Agenda packet — Covina City Council, February 6, 2024 (part 2 of 3)

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

MEASURE R SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(137)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE, JULY 1 $ 138,218 138,218 $ - $
Resources (Inflows):

Intergovernmental 741,156 798,277 57,121
Investment Earnings 3,000 9,704 6,704
Amounts Available for Appropriation 882,374 946,199 63,825 Charges to Appropriations (Outflows):

Capital Outlay 107,500 104,861 2,639
Debt Service:

Principal Retirement 205,000 205,000 -
Interest and Fiscal Charges 165,238 164,659 579
Total Charges to Appropriation 477,738 474,520 3,218
BUDGETARY FUND BALANCE, JUNE 30 $ 471,679 404,636 $ 67,043 $

Page 181 of 518 ends

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

OTHER GRANTS SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(138)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 82,807 82,807 $ - $
Resources (Inflows):

Intergovernmental 3,852,889 3,187,000 (665,889)
Investment Earnings - 2,794 2,794
Amounts Available for Appropriation 3,935,696 3,272,601 (663,095) Charges to Appropriations (Outflows):

Public Safety 3,093,938 3,032,043 61,895
Public Works 100,078 53,491 46,587
Culture and Recreation 239,479 56,035 183,444
Community Development 300,000 - 300,000
Capital Outlay 97,366 - 97,366
Total Charges to Appropriation 3,830,861 3,141,569 689,292 BUDGETARY FUND BALANCE - JUNE 30 $ 131,032 104,835 $ 26,197 $

Page 182 of 518 ends

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

GENERAL PROJECTS FUND CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(139)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 2,032,578 2,032,578 $ - $ Resources (Inflows):

Intergovernmental 504,092 253,145 (250,947)
Special Assessments - 252,550 252,550
Miscellaneous - 2,475 2,475
Amounts Available for Appropriation 2,536,670 2,540,748 4,078 Charges to Appropriations (Outflows):

Capital Outlay 2,181,745 889,058 1,292,687
Total Charges to Appropriation 2,181,745 889,058 1,292,687 BUDGETARY FUND BALANCE - JUNE 30 $ 1,651,690 354,925 $ 1,296,765 $

Page 183 of 518 ends

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

COVINA REVITALIZATION CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(140)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 281,911 281,911 $ - $ Resources (Inflows):

Investment Earnings 5,342 500 4,842
Amounts Available for Appropriation 287,253 282,411 4,842 Charges to Appropriations (Outflows):

Capital Outlay 21,424 282,411 260,987
Total Charges to Appropriation 21,424 282,411 260,987
BUDGETARY FUND BALANCE - JUNE 30 $ 265,829 - $ 265,829 $

Page 184 of 518 ends

CITY OF COVINA

SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE – MAJOR FUND

TRANSPORTATION CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(141)
Variance with
Final Budget
Positive
Original Final Actual (Negative)
BUDGETARY FUND BALANCE (DEFICIT) - JULY 1 $ (86,945) (86,945) $ (86,945) $ - $ Resources (Inflows):

Intergovernmental 3,500,000 5,549,085 1,420,575 (4,128,510) Transfers In 500,000 1,050,000 404,949 (645,051)
Amounts Available for Appropriation 3,913,055 6,512,140 1,738,579 (4,773,561) Charges to Appropriations (Outflows):

Capital Outlay 4,000,000 6,512,140 2,319,686 4,192,454
Total Charges to Appropriation 4,000,000 6,512,140 2,319,686 4,192,454 BUDGETARY FUND BALANCE (DEFICIT) - JUNE 30 $ - (86,945) $ (581,107) $ (581,107) $ Budgeted Amounts

Page 185 of 518 ends

CITY OF COVINA

NONMAJOR ENTERPRISE FUNDS
JUNE 30, 2023
(142)
The following are the individual nonmajor enterprise funds of the City:

Environmental Fund accounts for the general and administrative, environmental services, industrial waste and waste management operations.

Theater Fund accounts for the operation and production of public entertainment and economic development in downtown Covina.

Page 186 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF NET POSITION

NONMAJOR ENTERPRISE FUNDS
JUNE 30, 2023
(143)
Total
Non-Major
Environmental Theater Enterprise
ASSETS Fund Fund Funds

CURRENT ASSETS
Cash and Investments 1,596,421 $ 992,962 $ 2,589,383 $
Accounts Receivable, Net 290 11 ,142 301 ,150 ,292
Interest Receivable - 466 466
Lease Receivable 68,198 - 68,198
Prepaid Items 8,359 - 8,359
Total Current Assets 1,894,922 1,072,776 2,967,698

NONCURRENT ASSETS
Lease Receivable 209,541 - 209,541
Capital Assets:

Capital Assets, not Depreciated 17,696 - 17,696
Capital Assets, Depreciated, Net 1,444,365 3,298,640 4,743,005 Total Noncurrent Assets 1,462,061 3,508,181 4,970,242
Total Assets 3,356,983 4,580,957 7,937,940

DEFERRED OUTFLOWS OF RESOURCES
Deferred Amount on OPEB Plans 70,327 - 70,327
Deferred Amount on Pension Plans 273,356 - 273,356
Total Deferred Outflows of Resources 343,683 - 343,683

LIABILITIES

CURRENT LIABILITIES
Accounts Payable 70,522 70,869 141,391
Deposits Payable 495,701 5,489 501,190
Interest Payable 7,652 22,711 30,363
Compensated Absences 33,735 - 33,735
Pension Obligation Bonds Payable 38,269 - 38,269
Total Current Liabilities 645,879 99,069 744,948

NONCURRENT LIABILITIES
Compensated Absences 54,246 - 54,246
Advance from Sewer Fund - 2,750,000 2,750,000
Pension Bonds Payable 789,725 - 789,725
Net OPEB Liability 202,956 - 202,956
Net Pension Liability 377,190 - 377,190
Total Noncurrent Liabilities 1,424,117 2,750,000 4,174,117 Total Liabilities 2,069,996 2,849,069 4,919,065

DEFERRED INFLOWS OF RESOURCES
Deferred Amounts on OPEB Plans 36,406 - 36,406
Deferred Amounts on Pension Plans 1,607 - 1,607
Total Deferred Inflows of Resources 38,013 274,385 312,398

NET POSITION
Net Investment in Capital Assets 1,457,276 3,298,640 4,755,916 Unrestricted (1,841,137) 135,381 (1,705,756)
Total Net Position 1,592,657 $ 1,457,503 $ 3,050,160 $

Page 187 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

NONMAJOR ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2023
(144)
Total
Non-Major
Environmental Theater Enterprise
Fund Fund Funds

OPERATING REVENUES
Charges for Services - $ 33,198 $ 33,198 $
Environmental Fees 1,230,334 - 1,230,334
Total Operating Revenues 1,230,334 33,198 1,263,532

OPERATING EXPENSES
General and Administrative 661,401 436,400 1,097,801
Street Sweeping 151,150 - 151,150
Environmental Services 200,472 - 200,472
Industrial Waste 21,221 - 21,221
Waste Management 339,611 - 339,611
Depreciation 66,177 34,412 100,589
Total Operating Expenses 1,440,032 470,812 1,910,844
OPERATING INCOME (LOSS) (437,614) (209,698) (647,312)

NONOPERATING REVENUES (EXPENSES)
Investment Income 34,248 22,606 56,854
Interest Expense (18,374) (22,711) (41,085)
Rental Income - 75,222 75,222
Total Nonoperating Revenues 15,874 75,117 90,991
INCOME (LOSS) BEFORE TRANSFERS (362,497) (193,824) (556,321)

TRANSFERS
Transfers In 1,820,000 - 1,820,000
Total Transfers - 1,820,000 1,820,000
CHANGE IN NET POSITION 1,457,503 (193,824) 1,263,679
Net Position - Beginning of Year 1,786,481 - 1,786,481
NET POSITION - END OF YEAR $ 1,457,503 1,592,657 $ 3,050,160 $

Page 188 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF CASH FLOWS

NONMAJOR ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2023
(145)
Total
Non-Major
Environmental Theater Enterprise
Fund Fund Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from customers 1,174,750 $ 22,048 $ 1,196,798 $ Cash Payments to Suppliers of Goods
and Services (768,413) (389,892) (1,158,305)
Cash Payments to Employees for Services (494,225) (8,639) (502,864) Net Cash Used by
Operating Activities (87,888) (376,483) (464,371)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Cash Received from Other Funds - 1,820,000 1,820,000
Advances from Other Funds - 2,750,000 2,750,000
Net Cash Provided by Noncapital
Financing Activities - 4,570,000 4,570,000

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Acquisition of Capital Assets (220,159) (3,333,052) (3,553,211) Cash Received - Leases - 110,357 110,357
Principal Paid - (37,994) (37,994)
Interest and Debt Issuance Costs (18,421) - (18,421)
Net Cash Used by Capital and
Related Financing Activities (276,574) (3,222,695) (3,499,269)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment Income 34,248 22,140 56,388

NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 992,962 (330,214) 662,748
Cash and Cash Equivalents -
Beginning of Year 1,926,635 - 1,926,635

CASH AND CASH EQUIVALENTS -
END OF YEAR $ 992,962 1,596,421 $ 2,589,383 $

Page 189 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF CASH FLOWS

NONMAJOR ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2023
(146)
Total
Non-Major
Environmental Theater Enterprise
Fund Fund Funds

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED BY

OPERATING ACTIVITIES
Operating Loss (209,698) $ (437,614) $ (647,312) $
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Used by Operating Activities:

Depreciation 34,412 66,177 100,589
Changes in Operating Assets, Deferred Outflows
of Resources, Liabilities, and Deferred Inflows of
Resources:
(Increase) Decrease in Accounts Receivable (55,584) (11,150) (66,734) (Increase) Decrease in Prepaid Items (410) - (410)
(Increase) Decrease in Deferred Outflows
of Resources on OPEB Plan (10,517) - (10,517)
(Increase) Decrease in Deferred Outflows
of Resources on Pension Plans 729,430 - 729,430
Increase (Decrease) in Accounts Payable 577 70,869 71,446 Increase (Decrease) in Deposits Payable 11,835 5,489 17,324 Increase (Decrease) in Deferred Inflows
of Resources of OPEB Plan (1,133) - (1,133)
Increase (Decrease) in Deferred Inflows
of Resources Pension Plans (262,195) - (262,195)
Increase (Decrease) in Deferred Inflows
of Resources Leases - (38,489) (38,489)
Increase (Decrease) in Compensated Absences 3,931 - 3,931 Increase (Decrease) in Net OPEB Liability 14,427 - 14,427 Increase (Decrease) in Net Pension Liability (374,728) - (374,728) Net Cash Used by
Operating Activities (87,888) $ (376,483) $ (464,371) $

Page 190 of 518 ends

CITY OF COVINA

INTERNAL SERVICES FUNDS
YEAR ENDED JUNE 30, 2023
(147)
The internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis. Generally accepted accounting principles (GAAP) requires statement of net position items, and revenues and expenses of individual internal service funds be consolidated with the government-wide statement of net position and activities. GAAP still requires internal service funds to be presented in the financial statements.

The following are the individual internal service funds of the City:

Management Information Systems Fund accounts for the accumulation and allocation of costs associated with data processing and electronic information technology.

Central Equipment Fund accounts for the rental of motor vehicles to other departments and related costs.

Workers’ Compensation Fund accounts for worker’s compensation to other departments.

General Liability Fund accounts for general liability charges to other departments and related costs.

Building Maintenance Fund accounts for all maintenance and improvement activities for all City facilities with the exception of the Police Department.

Page 191 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF NET POSITION

INTERNAL SERVICES FUNDS
JUNE 30, 2023
(148)
Management
Information Central Workers’ General Building
Systems Equipment Compensation Liability Maintenance Total ASSETS:

CURRENT ASSETS
Cash and Cash Equivalents 2,069,386 $ 2,862,314 $ 7,398,729 $ 4,086,513 $ 827,712 $ 17,244,654 $ Accounts Receivable - 58,389 - 14,026 1,500 73,915
Due from Other Governments - 469 - - - 469
Prepaid Items 11,662 - 6,687 - - 18,349
Inventories - 39,492 - - - 39,492
Total Current Assets 2,081,048 2,960,664 7,405,416 4,100,539 829,212 17,376,879

NONCURRENT ASSETS
Capital Assets:

Being Depreciated, Net 394,023 849,572 - - 88,416 1,332,011 Total Noncurrent Assets 394,023 849,572 - - 88,416 1,332,011 Total Assets 2,475,071 3,810,236 7,405,416 4,100,539 917,628 18,708,890

DEFERRED OUTFLOWS OF RESOURCES
OPEB Related 76,896 67,969 24,557 22,942 3,661 196,025
Pension Related 308,823 208,477 105,536 154,844 95,156 872,836 Total Deferred Outflow of
Resources 385,719 276,446 130,093 177,786 98,817 1,068,861

LIABILITIES

CURRENT LIABILITIES
Accounts Payable 4,504 63,816 1,076 38,330 35,141 142,867 Interest Payable 8,713 6,896 3,011 1,777 - 20,397
Compensated Absences Payable 24,319 35,866 8,020 8,724 11,123 88,052 Lease Payable - 40,293 - - - 40,293
Pension Obligation Bonds Payable 43,578 33,825 15,061 8,888 - 101,352 Claims and Judgements - - 927,000 811,000 - 1,738,000
Total Current Liabilities 81,114 180,696 954,168 868,719 46,264 2,130,961

NONCURRENT LIABILITIES
Compensated Absences Payable 50,478 83,753 14,049 16,460 21,507 186,247 Lease Payable - 62,242 - - - 62,242
Pension Obligation Bonds Payable 899,267 698,015 310,795 183,420 - 2,091,497 Claims and Judgements - - 4,776,000 1,406,000 - 6,182,000 Net OPEB Liability 205,543 218,351 67,269 64,237 5,022 560,422 Net Pension Liability 287,667 426,130 145,624 213,662 131,300 1,204,383 Total Noncurrent Liabilities 1,594,226 1,337,220 5,313,737 1,883,779 157,829 10,286,791 Total Liabilities 1,675,340 1,517,916 6,267,905 2,752,498 204,093 12,417,752

DEFERRED INFLOWS OF RESOURCES
OPEB Related 39,374 34,125 12,061 9,150 - 94,710
Pension Related 1,815 1,226 620 910 559 5,130
Total Deferred Inflows of
Resources 41,189 35,351 12,681 10,060 559 99,840

NET POSITION
Net Investment in Capital Assets 394,023 711,300 - - 88,416 1,193,739 Unrestricted 750,238 1,822,115 1,254,923 1,515,767 723,377 6,066,420 Total Net Position 1,144,261 $ 2,533,415 $ 1,254,923 $ 1,515,767 $ 811,793 $ 7,260,159 $

Page 192 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

INTERNAL SERVICES FUNDS
YEAR ENDED JUNE 30, 2023
(149)
Management
Information Central Workers’ General Building
Systems Equipment Compensation Liability Maintenance Total

OPERATING REVENUES
Charges for Services 1,248,477 $ 1,444,152 $ 1,197,335 $ 2,262,770 $ 856,096 $ 7,008,830 $ Motor Pool Charges - 577,336 - - - 577,336
Total Operating Revenues 1,248,477 2,021,488 1,197,335 2,262,770 856,096 7,586,166

OPERATING EXPENSES
General and Administrative 1,184,878 159,437 1,180,379 1,195,832 1,041,933 4,762,459 Vehicle and Equipment Operation - 1,272,311 - - - 1,272,311 Depreciation 100,967 212,467 - - 2,370 315,804
Total Operating Expenses 1,285,845 1,644,215 1,180,379 1,195,832 1,044,303 6,350,574 OPERATING INCOME (LOSS) 377,273 (37,368) 16,956 1,066,938 1,235,592 (188,207)

NONOPERATING REVENUES (EXPENSES)
Interest Expense (20,922) (18,124) (7,231) - (4,267) (50,544) Total Nonoperating
Revenues (Expenses) (20,922) (18,124) (7,231) - (4,267) (50,544) INCOME (LOSS) BEFORE TRANSFERS 359,149 (58,290) 9,725 1,062,671 1,185,048 (188,207)

TRANSFERS
Transfers In 200,000 - - - 1,000,000 1,200,000
Total Transfers 200,000 - - - 1,000,000 1,200,000
CHANGES IN NET POSITION 359,149 141,710 9,725 1,062,671 811,793 2,385,048 Total Net Position - Beginning of Year 2,174,266 1,002,551 1,245,198 453,096 - 4,875,111 TOTAL NET POSITION - END OF YEAR $ 2,533,415 1,144,261 $ 1,254,923 $ 1,515,767 $ 811,793 $ 7,260,159 $

Page 193 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICES FUNDS
YEAR ENDED JUNE 30, 2023
(150)
Management
Information Central Workers’ General Building
Systems Equipment Compensation Liability Maintenance Total

CASH FLOWS FROM OPERATING

ACTIVITIES
Receipts from User Departments 1,250,112 $ 2,031,289 $ 1,197,936 $ 2,273,180 $ 854,596 $ 7,607,113 $ Payments to Suppliers of Goods or Services (596,960) (1,027,203) (700,469) (1,007,443) (643,253) (3,975,328) Payments to Employees (558,014) (261,309) (198,181) (183,383) (292,845) (1,493,732) Net Cash Used by
Operating Activities 95,138 742,777 299,286 1,082,354 2,138,053 (81,502)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Cash Received from Other Funds 200,000 - - - 1,000,000 1,200,000 Proceeds from Pension Bonds - - - - - -
Net Cash Provided by Noncapital
Financing Activities 200,000 - - - 1,000,000 1,200,000

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Interest Paid on Pension Bonds (20,981) (18,218) (7,250) - (4,278) (50,727) Principal Paid on Pension Bonds (43,264) (33,581) (14,952) - (8,824) (100,621) Principal Paid on Lease (3,722) - (39,670) - - (43,392) Acquisition of Capital Assets (15,777) - (267,863) - (90,786) (374,426) Net Cash Used by Capital and
Related Financing Activities (83,744) (359,332) (22,202) (13,102) (90,786) (569,166)

NET INCREASE IN CASH
AND CASH EQUIVALENTS 383,445 211,394 277,084 1,069,252 827,712 2,768,887 Cash and Cash Equivalents - Beginning of Year 2,478,869 1,857,992 7,121,645 3,017,261 - 14,475,767

CASH AND CASH EQUIVALENTS -
END OF YEAR $ 2,862,314 2,069,386 $ 7,398,729 $ 4,086,513 $ 827,712 $ 17,244,654 $

Page 194 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF CASH FLOWS (CONTINUED)

INTERNAL SERVICES FUNDS
YEAR ENDED JUNE 30, 2023
(151)
Management
Information Central Workers’ General Building
Systems Equipment Compensation Liability Maintenance Total

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH USED BY
OPERATING ACTIVITIES:

Operating Income (Loss) $ 377,273 (37,368) $ 16,956 $ 1,066,938 $ $ 1,235,592 (188,207) $ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by
Operating Activities:

Depreciation and Amortization 100,967 212,467 - - 2,370 315,804 (Increase) Decrease in Operating Assets
and Deferred Outflows of Resources:

Accounts Receivable 1,635 10,270 601 10,410 21,416 (1,500) Due from Other Governments - (469) (469)
Prepaids Items and Deposits 6,495 - - - - 6,495
Inventory 11,713 - - - - 11,713
Deferred Outflows of Resources -
OPEB Related (11,882) (8,020) (4,060) (5,958) (3,661) (33,581) Deferred Outflows of Resources -
Pension Related 705,358 523,671 130,916 53,121 1,317,910 (95,156) Increase (Decrease) in Operating
Liabilities and Deferred Inflows
of Resources:

Accounts Payable and
Accrued Liabilities 47,992 (54,409) (1,051) 35,141 (27,351) 322 Compensated Absences Payable 10,441 (31,360) 5,050 10,738 32,630 27,499 Net OPEB Liability 11,003 16,300 5,570 8,172 5,022 46,067 Net Pension Liability (334,333) (261,319) 57,724 (31,675) 131,300 (438,303) Claims Payable - - 239,000 - (37,000) 202,000
Deferred Inflows of Resources -
OPEB Related (1,280) (866) (438) - (641) (3,225)
Deferred Inflows of Resources -
Pension Related (264,985) (191,379) (61,583) 559 (53,799) (571,187) Total Adjustments 132,506 365,504 282,330 15,416 106,705 902,461 Net Cash Used by
Operating Activities 95,138 $ 742,777 $ 299,286 $ 1,082,354 $ (81,502) $ 2,138,053 $

Page 195 of 518 ends

CITY OF COVINA

CUSTODIAL FUNDS
YEAR ENDED JUNE 30, 2023
(152)
Custodial funds are used to account for assets held by the City as trustee or agent for individuals, private organizations, or other governmental units or funds.

