issues a notice for resumption of the services under the Contract. Consultant shall be entitled to an extension to any work schedule to the extent a delay was caused by the suspension. Upon receipt of a suspension notice, Consultant shall (1) discontinue the Work under the Contract, (2) place no further orders or subcontracts, (3) suspend all orders and subcontracts, (4) protect and maintain all completed Work, and (5) otherwise mitigate City's costs and liabilities for those areas of work suspended. Services under the Contract shall be resumed by the Consultant after such suspension on 10 calendar days' written notice from the City.
12.0 Termination
Under the terms hereunder, City may, at any time and for any reason, terminate this Contract upon not less than 21 days written notice to Consultant. Under such circumstances, this Contract shall terminate on the date set forth in such written notice.
12.1 Termination for Cause. If Consultant shall fail to diligently, timely, and expeditiously perform any of its respective obligations under this Contract, and such failure shall have continued for 10 days after City has delivered written notice thereof to Consultant; or Consultant shall make a general assignment for the benefit of its creditors, a receiver or trustee shall have been appointed on account of Consultant's insolvency, Consultant otherwise shall be or become insolvent, or an order for relief shall have been entered against Consultant under Chapter 7 or Chapter 11 of Title 11 of the United States Code, or Consultant otherwise shall be in default under the Contract and such default shall not have been cured within 10 days after City has delivered written notice to Consultant; then, City, upon 7 days prior written notice to Consultant, immediately may terminate this Contract for a cause.
12.1.1 Upon termination of this Contract for cause, Consultant shall be entitled only to payment of that portion of services performed for which Consultant has not been paid and which Consultant has satisfactorily performed, up to the date of such termination; provided, however, that: No allowance shall be included for any out-of-pocket costs and expenses incurred by Consultant because of the termination of this Contract.
12.1.2 Nothing contained in this Contract shall limit in any manner any rights or remedies otherwise available to City because of a default by Consultant under this Contract, including, without limitation, the right to seek full reimbursement from Consultant for all costs and expenses 5d.2
4 incurred or to be incurred by City because of Consultant's default hereunder and which City would not have otherwise incurred if Consultant had not defaulted hereunder.
12.2 Termination for Convenience - If the City terminates this Contract for reasons other than those set forth above, Consultant shall be entitled to payment for services performed which have not been paid to Consultant and which shall compensate Consultant for all services actually and satisfactorily performed by Consultant up to the date of such termination.
12.3 Duties of Consultant Upon Termination - Upon any termination of this Contract Consultant shall:
12.3.1 Discontinue all of its services under the Contract from and after the date of the notice of termination, except as may be required to complete any item or portion of work to a point where discontinuance will not cause unnecessary waste or duplicative work or cost.
12.3.2 Cancel, or, if so directed by City, transfer to City all or any of the commitments and Contracts made by Consultant relating to the services, to the extent they may be canceled or transferred by Consultant.
12.3.3 Transfer to City in the manner, to the extent, and at the time directed by City, all supplies, materials, and other property produced as a part of, or acquired in the performance of Consultant's services.
12.3.4 Take such other actions as the City may reasonably direct.
13.0 Insurance
Without limiting Consultant’s indemnification of City, and before the commencement of Work, Consultant agrees to provide insurance per the requirements set forth herein. If the Consultant uses existing coverage to comply with these requirements and that coverage does not meet the requirements, the Consultant agrees to modify the existing coverage to do so. The following coverages will be provided by the Consultant and maintained on behalf of the City and in accordance with the following requirements:
13.1 Commercial General Liability Insurance. Commercial General Liability coverage is at least as broad as the Insurance Services Office form CG 00 01. No claims made or modified occurrence forms will be accepted. Total limits for all coverages shall be no less than $1,000,000 per occurrence and $2,000,000 general aggregate. Coverage shall include bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability. The policy shall be endorsed to provide that the City of Brawley and its officers, officials, employees, and agents are additional insureds. This provision shall also apply to any excess policies.
13.2 Business Auto Liability Insurance. Business auto coverage at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of Consultant arising out of or in connection with the Work to be performed under this Agreement, including coverage for any owned, hired non-owned, or rented vehicles. Limits shall be no less than $1,000,000 combined single limit per accident.
13.3 Workers’ Compensation. Workers’ Compensation coverage providing workers’ compensation statutory benefits as required by law and Employer’s Liability Insurance of no less than $1,000,000 per accident.
