Citrus Heights City Council Meetings
October 27, 2022

Throughout 2022, city staff have coordinated with SMUD on an agreement for cost sharing, which agreement will be brought forward to the City Council at a future date. Until SMUD produces their own in- house construction drawings with cost estimate, it is unknown exactly what financial contribution SMUD will make, however, SMUD has committed no less than $750,000 for supporting their pro- rata share of the joint trench and other utility work. It is likely that SMUD will contribute more funding once they conclude their own design work. Furthermore, SMUD forces will furnish and install all electrical cabling on the project.

Following the pattern established during Phase 1 of the Auburn Boulevard Complete Streets Project, Comcast and CCI will not contribute financially to the underground infrastructure, however, their own crews will furnish and install all telecommunications cabling on the project.

In addition to the primary trenches conveying electrical and telecommunications lines underground, service connections on private properties will be modified to allow for the new underground service. The cost of these conversions impacting 20 properties is estimated to be $330,000, and will be paid for through project funding with no contribution from private property owners. Of note, not all properties within the Project corridor receive electrical or telecommunications service off of Auburn Boulevard, and therefore not every property fronting Auburn Boulevard will require service connection modifications to their electrical panel. After installation, each property owner in the UUD will be responsible for the maintenance of the conduit and electrical conversion equipment located on their respective property in accordance with utility provider requirements.

IV. SCHEDULE OF THE WORK
The estimated schedule for Phase 2 of the Project is:
• Completion of Design along with Caltrans Approvals: 8 months from October 2022 • Soliciting Contractor Bids/Award of Contract: 5 months • Construction: 24 months, starting in early 2024

It is expected that the proposed undergrounding, conversion of private utility services, and removal of overhead utilities and poles will be completed no later than April 2026.

This end date is three years and six months from the anticipated creation of the UUD, and is identified in the City Council resolution for consideration.

Leslie Blomquist, PE
City Engineer

Enclosures: Exhibit A Boundary Map Entitled “Auburn Boulevard Underground Utility District,” dated July 15, 2022,
Agenda Packet Page 163
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CITY OF CITRUS HEIGHTS
CIT

Y COUNCIL STAFF REPORT

MEMORANDUM
DATE
: October 27, 2022
TO: M
ayor and City Council Members
Ashley J. Feeney, City Manager
FRO
M: Casey Kempenaar, Community Development Director
Regina Cave, General Services Director
Alex Turcotte, Police Chief
Alison Bermudez, Senior Planner
SU
BJECT: Proposed Shopping Cart Ordinance
Summary and Recommendation
At the May 10, 2022 Strategic Planning Meeting, the City Council established an objective to present to City Council for consideration, a shopping cart ordinance and associated outreach plan.

St
aff recommends the City Council introduce for first reading, read by title only and waive the full reading of Ordinance No. 2022- _____, as shown in Attachment 2, an Ordinance of the City Council of the City of Citrus Heights adding Article VII to Chapter 50 of the Citrus Heights Municipal Code.

Fiscal Impact
While there is no direct fiscal impact related to this action, the ordinance does include a relatively minor fee ($25.00) to be collected from a business in certain instances for each cart impounded. This fee represents a small portion of the actual cost to recover and store collected carts.

In
itially, the most significant impact will be related to staffing as the proposed ordinance touches almost every City department including Community Development who will review the Shopping Cart Retrieval Plans submitted by each business, General Services who oversees the “Beautification Crew” including the collection and storage of the abandoned carts; and the Police Department who interfaces with the public and businesses on many of the blight related issues.

Although the ordinance will involve several departments, once implemented, the impact is anticipated to be limited in nature.

Item 13
Agenda Packet Page 164
Subject: Shopping Cart Ordinance
Date: October 27, 2022

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Background and Analysis
At the May 10, 2022 Strategic Planning Meeting, the City Council established an objective to present to City Council for consideration, a shopping cart ordinance and associated outreach plan that requires shopping cart fleets be retrofitted with lockable wheel devices.

Shopping carts continue to be a significant contributor to blight and accumulation of rubbish and debris throughout the City. Shopping carts are often found abandoned in areas creating hazardous conditions. On average, the City collects 35 – 40 shopping carts monthly, however, other parties, including Sunrise MarketPlace collect shopping carts as well. Despite these retrieval efforts, shopping carts continue to cause visual blight around the City. Shopping carts often end up in the City’s right of way creating both vehicular and pedestrian/bicyclist safety concerns. Shopping carts are also found abandoned in the City’s creek corridors increasing flood risk throughout the community.

In order to address the ongoing nuisance associated with shopping carts, staff developed the attached ordinance based on four principles:

1. Prevention – Shopping carts provide legitimate purpose; however, when carts leave the intended site, they often become a hazard and businesses ultimately need to replace carts adding long-term costs. Prevention is seen as the best tool to avoid this challenge.

2. Accountability –The Ordinance introduces accountability measures for both the business and the person using the cart to stop off site movement before it contributes to community blight or becomes a safety concern.

3. Shared Impact – The City recognizes that shopping cart theft is not always preventable.

The City has launched the Beautification Crew to quickly respond to blight, including shopping carts. The City will assist with cart collection to supplement efforts by the businesses that benefit from their use with a focus on those that impact the health and safety of the community.

4. Minimize Impact on Businesses – The ordinance allows flexibility for businesses to tailor cart theft prevention approaches that best suit their operations. However, the ordinance also introduces accountability by ensuring businesses have a plan in place that is well suited to stop cart theft.

These principles are incorporated into proposed ordinance (Attachment 2). The intent of the ordinance is to reduce the number of shopping carts which leave the business and become abandoned throughout the City which contributes to blight.

Existing Regulations/State Law
While there are state regulations which address abandoned shopping carts, the regulations are not conducive to reducing blight. Provisions of the “California Shopping Cart Law” (CA B&P Section 22435) allow abandoned shopping carts, which are not impeding emergency services, to remain at the abandoned location for three working days (72-hours) prior to a city taking action to impound the stray cart. Additionally, while state law considers the removal of a cart from a business premises to be a misdemeanor, rarely will a cart owner, if ever, press charges.

Agenda Packet Page 165
Subject: Shopping Cart Ordinance
Date: October 27, 2022

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Proposed Ordinance
The City’s proposed ordinance will strengthen what is currently in state law by allowing an abandoned cart to immediately be collected (instead of waiting 72 hours) when found off- premise. This shortened time frame will make a significant impact on reducing the visual blight caused by abandoned or stray shopping carts.

The following are key components to the proposal:

Shopping Cart Retrieval Plan Required
Feedback received from the City’s current cart retrieval service provider indicated that those businesses who have a cart containment system and retrieval procedures in place experience far less loss in theft and unauthorized cart removals than those businesses who do not monitor/manage their carts.

Therefore, the ordinance will require each business with more than five (5) shopping carts to submit a Shopping Cart Retrieval Plan (SCRP or Plan). The SCRP will provide the City information on the businesses methods employed to reduce cart removals, retrieval measures, employee training procedures, as well as the acknowledgement they have properly marked each cart as required by the ordinance. Despite these efforts, shopping carts may still find their way offsite and be picked up by the City. In these instances, the SCRP will provide the necessary information to notify businesses so they may reclaim their cart in a timely manner.

There will be no cost to the business when submitting their SCRP for review/approval. Once approved, the Plan will not require annual renewal. A business may amend the Plan at any time should circumstances change or if required by the City due to repeat impoundments. New businesses will be required to submit their SCRP during the business licensing process.

Impounded Cart Process
With the adoption of the ordinance, the City’s newest team, referred to as the “Beautification Crew,” will have the ability to pick up any abandoned and/or stray carts without having to wait the 72 hours otherwise required by state law. Impounded carts will be stored at the City corporation yard and businesses will have 72 hours to collect their cart without penalty. Carts not collected within 72 hours will be subject to a $25.00 per cart fee. Any carts not retrieved within 30 days or carts not properly identified, will be at the city’s discretion for permanent disposal. In addition, the ordinance will provide additional enforcement tools in cases where a business has more than five (5) shopping carts impounded during a six-month period. In those extreme cases, the City will have the ability to require the business to install wheel locking/stopping mechanisms or in rare instance, prohibit the owner from possessing shopping carts.

Staff intends to work with businesses to accomplish the objectives of the ordinance and are concerned with compliance versus taking punitive actions. The punitive actions are there for special cases where they are needed due to a lack of cooperation or complete disregard.

Shopping Cart Plan Timeline
Should the City Council approve the proposed ordinance the following key dates would follow:

Agenda Packet Page 166
Subject: Shopping Cart Ordinance
Date: October 27, 2022

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November 10, 2022 Second reading of ordinance
December 11, 2022 Ordinance become effective
December 12, 2022 Opening of Shopping Cart Plan submission period February 28, 2023 Close of Shopping Cart Plan submission period March 28, 2023 Final date to implement approved Shopping Cart Plan

Outreach
In July and August, staff attended several neighborhood association meetings and solicited feedback on a proposed shopping cart ordinance. Feedback on the proposal was well received as most attendees believed stray carts created blight throughout the city.

In September, the Draft Shopping Cart Ordinance was released for review/comment and posted on a dedicated webpage on the city’s website www.citrusheights.net/shoppingcarts . The
webpage provided a copy of the proposed ordinance, a robust FAQ sheet and the proposed implementation timeline (See Attachment 4). Over 80 businesses who utilize shopping carts were notified by direct mail of the proposed ordinance. In addition, information pieces were also sent to business groups including the Sunrise MarketPlace (SMP), Citrus Heights Chamber of Commerce, Industry Associations such as the Grocers Association and Retailers Association.

In September, staff presented the ordinance to both the SMP Board of Directors and the Citrus Heights Chamber of Commerce. Based upon feedback received from both the SMP Board and the Chamber of Commerce Board, the ordinance was further clarified to provide examples of how a business can satisfy the customer notification/signage requirements. While the business groups verbally supported the proposal, written letters of support have not been received. Should communication be received, staff will provide the Council a copy.

Surrounding Jurisdictions
According to the California Grocers Association, more than 120 jurisdictions in California have adopted regulations specifically addressing abandoned shopping carts. As typically done when considering ordinances, staff looks to our jurisdictional neighbors to see if the proposed ordinance is consistent with what is happening around us. Many local jurisdictions have shopping cart ordinances in place including Sacramento County and the cities of Elk Grove and Rancho Cordova. In the review of their regulations, this proposed ordinance is very similar in that they also require a SCRP and have penalties for non-compliance.

Amendments Based on Public Comments
Several businesses contacted City Staff via email or phone to discuss the proposed ordinance.

Included in Attachment 4 is a letter from Pet Smart who did not express any concerns with the ordinance and felt it was very similar to other agency’s regulations they work with around the state.

While staff did not receive any communications from businesses against the ordinance, e-mail communications were received from residents who had concerns with the imposition of fines for the unauthorized possession of a cart. The initial proposal considered the unauthorized possession of the cart as an infraction which comes with statutory fines defined in the Agenda Packet Page 167
Subject: Shopping Cart Ordinance
Date: October 27, 2022

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Government Code. In response to the feedback received, the consideration of the unauthorized possession as an infraction was removed from the ordinance.

Conclusion
Collectively, the measures included in the ordinance are intended to work together to prevent cart theft, to introduce accountability around shopping cart theft, and ensure a collection plan is in place for times when prevention and accountability do not prevent carts from being moved off site. The proposed ordinance is consistent with many ordinances locally and across the state and consistent with the Business and Professions Code related to shopping carts.

The proposed ordinance aligns with three of the City Council’s Three-Year goals:
- Preserve and enhance public safety
- Enhance community vibrancy and engagement
- Maintain public infrastructure and enhance alternative modes of transportation

The ordinance is proposed as a potential implementation measure coming out of the City Council adopted Focus Area Work Plan. This tool combined with other measures the City is in the process of implementing over the next two years are intended to produce results to improve community image, foster a clean business environment and enhance community pride. If issues arise that warrant revisiting a section of the proposed ordinance, staff has the ability to bring it back to City Council for consideration of an amendment at any time. Staff recommends City Council approve the proposed ordinance to help address a consistent problem that contributes to blight issues.