Downtown District Fund accounts for funds collected and disbursed by the City on behalf of the Downtown District Association members.

Prospero Park District Fund accounts for funds collected and disbursed by the City on behalf of the Prospero Park District Association members.

Page 196 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF FIDUCIARY NET POSITION

CUSTODIAL FUNDS
JUNE 30, 2023
(153)
Total
Downtown Prospero Custodial
District Park District Funds
ASSETS
Cash and Investments 125 $ 125 $ 250 $
Accounts Receivable 641 112 753
Total Assets 766 $ 237 $ 1,003 $

LIABILITIES
Due to Property Owners 766 $ 237 $ 1,003 $

Page 197 of 518 ends

CITY OF COVINA

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

CUSTODIAL FUNDS
JUNE 30, 2023
(154)
Totals
Downtown Prospero Custodial
District Park District Funds

ADDITIONS
Business Licenses Collected from Property Owners 6,775 $ 4,863 $ 11,638 $ Total Additions 6,775 4,863 11,638

DEDUCTIONS
Distributions to Property Owners 6,775 4,863 11,638
Total Deductions 6,775 4,863 11,638

CHANGES IN NET POSITION - - -
Net Position - Beginning of the Year - - -
NET POSITION - END OF YEAR $ - - $ - $

Page 198 of 518 ends

STATISTICAL SECTION

Page 199 of 518 ends

THIS PAGE INTENTIONALLY LEFT BLANK

Page 200 of 518 ends

CITY OF COVINA

STATISTICAL SECTION
(157)
This part of the City of Covina’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health.

FINANCIAL TRENDS
These schedules contain trend information to help the
reader understand how the City’s financial
performance and well-being have changed over time. 159

REVENUE CAPACITY
These schedules contain information to help the
reader assess the City’s significant local revenue
source, the property tax. 166

DEBT CAPACITY
These schedules contain information to help the
reader assess the affordability of the City’s current
levels of outstanding debt and the ability to issue
additional debt in the future. 172

DEMOGRAPHIC AND ECONOMIC INFORMATION
These schedules offer demographic and economic
indicators to help the reader understand the
environment within which the City’s financial activities take place. 178

OPERATING INFORMATION
These schedules contain service and infrastructure
data to help the reader understand how the information
in the City’s financial report relates to the services the City provides and the activities it performs. 179

DEBT CONTINUING DISCLOSURE
These schedules contain information that complies
with continuing disclosure requirements of each
bond issued. 184

Page 201 of 518 ends

THIS PAGE INTENTIONALLY LEFT BLANK

Page 202 of 518 ends

CITY OF COVINA

NET POSITION BY COMPONENT

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(159)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Governmental activitiesNet investment in capital assets 72,284,235 $ 70,723,029 $ 70,757,663 $ 74,371,948 $ 74,766,840 $ 84,857,338 $ 84,273,491 $ 81,877,731 $ 83,025,178 $ 86,804,262 $ Restricted 21,146,284 18,702,053 19,641,871 26,984,607 25,867,749 17,053,339 14,469,628 15,410,155 16,074,243 25,072,625Unrestricted 8,634,314 (29,330,744) (35,598,486) (39,202,847) (43,430,116) (46,481,365) (44,202,396) (37,601,064) (30,538,742) (35,785,873) Total governmental activities net position 102,064,833 $ 60,094,338 $ 54,801,048 $ 62,153,708 $ 57,204,473 $ 55,429,312 $ 54,540,723 $ 59,686,822 $ 68,560,679 $ 76,091,014 $ Business-type activitiesNet investment in capital assets 13,256,130 $ 13,766,584 $ 13,901,014 $ 14,333,903 $ 17,635,065 $ 18,856,666 $ 26,398,843 $ 32,790,931 $ 31,942,562 $ 35,390,399 $ Restricted - - - 4,353,289 5,613,256 7,122,938 - - -Unrestricted 22,391,275 20,749,710 24,142,448 24,413,236 20,585,317 18,672,662 17,719,110 14,407,201 15,308,140 14,148,677 Total business-type activities net position 35,647,405 $ 34,516,294 $ 38,043,462 $ 43,100,428 $ 43,833,638 $ 44,652,266 $ 44,117,953 $ 47,198,132 $ 47,250,702 $ 49,539,076 $ Total net positionNet investment in capital assets 85,540,365 $ 84,489,613 $ 84,658,677 $ 88,705,851 $ 92,401,905 $ 103,714,004 $ 110,672,334 $ 114,668,662 $ 114,967,740 $ 122,194,661 $ Restricted 21,146,284 18,702,053 19,641,871 31,337,896 31,481,005 24,176,277 14,469,628 15,410,155 16,074,243 25,072,625Unrestricted 31,025,589 (8,581,034) (11,456,038) (14,789,611) (22,844,799) (27,808,703) (26,483,286) (23,193,863) (15,230,602) (21,637,196) Total net position 137,712,238 $ 94,610,632 $ 92,844,510 $ 105,254,136 $ 101,038,111 $ $ 98,658,676 100,081,578 $ 106,884,954 $ 115,811,381 $ 125,630,090 $ Fiscal Year

Page 203 of 518 ends

CITY OF COVINA, CALIFORNIA

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(160)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023ExpensesGovernmental activities: General government 879,859 $ 1,188,341 $ 4,618,977 $ 5,786,202 $ 1,370,482 $ 2,082,578 $ 3,356,218 $ 3,131,410 $ 882,985 $ 3,792,606 $ Public safety 25,353,602 25,102,323 25,297,988 26,080,895 30,549,274 29,863,536 33,529,788 34,239,989 45,084,190 49,481,727 Public works 7,349,352 8,136,978 6,934,750 6,548,405 6,792,606 7,468,025 8,539,877 8,476,656 6,580,415 5,227,281 Culture and recreation 4,769,656 4,782,738 3,552,984 3,451,383 5,027,721 4,434,960 4,630,583 4,393,945 1,600,700 5,974,501 Community development 1,305,545 829,728 1,553,499 1,135,194 2,246,788 1,738,982 2,382,311 2,481,925 2,333,315 3,582,145 Transit 1,255,368 1,289,230 1,017,689 1,260,117 1,212,960 1,176,235 2,068,390 2,646,439 862,651 1,399,960 Redevelopment and housing 433,609 537,470 217,808 349,820 1,042,797 492,737 598,363 912,707 183,561 786,051 Interest on long-term debt 21,131 - - - - 287,459 251,550 238,058 708,305 1,336,291 Total governmental activities expenses 41,368,122 41,866,808 43,193,695 44,612,016 48,242,628 47,544,512 55,357,080 56,521,129 58,236,122 71,580,562 Business-type activities: Water utility 9,757,890 8,776,576 8,369,874 8,056,727 12,815,344 10,289,222 10,318,472 10,893,841 10,333,944 11,001,848 Environmental protection 946,778 1,159,693 940,492 867,142 1,109,212 1,195,439 1,176,992 1,047,347 1,341,932 1,455,858 Sewer utility 1,564,254 1,729,052 1,575,182 1,429,207 1,757,186 2,444,970 2,829,014 2,485,405 2,063,288 2,301,782 Theater - - - - - - - - - 493,523
Total business-type activities expenses 12,268,922 11,665,321 10,885,548 10,353,076 15,681,742 13,929,631 14,324,478 14,426,593 13,739,164 15,253,011 Total expenses 53,637,044 $ 53,532,129 $ 54,079,243 $ 54,965,092 $ 63,924,370 $ 61,474,143 $ 69,681,558 $ 70,947,722 $ 71,975,286 $ 86,833,573 $ Program revenuesGovernmental activities: Charges for services: General government 482,450 $ 435,274 $ 338,362 $ 290,160 $ 2,232,037 $ 2,192,160 $ 2,162,262 $ 2,361,216 2,602,937 2,328,058 Public safety 2,506,468 1,712,553 1,490,083 1,443,134 1,769,892 1,727,746 1,521,571 1,655,557 2,049,262 2,283,281 Public works 579,193 1,510,331 623,693 796,475 733,029 802,080 684,035 754,691 970,378 1,108,388 Culture and recreation 1,184,544 807,829 794,192 793,114 785,814 834,854 507,771 306,697 687,296 734,037 Community development 1,245,885 495,395 1,138,415 1,266,266 1,968,358 1,771,843 1,349,738 1,845,242 2,045,672 2,063,716 Transit 316,429 297,094 315,887 242,912 214,650 226,255 180,644 107,574 126,513 144,349 Redevelopment and housing 973,329 60,961 320,620 302,665 263,574 228,506 881,603 1,124,210 241,182 289,574 Operating grants and contributions 5,131,366 8,232,955 5,216,063 10,563,152 7,540,661 7,962,987 8,081,089 9,809,684 13,635,757 22,818,540 Capital grants and contributions 1,483,056 1,595,869 2,428,605 8,209,341 2,579,102 4,308,857 245,420 1,087,845 567,243 2,206,174 Total governmental activities program revenues 13,902,720 15,148,261 12,665,920 23,907,219 18,087,117 20,055,288 15,614,133 19,052,716 22,926,240 33,976,117 (Continued)
Fiscal Year

Page 204 of 518 ends

CITY OF COVINA, CALIFORNIA

CHANGES IN NET POSITION (CONTINUED)

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(161)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Business-type activities: Charges for services: Water utility 13,337,157 11,349,263 10,436,434 11,011,015 11,138,975 9,586,220 10,673,985 11,681,271 11,859,488 11,469,148 Environmental protection 1,317,849 1,240,317 1,159,700 1,313,194 1,170,122 1,190,124 1,003,527 1,144,576 1,142,051 1,229,521 Theater - - - - - - - - - 33,198
Sewer utility 2,213,642 2,596,319 2,683,503 2,760,749 2,833,092 2,923,535 2,905,488 3,093,941 3,305,418 3,043,013 Operating grants and contributions 1,554 - - - - - - - - 1,154 Capital grants and contributions 366,180 - - - - - - - - - Total business-type activities program revenues 17,236,382 15,185,899 14,279,637 15,084,958 15,142,189 13,699,879 14,583,000 15,919,788 16,306,957 15,776,034 Total program revenues 31,139,102 $ 30,334,160 $ 26,945,557 $ 38,992,177 $ 33,229,306 $ 33,755,167 $ 30,197,133 $ 34,972,504 $ 39,233,197 $ 49,752,151 $ Net (expense) revenueGovernmental activities (27,465,402) $ (26,718,547) $ (30,527,775) $ (20,704,797) $ (30,155,511) $ (27,489,224) $ (39,742,947) $ (37,468,413) $ (35,309,882) $ (37,604,445) $ Business-type activities 4,967,460 3,520,578 3,394,089 4,731,882 (539,553) (229,752) 258,522 1,493,195 2,859,617 523,023 Total net expense (22,497,942) $ (23,197,969) $ (27,133,686) $ (15,972,915) $ (30,695,064) $ (27,718,976) $ (39,484,425) $ (35,975,218) $ (32,450,265) $ (37,081,422) $ General revenues Governmental activities: Property taxes 11,725,280 $ 12,913,803 $ 12,564,219 $ 11,642,704 $ 12,575,318 $ 13,123,606 $ 13,812,070 $ 14,862,914 $ 15,338,132 $ 16,429,930 $ Sales taxes 5,643,574 6,569,382 7,929,069 9,164,440 8,950,753 9,315,358 9,296,400 10,793,459 11,426,354 11,493,906 Transaction and use tax - - - - - 1,438,519 6,579,486 8,098,540 8,823,059 8,787,686 Transient occupancy taxes 349,310 99,716 482,727 327,570 388,491 240,946 130,831 3,661 95,950 193,649 Property transfer taxes 157,945 159,795 223,766 200,253 236,899 217,332 212,485 216,776 278,481 214,879 Business license taxes 415,362 326,818 328,716 337,626 348,793 372,756 347,110 357,655 363,496 431,423 Utility user taxes 5,055,632 5,033,846 4,632,448 4,689,894 4,573,428 4,590,983 4,523,187 4,847,226 5,082,103 6,041,869 Franchise taxes 1,480,237 1,549,731 1,447,780 1,449,399 1,594,522 1,625,802 1,910,641 2,219,586 2,246,113 2,393,981 Investment earnings 473,543 641,993 193,209 226,671 144,176 883,542 620,835 (257,680) (1,162,614) 712,611 Transfers in/out (33,927) - - 18,900 - - - 22,340 1,020,279 (1,820,000) Gain on sale of capital assets - - 32,551 - - 15,129 54,268 - 462,215 - Miscellaneous - - - - - 12,562 49,645 455,723 210,171 254,846 Extraordinary loss - - - - - - - - - -
Total governmental activities 25,266,956 27,295,084 27,834,485 28,057,457 28,812,380 31,836,535 37,536,958 41,620,200 44,183,739 45,134,780 Business-type activities: Investment earnings 17,894 19,330 111,555 206,823 366,249 594,051 524,565 236,885 139,389 (129,871) Investment earnings - CIC 809,727 2,109 21,524 137,161 906,514 454,329 - 1,372,439 (1,926,157) - Miscellaneous - - - - - - - - - 75,222
Transfers in/out 33,927 - - (18,900) - - - (22,340) (1,020,279) 1,820,000 Total general revenues 26,128,504 $ 27,316,523 $ 27,967,564 $ 28,382,541 $ 30,085,143 $ 32,884,915 $ 38,061,523 $ 43,207,184 $ 41,376,692 $ 46,900,131 $ (Continued)
Fiscal Year

Page 205 of 518 ends

CITY OF COVINA, CALIFORNIA

CHANGES IN NET POSITION (CONTINUED)

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(162)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Change in net positionGovernmental activities (2, $ 576,537 198,446) $ (2,693,290) $ 7,352,660 $ (1,343,131) $ 4,347,311 $ (2,205,989) $ 4,151,787 $ 8,873,857 $ 7,530,335 $ Business-type activities 5, 3,542,017 829,008 3,527,168 5,056,966 733,210 818,628 783,087 3,080,179 52,570 2,288,374 Total changes in net position 3, $ 4,118,554 630,562 $ 833,878 $ 12,409,626 $ (609,921) $ 5,165,939 $ (1,422,902) $ 7,231,966 $ 8,926,427 $ 9,818,709 $ Fiscal Year

Page 206 of 518 ends

CITY OF COVINA, CALIFORNIA

FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(163)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023General fundReservedUnreservedNonspendable $ 28,094 $ 3,354,570 $ 753,534 $ 3,247,152 $ 3,116,097 $ 2,620,620 $ 2,621,554 $ 1,008,903 $ 82,179 $ 99,526 Restricted 7,436,731 21,359 347,012 395,420 448,927 385,692 428,079 387,764 20,136,982 10,422,833 Committed 21,359 6,699,720 6,483,613 2,656,872 3,708,388 6,981,901 8,029,233 8,508,328 385,762 362,653 Assigned 1,680,892 979,197 - 442,472 1,561,848 42,726 25,940 17,166 7,268 1,091 Unassigned - - (675,402) - - - 3,167,653 10,878,058 6,786,935 22,431,703 Total general fund 9,167,076 $ 11,054,846 $ 6,908,757 $ 6,741,916 $ 8,835,260 $ 10,030,939 $ 14,272,459 $ 20,800,219 $ 27,399,126 $ 33,317,806 $ All other governmental fundsReservedUnreserved, reported in: Special revenue funds Capital projects fundsNonspendable - $ - $ - $ - $ - $ 5,631 $ 1,159 $ 22,553 $ 7,949 $ 8,445 $ Restricted 8,879,178 8,945,660 10,265,504 18,465,625 24,623,938 20,506,425 17,912,873 14,909,282 15,232,311 23,840,470 Assigned 1,497,633 1,338,429 877,646 1,270,910 491,368 111,473 - 100,116 - - Unassigned (21,099) (58,040) (46,555) (27,396) (53,943) (1,685,799) (832,212) (332,512) (463,734) (657,818) Total all other governmental funds 10,355,712 $ 10,226,049 $ 11,096,595 $ 19,709,139 $ 25,061,363 $ 18,937,730 $ 17,081,820 $ 14,699,439 $ 14,776,526 $ 23,191,097 $