Consultant shall submit to City, along with the certificate of insurance, a Waiver Subrogation endorsement in favor of City of Brawley, its officers, agents, and employees. (This provision shall not apply if the Consultant has no employees performing work under this Agreement, however, in such case, the Consultant must sign the “Certificate of Exemption from Workers Compensation Insurance” included below.
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5 13.4 Professional Liability Insurance. Professional Liability (Errors and Omissions) insurance covering the services to be performed in connection with this Agreement shall be maintained with policy limits of not less than $1,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this agreement, and the Consultant agrees to maintain continuous coverage for a period no less than three years after completion of the services required by this Agreement.
14.0 Indemnification
For Professional Liability
When the law establishes a professional standard of care for Consultant’s Services, to the fullest extent permitted by law, Consultant shall indemnify, protect, and hold harmless City and all of its officials, employees, and agents (“Indemnified Parties”) from and against any losses, liabilities, damages, costs, and expenses, including legal counsel’s fees and costs to the extent same are caused in whole or in part by any negligent or wrongful act, error or omission of Consultant, its officers, agents, employees or sub-consultants (or any agency or individual that Consultant shall bear the legal liability thereof) in the performance of professional services under this agreement.
For other than Professional Liability
Other than in the performance of professional services and to the full extent permitted by law, Consultant shall indemnify, and hold harmless City, and any of its employees, officials, and agents from and against any liability (including for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceeding, losses, expenses or costs of any kind, whether actual, alleged or threatened, including legal counsel fees and costs, court costs, interest, defense costs, and expert witness fees), where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of this Agreement by Consultant or by any individual or agency for which Consultant is legally liable, including by not limited to officers, employees or subcontractors of Consultant.
15.0 Relationship of Parties
Consultant shall, for all purposes, be an independent contractor as to City, and under no circumstances shall the relationship of employer and employee arise between the agents or employees of Consultant and City.
16.0 Assignment and Subcontracting
16.1 Non-Assignment. A substantial inducement to the City for entering into this Contract is the professional reputation, experience, and competence of the Consultant. Assignments of any or all rights, duties, or obligations of the Consultant under this Contract will be permitted only with the express consent of the City. Consultant shall not subcontract any portion of the work to be performed under this Contract without the written authorization of City. If the City consents to such subcontract, the Consultant shall be fully responsible to the City for all acts or omissions of the subcontractor. Nothing in this Contract shall create any contractual relationship between the City and subcontractor nor shall it create any obligation on the part of the City to pay or to see to the payment of any monies due to any such subcontractor other than as otherwise is required by law.
16.2 Successors and Assigns. This Contract shall be binding upon the successors and assigns of each of the parties hereto in respect to all of the provisions hereof. Nothing herein shall be construed as creating any personal liability on the part of any officer or agent of any of the parties, nor shall it be construed as giving any rights or benefits hereunder to anyone other than the parties to this Contract.
17.0 Laws and Regulations
The consultant will comply in the performance of the Contract with all laws and regulations applicable to the Consultant in its performance of the Contract.
18.0 Force Majeure
In the event either party by reason of a Force Majeure is rendered unable to perform its duties under this Contract then upon the party giving written notice of the particulars and estimated duration of Force Majeure to 5d.2
6 the other party within 5 calendar days after knowledge of the occurrence of the Force Majeure, the party may have the time for performance of its duties extended for the period equal to the time performance is delayed by the Force Majeure. The effects of the Force Majeure shall be remedied with all reasonable dispatch, and the party giving notice shall use Best Efforts to eliminate and mitigate all consequences. A Force Majeure for which notice has not been given shall be an unexcused delay.
19.0 Attorneys' Fees
If either party to this Contract shall bring any action, claim, appeal, or alternative dispute resolution proceedings for any relief against the other, declaratory or otherwise, to enforce the terms of or to declare rights under this Contract (collectively, an Action), the losing party shall pay to the prevailing party a reasonable sum for attorney's fees and costs incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling, or award (collectively, a Decision) granted therein. Any Decision entered in such Action shall provide for the recovery of attorneys' fees and costs incurred in enforcing such Decision. The court or arbitrator may fix the amount of reasonable attorneys' fees and costs at the request of either party. For the purposes of this paragraph, attorneys' fees shall include, without limitation, fees incurred in the following: (1) post-judgment motions and collection actions; (2) contempt proceedings; (3) garnishment, levy, and debtor and third party examinations; (4) discovery; and (5) bankruptcy litigation. "Prevailing party" within the meaning of this paragraph includes, without limitation, a party who agrees to dismiss an Action on the other party's payment of the sums allegedly due or performance of the covenants allegedly breached, or who obtains substantially the relief it seeks.