Environmental Determination
The proposed amendments are exempt from CEQA Pursuant to CEQA Guidelines Section 15061(b)(3), also known as the “general rule” exemption, CEQA exempts activities that can be seen with certainty to have no possibility for causing a significant effect on the environment.

Attachments

1. Ordinance 2022- ____ an Ordinance of the City Council of the City of Citrus Heights adding Article VII to Chapter 50 of the Citrus Heights Municipal Code

2. Draft Shopping Cart Plan Application

3. Frequently Asked Questions

4. Comment Letters
a. PetSmart
b. J. Oliver
c. M. Lynch
d. R. Smith
e. D. Warren

Agenda Packet Page 168

CITY OF CITRUS HEIGHTS

ORDINANCE NO. 2022-___

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CITRUS HEIGHTS ADDING ARTICLE VII TO CHAPTER 50 OF THE CITRUS HEIGHTS MUNICIPAL

CODE RELATING TO THE REGULATION OF SHOPPING CARTS

THE CITY COUNCIL OF THE CITY OF CITRUS HEIGHTS HEREBY ORDAINS AS FOLLOWS:

SECTION 1. Declaration of Intent

The purpose of this ordinance is to ensure that measures are taken by cart owners to prevent the removal of shopping carts from store premises and parking lots and to facilitate the retrieval of abandoned carts as permitted by State law.

SECTION 2. Findings

• The proposed amendments will not be detrimental to the public, interest, health, safety, convenience, or welfare of the City.

• The proposed amendments are exempt from the California Environmental Quality Act (CEQA) under Section 15061(b)(3) and 15305 of the Guidelines

SECTION 3. Add Section VII to Chapter 50 to the Citrus Heights Municipal Code

Section VII, Chapter 50, Shopping Carts, is here by added to the Citrus Heights Municipal Code and shall read as set forth below:

ARTICLE VII. -- SHOPPING CARTS
Section 50-900. - Purpose.

Abandoned shopping carts constitute a nuisance, create potential hazards to the public health and safety and interfere with pedestrian and vehicular traffic within the City. Wrecked, dismantled and/or abandoned shopping carts on public or private property create conditions that reduce property values and promote blight and deterioration within the City’s neighborhoods.

The purpose of this section is to ensure that measures are taken by cart owners to prevent the removal of shopping carts from store premises and parking lots and to facilitate the retrieval of abandoned carts as permitted by State law. This section is based in part on California Business and Professions Code Section 22435 and following.

Section 50-901. - Applicability.

This section applies to:
(a) All businesses within the City of Citrus Heights that provide shopping carts for customer use at any one business location; and

Attachment 1
Agenda Packet Page 169
(b) Any person in possession of an off-site shopping cart.

Section 50-902. - Definitions.

Abandoned shopping cart means any cart removed from a business establishment’s premises without the written permission of the owner and located on either public or private property. This does not apply to carts that are removed for purposes of repair or maintenance.

Agent means the person or persons designated by the owner of the shopping cart authorized to perform or provide retrieval services on behalf of the business owner.

Cart means the same as shopping cart.

City means the City of Citrus Heights or its designated representatives.

Identified Shopping Cart means a shopping cart that has a permanently affixed sign that identifies, in accordance with Section 50-904, the owner of the cart or the retailer, or both.

Owner means a person or establishment providing shopping carts for customers’ use.

Premises means the entire area owned or under the control of a business owner, including the parking area or other off-street area.

Shopping cart means a basket which is mounted on wheels or a similar device generally used in a retail establishment by a customer for transporting goods.

Shopping cart plan means a document submitted by the owner of the cart pursuant to Section 50-907.

Unidentified Shopping Cart means a shopping cart that is not an identified cart, as defined above.

Section 50-903. - Declaration of Public Nuisance.

The spread of shopping carts deserted on public and private property causes blighted conditions in many areas of the City and results in the obstruction of public and private sidewalks, streets, parking lots, park spaces, and other areas, thereby creating hazards to the health and safety of the public. The Citrus Heights City Council declares abandoned shopping carts to be a public nuisance.

Section 50-904. - Shopping Cart Identification Requirements.

Every business providing shopping carts shall have a sign permanently affixed to each cart that includes all of the following information:
(a) The identity of the owner or business, or both;

(b) A valid address, store identity number, telephone number, or some other form of markings that clearly identifies the cart owner;

(c) Notice to the public that the unauthorized removal of the shopping cart from the premises of the business establishment, or the unauthorized possession of the shopping cart, is a violation of State Agenda Packet Page 170
laws and a violation of City ordinance.

Section 50-905. - Unauthorized Removal Possession of a Shopping Cart.

Without the prior written consent of the owner, it is unlawful for any person to remove, or cause to be removed, any shopping cart which is the property of the business establishment furnishing such carts for its customers’ use, from the parking lot or other premises of said business establishment.

Section 50-906. - Exception.

A violation of this section shall not apply to carts that are removed for the purposes of repair or maintenance with written consent of the business owner.

Section 50-907. - Mandatory Shopping Cart Plan.

Every owner of a business that maintains more than five (5) shopping carts shall implement a shopping cart plan in accordance with this section and shall submit to the City within sixty (60) days of adoption of this section and any time the plan is proposed to be amended. Such plan shall include all the following elements:
(a) Identifying Information. Name, address and telephone number of the business, and the name and telephone number of the on-site manager or designated agent;

(b) Shopping Cart Information. The number of on-site shopping carts held by the business, and a signed affidavit stating all carts will be in compliance with the shopping cart identification requirements listed in Section 50-904;

(c) Employee Training. A description of employee-training program to educate existing and new employees about the shopping cart plan;

(d) Notice to Customers: A description of the notification method(s) used to communicate to the public that unauthorized removal of a cart from the business premise is a violation of state law and Citrus Heights City Code. The method(s) used may include, but are not limited to, prominently displayed signage posted at each customer exit, printed on store shopping bags, printed on sales receipt, or other method approved by the City.

(e) Loss Prevention Measures. A description of the measures that the owner will implement to prevent the removal of shopping carts from the premises. These measures may include, but are not limited to, devices on shopping carts that automatically disable them if they are removed from the premises, designation of certain employees tasked to prevent the removal of shopping carts from the premises by assisting patrons with transporting groceries or merchandise to patrons’ vehicles and then returning shopping carts to the location where the retail establishment keeps the shopping carts, installation of obstacles to prevent the removal of shopping carts, prohibiting carts outside the building of the business unless accompanied by an employee, bollards and chains around the premises to prevent cart removal, collection of security deposits for use of all carts, or the rental or sale of utility carts that can be temporarily or permanently used to transport purchases;

(f) Retrieval Measures. Specific measures for the retrieval of abandoned carts by its employees, or proof that the owner has entered into a contract for cart retrieval services.

Agenda Packet Page 171
(g) Collaboration allowed: Two or more businesses may collaborate and submit a single-plan.

Section 50-908. – Shopping Cart Plan Timeline and Approval Process.

A proposed plan for preventing shopping cart removal shall be submitted to the City’s Community Development Department within sixty (60) days following the adoption of this ordinance. Any establishments that opens after the adoption of the ordinance codified in this section will have thirty (30) days from the filing date on their City business license application to submit a shopping cart removal prevention plan to the City for approval.

If a plan is rejected as incomplete or inadequate, or if additional information is needed, the City shall notify the owner within thirty (30) days from the date of the plan submission. The owner has thirty (30) days to submit the additional information or a complete or adequate plan.

The City may reject or deny a plan on any of the following grounds:
(a) The plan fails to include the information required under this section or fails to adequately address the required elements.

(b) The plan fails to address any special or unique conditions due to the geographical location of the premises as they relate to cart retention and prevention efforts.

(c) Implementation of the plan violates this section, or State or Federal law.

(d) The owner knowingly makes a false statement or omits relevant facts in the plan, or in any amendment or attachment or report.

Upon notice to the owner that the City has approved the prevention plan, the owner has thirty (30) days to implement the prevention plan at their establishment.

Any owner who fails to implement approved plan measures or fails to comply with the approved plan measures will be subject to enforcement of these requirements through any lawful means available to the City.

Section 50-909. - Plan Modification.

The owner shall submit a plan modification of any previously approved shopping cart plan to address changed circumstances. The City may require a business to submit a plan modification due to repeat impoundments or to modify ineffective provisions. The City shall review and consider the modification in the same manner set forth in Section 50-907 and 50-908.

Section 50-910. - Revocation of Plan.

The City may revoke an approved plan on any of the following grounds:
(a) A shopping cart has been found on off-premise on three or more occasions within the past six- month period where the City has had to notify business owner to pick up impounded cart(s).

(b) The plan fails to address any changed circumstances related to cart retention and prevention efforts.

(c) The owner has failed to comply with a provision of this section.

Agenda Packet Page 172
(d) The owner has knowingly made a false statement or fails to disclose relevant information in an application, an amendment or in a report to the City.

Business owners whose plans have been revoked are subject to penalties as provided in Section 50-911.

Section 50-911. - Penalties for Failing to Submit or Implement a Prevention Plan.

In addition to the penalties set forth in this chapter, any owner who fails to submit a prevention plan, implement the prevention plan or implement any required modifications to the plan as required by the City, within the time frames as specified in this section, shall be required to place disabling devices on all shopping carts owned, leased or used by the business establishment to prevent removal of shopping carts within sixty days of the date of service of the notice of violation from the City. Failure to install disabling devices as required is subject to an administrative citation for each day the disabling devices remain uninstalled.

Section 50-912. - Authority to Immediately Impound Abandoned Cart The City shall have the authority to remove and impound any off-premise cart on public or private property under the following conditions:
(a) The cart owner is notified within twenty-four (24) hours following the impoundment. Notification to the cart owner may be provided in person, by phone or by mail and the City shall document the notification used for each impounded cart.

(b) The notification shall inform the cart owner as to the location where the cart may be claimed.

(c) Impounded carts shall be held at a location designated by the City which is reasonably convenient to the cart owner and open for business at least six (6) hours a day.

(d) Any cart reclaimed by the cart owner within seventy-two (72) hours following the date of actual notification as provided pursuant to this section, shall be released and surrendered to the owner at no charge whatsoever, including the waiver of any redemption fees that would otherwise be applicable pursuant to Section 50-914.

(e) Any cart not reclaimed by the cart owner within seventy-two (72) hours following the date of actual notice as provided pursuant to this section, shall be subject to the collection of administrative costs under Section 50-914 commencing of the fourth day following the date of notice. Any cart reclaimed by the owner within seventy-two (72) hours following the date of actual notice as provided pursuant to this section, shall not be deemed an "occurrence" under Section 50- 913.

Section 50-913. - Repeat Impoundments.

Should the City impound, pursuant to California Business and Professions Code 22435.7, more than five (5) carts of any owner within a thirty-day (30) period, the City reserves the right to require the business to do one or more of the following:
(a) Require the owner to equip each shopping cart with wheel locking or stopping mechanism that is used in conjunction with an electronic or magnetic barrier along the premises of the retail establishment. The wheel locking or stopping mechanism must activate when the shopping cart Agenda Packet Page 173
crosses the electronic or magnetic barrier.

(b) Prohibit the owner from possessing shopping carts on its premises.

In shall be unlawful for an owner to fail to comply with either requirement when so ordered by the City in writing. Any such order is subject to an appeal to the City Manager within 21 days of service of the order.

Section 50-914. - Administrative Costs.

Pursuant to Business and Professions Code Section 22435.7, any owner that fails to retrieve its abandoned cart(s) within seventy-two (72) hours after receiving notice from the City shall pay the City’s actual costs for retrieving the cart(s) and providing the notification to the owner. The administrative costs shall be set forth in the City’s Master Fee Schedule.

Any owner who fails to retrieve abandoned carts in accordance with this section in excess of three (3) times during a specified six-month period shall be subject to an additional fifty ($50.00) dollar fine for each occurrence. An occurrence includes all carts owned by the owner that are impounded by the City in a one-day period.

The “specified six-month period” shall be the six-month periods ending on June 30th and December 31st of each calendar year.