Page 207 of 518 ends

CITY OF COVINA, CALIFORNIA

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(164)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023RevenuesTaxes 24,578,908 $ 26,901,523 $ 27,608,725 $ 27,811,886 $ 28,668,204 $ 30,925,091 $ 36,812,970 $ 41,399,927 $ 43,653,728 $ 45,977,006 $ Licenses and permits 756,173 965,527 888,120 1,128,331 1,698,138 1,307,877 999,449 1,603,293 1,442,013 1,565,187 Intergovernmental 7,338,277 6,062,377 7,850,431 12,122,236 7,968,101 9,388,149 8,487,182 10,166,315 13,200,093 24,537,803 Charges for services 2,748,519 2,850,307 2,746,174 2,484,969 4,713,987 5,000,622 4,011,688 4,196,257 5,492,740 5,050,901 Fines and forfeits 828,444 559,409 862,009 930,478 907,304 926,644 907,080 890,254 1,081,458 1,340,191 Special assessments 725,365 944,194 524,949 590,948 634,282 533,047 1,414,617 1,469,594 592,885 880,496 Investment earnings 186,627 206,047 193,209 226,671 380,716 1,281,892 1,430,498 (59,645) (980,055) 737,184 Miscellaneous 1,369,723 3,766,447 240,998 550,247 723,058 570,700 738,688 825,456 727,918 814,559 Total revenues 38,532,036 42,255,831 40,914,615 45,845,766 45,693,790 49,934,022 54,802,172 60,491,451 65,210,780 80,903,327 ExpendituresGeneral government 503,430 232,379 3,928,177 3,476,163 2,235,447 1,790,386 2,593,801 2,561,757 5,382,805 2,599,832 Public safety 24,415,716 24,617,224 23,721,228 23,283,514 26,571,782 28,302,062 29,372,913 32,413,668 73,854,134 36,377,733 Public works 3,183,073 4,377,357 3,109,378 3,762,770 4,753,148 4,091,454 4,474,244 6,962,063 5,833,291 4,138,958 Culture and recreation 4,546,531 4,602,280 3,245,947 3,254,141 3,923,981 4,282,219 3,926,265 3,456,912 7,079,292 4,587,871 Community development 1,289,508 832,898 1,543,411 1,202,281 1,890,189 1,852,180 2,247,775 2,277,834 5,432,129 3,229,912 Transit 980,911 1,020,243 746,109 957,374 764,864 887,211 1,734,472 2,277,196 951,556 967,643 Redevelopment and housing 466,232 490,745 265,742 287,877 1,005,353 517,758 567,340 890,178 679,401 719,415 Capital outlay 2,823,296 3,419,189 5,030,166 1,175,943 2,617,687 15,518,582 6,985,453 4,894,860 5,909,455 6,940,758 Debt service: Principal 579,404 - - - 210,000 300,000 305,000 310,000 320,000 2,639,742 Interest and fiscal charges 23,501 - - - 155,078 233,481 252,136 250,944 722,016 1,350,031 Bond issuance costs - - - - - 45,544 - - - -
Total expenditures 38,811,602 39,592,315 41,590,158 37,400,063 44,127,529 57,820,877 52,459,399 56,295,412 106,164,079 63,551,895 Excess of revenues over (under) expenditures (279,566) 2,663,516 (675,543) 8,445,703 1,566,261 (7,886,855) 2,342,773 4,196,039 (40,953,299) 17,351,432 (Continued)

Page 208 of 518 ends

CITY OF COVINA, CALIFORNIA

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (CONTINUED)

LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(165)
Other financing sources (uses) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Transfers in 977,149 $ 2,161,548 $ 2,317,808 $ 1,373,629 $ 1,186,303 $ 2,422,806 $ 1,195,374 $ 625,625 $ 613,927 $ 1,531,080 $ Transfers out (1,202,753) (2,415,967) (2,317,808) (1,373,629) (1,186,303) (3,861,325) (1,195,374) (676,285) (6,103,294) (4,551,080)Capital leases - - - - - - - - 460,000 -Loan Proceeds - - - - - - - - 12,476 1,819Tax allocation bonds issued - - - - - - - - - -Proceeds from debt issuance - - - - 5,625,000 2,500,000 - - 52,646,184 -Premium on debt issuance - - - - 254,307 - - - - -Payment to refunded bond account - - - - - - - - - -Gain (loss) on sale and disposal of capital assets 720,376 - - - - - 42,837 - - - Total other financing sources (uses 494,772 (254,419) - - 5,879,307 1,061,481 42,837 (50,660) 47,629,293 (3,018,181) Net changes in fund balances 215,206 $ 2,409,097 $ (675,543) $ 8,445,703 $ 7,445,568 $ (6,825,374) $ 2,385,610 $ 4,145,379 $ 6,675,994 $ 14,333,251 $ Debt service as a percentage of noncapital expenditures 1.7% 0.0% 0.0% 0.0% 0.9% 1.4% 1.2% 1.1% 1.0% 7.0%

Page 209 of 518 ends

CITY OF COVINA, CALIFORNIA

GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE

LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(166)
Fiscal Transient Property Business Utility Franchise
Year Property Taxes (1) Sales Taxes Occupancy Taxes Transfer Taxes License Taxes Users Taxes Taxes Total 2014 11,725,280 $ 5,643,574 $ 100,878 $ 157,945 $ 415,362 $ 5,055,632 $ 1,480,237 $ 24,578,908 $ 2015 12,913,803 6,569,382 348,148 159,795 326,818 5,033,846 1,549,731 26,901,523 2016 12,564,219 7,929,069 482,727 223,766 328,716 4,632,448 1,447,780 27,608,725 2017 11,642,704 9,164,440 327,570 200,253 337,626 4,689,894 1,449,399 27,811,886 2018 12,575,318 8,950,753 388,491 236,899 348,793 4,573,428 1,594,522 28,668,204 2019 13,123,395 10,753,877 240,946 217,332 372,756 4,590,983 1,625,802 30,925,091 2020 13,812,820 15,875,886 130,831 212,485 347,120 4,523,187 1,910,641 36,812,970 2021 14,862,914 18,891,999 3,661 216,776 357,765 4,847,226 2,219,586 41,399,927 2022 15,338,132 20,249,413 95,950 278,481 363,536 5,082,103 2,246,113 43,653,728 2023 16,419,598 20,281,592 193,649 214,879 431,438 6,041,869 2,393,981 45,977,006 (1) Includes both City property tax and Redevelopment Agency tax allocations up to 2012. Property tax in-lieu motor vehicle licenses are not included in amounts prior to fiscal year 2006.

Page 210 of 518 ends

CITY OF COVINA, CALIFORNIA

ASSESSED VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS
(167)
Total
Fiscal Effective
Year Secured Nonunitary Unsecured Total Rate (2)
2014 4,168,222,632 401,800 129,212,504 4,297,836,936 1.4047% 2015 4,391,097,348 401,800 136,165,789 4,527,664,937 1.4125% 2016 4,622,530,801 401,800 136,586,370 4,759,518,971 1.4548% 2017 4,833,140,987 656,500 129,151,190 4,962,948,677 1.4552% 2018 5,126,757,001 656,500 125,505,161 5,252,918,662 1.4801% 2019 5,368,832,086 53,800 130,846,429 5,499,732,315 1.4645% 2020 5,681,002,424 53,800 132,250,317 5,813,306,541 1.4974% 2021 5,986,855,692 9,148 138,241,671 6,125,106,511 1.4727% 2022 6,237,377,853 9,148 125,747,512 6,363,134,513 1.4892% 2023 6,605,639,837 9,148 144,173,457 6,749,822,442 1.4829% (1) Net of exemptions
Source: Los Angeles County/Hdl Companies
Assessed Value (1)
(2) Because of California's complicated taxing structure where different values are taxed at different rates due to Proposition 13 and Redevelopment dissolution statutes, we have used an effective rate. The rate has been calculated by dividing total revenue for the government preparing the statistical section by the total revenue base.

Page 211 of 518 ends

CITY OF COVINA, CALIFORNIA

ASSESSED VALUE OF TAXABLE PROPERTY BY USE

LAST TEN FISCAL YEARS
(168)
Total
Fiscal Effective
Year Residential Commercial Industrial Other Total Rate (2) 2014 3,051,809,271 794,611,256 228,672,928 222,743,481 4,297,836,936 1.4047% 2015 3,259,575,794 813,796,268 223,545,046 230,747,829 4,527,664,937 1.4125% 2016 3,429,044,663 855,846,637 228,745,403 245,882,268 4,759,518,971 1.4548% 2017 3,577,650,675 901,743,008 232,619,329 250,935,665 4,962,948,677 1.4552% 2018 3,790,868,304 923,889,405 237,982,559 300,178,394 5,252,918,662 1.4801% 2019 3,999,408,804 943,988,485 248,088,436 308,246,590 5,499,732,315 1.4645% 2020 4,236,209,336 995,891,012 261,497,564 319,708,629 5,813,306,541 1.4974% 2021 4,477,167,443 1,041,244,830 288,116,648 318,577,590 6,125,106,511 1.4727% 2022 4,685,689,429 1,078,429,108 307,074,332 291,941,644 6,363,134,513 1.4892% 2023 4,989,022,923 1,136,324,463 312,388,220 312,086,836 6,749,822,442 1.4829% (1) Net of exemptions
Source: Los Angeles County/Hdl Companies
Assessed Value (1)
(2) Because of California's complicated taxing structure where different values are taxed at different rates due to Proposition 13 and Redevelopment dissolution statutes, we have used an effective rate. The rate has been calculated by dividing total revenue for the government preparing the statistical section by the total revenue base.

Page 212 of 518 ends

CITY OF COVINA, CALIFORNIA
PROPERTY TAX RATES (1)

DIRECT AND OVERLAPPING GOVERNMENTS

LAST TEN FISCAL YEARS
(169)
Community Vehicle Total
Fiscal Basic Flood School College Water Parking Effective Year Levy (2) General Control Total District (3) District (4) District District Rate (5) 2014 1.0000 0.0000 0.0000 0.0000 0.2713 0.0425 0.0035 0.0875 1.4047 2015 1.0000 0.0000 0.0000 0.0000 0.2770 0.0446 0.0035 0.0875 1.4125 2016 1.0000 0.0000 0.0000 0.0000 0.3258 0.0380 0.0035 0.0875 1.4548 2017 1.0000 0.0000 0.0000 0.0000 0.3162 0.0481 0.0035 0.0875 1.4553 2018 1.0000 0.0000 0.0000 0.0000 0.3431 0.0460 0.0035 0.0875 1.4801 2019 1.0000 0.0000 0.0000 0.0000 0.3267 0.0467 0.0035 0.0875 1.4645 2020 1.0000 0.0000 0.0000 0.0000 0.3368 0.0695 0.0035 0.0875 1.4974 2021 1.0000 0.0000 0.0000 0.0000 0.3156 0.0662 0.0035 0.0875 1.4727 2022 1.0000 0.0000 0.0000 0.0000 0.3038 0.0944 0.0035 0.0875 1.4892 2023 1.0000 0.0000 0.0000 0.0000 0.3041 0.0878 0.0035 0.0875 1.4829 (1) Per $100 of assessed value
Revenue Augmentation Fund ($0.242) and other agencies ($0.082). (3) Azusa Unified School District, Charter Oak Unified School District and Covina Valley Unified School District . (4) Citrus Community College District and Mt. San Antonio Community College District .

Source: Los Angeles County/Hdl Companies .
(5) Because of California's complicated taxing structure where different values are taxed at different rates due to Proposition 13 and Redevelopment dissolution statutes, we have used an effective rate. The rate has been calculated by dividing total revenue for the government preparing the statistical section by the total revenue base.

County
(2) Basic levy for City ($0.154), County ($0.338), Covina Valley Unified School District ($0.184), Educational .

Page 213 of 518 ends

CITY OF COVINA, CALIFORNIA

PRINCIPAL PROPERTY OWNERS)

LAST TEN FISCAL YEARS
(170)
Percentage of Percentage of
Taxable Total Taxable Taxable Total Taxable
Primary Assessed Assessed Assessed Assessed
Taxpayer Use Value Rank Value (1) Value Rank Value (1)
Ikea Property Inc Commercial 81,855,358 $ 1 1.21% 72,429,940 $ 1 1.14% Vista Pointe Grand Apartments LLC Residential 64,618,483 2 0.96% 63,335,354 2 1.00% KIR Covina Limited Partnership Commercial 58,156,556 3 0.86% 57,016,246 3 0.90% Covina Grand Apartments LLC Residential 55,981,867 4 0.83% 54,893,487 4 0.86% Sierra Health and Life Insurance CompanCommercial 49,320,000 5 0.73% 40,272,949 5 0.63% UIMC Covina LLC Commercial 39,421,109 6 0.58% 38,648,149 6 0.61% FNL of Covina Partners LLC Commercial 34,940,037 7 0.52% 34,254,945 7 0.54% LVGEM Hotel Corporation Commercial 31,466,951 8 0.47% 33,053,607 8 0.52% Charter Communications Commercial 30,283,485 9 0.45% 29,327,356 10 0.46% CCP Covina 4003 LP Institutional 30,093,855 10 0.45% 29,503,782 9 0.46% Total 476,137,701 $ 7.06% 452,735,815 $ 7.12%
(1) Total assessed valuation of taxable property exclusive of exemptions.

Source: Los Angeles County/Hdl Companies
2023 2022
Principal Property Owners

Page 214 of 518 ends

CITY OF COVINA, CALIFORNIA
PROPERTY TAX LEVIES AND COLLECTIONS (1)

LAST TEN FISCAL YEARS
(171)
Percent of
Percent of Total Tax
Fiscal Total Tax Current Tax Current Taxes Delinquent Tax Total Tax Collections to Year Levy (2) Collections Collected Collections Collections Total Tax Levy 2014 5,195,545 5,095,292 98.1% 5,745 5,101,037 98.2%
2015 5,276,198 5,403,432 102.4% 6,191 5,409,623 102.5%
2016 5,553,269 5,809,940 104.6% (9,333) 5,800,607 104.5% 2017 5,815,150 5,996,355 103.1% 11,769 6,008,124 103.3% 2018 6,154,437 6,485,903 105.4% 98,063 6,583,966 107.0% 2019 6,483,113 6,548,523 101.0% 87,221 6,635,744 102.4% 2020 6,795,929 6,868,907 101.1% 70,619 6,939,526 102.1% 2021 7,277,691 7,335,258 100.8% 125,446 7,460,704 102.5% 2022 7,609,654 7,827,091 102.9% 125,398 7,952,489 104.5% 2023 8,111,743 8,311,716 102.5% 122,754 8,434,470 104.0% (1) Includes only City general property taxes of the General Fund and Municipal Parking District Special Revenue Fund (2) Includes secured and unsecured property tax levies exclusive of homeowner exemption, supplemental roll and in-lieu motor vehicle licenses.

Source: Los Angeles County.

Page 215 of 518 ends

CITY OF COVINA, CALIFORNIA

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
(172)
Percentage of Percentage of
Fiscal Certificates of Revenue Section 108 Pension Obligation Installment Revenue Pension Obligation Personal Debt Year Participation Bonds Notes Leases Loan Bonds Agreement Bonds Leases Bonds Total Income (1) Per Capita (1) 2014 - - - - - - - 28,342,757 4,033,567 - 32,376,324 3.88% 0.15%2015 - - - - - - - 27,419,747 3,764,539 - 31,184,286 4.00% 0.16%2016 - - - - - - - 26,466,734 3,482,249 - 29,948,983 4.14% 0.16%2017 - - - - - - - 25,483,722 3,186,043 - 28,669,765 4.38% 0.17%2018 5,657,747 - - 496,571 - - - 24,465,710 2,875,237 - 33,495,265 3.77% 0.15%2019 5,471,187 - - 496,571 2,375,000 - - 23,407,697 2,549,111 - 34,299,566 3.88% 0.14%2020 5,279,627 - - 244,087 2,250,000 - - 21,443,255 2,206,909 - 31,423,878 4.36% 0.16%2021 5,083,068 - - - 2,125,000 - 18,290,271 8,210,000 - - 33,708,339 4.23% 0.14%2022 4,876,509 - - 227,389 2,000,000 54,939,654 17,132,316 7,370,000 13,934 7,855,346 94,415,148 1.58% 0.05% 2023 4,659,950 305,403 153,335 1,875,000 52,529,291 15,991,560 6,515,000 10,531 7,510,709 89,550,779 1.92% 0.06% Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) See Demographic Statistics on page 178.(2) Due to the dissolution of the Covina Redevelopment Agency, the debt related to tax allocation bonds is no longer reported in this table.

Outstanding Debt by Type-Last Ten Fiscal Years
Activities
Business
Governmental Activities

Page 216 of 518 ends

CITY OF COVINA, CALIFORNIA

RATIOS OF NET GENERAL BONDED DEBT OUTSTANDING

LAST TEN FISCAL YEARS
(173)
Percentage of
Taxable
Less Amounts Assessed
Fiscal Pension Obligation Available in Debt Valuation (1) Year Bonds Service Fund Total of Property Per Capita (2) 2014 - - - 0.00% 0.00%
2015 - - - 0.00% 0.00%
2016 - - - 0.00% 0.00%
2017 - - - 0.00% 0.00%
2018 - - - 0.00% 0.00%
2019 - - - 0.00% 0.00%
2020 - - - 0.00% 0.00%
2021 - - - 0.00% 0.00%
2022 54,939,654 6,786,935 48,152,719 0.76% 0.00%
2023 52,529,291 22,431,703 30,097,588 0.45% 0.17%
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) See Assessed Value of Taxable Property-Last Ten Fiscal Years on page 167. (2) See Demographic Statistics on page 178.
(3) Due to the dissolution of the Covina Redevelopment Agency, Tax Allocation Bonded Debt is no longer reported on this schedule.