20.0 Governing Law and Venue
This Contract shall be interpreted in accordance with the substantive and procedural laws of the State of California. All actions or proceedings arising in connection with this Contract shall be tried and litigated exclusively in State court located in the County of Imperial, State of California, and Federal court located in the County of San Diego, State of California. The choice of venue is mandatory, thereby precluding the possibility of litigation between the parties with respect to or arising out of this Contract in any jurisdiction other than that specified in this paragraph. Each party hereby waives any right it may have to assert the doctrine of forum non convenes or a similar doctrine or to object to venue with respect to any proceeding brought in accordance with this paragraph and stipulates that the State and Federal courts located in the Counties of Imperial and San Diego, respectively, California, shall have in person jurisdiction and venue over each of them for the purpose of litigating any dispute or proceeding arising out of or related to this Contract. Each party hereby authorizes service of process sufficient for personal jurisdiction in any action against it at the address and in the manner for the giving of notice as set forth in this Contract.
21.0 Integration
This Contract and any exhibits hereto, as well as other documents referred to in this Contract, constitute the entire Contract between the parties with regard to the subject matter hereof and thereof. This Contract supersedes all previous Contracts between or among the parties. There are no Contracts, representations, or warranties between or among the parties other than those outlined in this Contract.
22.0 Authorized Representatives and Notices
22.1 Representatives. Before the commencement of the work under the Contract, the City and Consultant shall agree on the designation of a representative authorized to act on behalf of each party.
22.2 Notice and Communications. All communications relating to the day-to-day activities under this Contract shall be exchanged between the representatives of the City and the Consultant. All legal notices and communications required under or related to this Contract shall be in writing and shall be delivered personally or mailed by certified mail, postage prepaid, return receipt requested, to the representatives of City and Consultant identified below. Notice shall be effective on the date of delivery.
TO: City of Brawley TO: The Holt Group, Inc..
Romualdo Medina, Public Works Director James G. Holt, Secretary/CFO Operations 1601 North Imperial Avenue
180 South Western Avenue El Centro, CA 92243
Brawley, CA 92227 Phone: (760) 337-3883
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7 Phone: (760) 587-4047 Fax: (760) 337-5997
Fax: (760) 344-5612 E-mail:[email protected]
E-mail: [email protected]
22.3 A party may change or supplement the information exchanged concerning authorized representatives and notices by giving the other party written notice of the new information in the manner set forth above.
23.0 Waiver
The failure of the City to insist upon strict performance of any of the terms and conditions of this Contract, or to exercise or delay the exercise of any rights or remedies provided by this Contract or by law, or the acceptance of work or payment for work shall not release Consultant from any of the responsibilities or obligations imposed by law or by this Contract and shall not be deemed a waiver of any right of City to insist upon strict performance of this Contract. None of the provisions of the Contract shall be considered waived by either party except when such waivers are agreed upon in writing by the parties.
24.0 Survival of Obligations and Liabilities
The termination, cancellation, or acceptance of the work under the Contract shall not relieve Consultant of its obligations for work completed before the effective date of such termination, cancellation, or acceptance, nor shall it relieve Consultant of its liabilities at law or under this Contract.
25.0 Severability
If any provision of this Contract or the application thereof to any person or circumstance shall, at any time or to any extent, be invalid or unenforceable, the remainder of this Contract shall not be affected thereby, and each such provision shall be valid, and enforceable to the fullest extent permitted by law. However, if either party in good faith determines that the finding of illegality or unenforceability adversely affects the material consideration for its performance under this Contract such party may, by giving written notice to the other party, terminate this Contract.
26.0 Execution and Effective Date. This Contract has been executed by the duly authorized officers of the parties and shall be effective as of the 17th day of February 2026.
Dated: February 17, 2026. CITY OF BRAWLEY
By:_____________________________________
Rebecca Terrazas-Baxter Interim City Manager
The Holt Group, Inc. ATTEST:
By:__________________________ By: _______________________________ James G. Holt, Secretary/CFO Ana Gutierrez, City Clerk
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EXHIBIT A
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10 EXHIBIT B
Typical Monthly Invoice
Consultant’s Letterhead
City of Brawley
Project Title: Construction Management & Inspection Services for Southwest Brawley Street Maintenance Improvements Project Phase II.