Section 50-915. - Disposal of Abandoned Shopping Carts.

Pursuant to State law, any marked cart not reclaimed from the City within thirty (30) days after notification to the owner shall be sold or otherwise disposed of by the City or its agents as it sees fit.

If the cart owner is unknown and not clearly identified on the cart, the cart shall be designated as “unidentified” and disposed of by the City or its agents as it sees fit.

Section 50-916. - Emergency Services.

Pursuant to subdivision (c) of Business and Professions Code, Section 22435.7, any City officer, employee, or agent may immediately retrieve any shopping cart from public or private property if its location impedes emergency services.

Section 50-917. - Enforcement.

Any person who violates the provisions of this section is subject to any enforcement procedures permitted by law, including but not limited to: prosecution of a misdemeanor or an infraction, civil action for injunction, administrative enforcement procedures, including administrative citation, and revocation of a use permit if applicable.

Section 50-918. - Records Required for Retrieval Services.

Any person who engages in the business of shopping cart retrieval shall retain records showing written authorization from the owners to retrieve abandoned shopping carts and to be in possession of the shopping carts retrieved. A copy of the records showing written authorization shall be maintained in each vehicle used for abandoned shopping cart retrieval.

Section 50-919. – Business License Required for Retrieval Services.

Agenda Packet Page 174
Any person intending to operate a shopping cart retrieval service for the purposes described in this chapter shall first obtain a business license from the City.

SECTION 4. Severability. If any section, subdivision, sentence, clause, phrase or portion of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision, and such holding shall not affect the validity of the remaining portions thereof.

SECTION 5. Effective Date and Notice. This ordinance shall take effect thirty (30) days after its adoption, provided it is published in full or in summary within fifteen (15) days of its adoption, in a newspaper of general circulation published and circulated in the City of Citrus Heights.

PASSED AND ADOPTED by the City Council of the City of Citrus Heights this __day of ________, 2022, by the following vote:

AYES: Council Members:

NOES: Council Members:

ABSENT: Council Members:

ABSTAIN: Council Members:

_________________________________________
Porsche Middleton, Mayor

____________________________________
Amy Van, City Clerk
Agenda Packet Page 175

Cart Prevention Plan

Please complete the following. Attach additional sheets if necessary:

1. General Information (See also California B & P Code Section 22435) Name of Business
Name of Business or Corporate
Owner

Business Address

Citrus Heights, CA ZIP CODE
Name of On-Site Contact
Contact Phone Number
Contact Email

2. Cart Inventory
Approximately How Many Carts?

3. Community Outreach

4. Cart Signage – (Your store’s carts must contain these essential elements.) Every cart owned or provided by any Owner must have a sign permanently affixed to the cart that contains all the following information:
1) Identity of Owner, business establishment, or both
2) The address and or phone number of the Owner of the business establishment for Cart return. 3) Notice to the public that the unauthorized removal of the shopping cart from the premises of the business establishment, or the unauthorized possession of the shopping cart, is a violation of State laws and a violation of City ordinance.

Provide a Sample of the statement to be used and affixed to carts to comply with the above Ordinance standards:

If you are using stickers as signage, attach a sample sticker, a copy, or picture of the sticker or sign.

How will you inform customers that removing or being in possession of a shopping cart off the store premises is a violation of State law?
[ ] Signs posted near entrance doors or parking lot exits. [ ] Other: Please describe
(Attach additional sheets if needed.)
Attachment 2
Agenda Packet Page 176

For
Return the completed form to:

The City of Citrus Heights
Planning Division
6360 Fountain Sq. Drive
Citrus Heights, CA 95621
(916) 727-4740
Email: [email protected]
Remember to:
[ ] Check that all portions of the form are completed
[ ] Attach additional pages if necessary

5. Loss Prevention Measures
Please describe the shopping cart loss prevention measures in use at this store that are likely to prevent shopping carts from being removed from the premises. Check all that apply. [ ] Wheel Locks, Electronic, or other
disabling devices
[ ] Carts equipped
with poles
[ ] Security personnel [ ] Other (describe below)

6. Mandatory Retrieval
Each Prevention Plan requires a plan for cart retrieval within 24 hours upon notification by the City of Citrus Heights.

Who should the City of Citrus Heights contact for Cart Retrieval? Name: Phone:

7. Employee Training
Please describe the annual method of employee training on the store’s Abandoned Cart Prevention Plan. Check all that apply.
[ ] Staff Meetings [ ] Employee Orientation [ ] Other (describe below)

To the best of my knowledge the above information is true and accurate.

Signature (Store Representative) Print Name Title Date

For more information regarding Abandoned Shopping Carts go to:
http://www.citrusheights.net/shoppingcarts
Agenda Packet Page 177

CITY OF CITRUS HEIGHTS
Updated October 11, 2022
The City is proposing a new ordinance to establish an abatement and enforcement program for abandoned and/or unauthorized use of shopping carts. This ordinance will be one tool in a robust and diverse toolbox implemented to advance blight removal and prevention in Citrus Heights and ensure a clean and safe environment for residents, businesses, and shoppers. Below are some of the program’s highlights:
 Businesses are required to include signage on their property about the removal of shopping carts;  Each shopping cart shall be identified with signage that includes information about the ownership of the cart and the violation of the law regarding the removal of carts from the premises;  Removal of shopping carts from the store’s premises without the owner’s written approval is a violation and violators may be cited; and
 Businesses will be required to have a City approved Shopping Cart Plan in place by February 28, 2023. The plan shall include methods related to containment and retrieval of an abandoned or stolen shopping cart.

Frequently Asked Questions:

What shopping cart program does the City currently have? The City’s General Services Department picks up shopping carts abandoned carts from sidewalks and roadways. In addition, the City utilizes a Cart Retrieval Service for carts found abandoned on private property.

Why are we implementing a formal shopping cart program now? While the City retrieves shopping carts as part of nuisance abatements, our commercial areas are overburdened with a high frequency of shopping cart litter. Shoppers living in close proximity routinely use carts to transport purchases and abandon them in high-visibility areas.

Abandoned shopping carts pose a threat by obstructing pedestrian access, interfering with pedestrian and vehicular traffic, and emergency services. They also create visual blight in our commercial areas. Prevention measures are needed in addition to the City’s shopping cart program to resolve this issue.

In addition, the program will support our business community in the protection of business assets by reducing the number of carts removed from their premises and any carts removed will be returned to the business.

How am I supposed to retrieve carts being used by transients or those that have hazardous materials?
This program is meant to create prevention measures for carts that shoppers do not return.

Please do not retrieve carts that could pose a health or safety threat. The City’s cart program will recover this type of cart. The City is also creating a robust toolbox advance blight prevention goals and mitigate homelessness issues and has the potential to minimize this type of incident, including:
o Proactive Beautification Crew: A two-person full time crew and fully stocked truck patrolling proactively maintaining public areas, including: abandoned transient carts and debris, homeless camp abatement, illegal dumps, trash/liter removal, graffiti and debris removal, illegal sign removal from poles and public spaces, and weed abatement.
o Expanding Influence: Many blight issues take place right outside city borders. We are partnering with other government agencies that have jurisdictional responsibilities for public areas within the City limits (Caltrans) or on the edge of the City where Attachment 3
Agenda Packet Page 178
[Type here]

enforcement and cleanup challenges present problems for residents and businesses and establishing memorandums of agreement that would allow Citrus Heights greater clean up and enforcement ability.
o Increased Accountability and Consequences: Citrus Heights Police Department has implemented a Chronic Nuisance (repeat) Offender Program to prosecute chronic offenders of codes and ordinances for individuals and/or property. Also, severe cases will now have the potential to be referred for community prosecution.

What other local cities have similar ordinances?
While many jurisdictions in California have shopping cart ordinances, locally the County of Sacramento and the cities of Rancho Cordova and Elk Grove all have programs.

What is the timeline for implementation?
The proposed ordinance is anticipated to be reviewed by the City Council fall of 2022. If adopted, the ordinance will implement the following schedule:
o All businesses must submit and have an approved Shopping Cart retrieval Plan in place by February 28, 2023. Following the adoption of the ordinance, information will be available on website on the submittal and review process.

What happens when a cart is found off-property?
Owners of properly identified carts will be notified to retrieve the abandoned cart. Carts not retrieved within 3 days after notification are impounded. Unidentified carts are subject to immediate impoundment.

Do businesses have to pay a fee for recovering impounded shopping cart? Any cart reclaimed by the cart owner within 3 business days following notification shall be released with no charge whatsoever. Any cart not reclaimed by the cart owner within 3 business days following notice shall be subject to any applicable fee imposed pursuant to Section 50-914.

What is an on-site cart containment program?
It is a system selected by the retail establishment that effectively contains the shopping carts preventing the carts from removal. Effective containment programs may include, disabling devises to prevent the movement of carts, on-site security to prevent removal of carts from business premises, or any other measure approved by the City.

Do I need to post signs or label my cart?
Businesses shall post their premises in a conspicuous location notifying cart users that removal of carts from the premises or parking area is prohibited without the written cons ent of the retail establishment. All carts at a retail establishment must have a permanently affixed sign that states the following:
o Identifies the owner of the cart and/or retailer
o Notifies the public of the procedure to authorize the removal of the cart from the owner’s premises
o Notifies the public that the unauthorized removal of the cart from the owner’s premises or unauthorized possession of the cart is a violation of State law o Lists a valid telephone number or address for returning the cart to its owner.

Can I be exempt from having an on-site containment program? Any person owning a retail establishment where more than 5 cars are available for customer use must implement and maintain an effective cart nuisance abatement program.

When is the proposed program implemented?
Enforcement of the proposed Shopping Cart program would begin in March 2023.

Businesses subject to this ordinance must have their plan submitted and approved by February 28, 2023 in order to be in compliance.

Agenda Packet Page 179
[Type here]

What happens to items left in abandoned carts?
Any items left in abandoned shopping carts are disposed of.

Agenda Packet Page 180
Attachment 4
Written Public Comments Received

a. PetSmart
b. J. Oliver
c. M. Lynch
d. R. Smith
e. D. Warren

Agenda Packet Page 181
STORE # 52 6434 SUNRISE BLVD
CITRUS HEIGHTS, CA 95610 916-729-2866
California SHOPPING CART THEFT LAW

UNAUTHORIZED REMOVAL FROM PREMISES OR UNAUTHORIZED POSSESSION OF THIS CART IS A VIOLATION OF STATE LAW (B&P CODE 22435) ANY REMOVAL MUST BE BY WRITTEN PERMISSION OF STORE DIRECTOR.

IF CART IS FOUND OFF STORE PREMISES CALL TOLL FREE 888-992-4778 FOR CART PICKUP.

THE UNAUTHORIZED REMOVAL OF A
SHOPPING CART FROM THESE PREMISES IS PROHIBITED BY LAW.

Possession of a cart off of this property, without the written permission of the Store Manager, is a violation of city, county and state ordinances.

REMOVAL OF SHOPPING CARTS IS PROHIBITED BY LAW AND SHALL SUBJECT THE VIOLATOR TO A MINIMUM OF $100.00 (Ord. 2002-039 S 1) Agenda Packet Page 182
1 Bermudez, Alison
From: Planning
Sent: Wednesday, September 21, 2022 3:16 PM
To: Bermudez, Alison
Subject: FW: PetSmart Store 52 Citrus Heights, CA - shopping cart ordinance Attachments: Seat Flap #52 Citrus Heights CA PROOF.pdf
From: Mick Moore <[email protected]>
Sent: Wednesday, September 14, 2022 12:12 PM
To: Store 0052 Manager <[email protected]>; Adam Burton <[email protected]>; Christina Viramontes <[email protected]>; [email protected]; [email protected] Cc: Mick Moore <[email protected]>
Subject: PetSmart Store 52 Citrus Heights, CA ‐ shopping cart ordinance

City of Citrus Heights, CA ‐ I received your Anticipated Adoption of a Shopping Cart Ordinance for our PetSmart Store 52 located in your city.  This is very similar to many other municipalities.  I have attached the draft copy of the shopping cart placard that will be placed on each shopping cart.  Please revi ew  and approve.