Page 217 of 518 ends

CITY OF COVINA, CALIFORNIA

DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES BONDED DEBT AS OF JUNE 30, 2023
(174)
Net General
Activities Bonded Percentage Amount
and Capital Lease Applicable to Applicable to
Jurisdiction Debt Outstanding City of Covina(2) City of Covina Direct-City of Covina (1) $ 100.000% 52,682,626 52,682,626 $ Overlapping:

Water District:

Metropolitan Water District 19,215,000 0.186% 35,740
College:

Citrus Community College District 130,475,302 0.320% 417,521 Mt. San Antonio Community College District 882,482,780 5.985% 52,816,594 Mt. San Antonio Community College District Certificates 254,500,000 5.985% 15,231,825 School District:

Azusa Unified School District 133,098,432 1.313% 1,747,582 Azusa Unified School District General Fund Obligations 4,289,000 1.313% 56,315 Charter Oak Unified School District 58,820,000 38.462% 22,623,348 Charter Oak Unified School District Certificates of 775,000 38.462% 298,081 Covina-Valley Unified School District 184,178,129 42.678% 78,603,542 Los Angeles County:

Los Angeles County General Fund Obligations 2,601,551,282 0.356% 9,261,523 Los Angeles County Superintendent of Schools 3,403,487 0.356% 12,116 Los Angeles County Sanitation District No. 22 Authority 405,950 13.168% 53,455 Subtotal overlapping debt 181,157,642
Total direct and overlapping debt 233,840,268 $
Amount Applicable to City of Covina
Source: Los Angeles County/Hdl Companies
(1) Includes governmental activities debt reported in the Ratios of Outstanding Debt by Type on page 172. (2) The percentage of overlapping debt applicable is estimated by using taxable assessed values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.

Page 218 of 518 ends

CITY OF COVINA, CALIFORNIA

LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS
(175)
Total Debt Limitation- Total Debt
Fiscal Assessed Add Assessed 15% of Total Applicable Legal Year Value Exemptions Value Assessed Value to Limitation Debt Margin 2014 4,297,836,936 171,312,269 4,469,149,205 670,372,381 - 670,372,381 2015 4,527,664,937 180,062,301 4,707,727,238 706,159,086 - 706,159,086 2016 4,759,518,971 183,697,385 4,943,216,356 741,482,453 - 741,482,453 2017 4,962,948,677 196,055,673 5,159,004,350 773,850,653 - 773,850,653 2018 5,252,918,662 91,194,219 5,344,112,881 801,616,932 - 801,616,932 2019 5,499,732,315 184,378,433 5,684,110,748 852,616,612 - 852,616,612 2020 5,813,838,744 149,727,735 5,963,566,479 894,534,972 - 894,534,972 2021 6,125,106,511 231,099,414 6,356,205,925 953,430,889 - 953,430,889 2022 6,363,134,513 200,232,342 6,563,366,855 984,505,028 - 984,505,028 2023 6,749,822,442 254,387,103 7,004,209,545 1,050,631,432 - 1,050,631,432 Assessed Valuations Legal Debt Margin

Page 219 of 518 ends

CITY OF COVINA, CALIFORNIA

PLEDGED-REVENUE BOND COVERAGE

WATER UTILITY FUND INSTALLMENT AGREEMENT AND REVENUE BONDS

LAST TEN FISCAL YEARS
(176)
Net Revenue
Fiscal Gross Operating Available for
Year Revenues (1) Expenses (2) Debt Service Principal Interest Total Coverage 2014 13,339,122 8,771,194 4,567,928 255,000 731,412 986,412 4.63 2015 11,350,293 6,924,720 4,425,573 265,000 710,708 975,708 4.54 2016 10,506,025 6,394,614 4,111,411 280,000 710,113 990,113 4.15 2017 11,148,725 7,238,966 3,909,759 290,000 698,713 988,713 3.95 2018 11,350,497 8,484,444 2,866,053 300,000 685,413 985,413 2.91 2019 9,876,708 8,319,258 1,557,450 315,000 671,613 986,613 1.58 2020 10,889,143 8,141,622 2,747,521 330,000 658,713 988,713 2.78 2021 11,805,889 8,774,975 3,030,914 933,307 569,062 1,502,369 2.02 2022 11,902,839 8,335,858 3,566,981 1,157,955 354,474 1,512,429 2.36 2023 11,659,206 8,990,972 2,668,234 1,140,756 331,945 1,472,701 1.81 (1) Total revenues (including investment earnings) excluding joint venture investment income and gain on sale of capital assets.
(2) Total operating expenses exclusive of depreciation.

Debt Service Requirements

Page 220 of 518 ends

CITY OF COVINA, CALIFORNIA

PLEDGED-REVENUE BOND COVERAGE

SEWER FUND REVENUE BONDS

LAST TEN FISCAL YEARS
(177)
Net Revenue
Fiscal Gross Operating Available for
Year Revenues (1) Expenses (2) Debt Service Principal Interest Total Coverage 2014 2,229,571 784,732 1,444,839 640,000 656,056 1,296,056 1.11 2015 2,614,619 919,254 1,695,365 660,000 642,063 1,302,063 1.30 2016 2,720,240 785,109 1,935,131 675,000 619,781 1,294,781 1.49 2017 2,818,015 661,138 2,156,877 695,000 598,363 1,293,363 1.67 2018 2,967,675 1,013,663 1,954,012 720,000 574,469 1,294,469 1.51 2019 3,193,723 1,721,983 1,471,740 745,000 547,900 1,292,900 1.14 2020 3,166,964 2,367,418 799,546 895,000 397,205 1,292,205 0.62 2021 3,186,247 1,848,785 1,337,462 825,000 202,631 1,027,631 1.30 2022 3,325,666 1,529,927 1,795,739 840,000 186,054 1,026,054 1.75 2023 3,002,790 1,731,926 1,270,864 855,000 168,768 1,023,768 1.24 (1) Total revenues (including investment earnings) excluding gain on sale of capital assets. (2) Total operating expenses exclusive of depreciation.

Debt Service Requirements

Page 221 of 518 ends

CITY OF COVINA, CALIFORNIA

DEMOGRAPHIC AND ECONOMIC STATISTICS
(178)
K-12 School
Year Population (1) Enrollment (2)
2014 48,619 17,864
2015 48,640 17,432
2016 49,291 16,860
2017 49,011 16,806
2018 49,006 16,627
2019 48,876 16,294
2020 48,846 16,200
2021 48,833 15,854
2022 50,449 15,453
2023 50,350 15,413
Personal Per Capita
Income(3) Personal
Year ($ Thousand) Income(3)
2014 1,256,801 25,850
2015 1,248,346 25,665
2016 1,240,869 25,174
2017 1,256,462 25,636
2018 1,262,424 25,760
2019 1,330,564 27,223
2020 1,368,680 28,020
2021 1,426,212 29,205
2022 1,488,896 29,512
2023 1,717,049 34,102
Unemployment
Year Rate (4)
2014 6.1%
2015 6.8%
2016 8.0%
2017 6.3%
2018 5.1%
2019 4.9%
2020 4.7%
2021 13.3%
2022 9.5%
2023 5.1%

(1) State Department of Finance.
(2) State Department of Education-Covina Valley and Charter Oak Unified School Districts. (3) HdL, Coren & Cone.
(4) State Employment Development Department.

Last Ten Fiscal Years
Last Ten Fiscal Years
Last Ten Fiscal Years

Page 222 of 518 ends

CITY OF COVINA, CALIFORNIA

PRINCIPAL EMPLOYERS
AS OF JUNE 30, 2023
(179)
Employer Employees Rank
Percentage
of Total City
Employment Employees Rank
Percentage
of Total City
Employment
Covina Valley Unified School District 1,351 1 9.37% 1,316 1 8.72% Citrus Valley Health Partners-Intercommunity 926 2 6.42% 924 2 6.12% Charter Oak Unified School District 677 3 4.70% 668 3 4.43% Ikea U.S. West, Inc. 292 4 2.03% 332 4 2.20%
Wal-Mart 287 5 1.99% 319 5 2.11%
City of Covina 252 6 1.75% 239 6 1.58%
Howard J. Chudler & Associates, Inc 232 7 1.61% - - 0.00% The Home Depot 189 8 1.31% 238 7 1.58%
Bert's Mega Mall 165 9 1.14% 150 9 0.99%
Healthcare Partners Affiliates Medical Group 151 10 1.05% 170 8 1.13% Vitas Innovative Hospice Care - - 0.00% 146 10 0.97%
4,522 31.36% 4,502 29.83%
Source: City of Covina Finance Department, Covina Valley and Charter Oak School Districts and Citrus Valley Medical Center 2023 2022

Page 223 of 518 ends

CITY OF COVINA, CALIFORNIA

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION

LAST TEN FISCAL YEARS
(180)
2013 2014 2015 2016 2017 2018 2019 2020 2022 2023
Total Total Total Total Total Total Total Total Total Total General government 29.50 23.56 20.56 28.00 25.50 26.50 27.00 29.50 29.50 30.00 Public safety 94.50 99.50 100.50 112.00 99.50 98.50 98.50 95.50 96.50 98.00 Public works 26.50 19.50 19.50 25.00 21.80 21.80 22.80 23.80 23.80 24.00 Culture and recreation 56.50 43.18 43.41 30.94 21.95 22.47 29.67 30.08 29.19 27.00 Community development 5.00 14.50 16.50 7.00 6.50 7.50 9.50 9.50 11.00 10.50 Transit 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 Redevelopment and housing 12.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 15.00 Water utility 3.50 3.75 3.75 4.00 3.50 4.00 4.00 4.00 3.50 2.50 Environmental protection 4.50 5.50 5.50 3.00 3.00 3.00 3.00 3.00 3.00 2.00 Central equipment 5.50 6.00 6.00 1.00 - 2.00 2.00 2.00 2.00 2.00 Management information systems - - - - - - 1.00 - 1.00 1.00 Total full-time equivalent positions 238.50 230.49 230.72 225.94 196.75 200.77 212.47 212.38 214.49 212.50 Source: Finance Department Budget

Page 224 of 518 ends

CITY OF COVINA, CALIFORNIA
OPERATING INDICATORS BY FUNCTION (1)

LAST TEN FISCAL YEARS
(181)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
General Government
Finance:

Payroll checks issued 7,038 7,694 7,569 7,369 7,566 7,811 7,557 7,264 7,295 7,518 Accounts payable checks issued 7,093 6,374 5,729 5,281 5,296 5,500 5,153 5,445 5,380 5,234 Purchase orders issued 707 506 538 453 440 461 465 474 811 887 Community Development Block Grant (CDBG):

Seniors Served by Information and Referral Program N/A N/A N/A N/A 216 218 168 125 203 69 Seniors Served by Case Management Program N/A N/A N/A N/A 64 64 33 49 88 80 Seniors Served by Nutrition Program N/A N/A N/A N/A 132 127 307 115 239 341 Persons Served by Literacy Program N/A N/A N/A N/A 16 19 20 14 10 21 Persons Served by Job Training 14 12 - - 5 3 14 12 13 11 Houses rehabilitated 6 4 3 2 1 - - - - 1
Housing:

Transitional House-Number of people served 14 17 17 22 11 14 13 21 27 15 Covenants-Monitoring affordable units 460 460 460 460 460 460 449 460 460 460 Public Safety
Police:

Physical arrests 2,322 2,987 2,038 676 3,005 2,746 2,406 2,534 2,204 2,499 Parking violations 10,831 9,367 8,380 10,062 3,035 8,955 12,678 15,301 18,167 14,016 Traffic violations 4,475 3,314 1,711 5,426 12,063 1,598 1,355 1,540 2,068 1,895 Fire:

Number of calls answered 4,283 4,643 4,751 4,681 4,641 10,679 11,083 14,218 8,961 14,411 Inspections 2,279 2,279 1,389 2,583 1,472 2,843 2,383 1,964 2,415 1,756 Culture and Recreation
Parks and Recreation:

Leaders-in-Training participants 54 75 57 66 51 36 12 18 28 28 Youth sports participants 1,945 1,312 916 1,199 1,130 934 746 619 1,224 814 Leisure lifestyle classes participants 6,694 5,920 6,457 5,041 4,520 4,028 2,593 1,500 2,461 1,637 Cultural excursion program participants 489 580 565 595 406 468 326 150 397 420 Summer evening event attendees 25,000 25,000 25,000 16,975 17,170 10,100 9,200 1,500 3,827 6,275 Senior service participants (fee based) 3,202 2,296 1,036 1,248 939 364 727 357 Senior nutrition program meals served 16,565 18,336 14,641 12,798 11,642 11,628 19,088 33,758 31,248 42,627 Special events attendees 53,000 53,000 50,000 50,000 50,000 45,000 40,000 5,000 25,000 19,189 Special event participants 288 654
Aquatic participants 10,716 8,750 6,446 8,134 6,011 5,850 3,884 2,800 2,107 1,189 Day Camp Participants 842 745 682 580 402 2,800 375 415 Library:

Circulation
Books/Audiobooks/CD'S 127,254 111,236 102,019 100,913 99,434 97,548 67,451 10,564 46,050 54,321 DVD's 9,065 7,500 5,806 4,987 4,141 3,314 1,928 53 704 813 Toys 2,588 978 3,436 4,241 2,784 - - -
E-books 3,201 1,381 4,466 5,880 4,051 4,444
Total Circulation 136,319 118,736 108,803 108,488 108,392 108,303 76,629 16,587 50,805 59,578 Gate Count 222,129 206,514 194,182 189,432 189,021 187,098 120,381 1,273 50,750 48,992 Computer Services
Number of hours 14,976 13,860 10,782 10,374 12,825 12,891 6,298 45 900 1,890 Number of users 20,772 18,751 13,946 13,190 19,848 19,581 10,323 83 1,620 2,916 Library Cards
City Residents - Newly Issued 2,197 1,760 1,520 1,427 1,413 1,364 963 153 666 1,048 Non-City Residents - Newly Issued 2,713 2,118 1,679 1,594 1,257 1,198 865 106 788 954 Total Number of Current Library Cards 25,031 28,909 32,108 35,129 37,927 40,087 32,824 33,083 34,434 36,436 Library materials added
Books 4,903 3,439 2,580 2,866 2,475 1,827 1,600 1,736 1,605 1,659 CDs 86 298 222 196 131 198 156 191 117 -
Audiobooks 159 128 88 83 129 87 54 70 22 -
DVD's 221 181 150 215 155 212 154 145 179 76
Toys 99 119 97 67 27 - - -
Total Materials Added 5,369 4,046 3,159 3,459 2,987 2,391 1,991 2,142 1,923 1,697 Library Programs/Services
Storytime participants 2,060 1,397 1,756 1,649 1,542 1,662 1,317 592 390 805 Adult/Young Adult program participants 895 423 464 470 536 902 869 370 703 1,225 Children's program participants 3,222 3,014 4,264 5,351 7,343 7,264 5,171 1,034 1,085 1,398 Summer Reading Program participants 702 620 705 799 848 1,076 350 319 385 386 Joint Summer Reading program participants 1,079 1,079 811 1,153 1,468 1,818 1,806 - - - Accelerated Reader (AR) Testing Program Participants 2,665 1,861 - - 84 In-N-Out Cover-to-Cover Reading Program 202 181 240 252 274 244 366 - 252 269 Outreach (Class Visits on and off-site, number of participants 546 1,227 591 50 - 400 Homework Help Tutors 21* 12* 11 15 10 - - - - -
Homework Help Participants 1,120 738 997 529 418 - - - - - Library volunteer hours (3) 13,535 11,766 14,251 13,754 8,693 5,877 2,224 103 40 121

Page 225 of 518 ends

CITY OF COVINA, CALIFORNIA
OPERATING INDICATORS BY FUNCTION (CONTINUED) (1)

LAST TEN FISCAL YEARS
(182)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Literacy
Number of tutors 29 27 23 23 22 20 16 1 1 2
Number of adults served 101 97 79 79 92 83 81 22 27 27
Number of children served 52 37 31 39 43 44 31 - - -
Reference Questions
Adult/Circulation 20,907 20,436 21,418 22,561 20,281 20,778 15,607 1,200 12,500 17,562 Childrens 8,862 6,918 6,650 5,738 7,839 8,312 6,090 - - - Total Reference Questions 29,769 27,354 28,068 28,299 28,120 29,090 21,697 1,200 12,500 17,562 Planning
Planning reviews 281 610 1,733 1,820 1,911 283 156 388 633 741 Permits issued 2,204 2,253 1,344 1,411 1,482 71 - 147 633 741 Inspections 471 531 192 230 242 - - - 633 741
Building
Building reviews 450 503 1,362 561 792 820 842 1,040 254 284 Permits issued 1,599 1,658 3,494 1,514 894 3,927 3,290 4,598 4,852 335 Inspections 6,078 6,029 4,464 3,038 5,137 4,265 4,506 3,646 5,812 6,102 Transit
Average daily parking customers (station & structure paid) 821 845 747 (2) (2) 40 666 276 376 587 Average monthly parking customers (structure paid) 1,296 688 608 433 326 261 203 Dial-A-Cab participants (monthly average) 1,920 1,918 1,158 1,454 1,584 1,722 1,468 933 1,010 890 Subsidized bus passes (monthly average) 53 53 28 52 48 50 30 11 11 13 Code Enforcement
Total Inspections 4,601 4,434 1,840 1,902 2,956 834 2,113 1,467 1,951 1,890 Signs removed from public right of way 1,083 1,053 522 233 153 294 278 113 71 42 Industrial Waste Inspections 724 413 1 2 220 176 138 375 343 139 Water Utility
Average daily consumption (gallons) 5,125,309 4,450,897 3,944,447 4,398,752 5,000,000 5,760,000 3,600,000 3,168,176 4,666,365 4,007,146 Meter reads 106,430 103,851 103,490 (2) 2,291 (2) 4,252 2,061 2,532 2,419 Meter replacements 74 6 88 (2) 77 32 28 37 59 31
Consumer responses 4,765 12,703 5,805 (2) 590 350 727 208 276 291 Service line repairs 111 62 48 (2) 43 59 33 108 50 38
Main line repairs 38 34 45 (2) 70 49 69 49 82 40
Street Maintenance
Traffic sign remove/replace/install 234 92 185 153 118 102 201 185 185 57 Potholes repaired 2,738 4,058 3,629 4,645 3,802 5,390 6,379 3,981 2,792 5,736 Curb painted (lf) 10,117 15,436 17,860 37,370 16,960 75,262 26,788 21,239 4,257 15,918 Utility cuts repaired 15 - (2) (2) 73 20 87 76 155 21
Trees trimmed 474 799 2,163 231 255 129 158 84 185 284
Equipment Maintenance
Preventative maintenance service 475 492 367 325 284 291 302 288 241 254 Safety inspections 516 563 425 371 320 319 327 332 261 281 New Tires 127 122 82 117 98 121 115 102 102 101
Tire repairs 282 315 177 183 164 167 122 177 185 191
Work orders completed 1,043 1,345 829 681 631 646 657 771 696 684 Environmental Protection
Refuse collected (tons/month) 2,222 2,334 2,363 2,482 2,450 2,416 1,825 2,991 2,809 3,016 Recyclables collected (tons/month) 188 188 192 185 162 162 200 351 431 487 Green waste collected (tons/month) 483 469 463 462 457 469 366 929 905 509 Compressed natural gas sold (gallon equivalents) 59,351 28,080 33,845 30,999 30,182 29,045 14,427 13,691.04 25,989.00 25,130.00 (1) Information provided by various departments (2) Information not available. (3)Combination of Homework Help volunteer hours and Total volunteer hours. * Revised