Services from: (Date) to (Date)
Total Contract Amount
Previously Billed
Current Billing
Billed to Date
Amount Remaining
Total This Invoice
*Percent Completion shall be justified and be part of the invoice.
Attach backup information, if applicable.
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City of Brawley
City Council
February 17, 2026
Agenda Item No 5e
STAFF REPORT
To: City Council
From: Rebecca Terrazas-Baxter, City Manager
Prepared by: William Smerdon, City Attorney
Subject: Approval of Revised Mayor’s Message Provided Prior to Public Comments RECOMMENDATION:
Adopt the proposed revision to the Mayor’s Message provided prior to Public Comments at City Council meetings to include a prohibition on profanity and a requirement that speakers state both their name and residence when addressing the Council.
BACKGROUND INFORMATION:
During recent discussions, Council Member Grass suggested modifying the Mayor’s Message delivered prior to Public Comments to prohibit the use of profanity. Similar provisions are commonly included in the public comment guidelines or opening statements used by other municipalities and governing bodies.
In response to this suggestion, the City Manager, in consultation with Mayor Galvan, developed a proposed revision to the Mayor’s Message reflecting this change. While there is no legal requirement for City Council approval of the revised language, staff and the Mayor believe it is appropriate to seek Council direction and concurrence prior to implementation.
This item was previously brought to the City Council for consideration on January 6, 2026. At that meetings, the Council discussed the proposed profanity prohibition and also considered a recommendation by Mayor Pro Tem Kelley to add the requirement that speakers state their residence when providing public comment. The item was tabled to allow for further legal review of the residence requirement and to ensure that all Councilmembers could participate in the discussion. Following legal review, the City Attorney advised that the Council may request that speakers provide their residence, but speakers are not legally required to disclose it and may decline if they wish.
The proposed revision, including both the profanity prohibition and the option to request the speaker's residence, is intended to promote a respectful and orderly meeting environment while preserving the public’s right to address the Council.
FISCAL IMPACT:
There is no fiscal impact associated with the proposed action. Implementation would not require additional staffing, resources, or expenditures.
ALTERNATIVES:
1. Take no action and retain the current Mayor’s Message without modification. 5e
2. Approve the proposed language as presented.
3. Approve the proposed language without the residence requirement.
4. Direct staff to revise the proposed language further for Council consideration at a future meeting.
ATTACHMENTS:
1. Proposed Mayor's Public Comment Message
REPORT COORDINATED WITH (other than person preparing the staff report):
Staff, Title or Consultant, Agency
, , ,
REPORT APPROVAL(S):
Staff, Title or Consultant, Agency Status – Date of Status Rebecca Terrazas-Baxter, City Manager Approved - 2/10/2026 Silvia Luna, Finance Director Approved - 2/10/2026
5e
CURRENT LANGUAGE:
This is the time for the public to address the Council on any item not appearing on the agenda that is within the subject matter jurisdiction of the City Council. The Mayor will recognize you and when you come to the microphone, please state your name for the record. You are not allowed to make personal attacks on individuals or make comments which are slanderous, or which may invade an individual’s personal privacy. Please direct your questions and comments to the City Council.
PROPOSED LANGUAGE (January 6, 2026):
This is the time for the public to address the Council on any item not appearing on the agenda that is within the subject matter jurisdiction of the City Council. The Mayor will recognize you and when you come to the microphone, please state your name for the record. Speakers are expected to conduct themselves in a respectful and orderly manner.
Disruptive behavior and profanity is not permitted. You are not allowed to make personal attacks on individuals or make comments which are slanderous, or which may invade an individual’s personal privacy. Please direct your questions and comments to the City Council.
PROPOSED LANGUAGE (February 17, 2026):
This is the time for the public to address the Council on any item not appearing on the agenda that is within the subject matter jurisdiction of the City Council. The Mayor will recognize you and when you come to the microphone, please state your name and address for the record. Speakers are expected to conduct themselves in a respectful and orderly manner. Disruptive behavior and profanity is not permitted. You are not allowed to make personal attacks on individuals or make comments which are slanderous, or which may invade an individual’s personal privacy. Please direct your questions and comments to the City Council.