Also, PetSmart works with RMS (Retail Marketing Services) which is a cart retrieval company for many west coast stores.  RMS has added the Citrus Heights store to their retrieval services and will start combing the neighborhood at periodic times for our shopping carts.

I look forward to yo
ur  response.

Thanks

Mick Moore | Contracted Services
19601 N. 27th Ave., Phoenix, AZ 85027
office: 623‐587‐2570 | mobile: 602‐432‐8477 | fax: 623‐580‐6512 email: [email protected]

Agenda Packet Page 183
1 Bermudez, Alison
Subject: FW: Shopping card proposal
From: Janice Oliver‐Iraci <
Sent: Sunday, October 2, 2022 7:54 AM
To: Planning <[email protected]>
Subject: Shopping card proposal
I understand how important it is to solve the issue of blight in our city, and I understand that shopping carts that are abandoned play a big part of the blight. However, I think the proposed resolution is way too harsh on local businesses in our community.

It is very difficult for businesses to keep up with the costs these days, and this resolution could be the impetus for some of them to leave the city.

The article did not m
ention if any of the collected funds from individuals would go to the businesses to help them im plement these new procedures and absorb some of the cost. The other issue I see is that most of the individuals are unhoused, unemployed, and unable to pay the fines.

I urge the commission to keep brainstorming to find a different solution. Perhaps offer to pay some of the (qualifi
ed and vetted) unhoused to collect and return carts. There are some who would take up this work, although a m
inority. Perhaps work with Albert Sanchez in this regard.

Thank you for listening,
Janice Olive
r-Iraci
Agenda Packet Page 184
1 Bermudez, Alison
Subject: FW: Shopping Cart Ordinance
From: M Lynch <
Sent: Sunday, October 2, 2022 9:21 PM
To: Planning <[email protected]>
Subject: Shopping Cart Ordinance
The city proposes some interesting ideas when it com es to rogue shopping cart enforcement.

1. Fines - 99% of shopping carts that are seen tucked away behind buildings, overflowing with you name it, typically belong to homeless people. Wheather it be by unfortunate circumstances or by personal choice, these people can't even afford a roof over their heads. Anyone who thinks the threat of a fine here and there would put even the slightest dent in the problem is a fool.

2. Signage or locking devices - prices of everything these days continue to rise. Requiring every retailer offering carts to customers to spend time and money installing useless signage on hundreds of carts and or locking devices is just another expense retailers will just pass along to customers. Not really a great time to do that.

3. Only allow use while inside the store - It's already bad enough we are required to pay an extra fee if we want our purchased goods bagged via paper or the not much of an improvement plastic bags. Not allowing the carts to be used outside the building is even more ludicrous. As a senior on a very fixed income, how am I to be expected to carry my non bagged groceries to my car if the cart's wheels lock the minute it's out the door? Those intent on "permenently borrowing" a shopping cart probably dont make it a point of doing so from the carts in the store. They are likely perloined from the return corrals or the wayward cart that gets left wherever the previous user felt was most convenient. A perimeter wheel lock would seem most logical without useless signage on each cart. However the problem might still arise if someone parks in the farther end of a multi store property and makes their last and farthest stop from said parking space, the store requiring a cart, will the cart they are using for the specific use listed, end up locking up on them because they parked 50 feet beyond the "cart lock perimeter"? Is the shopper then going to be expected to leave their purchases in said cart, so they may retrieve their car and hope their items are still there waiting for them? These are all things many municipalities have attempted and failed in the past to inhibit shopping cart theft and blight.

How about instead of monitary fines for cart theives, figure out a way they can be required to spend a day or more rounding up cleaning and returning them to the respective stores. Many (certainly not all) homeless don't have jobs, aside from intersection median strip begging, I'm sure they'd be available to spend a day or so scouring the county rounding up those very items they stole. Perhaps also in lieu of fines require offenders to be assigned to retailer maintenence crews to help maintain, clean and repair the carts. That would certainly help eliminate that one squeaking wheel that insists on turning the opposite direction you're trying to go at every available opportunity.

Surely there must be some grant fund money designated for the homeless that would finance light training in these tasks. Rather than imposing a fine that would never be paid, or a warrant that will never be executed unless purely by chance, give these people a skill that might help them obtain some form of employment and perhaps dignity.

Just a few random thoughts on your proposal.

Thank you for your time.

Agenda Packet Page 185
2 Michael Lynch
7504 Snow Goose Ln
Citrus Heights, CA 95621
Agenda Packet Page 186
1 Bermudez, Alison
Subject: FW: shopping carts
‐‐‐‐‐Original Message‐‐‐‐‐
From: Rebecca and David Smith <>
Sent: Monday, October 3, 2022 11:45 AM
To: Planning <[email protected]>
Subject: shopping carts
I am scratching my head over this one. Unless I am mistaken our city came out against some COVID restrictions because they would dampen commerce. So now you are asking businesses to jump through a lot of hoops and  make expenditures, not to mention paying potential fines because property stolen from them is a “blight” and expense for the city. Isn’t the problem linked to theft and thus to those who are stealing the carts in the first place? Wouldn’t it make more sense to immediately confiscate any carts found “in the wild” so to speak, hold them as abandoned property in a fenced area for the period required by law and then dispose of them? If attended charge the attendee with theft (misdemeanor or felony depending on the value of the cart) unless the attendee has written proof of purchase or other arrangements with the owner of the cart. In terms of arguing that identifying markers may not be present on the cart, the markings proposed in the ordinance would most likely be subject to removal as well. I don’t know, this whole idea appears to be more of a punishment for the victim of the crime as most businesses seem to do a reasonably good job at collecting carts both during and after the business day. Seems to me that if the goal of our city is to be business friendly we work at enforcing the laws against theft that exist, not adding more ordinances that charge the retailers who are the victims not perpetrators of theft. Bluntly, charge the “John” not the “Worker.” Rebecca
Sent from my iPhone
Agenda Packet Page 187
1 Bermudez, Alison
From: Kempenaar, Casey
Sent: Friday, October 7, 2022 3:32 PM
To: Bermudez, Alison; Feeney, Ashley; Cave, Regina; Turcotte, Alex; Russo, Jason; Huber, Meghan
Subject: Fwd: Objection to shopping cart ordinance
Begin forwarded message:

From: DAVID WARREN <
Date: October 7, 2022 at 3:17:05 PM PDT
To: "Kempenaar, Casey" <[email protected]>
Subject: Objection to shopping cart ordinance

DAVID WARREN
7000 San Felipe Ct.

Citrus Heights, CA 95621
Telephone: 916 729 1635
Fax: (916) 727-0472
Internet: [email protected]
7 October 2022
[email protected]
via email
Casey Kempenaar
Community Developme
nt Director
City of Citrus Heights
6360 Fountain Square Drive
Citrus Heights, CA 95621
Re: Proposed ordinance regulating shopping carts
Dear Sir:

I am writing to address both the inane and counter-productive consequence of the proposed ordinance.

It should be self-evident that most individuals who remove shopping carts from business premises with the intent of using them as a vehicle to store personal property (i.e., homeless individuals), do not have neither the financial resources to pay the penalties set forth in the proposed ordinance or will make any effort to pay the fine. Thus, there is no disincentive to such individuals to prevent them from removing the shopping carts from the place of business.

The proposed ordinance will in fact aggravate the homeless problem. Credit reporting services pick up unpaid municipal fines as part of a credit record. Individuals attempting to move Agenda Packet Page 188
2 from homelessness into housing will have negative credit comments which will hinder their ability to obtain rental housing. Thus, the ordinance will add to the homeless population, increasing the need for shopping cart thefts, with the resultant aggravation of the shopping cart problem.

Issuing citations to homeless individuals who lack a permanent address is an inefficacious futile act. Homeless individuals have no residence address in which to seek enforcement of a fine. Any effort to enforce the ordinance as a misdemeanor is pointless in that (1) the booking cost at the County jail exceeds any benefit to the city; (2) any individual taken into custody for a shopping cart violation will be immediately released from custody because of County jail overcrowding; (3) the city will be responsible to taking into custody and safely storing the arrestees personal property, along with the cost of reuniting the property to the arrestee; and (4) the cost of the city attorney to prosecute the misdemeanor will exceed any miniscule potential benefit to the city.

The fact that the homeless individual who is cited pursuant to this ordinance will not face any real consequence will likely result in a further degradation of respect for the police because it will proffer evidence of the impotence of the police to regulate homeless conduct.

The ordinance should also be rejected because of the unnecessary burden that it places upon retail businesses. By way of example, the ordinance does not provide for an exception from financial sanction to a business which installs currently available security devices upon shopping carts which unfortunately easily overridden by nothing more than a magnet.

Businesses should only be charged for shopping carts which are confiscated from their business premises if the business has demonstrably failed to install reasonable security measures. A business owner who undertakes best practice shopping cart security measures should not face financial penalties any more than a property owner who acts to prevent the use of illegal fireworks on their property but fails because of a miscreant tenant or trespasser.

The above examples as they apply to those who typically confiscate and abandon shopping carts or offer shopping carts to customers should not be considered all of the reasons this ordinance should be rejected, but these objections should be sufficient to be the basis for rejecting the ordinance as drafted.

Please include this letter as part of the comments on the proposed ordinance when the ordinance is presented to the city council for consideration.

Yours truly,

David Warren

Sent from Mail for Windows

Agenda Packet Page 189
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CITY OF CITRUS HEIGHTS

CITY COUNCIL STAFF REPORT

MEMORANDUM
DATE
: October 27, 2022
TO: Mayor and City Council Members
Ashley J. Feeney, City Manager
FRO
M: Susan Talwar, Administrative Services Director
Tammy Nossardi, Finance Manager
SU
BJECT: Professional Services Agreement for Investment
Management/Advisory Services by Chandler Asset Management, Inc.

Summary and Recommendation
St
aff recommends the City Council adopt Resolution No. 2022 _____ a resolution of the City Council of the City of Citrus Heights, California, authorizing the City Manager to execute a contract with Chandler Asset Management, Inc. (Attachment 2) for investment management and advisory services for the City of Citrus Heights. The agreement shall commence upon the execution of this agreement and shall continue until this agreement is terminated effective upon receipt of notice of termination in writing delivered by the terminating party.

Fiscal Impact
Majority of the City’s funds are in the Local Agency Investment Fund (LAIF) account. LAIF maintains an average maturity of approximately 300 days. The return by investing in LAIF over one year, the return typically would be 0.62% as of September 30, 2022. A similar investment in a longer duration strategy (i.e., 1-3 Year US Treasury & Agency Index (1.8 years)) would have income returns of 1.012%, for the same time period. Income returns do not include change in fair value. The approach will be to build a portfolio that provides greater diversification than LAIF in sectors and maturities, and average longer than LAIF, while preserving safety and enhancing liquidity.

Th
e cost of investment management services is up to 1% of the average market value of the City’s portfolio. Staff anticipates that enhanced investment earnings will exceed investment management fees. This fee structure is consistent with the market rate for these services.

Item 14
Agenda Packet Page 190
Subject: Professional Services Agreement for Investment Management/Advisory Services by Chandler Asset Management
Date: October 27, 2022

Printed on Recycled Paper
Background and Analysis

Professional investment management of public funds is a best practice that provides substantial benefits to the City of Citrus Heights. These benefits include day-to-day monitoring of investment opportunities available in the market; periodic re-balancing of the portfolio to take advantage of interest rate trends; credit monitoring and analysis to protect the portfolio from credit and default risk; investment selection; and competitive shopping of investments to obtain the best rates.

A request for proposal for investment management services was issued in the spring of 2022 with the City receiving six responses. Staff evaluated the proposals in accordance with the evaluation criteria, which included responsiveness, technical experience, qualifications of staff and other considerations. After reviewing all the proposals, staff interviewed three candidates in the summer of 2022.

• Chandler Asset Management, Inc. (Chandler)
• Government Portfolio Advisors (GPA)
• PFM Asset Management

Staff recommends entering into an agreement with Chandler.