Page 226 of 518 ends

CITY OF COVINA, CALIFORNIA
CAPITAL ASSET STATISTICS BY FUNCTION (1)

LAST TEN FISCAL YEARS
(183)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
General Government
Finance:

Transitional House-Number of people served 14 17 17 22 11 14 13 21 27 15 Covenants-Monitoring affordable units 460 460 460 460 460 460 449 460 460 460 Public Safety
Police:

Circulation
Books/Audiobooks/CD'S 127,254 111,236 102,019 100,913 99,434 97,548 67,451 10,564 46,050 54,321 DVD's 9,065 7,500 5,806 4,987 4,141 3,314 1,928 53 704 813 Toys 2,588 978 3,436 4,241 2,784 - - -
E-books 3,201 1,381 4,466 5,880 4,051 4,444
Total Circulation 136,319 118,736 108,803 108,488 108,392 108,303 76,629 16,587 50,805 59,578 Gate Count 222,129 206,514 194,182 189,432 189,021 187,098 120,381 1,273 50,750 48,992 Computer Services
Number of hours 14,976 13,860 10,782 10,374 12,825 12,891 6,298 45 900 1,890 Number of users 20,772 18,751 13,946 13,190 19,848 19,581 10,323 83 1,620 2,916 Library Cards
City Residents - Newly Issued 2,197 1,760 1,520 1,427 1,413 1,364 963 153 666 1,048 Non-City Residents - Newly Issued 2,713 2,118 1,679 1,594 1,257 1,198 865 106 788 954 Total Number of Current Library Cards 25,031 28,909 32,108 35,129 37,927 40,087 32,824 33,083 34,434 36,436 Library materials added
Books 4,903 3,439 2,580 2,866 2,475 1,827 1,600 1,736 1,605 1,659 CDs 86 298 222 196 131 198 156 191 117 -
Audiobooks 159 128 88 83 129 87 54 70 22 -
DVD's 221 181 150 215 155 212 154 145 179 76
Toys 99 119 97 67 27 - - -
Total Materials Added 5,369 4,046 3,159 3,459 2,987 2,391 1,991 2,142 1,923 1,697 Library Programs/Services
Storytime participants 2,060 1,397 1,756 1,649 1,542 1,662 1,317 592 390 805 Adult/Young Adult program participants 895 423 464 470 536 902 869 370 703 1,225 Children's program participants 3,222 3,014 4,264 5,351 7,343 7,264 5,171 1,034 1,085 1,398 Summer Reading Program participants 702 620 705 799 848 1,076 350 319 385 386 Joint Summer Reading program participants 1,079 1,079 811 1,153 1,468 1,818 1,806 - - - Accelerated Reader (AR) Testing Program Participants 2,665 1,861 - - 84 In-N-Out Cover-to-Cover Reading Program 181 202 240 252 274 244 366 - 252 269 Outreach (Class Visits on and off-site, number of participants 546 1,227 591 50 - 400 Homework Help Tutors 21* 12* 11 15 10 - - - - -
Homework Help Participants 1,120 738 997 529 418 - - - - - Library volunteer hours (3) 13,535 11,766 14,251 13,754 8,693 5,877 2,224 103 40 121

Page 227 of 518 ends

CITY OF COVINA, CALIFORNIA

CONTINUING DISCLOSURE

WATER SYSTEM
(184)
6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Water Purchased (in acre-feet)
Covina Irrigating Company (CIC) 4,686.30 4,429.00 4,166.26 4,756.72 5,068.03 5,035.22 5,106.32 5,347.83 5,209.95 4,395.59 Three Valley Muni Water Dist(MWD) 1,427.10 931.00 467.20 198.00 62.70 - - 151.00 23.50 92.80 Total Purchased 6,113.40 5,360.00 4,633.46 4,954.72 5,130.73 5,035.22 5,106.32 5,498.83 5,233.45 5,233.45 Potable Water Sold (in acre-feet) 5,738.46 4,986.00 4,418.34 4,508.53 4,909.82 4,720.74 4,620.64 4,825.99 4,647.69 4,003.99 Change from previous year 5.90% -13.11% -11.39% 2.04% 8.90% -3.85% -2.12% 4.44% -3.69% -13.85% Population 48,619 49,002 48,984 49,011 49,006 48,876 48,846 48,833 50,449 50,350 Cost of CIC Water $/a-f 475.00 $ 475.00 $ 495.00 $ 495.00 $ 530.00 $ 530.00 $ 495.00 $ 520.00 $ 474.19 $ 476.00 $ Cost of MWD Water $/a-f 875.00 879.41 906.76 981.67 987.00 987.00 987.00 1,098.00 1,119.10 1,104.02 Number of Water Accounts(1) 8,550 8,635 8,638 8,642 8,656 8,701 8,506 8,524 8,821 9,044 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Operating Revenue
Charges for Services 13,337,157 10,896,780 10,436,434 11,011,015 11,138,975 9,586,220 10,673,985 11,681,271 11,823,907 11,401,122 Operating Expenses
Source & supply 3,944,941 3,146,588 2,707,841 2,849,099 3,190,768 3,116,482 3,067,435 3,561,787 3,202,530 3,376,108 Production & storage 497,422 556,304 911,509 1,072,317 2,224,760 928,941 1,093,228 1,155,010 1,222,831 1,380,661 Transmission & distribution 1,394,900 1,732,307 613,017 1,604,822 1,790,159 1,096,437 1,535,521 1,046,562 1,613,450 1,374,982 Customer acct & collections 1,082,024 1,061,295 1,363,414 1,474,373 1,347,476 1,304,399 906,296 603,793 548,231 433,053 Administrative & general 904,636 638,819 798,833 238,355 (68,719) 1,872,999 1,539,142 2,407,823 1,748,816 2,426,168 Depreciation 867,235 957,051 953,511 964,403 1,006,332 1,131,906 1,276,414 1,443,409 1,504,189 1,579,745 Total Operating Expenses 8,691,158 8,092,364 7,348,125 8,203,369 9,490,776 9,451,164 9,418,036 10,218,384 9,840,047 10,570,717 Net Revenues 4,645,999 2,804,416 3,088,309 2,807,646 1,648,199 135,056 1,255,949 1,462,887 1,983,860 830,405 2010 Bond Installment Payments 986,413 710,708 990,113 988,713 985,413 986,613 988,713 802,627 1,512,429 1,472,701 2020 BBVA Installment Payments 56,842 699,742 341,398
Coverage 4.71 3.95 3.12 2.84 1.67 0.14 1.27 0.97 1.26 0.46 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 Minimum Charge: Monthly Service Charge:
5/8" & 3/4" 33.24 $ 33.24 $ 33.24 $ 36.22 $ 37.67 $ 39.18 40.75 1" 49.44 49.44 49.44 56.74 59.01 61.38 63.84
1-1/2" 76.43 76.43 76.43 103.65 107.80 112.12 116.61
2" 115.15 115.15 115.15 162.30 168.80 175.56 182.59
3" 215.92 215.92 215.92 349.95 363.95 378.51 393.66
4" 359.84 359.84 359.84 622.64 647.55 673.46 700.40
6" 719.70 719.70 719.70 1,376.19 1,431.24 1488.49 1548.03 8" Monthly Fire Line Service Charge:

Charge per hundred cubic feet (hcf): 20.90 20.09 21.74 22.61 Single Family (0-16 ccf) 2.71 2.71 2.71 45.24 47.05 48.94 50.90 Single Family (17+ ccf) 3.02 3.02 3.02 88.60 92.15 95.84 99.68 Multi-Family (0-12 ccf) 2.71 2.71 2.71 244.24 254.01 264.18 274.75 Multi-Family (13+ ccf) 2.96 2.96 2.96 512.69 533.20 554.53 576.72 Commercial/Institutional 3.16 3.16 3.16 916.49 953.15 991.28 1030.94 Industrial/Manufacturing 2.74 2.74 2.74
Irrigation/Landscaping 3.16 3.16 3.16
City/Miscellaneous 2.75 2.75 2.75 2.86 2.98 3.10 3.23
Capital Improvements Projects Fee: 3.50 3.36 3.64 3.79
5/8" & 3/4" 2.54 2.54 2.54
1" 6.36 6.36 6.36 2.99 3.11 3.24 3.37
1-1/2" 12.72 12.72 12.72 3.01 3.14 3.27 3.41
2" 32.55 32.55 32.55 3.01 3.14 3.27 3.41
3" 61.03 61.03 61.03 3.05 3.18 3.31 3.45
4" 101.71 101.71 101.71 3.01 3.14 3.27 3.41
6" 203.43 203.43 203.43 3.10 3.23 3.36 3.50
8"
Private Fire Standby Service:
4" 21.71 21.71 21.71
6" 63.09 63.09 63.09
8" 134.46 134.46 134.46
10" 241.80 241.80 241.80
* Information presented is current as of 1/12/23
Customer
Type of
Business
Consumption
(in acre-feet)
% of total
consumption Revenue
% of total water
sales
Covina School District Governmental 83.59 2.09% $183,962.03 1.67% Inter-Comm Health SVC Commercial 67.24 1.68% $143,920.68 1.30% Covina 023-Woods 206 LP Multiple Family 59.65 1.49% $145,837.92 1.32% Charter Oak Unified School Dist Governmental 46.45 1.16% $76,919.62 0.70% Lvgem Hotel Corporation Commercial 30.64 0.77% $51,690.40 0.47% Spruell, Rosario O. Multiple Family 22.21 0.55% $44,213.24 0.40% Gref GG Eastland Center L.P. Commercial 18.99 0.47% $42,181.47 0.38% Miracle Mile Properties LP Multiple Family 18.61 0.46% $37,123.58 0.34% Covina Pines HOA Multiple Family 18.52 0.46% $40,342.65 0.37% Mobilaire Estates Multiple Family 16.26 0.41% $28,518.82 0.26% TOTALS 382.16 9.54% 794,710 $ 7.20%
GRAND TOTAL CONSUMPTION 4,003.99 GRAND TOTAL SALES 11,037,339 $ (1) Information obtained from Water information system
(2) Information obtained from Covina Comprehensive Annual Financial Report Construction
Tier 2 (15+ ccf)
Multi-Family
Uniform Rate
Commercial/Institutional
Industrial/Manufacturing
Consumption Rates:

Single Family
Tier 1 (0-14 ccf)
Irrigation/Landscaping
City/Miscellaneous
3"
4"
6"
8"
10"
Largest Water Accounts(1)
Summary of Operations
Water System Fund Revenues and Expenses(2)
Water Rates(1)
5/8" and 3/4"
1"
1-1/2"
2"
3"
4"
6"
2"

Page 228 of 518 ends

CITY OF COVINA, CALIFORNIA

CONTINUING DISCLOSURE

WASTEWATER SYSTEM
(185)
6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Operating Revenue
Special Assessments 2,213,642 2,596,318 2,683,503 2,760,749 2,833,092 2,923,535 2,905,488 3,093,941 3,277,343 2,894,697 Operating Expenses
General & Administrative 784,732 919,254 785,109 661,138 1,013,663 1,721,983 2,367,418 1,848,785 1,529,927 1,731,926 Depreciation 110,795 167,735 167,735 167,735 167,735 168,680 179,627 225,865 288,962 356,327 Total Operating Expenses 895,527 1,086,989 952,844 828,873 1,181,398 1,890,663 2,547,045 2,074,650 1,818,889 2,088,253 Net Revenues 1,318,115 1,509,329 1,730,659 1,931,876 1,651,694 1,032,872 358,443 1,019,291 1,458,454 806,444 2009 Bond Installment Payments 1,296,056 1,298,981 1,294,781 1,293,363 1,294,469 1,292,900 266,966 2019 Ref Bond Installment Payments 1,027,631 1,025,239 1,026,054 1,023,768 2021 Pension Obligation Bonds 113,921 18,968
Coverage 1.02 1.16 1.34 1.49 1.28 0.80 0.28 0.99 1.40 0.71 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023

10.88 10.57 11.21 11.45 11.45 11.45 11.45 11.45
(1) Monthly Rates
Sewer Rates (1)
Sewer Fund Revenues and Expenses

Page 229 of 518 ends

Page 230 of 518 ends

ATTACHMENT B

Page 231 of 518 ends

Page 232 of 518 ends

Page 233 of 518 ends

Page 234 of 518 ends

Page 235 of 518 ends

Page 236 of 518 ends

CITY OF COVINA, CALIFORNIA

SINGLE AUDIT OF FEDERALLY ASSISTED

GRANT PROGRAMS
JUNE 30, 2023

ATTACHMENT C

Page 237 of 518 ends

CITY OF COVINA

TABLE OF CONTENTS
JUNE 30, 2023
Page
Number
Independent Auditors’ Report on Internal Control over
Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards 1 - 2
Independent Auditors’ Report on Compliance for Each Major Federal Program, Report on Internal Control over Compliance, and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 3 - 5
Schedule of Expenditures of Federal Awards and Schedule of Findings and Questioned Costs:

Schedule of Expenditures of Federal Awards 6
Notes to Schedule of Expenditures of Federal Awards 7
Schedule of Findings and Questioned Costs 8 - 9
Summary Schedule of Prior-Year Audit Findings 10

Page 238 of 518 ends

CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.

CliftonLarsonAllen LLP
CLAconnect.com
1 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor and
Members of the City Council
of the City of Covina
Covina, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Covina (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise City’s basic financial statements, and have issued our report thereon dated January 17, 2024.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control. Accordingly, we do not express an opinion on the effectiveness of City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. .

Page 239 of 518 ends

Honorable Mayor and
Members of the City Council
of the City of Covina
2 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

CliftonLarsonAllen LLP
Irvine, California
January 17, 2024

Page 240 of 518 ends

CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.

CliftonLarsonAllen LLP
CLAconnect.com
3 INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR

FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE, AND

REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

REQUIRED BY THE UNIFORM GUIDANCE
Honorable Mayor and
Members of the City Council
of the City of Covina
Covina, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Covina‘s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on the City’s major federal program for the year ended June 30, 2023. The City’s major federal program is identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of compliance with the City’s compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.

Page 241 of 518 ends

Honorable Mayor and
Members of the City Council
of the City of Covina
4 Auditors’ Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
 exercise professional judgment and maintain professional skepticism throughout the audit.  identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
 obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Page 242 of 518 ends

Honorable Mayor and
Members of the City Council
of the City of Covina
5 Our consideration of internal control over compliance was for the limited purpose described in the Auditors’ Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We have issued our report thereon, dated January 17, 2024 which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

CliftonLarsonAllen LLP
Irvine, California
January 17, 2024

Page 243 of 518 ends

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

AND SCHEDULE OF FINDINGS AND QUESTIONED COSTS

Page 244 of 518 ends

Federal
Assistance Pass-Through Total Passed
Listing Entity Identifying Federal Through to
Number Number Expenditures Subrecipients
U.S. Department of Housing and Urban Development
Passed through Los Angeles County:

Community Development Block Grant - Entitlement Grants Cluster:

Community Development Block Grant 14.218 601875-22 44,999 $ 44,999 $ Community Development Block Grant 14.218 D96153-22 14,319 - Community Development Block Grant 14.218 601181-22 10,000 - Community Development Block Grant 14.218 601198-22 10,000 10,000 Community Development Block Grant 14.218 601194-22 10,000 10,000

14.218 D96164-22 28,180 -

14.218 602371-21 100,000 -
Subtotal Community Development Block Grant - Entitlement Grants Cluster: 217,498 64,999 Passed through Los Angeles County:

Section 108 Loan 14.218 None 185,597 -
Total United States Department of Housing and Urban Development 403,095 64,999 United States Department of Justice
Direct Assistance:

Bulletproof Vest Partnership Program 16.607 N/A 5,344 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 N/A 544 - Total United States Department of Justice - 5,888
United States Department of Treasury
Passed through the State of California:

COVID-19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 None 3,449,428 - Passed through State Water Resources Control Board:

COVID-19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 CA1910127-01 1,154 - Total United States Department of Treasury - 3,450,582
Institute of Museum and Library Services
Passed through the California State Library:

Grants to States 45.310 59-0300-0-1-503 52,046 -
Total Institute of Museum and Library Services - 52,046 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 64,999 3,911,611 $ Grantor / Program / Cluster Title
Federal Grantor / Pass - Through

CITY OF COVINA

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended June 30, 2023
See accompanying notes to schedule of expenditures of federal awards.

Page 245 of 518 ends

CITY OF COVINA

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2023
7 1. BASIS OF PRESENTATION
The accompanying Schedule of Expenditures of Federal Awards (the Schedule) include the federal award activities of the City of Covina, California (the City), under programs of the federal government, as well as federal financial assistance passed through other government agencies for the year ended June 30, 2023. The information in the Schedule of Expenditures of Federal Awards (SEFA) is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule present only a selected portion of the operations of the City, they are not intended to, and do not, present the financial statements of the City. The City’s reporting entity is defined in Note 1 of the notes to the City’s financial statements.

2. BASIS OF ACCOUNTING
The accompanying Schedule is presented using the modified accrual basis of accounting for governmental funds and the accrual basis for proprietary funds, which is described in the Note 1 of the notes to the City’s financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. The information in the SEFA is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in the SEFA may differ from amounts presented in, or used in the preparation of, the basic financial statements. Pass-through entity identifying numbers are identified where available.