5e.1
City of Brawley
City Council
February 17, 2026
Agenda Item No 5f
STAFF REPORT
To: City Council
From: Silvia Luna, Finance Director
Prepared by: Silvia Luna, Finance Director
Subject: Presentation of 10-Year General Fund Financial Projection (FY 2026/27 – FY 2035/36)
RECOMMENDATION:
Receive and file the report and provide policy direction, if any, regarding reserve targets, labor cost parameters, or long-term financial strategies.
BACKGROUND INFORMATION:
Long-term financial planning promotes fiscal stability, the ability to discuss revenue constraints, and expense projections. The City has multiple funding sources, however, the most flexible source supporting core operations and community services is the General Fund. Therefore, the 10-year financial projections are based exclusively on the General Fund.
The City annually prepares a long-term financial forecast to evaluate the sustainability of General Fund operations beyond the adopted budget year. The purpose of this projection is to:
Identify structural revenue and expenditure trends
Evaluate long-term reserve levels
Assess the impact of personnel cost growth
Provide policy guidance for labor negotiations and strategic planning Support proactive financial decision-making
The projection covers fiscal years 2026/27 through 2035/36 and the intent of the overview is to facilitate discussion of the City’s financial outlook based on current knowledge, discuss alternatives to avoid using or depleting reserves in future fiscal years, and plan for a known increase in an effective manner.
This overview also sets the tone for the upcoming fiscal year 2026/27 budget process.
General Fund Structural Analysis Key Highlights
Revenue Assumptions
Revenue projections are based on historical trends and conservative long-term growth factors by category. Key assumptions include:
Sales Tax: 2.5% annual growth
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Measure J (Transaction & Use Tax): 3.0%
Property Tax: 3.0%
Motor Vehicle In-Lieu: 3.0%
Utility User Tax: 4.0%
Franchise Fees: 2.0%
TOT (Hotel Tax): 1.0%
Fees & Charges: 3.0% (reflecting updated fee schedule and CPI adjustments) Grant and third-party funding: Assumed to fluctuate and may include non-recurring sources Revenue projections are intentionally conservative to avoid overstating future growth.
Expenditure Assumptions
The General Fund is approximately 80% personnel-driven, with roughly 50% of expenditures attributed to Police and Fire services.
Key expenditure assumptions include:
Salary Growth: 4% annually (reflecting contractual obligations and step movement) Health Insurance: 7% annual growth
Workers’ Compensation & Liability: 5% growth
Maintenance & Operations: 3–3.5% growth
CalPERS UAL payments: Based on actuarial valuation dated June 30, 2024 Approximately 80% of total pension costs are allocated to the General Fund Additionally:
Beginning FY 2026/27, the General Fund assumes funding for one Crime Prevention Coordinator previously grant-funded.
Beginning FY 2027/28, five full-time Police Officer positions previously grant-funded are incorporated into the General Fund.
The City’s Pension Obligation Bond (issued July 12, 2017) matures September 1, 2032.
Structural Outlook
Under current assumptions:
Revenues grow at approximately 2.5%–3.0% annually.
Personnel costs grow at approximately 4% annually.
Health insurance and pension obligations exert upward pressure on expenditures.
As a result, operating deficits are projected beginning in FY 2026/27, leading to gradual reserve utilization over the 10-year period.
The primary structural driver is personnel cost growth relative to revenue growth. Absent corrective action, structural deficits will require either expenditure adjustments, revenue enhancements, or continued reserve utilization.
While the City currently maintains healthy reserves, long-term structural sustainability will require proactive policy decisions to align recurring revenues with recurring expenditures.
Risk Factors
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Key variables that could materially impact the projection include:
Outcome of upcoming labor negotiations
Changes in CalPERS actuarial assumptions
Economic conditions affecting sales and property tax
Healthcare cost inflation
Deferred capital improvement needs
Public safety staffing levels
A 1% change in salary growth assumptions significantly alters the long-term reserve trajectory.
Strategic Considerations
The City enters the forecast period with healthy reserves; however, long-term sustainability will require:
Careful consideration of future labor agreements
Monitoring pension cost trends
Evaluation of service levels
Ongoing fee schedule maintenance
Strategic capital planning
This forecast is intended as a policy tool to guide future financial decisions rather than a fixed prediction.
FISCAL IMPACT:
While no immediate budget amendment is required, the projection highlights emerging structural imbalances that warrant policy consideration in upcoming budget cycles. The projection reflects current assumptions regarding revenue growth, labor agreements, pension obligations, health insurance trends, and operational cost escalation.