The most significant factors
considered in recommending Chandler:

• Clients similar to the City of Citrus Heights that Chandler currently manages is City of American Canyon in Napa County, City of Atwater in Merced County and City of Arcata in Humboldt County;
• Provided thorough documentation of understanding the City of Citrus Heights, including the investment policy and suggesting improvements for future consideration; • Great references on being service oriented, providing assistance beyond contracted services, validated performance beyond the benchmark while maintaining a lower risk than the benchmark; and
• Reporting and integration software that will save on City’s staff time for accounting for investments.

With the award of this agreement, the Finance Department and Chandler will work on developing an investment program, including analysis of risk and return, investment policy development and review, and cash flow analysis and forecasting. Chandler will implement investment strategies that meet the City’s risk and return requirements, provide comprehensive investment reporting to save staff time, and conduct education and training for staff enrichment.

Chandler will provide staff monthly reporting, hold quarterly meetings to discuss quarterly results, and be available to present to the City as needed. Chandler will be assisting staff with the annual update of the Investment Policy, which ultimately will be submitted to City Council for review and approval.

Agenda Packet Page 191
Subject: Professional Services Agreement for Investment Management/Advisory Services by Chandler Asset Management
Date: October 27, 2022

Printed on Recycled Paper
Attachments

1. Re
solution No. 2022 _____ a resolution of the City Council of the City of Citrus Heights, California authorizing the City Manager to execute the agreement with Chandler Asset Management, Inc. for investment management and advisory services for the City of Citrus Heights.

2. Chandler Asset Management, Inc. Agreement
Agenda Packet Page 192
RESOLUTION NO. 2022 - ____

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS

HEIGHTS AUTHORIZING THE CITY MANAGER TO EXECUTE A
CONTRACT WITH CHANDLER ASSET MANAGEMENT, INC. FOR

INVESTMENT MANAGEMENT AND ADVISORY SERVICES

WHEREAS, the City Council of the City of Citrus Heights wishes to engage the services of Chandler Asset Management, Inc. to provide investment management and advisory services with the cost being based on the amount calculated on the average market value of the City of Citrus Heights’ portfolio in accordance with the following schedule:

Assets Under Management Annual Investment Management Fee First $25 million 0.10 of 1% (10 basis points)
Next $25 million 0.08 of 1% (8 basis points)
Next $50 million 0.06 of 1% (6 basis points)
Assets in excess of $100 million 0.04 of 1% (4 basis points)

WHEREAS, Chandler Asset Management, Inc. was selected from six investment management and advisory service firms who submitted proposals to perform investment and advisory services for the City of Citrus Heights; and

WHEREAS, Chandler Asset Management, Inc. possesses the necessary experience, training, education and qualifications to perform the services for which it is being retained.

NOW THEREFORE BE IT RESOLVED that the City Council of the City of Citrus Heights hereby authorize the City Manager to enter into an agreement with Chandler Asset Management, Inc., to provide investment management and advisory services.

PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 27th day of October 2022, by the following vote, to wit:

AYES: Council Members:

NOES: Council Members:

ABSTAIN: Council Members:

ABSENT: Council Members:

Porsche Middleton, Mayor

ATTEST:

_________________________________
Amy Van, City Clerk
Agenda Packet Page 193
1 INVESTMENT MANAGEMENT AGREEMENT
(Institutional Client, Non-ERISA)
Cit
y of Citrus Heights (Client) hereby retains Chandler Asset Management, Inc. (Chandler) as Investment Adviser on the terms and conditions set forth herein.

1. Term. The term of this Agreement shall commence upon the execution of this Agreement and shall continue until this Agreement is terminated effective upon receipt of notice of termination in writing delivered by the terminating party.

2. Fees. Client shall compensate Chandler monthly an amount calculated on the average market value of Client's portfolio, including accrued interest, in accordance with the following schedule:

As
sets Under Management Annua
l Investment Management Fee
First $25 million 0.10
of 1% (10 basis points)
Next $25 million 0.08
of 1% (8 basis points)
Next $50 million 0.06 of 1% (6 basis points)
Assets in excess of $100 million 0.04 of 1% (4 basis points) The
fees expressed above do not include any custody fees that may be charged by Client's bank or other third party custodian.

Fees
shall be prorated to the effective date of termination on the basis of actual days elapsed, and any unearned portion of prepaid fees shall be refunded. Client is not required to pay any start-up or closing fees; there are no penalty fees.

Fe
es shall be deducted monthly in arrears from Client’s custody account.

3. Client Representative. In its capacity as investment manager, Chandler shall receive all instructions, directions and other communications on Client's behalf respecting Client's account from ________________ (Representative). Chandler is hereby authorized to rely and act upon all such instructions, directions and communications from such Representative or any agent of such Representative.

4. Investment Policy. In investing and reinvesting Client’s assets, Chandler shall comply with Client’s Investment Policy, which is attached hereto as Exhibit A.

5. Authority of Chandl er. Chandler is hereby granted full discretion to invest and reinvest all assets under its management in any type of security it deems appropriate, subject to the instructions given or guidelines set by Representative.

6. N otices. All reports and other communications required hereunder to be in writing shall be delivered in person, or sent by first-class mail postage prepaid, by overnight courier, by confirmed facsimile Agenda Packet Page 194

2 with original to follow or by confirmed electronic mail with proof of receipt to the addresses set forth below. Either party to this Agreement may, by written notice given at any time, designate a different address for the receipt of reports and other communications due hereunder.

Chandler Asset Management
Attn: Nicole Dragoo
6225 Lusk Boulevard
San Diego, CA 92121
[email protected]

City of Citrus Heights
Attn:
6360 Fountain Square Dr.

Citrus Heights, CA, 95621
Email

7. Electronic Delivery. From time to time, Chandler may be required to deliver certain documents to Client such as account information, notices and required disclosures. Client hereby consents to Chandler’s use of electronic means, such as email, to make such delivery. This delivery may include notification of the availability of such document(s) on a website, and Client agrees that such notification will constitute “delivery”. Client further agrees to provide Chandler with Client’s email address(s) and to keep this information current at all times by promptly notifying Chandler of any change in email address(s).

Client email address(s):______________________________________________________________

8. Proxy Voting. Chandler will vote proxies on behalf of Client unless otherwise instructed. Chandler has adopted and implemented written policies and procedures and will provide Client with a description of the proxy voting procedures upon request. Chandler will provide information regarding how Clients’ proxies were voted upon request. To request proxy policies or other information, please contact us by mail at the address provided, by calling 800-317-4747 or by emailing your request to
[email protected].

9. Custody of Securities and Funds. Chandler shall not have custody or possession of the funds or securities that Client has placed under its management. Client shall appoint a custodian to take and have possession of its assets. Client recognizes the importance of comparing statements received from the appointed custodian to statements received from Chandler. Client recognizes that the fees expressed above do not include fees Client will incur for custodial services.

10. Valuation. Chandler will value securities held in portfolios managed by Chandler no less than monthly. Securities or investments in the portfolio will be valued in a manner determined in good faith by Chandler to reflect fair market value.

11. Investment Advice. Client recognizes that the opinions, recommendations and actions of Chandler will be based on information deemed by it to be reliable, but not guaranteed to or by it. Provided that Chandler acts in good faith, Client agrees that Chandler will not in any way be liable for any Agenda Packet Page 195

3 error in judgment or for any act or omission, except as may otherwise be provided for under the Federal Securities laws or other applicable laws.

12. Payment of Commissions. Chandler may place buy and sell orders with or through such brokers or dealers as it may select. It is the policy and practice of Chandler to strive for the best price and execution and for commission and discounts which are competitive in relation to the value of the transaction and which comply with Section 28(e) of the Securities and Exchange Act. Nevertheless, it is understood that Chandler may pay a commission on transactions in excess of the amount another broker or dealer may charge, and that Chandler makes no warranty or representation regarding commissions paid on transactions hereunder.

13. Other Clients. It is further understood that Chandler may be acting in a similar capacity for other institutional and individual clients, and that investments and reinvestments for Client's portfolio may differ from those made or recommended with respect to other accounts and clients even though the investment objectives may be the same or similar. Accordingly, it is agreed that Chandler will have no obligation to purchase or sell for Client's account any securities which it may purchase or sell for other clients.

14. Confidential Relationship. The terms and conditions of this Agreement, and all information and advice furnished by either party to the other shall be treated as confidential and shall not be disclosed to third parties except (i) as required by law, rule, or regulation, (ii) as requested by a regulatory authority, (iii) for disclosures by either party of information that has become public by means other than wrongful conduct by such party or its officers, employees, or other personnel, (iv) for disclosures by either party to its legal counsel, accountants, or other professional advisers, (v) as necessary for Chandler to carry out its responsibilities hereunder, or (vi) as otherwise expressly agreed by the parties.

15. No Assignment& Amendments. Neither party may assign, directly or indirectly, all or part of its rights or obligations under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. This Agreement may be amended at any time by mutual agreement in writing.

16. Governing Law. It is understood that this Agreement shall be governed by and construed under and in accordance with the laws of the State of California.

17. Severability. Any provision of this Agreement which is prohibited or unenforceable shall be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.

18. Receipt of Brochure and Privacy Policy. Client hereby acknowledges receipt of the disclosure statement or "brochure" and “brochure supplement” also known as Part 2A and Part 2B of Form ADV, required to be delivered pursuant to Rule 204-3 of the Investment Advisers Act of 1940 (Brochure). Client further acknowledges receipt of Chandler’s Privacy Policy, as required by Regulation S-P.

19. Arbitration. It is agreed that any controversy between Chandler and the Client arising out of Chandler business or this Agreement, shall be submitted to arbitration conducted under the Agenda Packet Page 196

4 provisions of the commercial arbitration rules of the American Arbitration Association. Arbitration must be commenced by service upon the other party of a written demand for arbitration or a written notice of intention to arbitrate. Judgment upon any award rendered by the arbitrators shall be final and may be entered in any court having jurisdiction thereof. This clause does not constitute a waiver of any right including the right to choose the forum, whether arbitration or adjudication, in which to seek resolution of disputes.

Client

By:

Date

Name & Title:_________________________________________________

Chandler Asset Management, Inc.,
a California Corporation

By:

Nicole Dragoo Date
President
Agenda Packet Page 197
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CITY OF CITRUS HEIGHTS

CITY COUNCIL STAFF REPORT

MEMORANDUM
DATE: October 27, 2022
TO: M
ayor and City Council Members
Ashley J. Feeney, City Manager
FRO
M: Susan Talwar, Administrative Services Director
Tammy Nossardi, Finance Manager
SU
BJECT: Financial Update
Summary and Recommendation
Sta
ff recommends the City Council review the information presented on the preliminary General Fund operating results for Fiscal Year 2021-22, the General Fund revenues and expenditures for the first quarter of Fiscal Year 2022-23 and the updated Ten-Year Financial Forecast. This is an information item only. No City Council action is requested.

Fiscal Impact
Th
e Fiscal Year (FY) 21-22 General Fund budget projected, in June 2022, revenues of $35,807,420 available to fund expenditures of $35,427,668 with a projected year-end increase to General Fund Reserves totaling $1,373,752. Unaudited actuals for FY 21-22 have been recorded with an operating surplus of $3,037,878. The General Fund reserve balance is up from $8.4 million to $11.4 million at end of FY 21-22.

In J
une 2022, FY 22-23 General Fund budget was amended to provide $6.8 million surplus. As projected in the Ten-Year Financial Forecast, the $6.8 million surplus creates an opportunity to fund reserves and continue to build up in the coming years.

Th
is is an informational item only.

Background and Analysis
Fiscal Year 2021-22 Preliminary Operating Results
The Fiscal Year 2021-22 General Fund Budget, as adopted in April 2021 and subsequently amended on February 2022, anticipated revenue of $35.2 million to fund expenditures of $33.8 million with the resulting $1.4 million surplus. A subsequent budget amendment was approved on March 2022, when the City Council authorized prepayment of the outstanding revolving line of credit balance of $3.5million, amending General Fund budget expenditures to $37.3 million.