3. INDIRECT COST RATE
The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

4. CONTINGENCIES
Under the terms of federal grants, additional audits may be requested by the grantor agencies and certain costs may be questioned as not being appropriate expenditures under the terms of the grants. Such audits could lead to a request for reimbursement to the grantor agencies.

Page 246 of 518 ends

CITY OF COVINA

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2023
8 Section I – Summary of Auditors’ Results
Financial Statements

1. Type of auditors’ report issued: Unmodified

2. Internal control over financial reporting:
 Material weakness(es) identified? yes x no
 Significant deficiency(ies) identified? yes x none reported

3. Noncompliance material to financial
statements noted? yes x no
Federal Awards

1. Internal control over major federal programs:
 Material weakness(es) identified? yes x no
 Significant deficiency(ies) identified? yes x none reported

2. Type of auditors’ report issued on
compliance for major federal programs: Unmodified

3. Any audit findings disclosed that are
required to be reported in accordance
with 2 CFR 200.516(a)? yes x no
Identification of Major Federal Programs
Assistance Listing Number(s) Name of Federal Program or Cluster

21.027 COVID-19 Coronavirus State and Local Fiscal
Recovery Funds

Dollar threshold used to distinguish between
Type A and Type B programs: $ 750,000
Auditee qualified as low-risk auditee? yes x no

Page 247 of 518 ends

CITY OF COVINA

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023
9 Section II – Financial Statement Findings
Our audit did not disclose any matters required to be reported in accordance with Government Auditing Standards.

Section III – Findings and Questioned Costs – Major Federal Programs Our audit did not disclose any matters required to be reported in accordance with 2 CFR 200.516(a).

Page 248 of 518 ends

CITY OF COVINA

SUMMARY SCHEDULE OF PRIOR-YEAR FINDINGS
YEAR ENDED JUNE 30, 2023
10 Section I – Financial Statement Findings
Finding 2022-001 – Internal Control over Financial Reporting Condition: During our audit a material audit adjustment was required to adjust unearned revenue by reclassifying revenue to unearned for the Other Grants Special Revenue Fund and the ARPA Special Revenue Fund.

Status: Corrected.

Section II – Findings and Questioned Costs – Major Federal Programs There were no findings and questioned costs related to major federal programs in the prior year.

Page 249 of 518 ends

Page 250 of 518 ends

ATTACHMENT D

Page 251 of 518 ends

Page 252 of 518 ends

Page 253 of 518 ends

Page 254 of 518 ends

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 5
Meeting: February 6, 2024
Title: Resolution CC 2024-04 – A Resolution of the City Council of the City of Covina, California, Setting Fees Relating to Sidewalk Vendors, Food Trucks, and Sidewalk Vending Permits
Presented by: Brian K. Lee, AICP, Director of Community Development Recommendation: Adopt Resolution CC 2024-04.

EXECUTIVE SUMMARY:

In January 1, 2019, SB 946, the California Safe Sidewalk Vending Act, became effective. SB 946 established requirements for local regulation of sidewalk vendors and food truck operators, in that California cities could create regulations and a licensing and permitting procedures that would impose operational requirements for sidewalk vendors and food truck operators for the purposes of protecting the public health, safety and welfare.

Furthermore, SB 946 authorizes California cities to establish fees and administrative fines pursuant to the implementation of SB 946.

DISCUSSION:

The California Government Code allows cities to establish fees and fines for the implementation and ongoing administration of activities within a city’s boundaries to cover a city’s administrative costs. Resolution CC 2024- 04 establishes permit fees, administrative fines, and equipment recovery fees in regard to sidewalk vending and food truck operations within the City of Covina as follows:

FISCAL IMPACT:

There is no fiscal impact at this time.

Fee or Fine Amount Notation

1. Application Fee per each Sidewalk
Vendor or Food Truck Operator
Permit.
$400.00 Application Permit Fee of $400 per vending cart or food truck shall be required for an application for a Sidewalk Vending/Food Truck Permit

2. Employee Application Permit Fee. $100.00 An Employee Application Permit Fee of $100 per employee shall be required of all person(s) who will be employed by the applicant for a Sidewalk Vending/Food Truck Operator Permit who will work as a stationary or roaming sidewalk vendor or Food Truck employee.

3. Sidewalk Vending/Food Truck
Operator Permit Change of
Information Fee
$100.00 A Sidewalk Vending/Food Truck Operator Permit Change of Information Fee of $100 shall be imposed when any applicant who has been issued a Sidewalk Vender/Food Truck Operator Permit changes any information as provided in the application or CMC Chapter 5.90.

4. Administrative Fines:
a. First Violation: $100.00
b. Second Violation within one year
of the first violation;
$200.00
c. Each Additional Violation within
one year of the first violation:
$500.00

5. Recovery Fee: $300.00 Recovery fee required to be paid by all person(s) who recover equipment, items, paraphernalia or similar items that have been removed by City personnel from obstructing the public right of way.

Page 255 of 518 ends

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

The proposed action of adopting a resolution approving fees and fines are a Statutory Exemption pursuant to Section 15273(a) of the State of California Environmental Quality Act (“CEQA”) Guidelines, because it has no potential for resulting in physical change in the environment, directly or indirectly, and the adoption of a fee and fine schedule is to recover operating costs incurred by the City to administer the Street Vendor and Food Truck Operator ordinance provisions.

Respectfully submitted,

Page 256 of 518 ends

ATTACHMENT A
RESOLUTION CC 2024-04

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA,

CALIFORNIA, SETTING FEES RELATING TO SIDEWALK VENDORS,

FOOD TRUCKS AND SIDEWALK VENDING PERMITS
WHEREAS, Senate Bill 946, the California Safe Sidewalk Vending Act (“SB 946”), became effective on January 1, 2019; and
WHEREAS, SB 946 establishes requirements for local regulation of sidewalk vendors and food truck operators; and
WHEREAS, the City seeks to implement sidewalk vending regulations to provide a licensing and permitting process and impose operational requirements for sidewalk vendors and food trucks operators in the City to comply with SB 946 and protect the health, safety, and welfare of the community; and
WHEREAS, California Government Code Sections 51039(a)(1) and 51039(a)(3)(A) authorize a city that has adopted an ordinance to regulate sidewalk vendors and food trucks in compliance with SB 946 to establish specified fees and administrative fines for violation of that ordinance; and
WHEREAS, on June 6, 2023, the City Council introduced Ordinance 23-05, amending Covina Municipal Code (“CMC”) Chapter 5.90 relating to regulation of sidewalk vendors and food truck operators in compliance with SB 946; and
WHEREAS, on December 19, 2023, the City Council introduced Ordinance 23-14, amending Covina Municipal Code (“CMC”) Chapter 5.90 relating to regulation of sidewalk vendors and food truck operators in compliance with SB 946.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA,

CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS:

SECTION 1. As provided in California Government Code Sections 51039(a)(1), the following schedule of administrative fines is adopted for a violation of Chapter 5.54 by a sidewalk vendor and/or food truck operator who has a current and valid Sidewalk Vending/Food Truck Permit issued by the City: a. An administrative fine not exceeding $100 for a first violation; b. An administrative fine not exceeding $200 for a second violation within one year of the first violation; and c. An administrative fine not exceeding $500 for each additional violation within one year of the first violation.

SECTION 2. An Application Permit Fee of $400 per vending cart or food truck shall be required for an application for a Sidewalk Vending/Food Truck Permit.

SECTION 3. An Employee Application Permit Fee of $100 per employee shall be required of all person(s) who will be employed by the applicant for a Sidewalk Vending/Food Truck

Page 257 of 518 ends

Resolution CC 2024-04 Page 2 of 2
Operator Permit who will work as a stationary or roaming sidewalk vendor or Food Truck employee.

SECTION 4. A Sidewalk Vending/Food Truck Operator Permit Change of Information Fee of $100 shall be imposed when any applicant who has been issued a Sidewalk Vender/Food Truck Operator Permit changes any information as provided in the application or Chapter 5.90.

SECTION 5. A Recovery Fee of $300 shall be required paid by all person(s) who recover equipment, items, paraphernalia or similar items that have been removed by City personnel from obstructing the public Right-of-Way prior to their recovery by the owner of the equipment.

SECTION 6. This Resolution shall be effective immediately upon the effective date of Ordinance 23-14.

APPROVED and PASSED this 6
th day of February, 2024.

City of Covina, California
BY:

WALTER ALLEN, III, Mayor
ATTEST:
______________________________________
FABIAN VELEZ, Chief Deputy City Clerk

CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2024-04 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 6
th day of February, 2024, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
__________________________________________
FABIAN VELEZ, Chief Deputy City Clerk

Page 258 of 518 ends

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 6
Meeting: February 6, 2024
Title: Request to Approve Revisions to the Covina Residential Rehabilitation Grant/Loan Program Handbook for participants of the Community Development Block Grant (CDBG) Residential Rehabilitation Program
Presented by: Brian K. Lee, AICP, Director of Community Development Recommendation: Approve revisions to the Covina Residential Rehabilitation Grant/Loan Program Handbook for participants of the Community Development Block Grant (CDBG) Residential Rehabilitation Program.

BACKGROUND:

The City of Covina is a recipient of the Federal Government’s Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) funds which are targeted to benefit very-low, low, and moderate-income persons to eliminate slum and blight. These funds are received through a partnership with the Los Angeles Community Development Authority (LACDA). As a disbursing agent for these funds, the City administers the Covina Residential Rehabilitation Grant/Loan Program. The Program is designed to assist income qualified, owner-occupied homeowners in maintaining the existing housing stock with necessary home repairs to correct health and safety issues, such as roof replacement, plumbing, and ADA accessibility. This program is not a beautification program and my not be used to upgrade or beautify homes, except as a natural result of any rehabilitation performed.

This Program began in 1990 at which time, the maximum allowable expenditure was $5,000. In 2009, it was amended to the current grant amount of $10,000 and loan amount of $20,000, for a total allowable expenditure of $30,000. The amount available to mobile home owners increased to a maximum of $8,000, which is a forgivable grant.

On September 17, 2013, the Covina City Council approved the revisions to the Covina Residential Rehabilitation Grant/Loan Program Handbook (“Program Policy Manual”) for participants of the CDBG Residential Rehabilitation Program to address areas in which the prior Program did not specifically address.

DISCUSSION:

To ensure that the homeowners and contractors fulfill and understand the terms and conditions of all Program requirements and are aware of the Program policies, the Program Policy Manual was established. The last update to the Covina Residential Rehabilitation Grant/Loan Program Handbook was approved by the City Council in 2013. Since that time, minor changes and new policies have become necessary to implement in order to continue the successful operation of the program. Additionally, changes are proposed to increase the qualifying limits of applicants in order to keep up with the cost of living.

The highlight of major changes as proposed are as follows:

Page 259 of 518 ends

 Other Grant/Loan Conditions, page 10: Increase total allowable assets (not including home to be rehabilitated) to $60,000.
 General Provisions & Conditions, page 12: Allows minor amendments to the Program Policy Manual to be made by the City Manager administratively, with the exception of Federal regulations and CDA procedures which shall remain unmodified.
 Pre-Construction Conference, page 29: The Homeowner and the Contractor shall sign an acknowledgement agreement that they understand the terms and conditions of all Program requirements and it was reviewed during the Pre-Construction meeting and a copy of the Covina Residential Rehabilitation Gran/Loan Program Handbook, Section 3 has been provided.  Refinancing and Subordination of a Covina Residential Rehabilitation Program Loan, page 12: The City of Covina will, on a case-by-case basis review and approve or deny subordination requests from loan recipient. The time to complete and approve a subordination application varies. Typically, it takes between one and two months. To request the City of Covina to subordinate, homeowners/loan recipient must submit in writing the following information to the Special Projects Division:

1. The reason for the subordination request (Sale, refinance, or cash out).

2. The name, address, contact person (s) at the cooperating financial institution.

3. The City will only consider providing a loan subordination without immediate loan repayment if the refinance is solely to obtain a lower rate mortgage with no cash out. The City will not subordinate for reverse mortgages.
 Applicant Income Limits, page 16: The gross income limits for the grant/loan are updated to those of the current fiscal year as well as the income inclusion reference.  Section 4, City funding requests/reporting procedures, page 42, City Staff are not funded using program administration funds, therefore references to tracking of administrative costs section is removed.  Section 4, Tracking of the outstanding loans, page 42: At the request of the homeowner no more than once per year, City Staff will prepare a letter notifying them of any interest that has accrued and what their current loan balance is.

The above referenced Program Policy Manual is attached for review and approval in its proposed final form as Attachment A, and the previous version is attached as Attachment B.

FISCAL IMPACT:

This action has no fiscal impact.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

Page 260 of 518 ends

February, 2024

ATTACHMENT A

COVINA RESIDENTIAL

REHABILITATION

GRANT/LOAN PROGRAM

HANDBOOK
(Funded using Community Development
Block Grant (CDBG) Funds)
This project has been funded in part by the U.S.

Department of Housing and Urban Development
through the CDBG Program.
(PROGRAM POLICY MANUAL)
Adopted: 09/19/1995
Revision #1: 03/16/1998
Revision #2: 10/16/2001
Revision #3: 02/17/2009
Revision #4: 09/17/2013
Revision #5: 2/6/2024
City of Covina
Special Projects Division
125 East College Street
Covina, CA 91723
(626) 384-5443

Page 261 of 518 ends

February, 2024
1 COVINA RESIDENTIAL REHABILITATION GRANT/LOAN

PROGRAM

POLICIES & PROCEDURES

TABLE OF CONTENTS
PAGE
POLICIES AND PROCEDURES. .......... .......... .................... .......... .......... ....... 2 SECTION 1 – General Provisions and Conditions....... .......... .......... ....... 2 SECTION 2 - Determining Eligibility ...... .................... .......... .......... ..... 13 SECTION 3 – Inspection/Contractor Payment Procedures .... .......... ..... 24 SECTION 4 – Reporting Procedures...... .................... .......... .......... ..... 41 APPENDICES........ .......... ......... .......... .......... .................... .......... .......... ..... 43

Page 262 of 518 ends

February, 2024
2 SECTION 1

TABLE OF CONTENTS

GENERAL PROVISIONS AND CONDITIONS
PAGE
SECTION 1 -GENERAL PROVISIONS AND CONDITIONS.. .......... .......... ....... 3 A. Purpose ... ......... .......... .......... .................... .......... .......... ....... 4 B. Applicants ......... .......... .......... .................... .......... .......... ....... 4 C. Property Eligibility Requirements.................. .......... .......... ....... 5 D. Eligible Activities .......... .......... .................... .......... .......... ....... 6 E. Ineligible Repairs .......... .......... .................... .......... .......... ....... 7 F. Types of Grants/Loans.. .......... .................... .......... .......... ....... 8 G. Maximum Grant/Loan Amount .................... .......... .......... ....... 8 H. Interest Rate...... .......... .......... .................... .......... .......... ....... 8 I. Loan Terms........ .......... .......... .................... .......... .......... ....... 8 J. Other Loan Conditions . .......... .................... .......... .......... ..... 10 K. Miscellaneous Conditions........ .................... .......... .......... ..... 12 L. Refinancing and Subordination .................... .......... .......... ..... 12 M. Amendments..... .......... .......... .................... .......... .......... ..... 12

Page 263 of 518 ends

February, 2024
3 CITY OF COVINA

RESIDENTIAL REHABILITATION GRANT/LOAN PROGRAM

GENERAL PROVISIONS & CONDITIONS
SECTION 1
The CITY of Covina (CITY) is a recipient of the Federal Government's Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) funds which are targeted to benefit very-low, low, and moderate-income persons to eliminate slum and blight. These funds are received through a partnership with the Los Angeles Community Development Authority (LACDA). As a disbursing agent for these funds, the CITY administers a grant/loan program designed to assist eligible Homeowners in maintaining the existing housing stock of the incorporated areas of the CITY through home rehabilitation. This program consists of the Covina Residential Rehabilitation Grant/Loan Program for Very Low-,Low- and Moderate-Income Residents (Rehab Program) as defined in CDBG Bulletin Annual Income Guidelines (as revised each year).

The Rehab Program is in compliance with CDBG regulations. All activities of this program are in accordance with criteria and standards set forth in Federal regulations governing CDBG Programs, 24 CFR Part 570, as amended.

The Rehab Program provides grant/loan funds of up to a maximum of $30,000 to owneroccupied single family detached homes and grant funds of up to $8,000 for owner-occupied mobile homes who fall within the category of very-low, low, and moderate income, as defined by the Department of Housing and Urban Development (HUD) as equal to or less than 80% of median income for the County of Los Angeles, as amended each year.

The grant/loan program is to be used to correct health and safety issues and aid in the preservation of decent, safe and sanitary housing within the CITY limits of the CITY of Covina. This program is not a beautification program and may not be used to upgrade or beautify homes, except as a natural result of any rehabilitation performed.

The loan program is administered by CITY personnel. As such, the CITY is responsible for marketing the program, processing and packaging rehabilitation grants/loans, performing onsite inspections, and acting as a quality control agent. The Homeowner is obligated to fulfill the terms and conditions of its contract with CITY, established CITY policies and procedures as outlined in this handbook, and comply with local codes and regulations (Covina Municipal Code).

This handbook has been written as an aid to the Homeowner and Contractor in fulfilling the terms and conditions of all requirements. Under no circumstances does this handbook supersede the responsibilities outlined in the actual Homeowner contracts or any Agreement.

This program was begun by the Covina Redevelopment Agency in 1990 at which time, the

Page 264 of 518 ends

February, 2024
4 maximum allowable expenditure was $5,000. This was amended in 1995 to include a $4,000 grant with an additional $3,000 loan available. This was amended in 2001 to increase the additional loan amount available to $6,000, for a total allowable expenditure of $10,000 per single family home and a maximum of $3,000 for mobile homes and a maximum interest rate to apply to loans of 3%. This was amended in 2009 which increased the grant to $10,000 and the additional loan amount available to $20,000, for a total allowable expenditure of $30,000. The amount available to mobile home owners increased to a maximum of $8,000, which is a grant.

General Provisions and Conditions for program are delineated herein.