Under current assumptions, expenditures are projected to grow at a rate slightly exceeding revenues, resulting in gradual reserve utilization beginning in FY 2026/27. The City enters the forecast period with an estimated General Fund reserve balance of approximately $12 million as of June 30, 2026, representing roughly 41% of budgeted expenditures. At currently projected deficit levels, reserves could potentially sustain approximately five years of recurring operating shortfalls without breaching the City’s established reserve policy threshold.
Future labor negotiations, staffing levels, and revenue performance will materially impact long-term sustainability.
ALTERNATIVES:
Receive and file the report.
Provide direction to staff regarding financial strategies, labor cost parameters, or reserve targets. Request additional analysis scenarios.
ATTACHMENTS:
1. Attachment 1 – General Fund Financial Projections- 10-year Economic Outlook
2. Attachment 2 – FY2025/26 General Fund Budget Overview REPORT COORDINATED WITH (other than person preparing the staff report):
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REPORT APPROVAL(S):
Staff, Title or Consultant, Agency Status – Date of Status Rebecca Terrazas-Baxter, City Manager Approved – 2/12/2026 5f
City of Brawley
As of January 31, 2026 Actual Growth Current Budget 2026/27 to 2035/36 2024/25 Projections 2025/26 * 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/35 2035/36 TOTAL
1. Cash Receipts
Sales Taxes $ 3,416,398 2.5% $ 3,067,110 $ 3,143,788 $ 3,222,382 $ 3,302,942 $ 3,385,516 $ 3,470,153 $ 3,556,907 $ 3,645,830 $ 3,736,976 $ 3,830,400 $ 3,926,160 $ 35,221,054 Measure J ( Sales TUT) 1,033,880 3.0% 3,800,000 3,914,000 $ $ 4,031,420 $ 4,152,363 $ 4,276,933 $ 4,405,241 $ 4,537,399 $ 4,673,521 $ 4,813,726 $ 4,958,138 $ 5,106,882 $ 44,869,624 Motor Vehicle In-Lieu 3,324,362 3.0% 3,390,851 3,492,577 3,597,354 3,705,274 3,816,433 3,930,926 4,048,853 4,170,319 4,295,429 4,424,291 4,557,020 40,038,476 Property Tax 2,601,795 3.0% 2,491,557 2,566,304 2,643,293 2,722,592 2,804,269 2,888,397 2,975,049 3,064,301 3,156,230 3,250,917 3,348,444 29,419,796 Utility User Tax ᵃ 2,643,322 4.0% 2,976,011 3,095,051 3,218,853 3,347,608 3,481,512 3,620,772 3,765,603 3,916,227 4,072,877 4,235,792 4,405,223 37,159,519 Franchise Fees 639,759 2.0% 691,490 705,320 719,426 733,815 748,491 763,461 778,730 794,305 810,191 826,395 842,922 7,723,055 RPTTF Residual Property Taxes ᵇ 1,168,119 1.0% 729,000 736,290 743,653 751,089 758,600 766,186 773,848 781,587 789,403 797,297 805,270 7,703,222 Transient Occupancy Taxes (TOT hotels) 421,740 1.0% 480,000 484,800 489,648 494,544 499,490 504,485 509,530 514,625 519,771 524,969 530,219 5,072,081 Real Property Transfer Taxes 43,803 1.0% 50,000 50,500 51,005 51,515 52,030 52,551 53,076 53,607 54,143 54,684 55,231 528,342 Business License Tax 79,044 1.0% 70,000 70,700 71,407 72,121 72,842 73,571 74,306 75,049 75,800 76,558 77,324 739,678 Fees and Charges for Services 6,744,258 3.0% 6,379,296 6,570,675 6,767,795 6,970,829 7,179,954 7,395,352 7,617,213 7,845,729 8,081,101 8,323,534 8,573,240 75,325,424 Transfers In from Other Funds ͨ 242,621 0.5% 258,000 259,290 260,586 261,889 263,199 264,515 265,837 267,167 268,502 269,845 271,194 2,652,025 Grant Revenues and other 3rd Party Funding ͩ 1,310,936 1.0% 1,668,460 530,378 535,682 541,039 546,449 551,913 557,433 563,007 568,637 574,323 580,067 5,548,927 Interest/Miscellaneous Receipts ͤ 678,294 1.0% 250,275 252,778 255,306 257,859 260,437 263,042 265,672 268,329 271,012 273,722 276,459 2,644,615 Business Licenses/Permits 256,533 1.0% 331,100 334,411 337,755 341,133 344,544 347,989 351,469 354,984 358,534 362,119 365,740 3,498,679 Fines and Assessments 9,237 1.0% 17,000 17,170 17,342 17,515 17,690 17,867 18,046 18,226 18,409 18,593 18,779 179,636 Reimbursements & Recoveries (One-time) - 0.0% 1,115,800 - - - - - - - - - - - Carryover Funding/Use of Reserves ᶠ - - -