Item 15
Agenda Packet Page 198
Subject: Financial Update
Date: October 27, 2022

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While the City’s fiscal year ended on June 30th, revenues continue to be recorded and expenditures processed through August 31st. Preliminary operating results are now available, subject to any adjustments which could be made by the City’s auditors during their upcoming review of financial transactions for Fiscal Year 2021-22.

General Fund revenue for Fiscal Year 2021-22 totaled $36.7 million – $1.5 million over the $35.2 million budgeted amount. This revenue variance was mainly attributable to the following:
- Sales Tax. The original budget estimate for sales tax revenue was $14.1 million. The effect of inflationary and interest rate pressures, and the pandemic rebound generated sales tax revenue of $14.4 million.
- Building Permit/Plan Check Fees. Revenue from building permits and plan check fees totaled $2.4 million which is $200,000 over the budgeted amount. This was the result of increased residential and commercial building activity which is expected to slow down by the end of the current calendar year.
- Other Revenue. This category includes mainly reimbursements for planning, engineering and public safety costs as well as recovery of costs for damage to City property and other miscellaneous revenue. The total amount of other revenue received was $1.4 million compared to the budget of $1.2 million. This is mostly one-time revenue which is not expected to recur annually.
- Community Center Rentals. Revenue from rental of the three community centers was budgeted at $175,000. With the ease of COVID pandemic restrictions, the community center use has seen a slight uptick resulting in revenue of $200,000. - Line of Credit Prepayment. Due to increased revenue and operating budget savings, there was not a need to access the line of credit. On March 24, 2022, the City Council authorized to pay off the line of credit balance of $3.5 million.
- American Rescue Plan Act (ARPA). For FY21-22 Council appropriated $2.6 million to the Police Department of which $1.6 million was actual expenditures resulting in $1 million savings.

General Fund expenditures totaled $33.6 million compared to the approved budget of $37.3 million. Budget savings of $3.6 million were realized from labor cost savings due to position vacancies and reduced associated operating costs. Of the total budget savings, $2.4 million was attributable to the Police Department due to vacancies.

The City’s auditors are currently conducting the annual financial audit which is expected to be completed by early December. The audited financial statements will be prepared and a final financial report for Fiscal Year 2021-22 will be presented to the Finance and Administration Committee and then to the City Council in January 2023.

A summary of General Fund revenues and expenditures for Fiscal Year 2021-22 is provided below:

Agenda Packet Page 199
Subject: Financial Update
Date: October 27, 2022

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General Fund Summary
Fiscal Year 2021-22
Preliminary Unaudited Results
FY 2021-22 FY 2021-22
Budget Actual Actual vs. Budget
Revenue
Sales Tax 14,104,000$ 14,412,009$ 308,009$ Utility Users Tax 2,780,000 3,065,239 285,239 Franchi se Fees 1,215,000 1,290,165 75,165 Property Transfer Tax 450,000 638,183 188,183 Transient Occupancy Tax 18,000 32,595 14,595 Business License 259,400 284,898 25,498 Building Permits/Plan Check Fees 2,209,800 2,434,280 224,480 Other Li censes and Permi ts 556,500 561,429 4,929 Motor Vehi cl e i n Li eu 9,581,920 9,683,155 101,235 Fi nes & Forfei tures 755,000 787,138 32,138 Charges for Service 365,850 385,478 19,628 Community Center Rentals 175,000 212,059 37,059 Cost Allocations 1,458,192 1,440,305 (17,887) Other Revenue 1,280,673 1,443,512 162,839 Subtotal Revenue 35,209,335$ 36,670,444 1,461,109$ Great Pl ates Rei mbursement - 33,212 33,212 Total Revenue 35,209,335$ 36,703,656$ 1,494,321$ Expenditures
City Council 135,436$ 128,050$ (7,386)$ City Manager 683,164 418,278 (264,886) Economi c Devel opment 554,749 447,017 (107,732) City Attorney 309,000 307,903 (1,097) City Clerk 320,179 267,972 (52,207) Elections - - - Administrative Services Department
Human Resources 692,154 624,151 (68,003) Informati on Servi ces 1,009,777 1,005,014 (4,763) Ri sk Management 2,253,642 1,989,363 (264,279) Finance 934,715 935,103 388 Total Administrative Services Department 4,890,288 4,553,631 (336,657) Non-Departmental 2,802,269 2,537,127 (265,142) Police Department
Police 19,243,356 16,935,821 (2,307,535) Animal Control 750,439 568,199 (182,240) Total Police Department 19,993,795 17,504,020 (2,489,775) General Services Department
Engineering 476,899 618,568 141,669 Facility Management 455,551 413,678 (41,873) Fl eet Management 160,822 140,681 (20,141) Community Events 165,275 137,758 (27,517) Community Centers 668,059 578,924 (89,135) Total General Services Department 1,926,606 1,889,609 (36,997) Community Development Department
Housing 83,927 135,919 51,992 Planning 631,820 557,046 (74,774) Building Inspection 949,785 908,864 (40,921) Planning Com m ission 16,686 8,340 (8,346) Total Community Development Department 1,682,218 1,610,169 (72,049) History & A rts Commission 20,000 5,000 (15,000) Transfers Out 477,000 477,000 - Subtotal Expenditures 33,794,704$ 30,145,776$ (3,648,928)$ Li ne of Credi t Payment 3,520,001 3,520,001 - Total Expenditures 37,314,705$ 33,665,777$ (3,648,928)$ Net Operating Surplus/(Shortfall) (2,105,370)$ 3,037,879$ Agenda Packet Page 200
Subject: Financial Update
Date: October 27, 2022

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Fiscal Year 2022-23 – First Quarter
The budget for Fiscal Year 2022-23 was adopted by the City Council on April 22, 2021 and subsequently amended on June 23, 2022 to include appropriations of the City’s allocation of American Rescue Plan Act (ARPA) funding to restore Police Department staffing.

The General Fund budget for Fiscal Year 2022-23 anticipates revenue of $42 million. As of September 30th, the City had received $2.6 million or 6.3 percent of the annual budgeted revenue. This is due to the timing of how revenue is paid to the City. - Sales Tax – The largest source of revenue to the General Fund is sales tax. Sales tax revenue was budgeted at $14.3 million or 33.9 percent of total budgeted revenue.

Because there is a two-month lag in the remittance of sales tax by the State of California, the City has only received $1.0 million by the end of the first quarter of the fiscal year. - Motor Vehicle in-lieu – The second largest source of revenue to the General Fund is motor vehicle in-lieu fees, budgeted at $10.3 million or 24.5 percent of total anticipated revenue. Motor vehicle in-lieu fees are paid to the City in two installments – one-half in January and one-half in May.
- Property Tax – The City will receive its first property tax revenue, the third largest revenue source to General Fund, budgeted at $6.8 million or 16.3 percent, paid to the City in two installments – one-half in January and one-half in May.

General Fund expenditures for Fiscal Year 2022-23 are budgeted at $35.3 million. As of September 30
th, the City had expended $10.5 million or 29.6 percent of the annual budget.

Included in the first quarter expenditures are payments for annual insurance premiums and CalPERS pension liabilities. While revenues are cyclical General Fund expenditures are consistent exceeding revenues by $7.8 million during the first quarter of the fiscal year. This is common due to the timing of when revenue is received and the fairly stable monthly expenditure level and demonstrates the significance of maintaining a sufficient level of General Fund reserves.

A summary of General Fund revenues and expenditures as of September 30, 2022 is provided below:

Agenda Packet Page 201
Subject: Financial Update
Date: October 27, 2022

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General Fund Summary
Fiscal Year 2022-23
As of September 30, 2022
FY 2022-23 Actual
Budget Sept. 30, 2022 % of Budget
Revenue
Sales Tax 14,323,000 1,097,675 7.7% Utility Users Tax 2,850,000 399,956 14.0% Franchise Fees 1,245,000 99,474 8.0% Property Tax 6,883,000 - 0.0% Property Transfer Tax 500,000 87,811 17.6% Transient Occupancy Tax 18,000 23,858 132.5% Business License 255,350 96,671 37.9% Building Permits/Plan Check Fees 1,562,625 501,950 32.1% Licenses and Permits 509,300 113,359 22.3% Motor Vehicle in Lieu 10,319,000 - 0.0% Fines & Forfeitures 775,100 57,277 7.4% Charges for Service 187,000 61,069 32.7% Community Center Rentals 308,000 134,674 43.7% Cost Allocations / Reimbursement 1,502,637 7,700 0.5% Other Revenue 897,110 (11,896) -1.3% Total Revenue 42,135,122 2,669,578 6.3% Expenditures
City Council 144,118 22,921 15.9% City Manager 708,008 96,109 13.6% Economic Development 559,463 129,721 23.2% City Attorney 318,270 25,074 7.9% City Clerk 293,564 72,912 24.8% Elections 51,000 265 0.5% Administrative Services Department
Human Resources 716,670 157,832 22.0% Information Services 1,097,371 289,312 26.4% Risk Management 2,460,950 1,042,573 42.4% Finance 973,239 230,455 23.7% Total Administrative Services Department 5,248,230 1,720,173 32.8% Non-Departmental 2,566,908 1,790,985 69.8% Police Department
Police 19,641,762 4,358,501 22.2% Animal Control 771,165 147,082 19.1% Total Police Department 20,412,927 4,505,583 22.1% General Services Department
Engineering 488,913 115,953 23.7% Facility Management 469,808 86,488 18.4% Community Centers 728,235 182,435 25.1% Community Events 239,031 61,608 25.8% Fleet Management 174,458 36,378 20.9% Total General Services Department 2,100,445 482,863 23.0% Community Development Department
Housing 86,420 40,518 46.9% Planning 651,869 145,069 22.3% Building Inspection 979,664 247,671 25.3% Planning Commission 17,186 - 0.0% Total Community Development Departmen 1,735,139 433,258 25.0% History & Arts Commission 20,000 - 0.0% Transfers Out 1,197,000 1,197,000 100.0% Total Expenditures 35,355,072 10,476,864 29.6% Operating Surplus/(Shortfall) 6,780,050 (7,807,286) Agenda Packet Page 202
Subject: Financial Update
Date: October 27, 2022

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American Rescue Plan Act
The City of Citrus Heights was allocated $15.6 million in American Rescue Plan Act (ARPA) funding. To date, the City has appropriated $4.3 million of ARPA funding to the Police Department to restore staffing levels ($2.5million of which $1.6 million was expended in FY 21- 22 and $2.8 million in FY 22-23), $1.4 million for the replacement of Police Fleet Vehicles & equipment, and $600,000 towards the update of the Public Safety Communications Center. An additional $320,000 for Small Business COVID Recovery Grant Program of which $281,111 was expended in FY 21-22 and $975,000 allocation to Beautification Crew, Citrus Heights Block Party Trailer, and Community Projects Grant Program.

A Summary of ARPA funding has been provided below.

Ten Year Financial Forecast
As a strategic fiscal planning tool, the City maintains a long-term financial forecast. This forecast is updated periodically to reflect information currently available regarding anticipated future revenues and expenditures. The financial forecast covers a te n-year period for the City’s General Fund. The City Council last reviewed the Ten-Year Financial Forecast on June 23, 2022. The Ten- Year Financial Forecast has been updated and includes the following changes:

• One additional year added to forecast period – Fiscal Year 2031-32 • Fiscal Year 2021-22 updated to reflect actual revenues and expenditures • Fiscal Years 2022-23 adjusted to reflect the Adopted Budget • Pension liability (UAL) costs updated based upon recent CalPERS information • Line item added for street repairs with minimal available funding (limited to amount which will not deplete reserves below City Council approved minimum level) • Line item added for potential funding of City match for Auburn Boulevard Complete Streets Revitalization Project ($4.0 million) in Fiscal Year 2023-24 – although it is 15,676,972.00$
Commited Actual Ending Balance
6/24/2021Rehire Public Safety staff to pre-pandemic levels FY 21/22 2,541,434.00$ 1,568,805.00$ 14,108,167.00$ 6/24/2021Rehire Public Safety staff to pre-pandemic levels FY 22/23 2,811,775.00$ 11,296,392.00$ 1/13/2022Small Business COVID Recovery Grant 320,000.00$ 281,111.00$ 11,015,281.00$ 6/23/2022Beautification Crew Pilot Program 875,000.00$ 10,140,281.00$ 6/23/2022Police Fleet Vehicles & Equipment 1,400,000.00$ 8,740,281.00$ 6/23/2022Public Safety Communications Center Critical Needs 600,000.00$ 8,140,281.00$ 6/23/2022Block Party Trailer - Economic Development 50,000.00$ 8,090,281.00$ 9/22/2022Community Projects Grant Program 50,000.00$ 8,040,281.00$ Spent 1,849,916.00$
Committed 5,786,775.00$
Remaining Balance 8,040,281.00$
ARPA Approved Commited Funds
Total Award
Agenda Packet Page 203
Subject: Financial Update
Date: October 27, 2022

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anticipated that some funding will be required in Fiscal Year 2022- 23 based upon project schedule.