I. GENERAL PROVISIONS/CONDITIONS FOR GRANT/LOAN PROGRAM A. Purpose
Covina Residential Rehabilitation Grant/Loan Program shall be used to finance the cost of repairs to correct code violations or incipient violations of CITY's Municipal Code and conditions determined to be detrimental to public health and safety, as well as aid in the preservation of decent, safe and sanitary housing. The type of grant/loan offered through the Rehab Program is:

Deferred Payment Grant/Loan for Single Family Homes (3%) For mobile home owners, $8,000 is considered a grant. For single family homes, the first $10,000 spent is considered a grant, which is written off over 5 years (20% each year), on the anniversary date of the project completion date, dependent upon meeting certain criteria. Any expenditure over $10,000 and up to a maximum of $30,000 is a loan which accrues SIMPLE interest of three percent (3%) for 10 years, beginning on the date the project is completed subject to certain criteria.

Grant for Mobile Home Rehabilitation, a grant of up to $8,000 is available.

Marketing
The CITY shall use any marketing strategies it sees fit as part of the overall marketing strategy to contact all property owners eligible for program.

B. Applicants
Grant/Loans shall be given to eligible very-low, low, and moderate income, residential owner-occupants, who cannot otherwise obtain funding through conventional loans or other sources, to cover the cost of necessary housing rehabilitation. The entire process, from qualifying for participation in the program to completing rehabilitation will take no longer than six (6) months.

1. Owner-occupants, or Homeowners, shall be considered to be any person(s) that holds title to the home being rehabilitated and who is/are legally responsible for repayment of the grant/loan. In the case of multiple ownership, the signature of each titleholder is required on all

Page 265 of 518 ends

February, 2024
5 appropriate documents. Income for all members of the household and/or any person(s) listed on title of the property in question, as defined by Section 61 of the IRS Code of 1954, as amended, governs grant/loan eligibility.

2. Applicants who have participated in the program previously must wait a minimum of ten (10) years prior to applying for assistance again.

Applicants who have been participants at any time in the past shall be subject to restrictions on the total amount available as described in Section I.G.

3. Conflict of Interest. Covina Residential Rehabilitation Grant/Loans will not be granted to any member of the City Council or the governing body of the County of Los Angeles, or to any person who exercises any functions or responsibilities in connection with the administration of the Covina Residential Rehabilitation Grant/Loan Program. Members of the above stated organizations shall have no interest, direct or indirect, in the proceeds from the Covina Residential Rehabilitation Grant/Loan or in any contract entered into by the Homeowner for the performance of the work financed, in whole or in part, with the proceeds of the grant/loan.

Further, any Contractor who contracts with a Homeowner agrees that any conflict or potential conflict of interest shall be fully disclosed prior to execution of the contract and shall comply with all applicable federal, state and county laws and regulations governing conflicts of interest, in accordance with 24 CFR Part 84, Sec. 84-42.

C. Property Eligibility Requirements

1. Homeowner shall have sufficient equity in the home to secure the grant/loan. Equity will be calculated based on using estimated value of the home as listed on www.zillow.com or any other comparable tool and by subtracting all outstanding amounts due in any lien on the home.

2. For all grants/loans, the home must be owner-occupied, as the principal residence of the homeowner/applicant for a minimum of twelve (12) months prior to the date of the grant/loan application. Exceptions to this requirement may be made in hardship cases at the sole discretion of the CITY.

3. The home under consideration for rehabilitation must be residential and consist of either one single family house or single mobile home on one lot. Properties with more than one unit will be considered at the sole discretion of the CITY.

4. Owner shall not have any restrictions or encumbrances that would unduly restrict the good and marketable nature of the ownership interest as determined by the CITY. Example: Non-Revocable Trust.

Page 266 of 518 ends

February, 2024
6 5. Homeowner shall be current in mortgage payments to lender, or be able to show that regular monthly payments are being made.

D. Eligible Activities
The CITY, in its sole discretion, may focus on certain items of improvements and forego other improvements requested by the Homeowner in order to be able to serve a greater number of Homeowners.

1. Improvements that may be financed can be found in CDBG Bulletin 06- 0035 and are:
a. Code violations
b. Correction of incipient violations
c. Cost effective energy conservation measures, excluding solar heating, cooling and water systems
a. Removal of lead-based paint or any hazard conditions (*Department of Housing and Urban Development 24 CFR Part 35, 510, 511, 570 and 590, as amended)
e. Removal of barriers to the handicapped
f. Removal of rodents and roaches (pest control)
g. Removal of termites and repair of termite damage
h. General property improvements as an integral part of the rehabilitation work;
i. Bedroom and bathroom additions to eliminate overcrowding.

Room Additions – as funds are limited, room additions will not be considered except in extreme conditions.

2. Type of work:
a. Appliances:

Appliances will be considered only if the gas or electrical company determines an existing built-in stove or oven to be inoperable.

Replacement requests must be accompanied by written
justification and a gas/electrical company work order (code violations).
b. Driveways:

Driveways will be considered for grants/loans only if the CITY determines that the present driveway constitutes a detriment to public health and a safety hazard. Driveway requests must be accompanied by written justification and pictures.
c. Sandblasting and Stucco Work:

Sandblasting or Stuccowork to the exterior will be considered for grants/loans only if the exterior is damaged to the extent that it is more expedient to sandblast or stucco.

Page 267 of 518 ends

February, 2024
7 d. Garages:

New construction of garages and carports will only be considered for grants/loans if the present garage or carport constitutes a detriment public health and a safety hazard.
e. Flooring:

Kitchen and Bathroom. If flooring is required in kitchen and bathroom areas, single sheet linoleum type or composition is recommended. Ceramic or porcelain tile may be used if
Homeowner is able to justify the cost of installing such is comparable to installing linoleum- or composition-type flooring.

Other areas of the home. Will be considered if occupant is handicapped and replacement of flooring makes it easier to ambulate within the home.

E. Ineligible Repairs
Ineligible rehabilitation repairs include cosmetic repairs, speculative income producing renovation work, luxury remodeling, and convenience repair work.

Materials, fixtures or equipment of a type or quality which exceeds that customarily used in properties of the same general type as the property to be rehabilitated are ineligible. The following improvements are not eligible under the Program:

1. Barbecue Pits

2. Burglar Alarms

3. Flower Boxes or Planters

4. Greenhouses

5. Animal Kennels

6. Indoor/Outdoor Fireplaces or Hearths

7. Penthouses

8. Photo Murals

9. Stands (planters, room dividers, etc.)

10. Walls which serve as partial room dividers

11. Steam cleaning of exterior surfaces

12. Television Antenna

13. Tennis Courts

14. Tree Surgery

15. Drapes, Shades, Blinds

16. Exterior Window Awnings

17. Yard Sprinkler Systems

18. Storage Shed

19. Microwave Oven

20. Patios (except repairs if attached to home only and permit on file at CITY Building Department approving patio construction)

21. Wallpaper

22. Landscaping (planting flowers, plants or trees)

Page 268 of 518 ends

February, 2024
8 23. Water Purifier

24. Kitchen appliances which are designed and manufactured to be free standing and are not built-in and permanently affixed as an integral part of the kitchen in a residential structure.

25. Bathhouse, swimming pools, hot tubs, spas, jacuzzi or accessories for any of these

26. New construction except items that will remedy a public health and safety hazard

27. Purchase, installation, and repair of furniture

28. Any items considered “Luxury”

29. Any items considered to be movable
F. Type of Grant/Loans
The only type of Grant/Loan currently available for single family homes is a Deferred Payment Loan. For mobile homes, there is only a Grant program.

Deferred Payment Loans and Mobile Home Grants are available to qualified low-income applicants, whose income does not exceed 80% of County Median Income, as published on the California Department of Housing & Community Development website for “CDBG and HOME” programs.

G. Maximum Grant/Loan Amount
The maximum amount allowed for a Deferred Payment Loan is $30,000 for a single-family home or $8,000 for a mobile home. For a single-family home, the first 10,000 is considered to be a grant and the remaining 20,000 is a loan.

However, this amount may be increased based on the extent of rehabilitation necessary to achieve the desired Housing Quality Standards if approved by Community Development Director.

PRIOR participants of the program are ONLY allowed up to the current maximum amounts for the program. For instance, if a participant received a grant in the past of $4,000, and a loan for $1,000, the amount of money available to this participant now, would be $6,000 in grant money and $19,000 of loan money.

H. Interest Rate
The loan portion of a Deferred Payment Loan shall bear a 3% SIMPLE INTEREST RATE. Interest will accrue for 10 years only. Except under certain circumstances, the grant portion will not accrue interest.

The grant for mobile home rehabilitation will not accrue interest.

I. Loan Terms

1. General
a. The Grant/Loan shall be between the CITY and the Homeowner.

Page 269 of 518 ends

February, 2024
9 b. The Homeowner has the right to repay the loan portion at any time, in part or in full, without prepayment penalties. c. The Homeowner must pay in full the unpaid principal of the loan plus any accrued interest that is due on the loan at the time of refinancing the single family home. Under certain circumstances, the grant may become a part of the loan and subject to
repayment.

2. Deferred Loans
a. The loan portion of the grant/loan shall bear interest for 10 years from the date of the Promissory Note. No more interest shall be added after the 10th year.
b. The loan payments shall be deferred during the life of the loan.

No monthly payments are required. However, the Homeowner, at any time, may elect to make a minimum monthly payment of $25.00 or more.

3. Repayment of Grant/Loan
a. Provided that the Homeowner continues to (i) hold title to the home, (ii) reside in the home as his or her principal residence, (iii) does not refinance the home and (iv) does not transfer the home to another person, whether by sale, gift, bequest or intestate succession (except as may be allowed by the CITY under
Section J.1. below), the principal and accrued interest on the loan shall not become due and payable by the Homeowner to the CITY.
b. Additionally, the amount of any grant for a single family home shall be written off/forgiven at a rate of 20% for each 12-month period after the project completion date that the conditions in the last paragraph are met. If the conditions are met for a period of 5 years (60 months) the grant shall be fully written off and the Homeowner shall have no obligation to repay any portion of the grant.
c. If the above conditions are not met, the full unpaid principal amount of the loan plus accrued interest shall be immediately due and payable to the CITY. In addition, the grant amount will no longer continue to be written off and prior amounts written off may be reversed. The grant amount shall become a loan which shall accrue interest at the rate set forth above and shall also become immediately due and payable to CITY.
d. Recertification of continued principal residence occupancy may be

Page 270 of 518 ends

February, 2024
10 required to be completed for each of the five (5) years following the anniversary date of the completion of the rehabilitation.

J. Other Grant/Loan Conditions
Specific terms and conditions for a Covina Residential Rehabilitation Grant/Loan are incorporated in the Promissory Note, secured by a Deed of Trust.

Additionally, Homeowner shall agree to comply with following terms and conditions:

1. Assignment and Assumption:

Covina Residential Rehabilitation Grant/Loans are generally not assignable or assumable. But the CITY may consider the following exceptions:
a. The title to the home has not been sold or transferred except to the Homeowner's spouse (as a consequence of marriage,
dissolution of marriage, or death), or to a son, daughter and/or legal dependent that will own and occupy the home as his or her primary residence; and
b. The new Homeowner meets these eligibility criteria and his or her income is such that the loan could not be repaid by refinancing from another source without the new Homeowner exceeding his or her ability to afford his or her housing costs. Such evidence may include income verifications and written rejections or refinancing applications from lending institutions, which provide the reasons for rejection.
e. If it is determined by the CITY that the new Homeowner is not eligible for assignment and assumption, the grant/loan shall be immediately due and payable.

2. Fire Insurance Requirements
The CITY verifies fire insurance coverage at the time of applying for the grant/loan and through any rehabilitation work done.

3. Refinancing – If Homeowner decides to refinance the home, any amount outstanding for the grant/loan must be repaid at that time, unless otherwise approved by the CITY. The CITY will only consider providing a loan subordination without immediate loan repayment if the refinance is solely to obtain a lower rate mortgage with no cash out. The CITY will not subordinate for reverse mortgages.

4. Assets – Total assets (not including home to be rehabilitated) must not be more than $60,000.

K. Miscellaneous Conditions

1. All applicable work funded by a grant/loan shall conform to cost effective

Page 271 of 518 ends

February, 2024
11 energy conservation standards.

2. In compliance with 24 CFR Part 35, lead based paint products shall not be used on any project funded by a grant/loan.

3. Contractor shall keep all records of funds received from the CITY and make them accessible for audit or examination for a period of five (5) years after final payments are issued and other pending matters are closed (24 CFR Part 200). The CITY shall maintain for a period of five (5) years after the expiration of the contract with the Homeowner, complete and adequate financial records and accounts as considered necessary by the Los Angeles County Community Development Commission (LACDC) to assure proper accounting for all program funds and to support all program expenditures.

4. Contractor may not conduct any activity, including any payment to any person, officer, or employee of any agency or member of Congress in connection with the awarding of any federal contract, grant, or loan, intended to influence legislation, administrative rule-making or the election of candidates for public office during time compensated for under representation that such activity is being performed as a part of the contract responsibility.

5. It is understood that each person/entity/firm who applies for a Community Development Commission contract, and as part of that process, shall certify that they are familiar with the requirements of the Los Angeles County Code Chapter 2.160, (Los Angeles County Ordinance 93-0031); and that all such persons/entities/firms have and will comply with the County Code, and; that any person/entity/firm who seeks a contract with the Community Development Commission shall be disqualified therefrom and denied the contract and, shall be liable in civil action, if any lobbyist, lobbying firm, lobbyist employer or any other person or entity acting on behalf of such person/entity/firm fails to comply with the provisions of the County Code.

6. Executive Order 11246 requires that during the performance of any contract subject to this policy, the contractor agrees not to discriminate against any employee or applicant for employment because of race, religion, sex, color, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, religion, sex, color, or national origin. Such action shall include, but not limited to, the following: employment upgrading, demotion or transfer: recruitment or recruitment advertising: layoff or termination: rates of pay or other forms of compensation: and selection for training, including apprenticeship.

The contractor shall post in conspicuous places, available to employees

Page 272 of 518 ends

February, 2024
12 and applicants for employment, notices to be provided by the contractor setting forth the provisions of this nondiscrimination clause.

7. Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u, requires that to the greatest extent feasible, opportunities for training and employment be given to lower-income residents of the project area and contracts for work in connection with the project be awarded to business concerns, which are located in, or owned in substantial part, by persons residing in the area of the project.

8. Title VI of the Civil Rights Act of 1964 and Section 109, Title I of the Housing and Community Development Act of 1974, provides that no person shall, on the ground race, color, national origin, or sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with funds made available under this Title.

9. Prohibition against discrimination on the basis of age under the Age Discrimination Act of 1975, or with respect to an otherwise qualified handicapped individual, as provided in Section 504 of the Rehabilitation Act of 1973, shall also apply to any such program or activity.

L. Refinancing and Subordination
The CITY will, on a case-by-case basis review and approve or deny subordination requests from loan recipient. The time to complete and approve a subordination application varies. Typically, it takes between one and two months. To request the CITY to subordinate, homeowners/loan recipient must submit in writing the following information to Special Projects Division:

1. The reason for the subordination request (Sale, refinance, or cash out).

2. The name, address, contact person (s) at the cooperating financial institution.

The CITY will only consider providing a loan subordination without immediate loan repayment if the refinance is solely to obtain a lower rate mortgage with no cash out. The CITY will not subordinate for reverse mortgages.

M. Amendments
Amendments to the Program Policy Manual may be made by the City Manager administratively, with the exception of Federal regulations and CDA procedures, which shall remain unmodified.

Page 273 of 518 ends

February, 2024
13 SECTION 2

TABLE OF CONTENTS

DETERMINING ELIGIBILITY
PAGE
SECTION 2 – DETERMINING CLIENT ELIGIBILITY............. .......... .......... ......... ...... 13 I. GRANT/LOAN PROGRAM PROCEDURES............. .......... .......... ......... ...... 14 A. Introduction........ .......... .......... .................... .......... ..........……………14 B. Application Procedure... .......... .................... .......... .......... ......... ...... 14 C. Grant/Loan Review and Approval Process….……….. ....... ......... ...... 15 D. Applicant Income Limits .......... .................... .......... .......... ......... ...... 16 E. Initial Inspection. .......... .......... .................... .......... .......... ......... ...... 20 F. Write-up of Rehabilitation......... .................... .......... .......... ......... ...... 21 G. Application Approval/Rejection .................... .......... .......... ......... ...... 21 H. Lead Based Paint/Asbestos Inspection Reports...... .......... ......... ...... 22 I. Deed Recording/Note Signing. .................... .......... .......... ......... ...... 22 J. Homeowner/Project Set-up in LACDC.org Website .......... ......... ...... 22

Page 274 of 518 ends

February, 2024
14 SECTION 2

COVINA RESIDENTIAL REHABILITATION GRANT/LOAN

DETERMINING CLIENT ELIGIBILITY
I. GRANT/LOAN PROCEDURE
A. Introduction
This section delineates the steps involved in the processing of Grants/Loans and includes procedure related to the packaging of grant/loan applications, and the reviewing of the package and approval of the grant/loan by the CITY.

B. Application Procedure
A Preliminary Application is completed by Homeowners desiring to participate in the Grant/Loan Program. Included in this form is a description of the type of rehabilitation work requested. This form is signed and dated by the Homeowner. This form is used to place the Homeowner on the CITY’s waiting list. When there is available funding, the Homeowner is contacted and asked to complete a more in-depth application.

If the Homeowner is still interested in participating in the program, the Homeowner is then responsible for submitting all requested documentation to the CITY for approval.

Application Process
The following describes procedures for the handling of the grant/loan application and the packaging of the final grant/loan application. This process will take no more than four (4) weeks to complete.

1. Eligibility Determination
The CITY sends out the detailed application packet. Homeowner must supply the CITY with the following documents:
(a) Completed application
(b) Property tax statement
(c) Paycheck stubs, or other income documentation for the last 3 months
(d) AFDC, Social Security, Pension, dividends, interest for the last 3 months
(e) Income Tax Returns for 3 years or statement of non-filing Federal income tax returns for the previous three (3) years are required as the primary means of income verification for all grants/loans. If the Homeowner does not earn sufficient income to warrant the filing of a tax return, CITY will require a statement of non-filing, signed by the Homeowner in the place of the Federal income tax return
(f) Current mortgage statement for all mortgages on the subject home
(g) Current fire insurance policy on the subject home

Page 275 of 518 ends

February, 2024
15 (h) Signed acknowledgement of receiving “A Consumer Guide to Asbestos”, “Protect Your Family From Lead in Your Home” and “Watch Out for Lead Based Paint Poisoning”
(i) Credit Authorization form

2. The CITY is responsible for explaining program details to the Homeowner and highlighting such facts as the terms, conditions, and repayment terms, as well as to make clear there are no required monthly payments; however, the Homeowner may elect to make a minimum monthly payment of $25.00 or more. The Homeowner must understand that a lien may be placed on the subject home for the grant/loan amount until it is repaid or written off. The Homeowner must understand that the contract is a private contract between the Homeowner and Contractor.