2. Total Revenue $24,614,100 $27,765,950 $26,224,031 $26,962,907 $27,724,126 $28,508,390 $29,316,423 $30,148,973 $31,006,812 $31,890,739 $32,801,577 $33,740,175 $298,324,153
3. Cash Paid Out
Police Operational Costs 1,503,852 3.5% 1,442,870 1,493,370 1,545,638 1,599,736 1,655,727 1,713,677 1,773,656 1,835,734 1,899,984 1,966,484 2,035,311 17,519,316 Fire Operational Costs (two stations) 584,324 3.5% 751,017 777,303 804,508 832,666 861,809 891,973 923,192 955,503 988,946 1,023,559 1,059,384 9,118,842 Salaries (Full-Time Employees) ᶢ 7,936,084 4% 9,120,380 9,555,195 10,408,558 10,824,900 11,257,896 11,708,212 12,176,540 12,663,602 13,170,146 13,696,952 14,244,830 119,706,831 Maintenance & Operations ʰ 4,044,352 3% 4,547,419 4,812,773 4,934,859 5,060,041 5,188,399 5,320,013 5,454,966 5,593,342 5,735,228 5,880,714 6,029,890 54,010,226 Workers Comp. & General Liability Ins. 1,585,563 5% 1,753,953 1,841,651 1,933,733 2,030,420 2,131,941 2,238,538 2,350,465 2,467,988 2,591,387 2,720,957 2,857,005 23,164,084 Employee Medical Insurance Costs 1,140,777 7% 1,287,503 1,395,628 1,588,803 1,700,020 1,819,021 1,946,352 2,082,597 2,228,379 2,384,365 2,551,271 2,729,860 20,426,297 Other Personnel Costs ͥ 2,488,322 4% 2,700,867 2,808,902 2,921,258 3,038,108 3,159,633 3,286,018 3,417,459 3,554,157 3,696,323 3,844,176 3,997,943 33,723,978 PERS Unfunded Pension Liability ᶨ 956,619 * 1,298,459 1,464,844 1,778,089 1,767,447 1,746,053 1,770,733 1,796,093 1,822,169 1,815,785 1,766,719 1,632,240 17,360,172 PERS Normal Payroll Costs 1,165,814 * 1,334,553 1,375,749 1,389,128 1,444,694 1,502,481 1,562,581 1,625,084 1,690,087 1,757,691 1,827,998 1,901,118 16,076,611 Salaries (Part-Time/Temporary) ᵏ 339,414 2.0% 547,025 557,966 569,125 580,507 592,117 603,960 616,039 628,360 640,927 653,746 666,820 6,109,567 Pension Obligation Bond ᶥ 1,046,909 * 1,099,353 1,095,722 1,136,643 1,174,058 1,215,895 1,253,626 1,298,848 1,245,126 - - - 8,419,917 Capital Improvements ᵐ 45,711 3,232,790 - - - - - - - - - - - Carryover Funding Operational Expenses ᶠ - - - - - - - - - - -
4. Total Operational Expenses $22,837,741 $29,116,189 $27,179,102 $29,010,342 $30,052,596 $31,130,973 $32,295,682 $33,514,938 $34,684,447 $34,680,784 $35,932,575 $37,154,401 $325,635,840
5. Yearly Operating Cash Position
Operational Surplus /( Deficit) (2
minus 4) 1,776,359 (1,350,239) (955,071) (2,047,435) (2,328,470) (2,622,583) (2,979,260) (3,365,966) (3,677,634) (2,790,044) (3,130,999) (3,414,226)
6. General Fund Balance Reserves
General Fund Reserve Balance 13,362,951 12,012,712 11,057,641 9,010,206 6,681,736 4,059,153 1,079,893 (2,286,072) (5,963,706) (8,753,751) (11,884,749) (15,298,975) General Fund Reserves % of expenditures 59% 41% 41% 31% 22% 13% 3% -7% -17% -25% -33% -41% Operating Budget Notes
a. In November 2024, voters approved an additional 1% Sales Transaction and Use Tax. This general tax supports public safety and essential City services. b. In November 2021, voters approved an amendment to the Utility User Tax (UUT), retaining the 4% rate, removing the sunset provision, and modernizing the tax to include expanded service categories. c. RPTTF refers to the Redevelopment Property Tax Trust Fund, which represents property tax revenues distributed following the dissolution of Redevelopment Agencies. d. In December 2025, the City Council approved a new User and Regulatory Fee Schedule. The updated schedule establishes new fees where applicable and authorizes annual CPI-based adjustments for certain fees to maintain cost