A summary of the Ten-Year Financial Forecast is provided below. A more detailed version is attached to this report.

The information on Fiscal Year 2021-22 General Fund operating results and the updated Ten Year Financial Forecast was reviewed with the Finance and Administration Committee.

Attachments

1. Ten Year Financial Forecast
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Actual Budget P rojected Projected Projected Projected Projected Projected Projected Projected Projected TOTAL REVENUE 36,703,656 42, 135,122 42,904,148 44,318,068 45,734,988 47,170,733 48,301,571 49,461,416 50,599,307 51,642,329 52,825,203 TOTAL OPERATING EXPENDITURES 33,665,777 35,355,072 39,917,212 40,214,417 41,393,156 42,623,174 43,840,133 45,093,470 46,384,293 47,713,706 49,083,896 STREET REPAIRS 2,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 Auburn Blvd - Phase 2 Match 4,000,000
Net Operating Position 3,037,878 6,780,050 (3,013,064) 103,651 341,832 547,559 461,437 367,946 215,014 (71,378) (258,693) Ending Reserve Balance 11,457,802$ 18,237,851$ 15,224,787$ 15,328,438$ 15,670,271$ 16,217,830$ 16,679,267$ 17,047,213$ 17,262,227$ 17,190,850$ 16,932,157$ Minimum Reserve per City Council Policy (17%) 5,723,182$ 6,010,362$ 7,805,926$ 7,516,451$ 7,716,836$ 7,925,940$ 8,132,823$ 8,345,890$ 8,565,330$ 8,791,330$ 9,024,262$ Over(under) Reserve Target 5,734,619 12,227,489 7,418,861 7,811,988 7,953,434 8,291,890 8,546,445 8,701,323 8,696,897 8,399,520 7,907,894 City Manager Target Reserve @25% 8,416,444 8,838,768 11,479,303 11,053,604 11,348,289 11,655,794 11,960,033 12,273,368 12,596,073 12,928,427 13,270,974 Over(under) Reserve Target 3,041,357 9,399,083 3,745,484 4,274,834 4,321,982 4,562,036 4,719,234 4,773,846 4,666,154 4,262,423 3,661,183 Agenda Packet Page 204
General Fund Ten Year Financial Forecast
With Partial Steet Funding
October 2022 10/27/2022
FY 2021-22 FY 2022-23
FY 19/20 FY 2020-21 Budget FY 2021-22 Amended Budget FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Actual Actual (Amended) Actual (Unaudited) (Jun Forecast) Projected Projected Projected Projected Projected Projected Projected Projected Projected

REVENUE
Taxes and Franchises
Property Tax - - - - 6,883,000 7,183,497 7,495,213 7,825,438 8,170,146 8,333,549 8,500,220 8,670,224 8,843,629 9,020,501 Sales & Use Tax 12,083,836 13,373,483 14,104,000 14,412,009 14,323,000 14,677,899 15,059,312 15,360,498 15,667,708 15,981,062 16,300,684 16,626,697 16,959,231 17,298,416 Utility Users Tax 2,650,891 2,717,945 2,780,000 3,065,239 2,850,000 2,850,000 2,850,000 2,850,000 2,850,000 2,850,000 2,850,000 2,850,000 2,850,000 2,850,000 Franchise Fees 664,123 619,090 700,000 747,106 725,000 743,125 761,703 780,746 800,264 820,271 840,778 861,797 883,342 905,426 Solid Waste Franchise Fees 497,073 522,754 515,000 543,059 520,000 533,000 546,325 559,983 573,983 588,332 603,041 618,117 633,570 649,409 Real Property Transfer Tax 306,250 383,773 450,000 638,183 500,000 379,250 388,731 398,450 408,411 418,621 429,087 439,814 450,809 462,079 Transient Occupancy Tax 19,879 23,237 18,000 32,595 23,000 36,000 36,900 37,823 38,768 39,737 40,731 41,749 42,793 43,863 Total Taxes and Franchises 16,222,051 17,640,282 18,567,000 19,438,191 25,824,000 26,402,771 27,138,184 27,812,937 28,509,280 29,031,573 29,564,539 30,108,398 30,663,373 31,229,693 Licenses and Permits
Business License Tax 275,399 291,240 290,900 377,201 298,875 316,981 324,906 333,028 341,354 349,888 358,635 367,601 376,791 386,211 Building Plan Check 237,914 592,703 614,200 682,365 348,000 269,216 275,947 282,845 289,916 297,164 304,593 312,208 320,014 328,014 Engineering Plan Check 176,563 (17,013) 32,800 33,193 33,700 34,543 35,406 36,291 37,198 38,128 39,082 40,059 41,060 42,087 Zone Check 11,650 26,456 6,700 - 10,000 10,250 10,506 10,769 11,038 11,314 11,597 11,887 12,184 12,489 Building Permit Fees 940,625 1,789,146 1,870,000 2,056,477 1,340,700 1,045,193 1,071,322 1,098,105 1,125,558 1,153,697 1,182,539 1,212,103 1,242,405 1,273,466 Engineering Fees Utilities (17,096) 63,212 132,600 76,429 60,000 140,015 143,515 147,103 150,781 154,550 158,414 162,374 166,434 170,595 Tree Permit 2,100 1,470 1,500 - 2,000 2,050 2,101 2,154 2,208 2,263 2,319 2,377 2,437 2,498 Transportation Permits 26,322 16,340 15,000 15,186 15,000 15,375 15,759 16,153 16,557 16,971 17,395 17,830 18,276 18,733 Animal License 51,150 43,547 47,000 39,756 40,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55, 000
Total Licenses and Permits 1,704,626 2,807,101 3,010,700 3,280,607 2,148,275 1,888,623 1,934,463 1,981,450 2,029,611 2,078,976 2,129,576 2,181,440 2,234,601 2,289,091 Fines and Forfeitures 939,543 877,599 755,200 787,639 775,100 1,027,667 1,053,359 1,079,693 1,106,685 1,134,352 1,162,711 1,191,779 1,191,779 1,221,573 Intergovernmental (inc. Motor Vehicle In-Lieu Fees) 8,945,458 12,418,967 9,606,920 9,762,521 10,319,500 10,229,981 10,673,963 11,144,684 11,635,050 11,984,101 12,343,624 12,713,933 13,095,351 13,488,212 Use of Money 78,560 5,109 30,000 (263,808) 50,000 114,578 119,366 153,284 156,703 162,178 166,793 170,472 172,622 171,908 Charges for Services 691,109 422,960 556,050 597,576 675,100 897,746 920,190 943,195 966,775 990,944 1,015,717 1,041,110 1,041,110 1,067,138 Dignity Lease 133,267 173,356 214,451 214,451 256,609 299,737 343,987 389,343 435,834 483,487 532,331 582,397 633,714 682,565 Cost Allocations 1,483,599 1,415,720 1,458,192 1,440,305 1,501,937 1,577,973 1,657,857 1,741,786 1,829,964 1,922,606 2,019,938 2,070,437 2,070,437 2,122,198 CARES Act -
FEMA/Cal OES - Great Plates Reimbursement -
Other Revenues 1,111,116 1,165,750 1,010,822 1,446,174 584,601 465,072 476,699 488,617 500,832 513,353 526,187 539,341 539,341 552,825 TOTAL REVENUE 31,309,328$ 36,926,844$ 35,209,335$ 36,703,656$ 42,135,122$ 42,904,148$ 44,318,068$ 45,734,988$ 47,170,733$ 48,301,571$ 49,461,416$ 50,599,307$ 51,642,329$ 52,825,203$

EXPENDITURES
Labor
Salaries (incl OT, standby) 17,351,643 16,683,636 16,733,981 15,436,359 17,375,867 20,458,928 21,072,696 21,704,877 22,356,023 23,026,704 23,717,505 24,429,030 25,161,901 25,916,758 Retirement 2,153,431 2,196,810 2,206,795 1,914,627 2,265,107 2,561,640 2,638,489 2,717,644 2,799,173 2,883,148 2,969,643 3,058,732 3,150,494 3,245,009 Retiremenent - UAL 800,066 1,102,196 1,353,703 1,353,703 1,613,206 1,771,228 1,933,817 2,037,624 2,133,476 2,182,244 2,232,344 2,283,834 2,336,733 2,392,114 Compensated Absences 360,000 366,237 350,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 Benefits (excluding Retirement) 4,015,660 4,180,628 3,933,341 3,113,744 4,096,963 4,867,064 5,013,076 5,163,469 5,318,373 5,477,924 5,642,262 5,811,529 5,985,875 6,165,451 Total Labor 24,320,800 24,163,270 24,587,820 22,184,670 25,701,142 30,058,860 31,058,078 32,023,612 33,007,045 33,970,020 34,961,753 35,983,125 37,035,003 38,119,332 Operating Costs 7,401,712 6,698,864 8,400,861 7,236,186 8,380,730 8,632,152 7,980,139 8,219,543 8,466,130 8,720,114 8,981,717 9,251,169 9,528,704 9,814,565 Interest Expense 332,845 247,920 76,200 76,200 76,200 - - - - - - - Line of Credit Principal Repayment 3,520,001 3,520,001 - - - - - - - - - - Transfers-Out 437,312 487,000 477,000 1,197,000 1,150,000 1,100,000 1,150,000 1,150,000 1,150,000 1,150,000 1,150,000 1,150,000 1,150,000 Auburn Blvd - Phase 2 City Match 4,000,000
STREET REPAIRS - - - - - 2,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 TOTAL EXPENDITURES 31,722,512$ 33,316,148$ 37,328,527$ 33,665,777$ 35,355,072$ 45,917,212$ 44,214,417$ 45,393,156$ 46,623,174$ 47,840,133$ 49,093,470$ 50,384,293$ 51,713,706$ 53,083,896$ NET OPERATING POSITION (413,184)$ 3,610,696$ (2,119,192)$ 3,037,878$ 6,780,050$ (3,013,064)$ 103,651$ 341,832$ 547,559$ 461,437$ 367,946$ 215,014$ (71,378)$ (258,693)$ Line of Credit Draw for Operating Expenses -
Net Position After Line of Credit Draw
Beginning Reserve Balance (Unassigned/Committed) 8,419,923 8,419,923 11,457,802 18,237,851 15,224,787 15,328,438 15,670,271 16,217,830 16,679,267 17,047,213 17,262,227 17,190,850 Ending Reserve Balance 8,419,923$ 6,300,731$ 11,457,802$ 18,237,851$ 15,224,787$ 15,328,438$ 15,670,271$ 16,217,830$ 16,679,267$ 17,047,213$ 17,262,227$ 17,190,850$ 16,932,157$ June 2022 Forecast 8,447,432$ 6,300,731$ 9,793,675$ 16,573,724$ 13,040,085$ 12,500,669$ 13,058,094$ 13,470,280$ 13,791,805$ 14,015,191$ 14,080,886$ 13,855,316$ 13,437,441$ Minimum Reserve per Council Policy (17%) 5,663,745$ 6,345,850$ 5,723,182$ 6,010,362$ 7,125,926$ 7,516,451$ 7,716,836$ 7,925,940$ 8,132,823$ 8,345,890$ 8,565,330$ 8,791,330$ 9,024,262$ City Manager Target Reserve @25% 8,329,037$ 9,332,132$ 8,416,444$ 8,838,768$ 11,479,303$ 11,053,604$ 11,348,289$ 11,655,794$ 11,960,033$ 12,273,368$ 12,596,073$ 12,928,427$ 13,270,974$ Agenda Packet Page 205
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CITY OF CITRUS HEIGHTS

CITY COUNCIL STAFF REPORT

MEMORANDUM
DATE
: October 27, 2022
TO: Mayor and City Council Members
Ashley J. Feeney, City Manager
FRO
M: Susan Talwar, Administrative Services Director
Tammy Nossardi, Finance Manager
Brian Koski, Information Technology Manager
SU
BJECT: Request to Utilize American Rescue Plan Act Funds to Upgrade Major, Critical Information Technology Projects and Execute a Contract with Tyler Technologies
Summary and Recommendation
At the May 10, 2022 Strategic Planning Meeting, the City Council established an objective to present to City Council for direction, options and recommendations on replacement of enterprise financial software system (Eden).