recovery. e. Grant revenues and third-party funding fluctuate annually and may include one-time or non-recurring funding sources. f. Salaries (Full-Time Employees): The City has four bargaining units and non-represented employees with agreements in effect through June 30, 2026. Under these agreements, eligible employees may receive step increases (up to 5%) and cost-of-living adjustments (4% in FY 2024/25 and 2% in FY 2025/26). g. Beginning in FY 2026/27, funding for one full-time Crime Prevention Coordinator position is included in the General Fund. This position was previously supported by grant funding. h. Beginning in FY 2027/28, funding for five full-time Police Officer positions is included in the General Fund. These positions were previously supported by grant funding. i. Maintenance and Operations include expenditures for all General Fund departments other than Police and Fire. j. Other Personnel Costs include overtime, incentive pays, uniform allowances, standby pay, employer-paid Social Security taxes, tuition reimbursements, and other negotiated compensation components. k. PERS (California Public Employees’ Retirement System) unfunded pension liability projections are based on actuarial valuations as of June 30, 2024 (issued August 2025). Approximately 80% of total employer pension costs are allocated to the General Fund. l. The City issued a Pension Obligation Bond in the amount of $16,310,000 on July 12, 2017, which fully matures on September 1, 2032. As of June 30, 2026, the remaining principal and interest payments total approximately $9,160,000. m. Ongoing capital expenditure projections are not included in this forecast. Staff is currently identifying deferred capital improvements and large equipment replacement needs that may impact future financial planning.
ATTACHMENT 1
GENERAL FUND FINANCIAL PROJECTIONS - 10 Year Economic Outlook OPERATING BUDGET & CAPITAL PROJECTS FUNDED BY THE GENERAL FUND The Current Budget for
2025/26 includes
carryovers from 2024/25
and approved
adjustments through
01/31/26.
Revenue projections are
based on current
economic conditions and
historical trends. All
assumptions include
stable growth with no
economic downturns.
Expenditure projections
are based on current
operations, identified
projects, and known
regulatory requirements.
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Attachment 2
$ 26,862,692
Approval Date Budget Adjustment No. Account Number Budget Adjustment Description Adjustment
Amount
11/4/2025 Carryover funding for operational revenues 733,010 11/4/2025 OTS STEP Grant Award 80,000
1/20/2026 Q1 review approved budget report adjustments 8,325 Pending Potential Tax Revenue Adjustments 300,000
Pending Potential Reimbursements/Insurance Settlement 1,115,800 TOTAL ADJUSTED REVENUES $ 29,099,827
$ 26,792,163
Approval Date Budget Adjustment No. Account Number Budget Adjustment Description Adjustment
Amount
7/15/2025 BA0000207 101-521.000-800.300 Lion Ctr and Teen Center Facility Renovations 192,000 10/7/2025 BA0000222 101-511.000-800.400 JD Parks Lawn mower 2,000 11/4/2025 Carryover funding for operational expenses 1,005,558 11/4/2025 OTS STEP Grant Expenses 79,928
1/20/2026 Q1 approved budget report adjustments 47,157
Pending Estimated Lion Ctr. Pool Repairs 2,120,880
Pending Estimated Lion Ctr. Reopening Costs 210,380
TOTAL ADJUSTED EXPENSES $ 30,450,066
Total Budget Surplus/( Deficit) $ (1,350,239)
FY 2025/26 General Fund Budget Overview
Adopted Revenues
Adopted Expenses
* For purposes of structural analysis, the General Fund projections exclude the Pension Obligation Bond (POB) operating transfer reflected under the Non-Departmental budget category.
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