The
City’s Enterprise Resource Planning (ERP) system has become obsolete and will no longer be serviced by the vendor starting in 2024. The ERP system is the central software system for municipal operations. This item has long been identified as a need to be addressed. Tyler Munis is an excellent product when evaluated against other vendors and many cities are switching to this vendor at a much higher cost as they would need to migrate their data from another vendor.

Fortunately, the city currently utilizes Tyler Eden who is offering the replacement Tyler Munis product. This is a one-time investment that should last a decade or more before needing to be revisited. There will be annual maintenance cost as with any system that will be ongoing.

Sta
ff recommends the City Council adopt Resolution No. 2022 _______ a resolution of the City Council of the City of Citrus Heights, California authorizing the City Manager to utilize the American Rescue Plan Act (ARPA) Funds for Information Technology (IT) hardware and software critical projects.

St
aff recommends the City Council adopt Resolution No. 2022 _______ a resolution of the City Council of the City of Citrus Heights, California authorizing the City Manager to execute a contract with Tyler Technologies (Attachment 3) for an Enterprise Resource Planning (ERP) system.

Item 16
Agenda Packet Page 206
Subject: Request to Utilize American Rescue Plan Act Funds to Upgrade Major, Critical Information Technology Projects and Execute a Contract with Tyler Technologies Date: October 27, 2022

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Fiscal Impact

Major components of the City’s Information Technology hardware equipment and software is in need of updates due to its end-of-life cycle. Staff is requesting funding through ARPA of $1,198,350. The FY 22-23 budget has allocated $590,000 for IT replacements, which is not enough to catch up on updates to citywide technology. Staff discussed funding recommendations with the Finance Committee on October 19, 2022. The Finance Committee recommended use of ARPA funds as this is a one-time request, is part of a critical city need and is consistent with ARPA guidelines. The request fits within the ARPA limitations of “Technology infrastructure to improve access to and the user experience of government IT systems…”, freeing up budgeted General Fund dollars for other projects/operating needs. Over the past decade, IT has deferred maintenance and/or replacements due to lack of funding. Annual maintenance cost in the following fiscal years of $106,224 would be incorporated into the information systems software maintenance General Fund account. No fiscal impact to the General Fund is projected in FY22-23.

Table 1 – Cost Breakdown of Information Technology Upgrades Item qty unit cost
Tyler Enterprise ERP 1 $ 860,350 $ 860,350 Virtual Cluster - Servers and File Storage 2 $ 80,000 $ 160,000 Core/backbone switches 2 $ 25,000 $ 50,000 Data Backup system 1 $ 65,000 $ 65,000 Workstations - Desktop PC 60 $ 530 $ 32,000 Workstations - Laptops 26 $ 1,170 $ 31,000 Total Request:

$ 1,198,350

Vendor Operation Annual Maintenance Cost
Current Projected Net Impact
Permit City Building Permits $16,000
MGO Planning $8,640
CitizenServe Business Licenses $10,800
Permit Soft General Services Permits $13,000
Tyler Eden Finance $28,500
Time and Attendance Payroll $3,400
Tyler Munis ERP All of the above, plus HR &
Payroll
$186,564
Net Impact to Budget $106,224

Agenda Packet Page 207
Subject: Request to Utilize American Rescue Plan Act Funds to Upgrade Major, Critical Information Technology Projects and Execute a Contract with Tyler Technologies Date: October 27, 2022

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Table 2 – History of ARPA Funding Allocations
ARPA Approved Committed Funds
Total Award $ 15,676,972
6/24/2021 Rehire Public Safety staff to pre-pandemic levels FY 21/22 $ (1,568,805) 6/24/2021 Rehire Public Safety staff to pre-pandemic levels FY 22/23 $ (2,811,775) 1/13/2022 Small Business COVID Recovery Grant $ (281,111) 6/23/2022 Beautification Crew Pilot Program $ (875,000) 6/23/2022 Police Fleet Vehicles & Equipment $ (1,400,000) 6/23/2022 Public Safety Communications Center Critical Needs $ (600,000) 6/23/2022 Block Party Trailer - Economic Development $ (50,000) 9/22/2022 Community Projects Grant Program $ (50,000)

Remaining Balance $ 8,040,281
Proposed ERP System and Technology $ (1,198,350)
Proposed Total Allocation Remaining $ 6,841,931

Background and Analysis

Enterprise Resource Planning System
The City’s Enterprise Resource Planning (ERP) system is a vital component of the City’s operations and serves as the primary software platform to manage day-to-day activities including but not limited to accounts receivable, accounts payable, general ledger, costs, budgets, forecasting, payroll, benefits, employee data management, and operational and financial reports.

The current Tyler Eden system was implemented in 2010, this older version of ERP system software is antiquated and will no longer be supported at the end of 2024. In addition, the City uses four separate third party payment processing systems (Permit City, MGO, CitizenServe and Permit Soft) to collect revenue for the City.

The cost to upgrade the existing financial module alone quoted an implementation cost of $490,000 and an annual maintenance increase of $90,000. Administrative Services staff met with key staff across City departments, including the Police Department, to better understand the needs with respect to the systems currently utilized and the needs in the next ERP system. It was clear the need for efficiencies in workflow, combining six existing systems onto one platform would save staff time and also provide an enhanced customer service experience. It will also avoid continually needing to renew licensing on other systems and greatly improve municipal service efficiencies. The Tyler Munis system is an upgrade of the existing Tyler Eden product that the city currently uses which will cost $860,350 which is less costly than switching to an alternative vendor product that would require data migration.

Tyler Technologies is a leader in the municipal government ERP, with 37,000 installations in 12,000 locations. Tyler Munis ERP is being used by over 2,000 public agencies in California.

Tyler Munis ERP is designed specifically for governments and integrates finance, purchasing, Agenda Packet Page 208
Subject: Request to Utilize American Rescue Plan Act Funds to Upgrade Major, Critical Information Technology Projects and Execute a Contract with Tyler Technologies Date: October 27, 2022

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payroll, human resources, community development, code enforcement, project management and permitting. Tyler Munis continued to refine their platform during the pandemic allowing for better customer service interface for those that wish to utilize remote services.

The new version of the Munis software would centralize collection into one system and provide a modern, web-based graphical user interface, and additional functionality that can be leveraged to improve service delivery through streamlined business processes.

The implementation of Tyler Munis will be an extensive project spanning over multiple fiscal years. The implementation will be divided into phases, with each phase “going-live” before we move on to the next phase. Each phase includes: evaluating the City’s current workflows and business processes; identifying new processes to function within the new ERP; updating processes to current best practices enabled by the new ERP; testing the functionality and accuracy of the processes built into the new ERP and training all users. In authorizing a contract now, staff and the vendor will be able to start the process of transitioning to the new system in January 2023. The complete transition (including financials, procurement, Human Resources, Payroll, revenues, permitting and licensing) to Tyler Munis ERP/EnerGov is expected to be completed by Fiscal Year 23-24.

Hardware and Supporting Infrastructure
The replacement of the City’s virtual server platform, backbone switches and data backup system are coming to the end of its life cycle this fiscal year. This combined system provides 90% of the city and police client-server environment. The system saves on overall hardware, power consumption, and provides fault tolerance for uptime and redundancy. The system components were purchased in late 2015, several of these servers have had multiple warranty extensions and will be out of warranty, or unable to be covered further under warranty due to lack of parts or age of the system itself. Industry standard replacement cycle for hardware such as servers and workstations are generally five years.

Attachments

1. Resolution No. 2022 _______ a resolution of the City Council of the City of Citrus Heights, California authorizing the City Manager to utilize the American Rescue Plan Act (ARPA) Funds for Information Technology (IT) hardware and software critical projects.

2. Resolution No. 2022 _______ a resolution of the City Council of the City of Citrus Heights, California authorizing the City Manager to execute a contract with Tyler Technologies for the use of and implementation of Enterprise Resource Planning (ERP) system software, service and maintenance agreement.

Agenda Packet Page 209
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RESOLUTION NO. 2022- ___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS HEIGHTS,

CALIFORNIA, AUTHORIZING THE CITY MANAGER TO UTILIZE THE AMERICAN

RESCUE PLAN ACT FUNDS FOR INFORMATION TECHNOLOGY HARDWARE AND

SOFTWARE CRITICAL PROJECTS

WHEREAS, the City of Citrus Heights has determined a need to update technology to meet the City’s operational needs; and

WHEREAS, at the Strategic Planning Workshop on May 10, 2022 a strategic Objective was defined to present to City Council for direction, options, and recommendations on replacement of enterprise financial software; and

WHEREAS, the hardware and software replacement schedules have lagged beyond normal cycles and is in need of updates and replacements; and

WHEREAS, the City will utilize the funds to replace and update information technology hardware and software determined to be outdated; and

WHEREAS, the City Council wishes to authorize staff to utilize American Rescue Plan Act funds for the information technology replacement project.

NOW THEREFORE BE IT RESOLVED AND ORDERED by the City of Citrus Heights that the City Council hereby authorizes the City Manager to acquire and install the necessary information technology hardware and software in the amount not to exceed $1,198,350.

The City Clerk shall certify the passage and adoption of this Resolution and enter it into the book of original resolutions.

PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 27th day of October 2022 by the following vote, to wit:

AYES: Council Members:

NOES: Council Members:

ABSTAIN: Council Members:

ABSENT: Council Members:

Porsche Middleton, Mayor

ATTEST:

Amy Van, City Clerk

Agenda Packet Page 210
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RESOLUTION NO. 2022- ___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS HEIGHTS,

CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT

WITH TYLER TECHNOLOGIES FOR AN ENTERPRISE RESOURCE PLANNING SYSTEM

WHEREAS, the City of Citrus Hei ghts is to replace its current Enterprise Resource Planning (ERP) System; and

WHEREAS, at the Strategic Planning Workshop on May 10, 2022 a strategic Objective was defined to present to City Council a for direction, options, and recommendations on replacement of enterprise financial software; and

WHEREAS, the City determined that the MUNIS and Energov products proposed by Tyler Technologies are the best products to meet the City’s operational needs; and

WHEREAS, the City wishes to enter into an Agreement with Tyler Technologies, Inc. to implement an Enterprise Resource Planning System in the amount of $860,350; and

WHEREAS, the ERP replacement project is to be funded through the American Rescue Plan Act; and

WHEREAS, the City Council wishes to authorize the City Manager, with consultation from the City Attorney, to execute a License and Services Agreement with terms favorable to the City.

NOW THEREFORE BE IT RESOLVED AND ORDERED by the City of Citrus Heights that the City Council hereby authorizes the City Manager, with consultation from the City Attorney, to execute a License and Services
Agreement with Tyler Technologies for $860,350. The City Manager and City Attorney are given authority to execute an Agreement in the best interest of the City.

The City Clerk shall certify the passage and adoption of this Resolution and enter it into the book of original resolutions.

PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 27th day of October 2022 by the following vote, to wit:

AYES: Council Members:

NOES: Council Members:

ABSTAIN: Council Members:

ABSENT: Council Members:

Porsche Middleton, Mayor

ATTEST:

Agenda Packet Page 211
Tyler Munis Energov Contract Services

Amy Van, City Clerk

Agenda Packet Page 212