3. The Homeowner is advised that a Lead-Based Paint Inspection/Risk Assessment Report and an Asbestos Inspection Report will be required.

These reports are provided at the Homeowner’s expense; any costs resulting from these inspections will be incorporated into the grant/loan.

As a part of the application package, “A Consumer Guide to Asbestos” and “Protect your Family From Lead in your Home” as well as “Watch Out For Lead-Based Paint Poisoning” is distributed to the Homeowner.

The Homeowner must sign and acknowledge receipt of these informational packets.

A Lead Based Paint and Asbestos Containing Material Test shall be performed on each property considered for rehabilitation. The CITY’s Contractor (which shall have a valid contract in place between the CITY and the Contractor), currently Barr & Clark, shall be used for such testing. This Contractor submits completed reports to the CITY.

The CITY shall provide a copy of each report to the Homeowner. The Homeowner acknowledges receipt of reports by signing “Notice of Asbestos Evaluation, Notice of Lead Hazard Evaluation” form which is maintained in Homeowner file.

C. Grant/Loan Review and Approval Process
The process for the review and approval of the application is described below:

1. Once all of the required documents are received, they are reviewed.

2. A copy of the current CDBG Bulletin-Income Guidelines is placed in the file with the computation of Homeowner total income and verification that the Homeowner qualifies based on income limits. See Section D below for more detailed information.

Page 276 of 518 ends

February, 2024
16 3. A visual inspection appointment is made with the Homeowner and CITY personnel as well as a Code Enforcement Officer in order to assess the needs of the Homeowner, based on the preliminary application.

4. The CITY shall advise the Homeowner, in writing, of grant/loan approval by issuing an Approval Letter. This letter details the program as well as discusses the work authorized based on the visual inspection and recommendations made by the Code Enforcement Officer.

5. If the grant/loan is disapproved due to lack of justification or clarification, the Homeowner is advised in writing and given a deadline to come and pick up any supporting documentation at the CITY. If supporting documentation is not picked up by the deadline, it is shredded.

D. Applicant Income Limits

1. Gross annual family income cannot exceed 80% of the annual family median income, adjusted for family size, established by HUD for Los Angeles County. Income limits are subject to change by HUD. Income is defined as the combined income of all members of the household, as defined in 24 CFR § 5.609 (Part 5 annual income) annual income as reported under the census long form, as amended.

2. The gross income limits for the Grant/Loan Program for Fiscal Year 2023-2024 per CDBG Bulletin 23-0010 are shown below:

Persons Deferred Loans
Per Family (80% Median Income)*
1 $70,650
2 $80,750
3 $90,850
4 $100,900
5 $109,000
6 $117,050
7 $125,150
8 $133,200
*Income after adjustment for allowable inclusions and exclusions Note: When future legislative changes are made to the definition of annual income, the change will be published in the Federal Register and agencies will be given 60 (sixty) days from the date of publication to implement the changes.

3. Income Inclusions (HUD Handbook 4350.3, Chapter 5; 24 CFR 5.609) a. Salary Income. The full gross amount before any payroll deductions of wages and salaries, overtime pay, commissions,

Page 277 of 518 ends

February, 2024
17 fees, tips, and bonuses, and other compensation for personal services
b. Self-Employment Income. The net income from operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for
depreciation of assets used in a business or profession may be deducted, based on straight-line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family.
c. Personal Interest. Interest, dividends, and other net income of any kind from real or personal property:

Expenditures for amortization of capital indebtedness shall not be used as a deduction in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD.
d. Pension/Social Security/Disability/Supplemental Security Income.

The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum payment for the delayed start of a periodic payment.
e. Payments in lieu of earnings. Unemployment, worker's compensation, and severance pay (but see paragraph c. under Income Exclusions).
f. Welfare Assistance/General Relief. If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustments by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be

Page 278 of 518 ends

February, 2024
18 included as income shall consist of:
(1) The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus (2) The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount
calculated under this paragraph shall be the amount
resulting from one application of the percentage.
g. Alimony/Child Support. Periodic and determinable allowance, such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling.
h. All regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is head of the family, spouse, or other person whose dependents are residing in the unit (but see paragraph (g) under Income Exclusions).
i. Rental Income. Income received from rental property. j. In-Home Supportive Services. Income earned by a
caregiver/caretaker providing in-home supportive services for a different household.

4. Income Exclusions
a. Income from employment of children (including foster children) under the age of 18 years.
b. Payments received for the care of foster children.
c. Lump-sum additions to family assets, such as inheritance, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses (but see paragraph c. of Income Inclusions).
d. Amount received by the family that is specifically for, or in reimbursement of, the cost of medical expenses for any family member.
e. Income of a live-in aide for the same household.

Page 279 of 518 ends

February, 2024
19 f. Amount of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the Government to a veteran, for use in meeting the costs of tuition, fees, books, equipment, materials, supplies, transportation, and miscellaneous personal expenses of the student. Any amounts of such scholarships or payments to a veteran not used for the above purposes that are available for subsistence are to be included in income.
g. The special pay to a family member serving in the Armed Forces who is exposed to hostile fire.
h. Amounts received under training programs funded by HUD. i. Amounts received by a disabled person that is disregarded for a limited time for purposes of supplemental security income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS).
j. Amounts received by a participant in other publicly assisted programs that are specifically for or in reimbursement of out-ofpocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and that are made solely to allow participation in a specific program.
k. Temporary, nonrecurring, or sporadic income (including gifts). l. Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the 24 CFR 5.609(c). The following is a list of types of income that qualify for that exclusion (9/27/89 regulations):
(1) The value of the allotment provided to an eligible
household under the Food Stamp Act of 1977.
(2) Payments to volunteers under the Domestic Volunteer Service Act of 1973 (employment through VISTA, Retired
Senior Volunteer Program, Foster Grandparents Program,
youthful offenders incarceration alternatives, senior
companions).
(3) Payments received under the Alaska Native Claims
Settlement Act (43 U.S.C. 1626(c)).
(4) Income derived from certain submarginal land of the

Page 280 of 518 ends

February, 2024
20 United States that is held in trust for certain Indian tribes (25 U.S.C. 459)(e)).
(5) Payments or allowances made under the Department of Health and Human Services' Low-Income Home Energy
Assistance Program (42 U.S.C. 8624(f)).
(6) Payments received under programs funded in whole or in part under the Job Training Partnership Act.
(7) Income derived from the disposition of funds of the Grand River Band of Ottawa Indians.
(8) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission
or the Court of Claims (25 U.S.C. 1407-1408) or from
funds held in trust for an Indian tribe by the Secretary of Interior (25 U.S.C. 117a).
(9) Amounts of scholarships funded under Title IV of the Higher Education Act of 1985 including awards under the Federal work-study program or under the Bureaus of
Indian Affairs student assistance programs, that are made available to cover the costs of tuition fees, books,
equipment, materials, supplies, transportation, and
miscellaneous personal expenses of a student at an
educational institution (20 U.S.C. 1087 uu).
(10) Payments received from programs funded under Title V of the Older Americans Act of 1965 (42 U.S.C. 3056(f)).
(11) Any earned income tax credit to the extent it exceeds income tax liability.
(12) Payments received after January 1, 1989, from the Agent Orange Settlement Fund or any other funds established
pursuant to the settlement in the In Re Agent Orange
Product Liability Litigation, 597 F. Supp. 740 (E.D.N.Y. 1984); In Re Agent Orange product liability litigation, MDL No. 381 (E.D.N.Y.).
(13) Payments received under the Maine Indian Claims
Settlement Act of 1980.

E. Initial Inspection to Determine Extent of Work

1. The CITY personnel and CITY Code Enforcement inspector are

Page 281 of 518 ends

February, 2024
21 responsible for making an initial, on-site inspection of the property to be rehabilitated for identification of code violations (A items = code violations; B items = incipient violations, i.e., those items which must be corrected to meet codes) elimination of items creating a detriment to public health and safety. Code violations are identified and defined in the Covina Municipal Code. A Pre-Inspection Request Form is given to Code Enforcement Officer for notes and signature and is filed in the Homeowner file.

2. During the course of the initial inspection, the CITY personnel is obligated to take application measurements, and at least 10-12 photos of all items to be rehabilitated or corrected. Photos should include at least 1 full view of exterior of property. A Photography Permission Form is signed by Homeowner and placed in the Homeowner file.

F. Write-up of Rehabilitation
The CITY shall prepare a Bid Work Write Up for all its rehabilitation jobs.

CITY personnel will prepare and complete an accurate write-up for all items of work to be done. The Bid Work Write Up must include all estimated square or linear footage, room sizes, as required and necessary.

CITY Code Enforcement Officer will make notes as to any Covina Municipal Code Violations or other items for rehabilitation and sign and return this form to CITY personnel for inclusion in Homeowner Grant/Loan file. The Code Enforcement Officer’s recommendations will be incorporated into the Bid Work Write Up.

Contingency Reserve Money

1. The CITY permits a 10% contingency allowance, with exceptions, to cover unforeseen conditions arising during the rehabilitation process. An "unforeseen" circumstance means "not seen as a development beforehand" and encompasses items such as plumbing, faulty electrical, replacement of dry rot and termite infested lumber, unforeseen water damage or other conditions which cannot be determined until the actual rehabilitation has begun.

2. The 10% contingency allowance comprises 10% of the rehabilitation contract.

3. Request for use of contingency funds shall occur through the Change Order process (See Section 3.II.I) with CITY prior approval.

G. Application Approval/Rejection
If the application is approved, the Homeowner is notified of the approval along with a list of next steps that must be taken to continue in the program by issuing

Page 282 of 518 ends

February, 2024
22 an Approval Letter.

If the loan is rejected, the Homeowner is notified of the reason for rejection.

If the application and all supporting documentation is not received by the CITY from the Homeowner within four (4) weeks after Homeowner is sent the application, the grant/loan will automatically be rejected.

H. Lead Based Paint/Asbestos Containing Material Reports After the Homeowner is approved to participate in the Program, a Lead-Based Paint Inspection/Risk Assessment Report and an Asbestos Inspection Report are obtained. These reports are provided at the Homeowner’s expense; any costs resulting from these inspections are incorporated into the grant/loan.

A copy is provided to the Homeowner and receipt of such is evidenced by the “Notice of Asbestos Evaluation, Notice of Lead Hazard Evaluation” form.

I. Deed Recording/Note Signing/Grant & Loan Agreement

1. CITY personnel shall schedule date with the Homeowner for the signing of the documents listed below:
a. Deed of Trust (must be notarized), if applicable
b. Promissory Note
c. Residential Grant and Loan Agreement

2. CITY personnel are responsible for ensuring the accuracy and validity of the loan documents. The Homeowner shall be advised when payments are due and where to make the grant/loan payments. It is important that the Homeowner review the terms, conditions, and repayment of the program to insure the Homeowner’s full understanding.

3. The borrower shall provide security for the grant/loan in the form of a Promissory Note, and if applicable, a Deed of Trust. CITY will not accept mortgage interest in the property at less than third (3rd) position on all loans.

J. Homeowner/Project Set Up in LACDC.org website

1. Historical Preservation/Environmental Impact Clearance a. Historical Preservation, Section 106, National Historic Preservation Act of 1966 as amended 54 USC 300101 et seq. mandates that all activity in which the Federal Government is directly or indirectly involved be subject to review for compliance with Section 106. In order to comply with Section 106, the CITY requires that clearance be submitted for review, accompanied by a set of four (4) photos, to a Basic Property Identification Form for loan amounts up to $24,999 and the property information. These photos will include:
(1) 1 front view of the dwelling to be rehabilitated

Page 283 of 518 ends

February, 2024
23 (2) 1 view each (total of 2) of the houses on each side of the dwelling to assess the architectural design of neighboring homes
(3) 1 view of the house directly across the street from the dwelling
b. Detailed Property Identification Form (DPI), the form must be submitted along with four photos, and property information for loan amounts at or above $25,000.
c. After receipt by LACDC, the form is forwarded to LACDC's CDBG Historic Preservation Planner for review and clearance. The loan consultant should allow approximately seven (7) days for clearance. In the interim, normal loan consultant processing of the loan may continue.
d. Should the CDBG Historic Preservation Planner's review establish that the structure may be eligible or placement into the National Register, the work write-up and completed research forms are sent to the State of California Historical Preservation Office (SHPO), for official determination of National Register eligibility.

The Loan Consultant shall be notified immediately. A time frame for the above is approximately 45 days.
e. CITY shall act as a liaison between the Homeowner and the SHPO throughout the rehabilitation process, advising the Homeowner of any special requirements and documentation necessary for completion of the project.

Page 284 of 518 ends

February, 2024
24 SECTION 3

TABLE OF CONTENTS

INSPECTION/CONTRACTOR PAYMENT PROCEDURES
PAGE
SECTION 3 - INSPECTION/CONTRACTOR PAYMENT PROCEDURES... ......... ...... 24 I. INSPECTION/BID PROCESS/
AGREEMENT FOR REHABILITATION ............ .......... .......... ......... ...... 25 A. Inspection Process ....... .......... .................... .......... .......... ......... ...... 25 B. Bid Process ....... .......... .......... .................... .......... .......... ......... ...... 25 C. Review of Bids... .......... .......... .................... .......... .......... ......... ...... 27 D. Agreement for Rehabilitation... .................... .......... .......... ......... ...... 28 II. PRE-CONTRUCTION CONFERENCE................... .......... .. …. .. ......... ...... 28 A. Responsibilities.. .......... .......... .................... .......... .......... ......... ...... 29 B. Permits and Codes ....... .......... .................... .......... .......... ......... ...... 29 C. General Guarantee and Warranty ................ .......... .......... ......... ...... 29 D. Conflicts... ......... .......... .......... .................... .......... .......... ......... ...... 30 E. Breach of Conditions .... .......... .................... .......... .......... ......... ...... 30 F. Hold Harmless Clause .. .......... .................... .......... .......... ......... ...... 31 G. Property Access/Maintenance. .................... .......... .......... ......... ...... 31 H. Sign Contracts... .......... .......... .................... .......... .......... ......... ...... 32 I. Change Orders .. .......... .......... .................... .......... .......... ......... ...... 32 J. Substitution of Contractor......... .................... .......... .......... ......... ...... 33 III. CONTRACTOR PAYMENT PROCEDURE ............ .......... .......... ......... ...... 35 A. Rehabilitation Payments.......... .................... .......... .......... ......... ...... 35 B. Time Extension of Agreement for Rehabilitation...... .......... ......... ...... 37 C. Monitoring ......... .......... .......... .................... .......... .......... ......... ...... 38 D. Rehabilitation Final Payment... .................... .......... .......... ......... ...... 39 E. CITY Inspection at Final .......... .................... .......... .......... ......... ...... 40 IV. CLOSEOUT OF THE PROJECT....... .................... .......... .......... ......... ...... 40 A. Disbursement Printout Sheet... .................... .......... .......... ......... ...... 40 B. Close Out Letter .......... .......... .................... .......... .......... ......... ...... 40 C. Close Out in LACDC.org ......... .................... .......... .......... ......... ...... 40

Page 285 of 518 ends

February, 2024
25 SECTION 3

RESIDENTIAL REHABILITATION GRANT/LOAN PROGRAM

REHABILITATION INSPECTION/CONTRACTOR PAYMENT PROCEDURES I. INSPECTION/BID PROCESS/AGREEMENT FOR REHABILITATION
A. Inspection Process - The inspection process is described below.

Responsibility for inspection activities lies with the CITY and the CITY's inspector(s).

1. CITY personnel and CITY Code Enforcement Inspector are responsible for making an initial, on-site inspection of the property to be rehabilitated for identification of code violations and other items to be rehabilitated.

Code violations are identified and defined in the Covina Municipal Code.

2. During the course of the initial inspection, CITY personnel are obligated to take application measurements, and approximately 10-12 photos of all rehabilitation to be corrected. Photos should include at least 1 full view of exterior of property, 1 photo of neighbor on each side of home as well as 1 photo of home on opposite side of street.

B. Bid Process
Each bid submitted must be for repairs and replacements that are for similar materials and replacement costs that currently exist in the home.

For example, if flooring is to be replaced and is currently vinyl, the homeowner may replace with vinyl or tile at a cost not to exceed the cost of replacing with vinyl. The bid process is as follows:

1. Requests for bids are solicited by the Homeowner. Each bid package that goes out for solicitation should include the Bid Work Write Up as described in Section 2.F.

2. Homeowner must solicit at least three (3) bids from licensed, eligible Contractors to allow for reasonable competition. This process will not be allowed to take more than four (4) weeks to complete. If all bids are not received within this time period, the application will automatically be rejected and the homeowner will not be able to continue participation in the program.

3. The Homeowner is advised that they may invite a licensed California Contractor of his/her choice to participate in the bid process.

4. Any eligible bid, provided by a licensed eligible Contractor chosen by the Homeowner, may be considered. If the lowest bid Contractor is not chosen, written justification must be provided as to why the Homeowner is choosing the Contractor.

Page 286 of 518 ends

February, 2024
26 5. Bonus, Commission, or Fee. The Homeowner(s) shall not pay any bonus, commission or fee, for the purpose of obtaining approval of the grant/loan application, or for any other approval or concurrence required by the CITY or its agents, to complete the rehabilitation work financed, in whole or in part, with the Covina Residential Rehabilitation Grant/Loan Program.

The Homeowner shall not receive any bonus, commission or fee, also known as a “kick-back”, for the purpose of choosing one Contractor over another.

6. Discrimination
a. The CITY shall inform the Homeowner and Contractor of applicable laws regarding nondiscrimination based upon sex, age, race, creed, color, religion, national origin or ancestry in the awarding of the contract for rehabilitation of property assisted by the Covina Residential Rehabilitation Grant/Loan Program. b. The CITY shall not discriminate upon the basis of sex, age, race, creed, color, religion, national origin or ancestry in accepting applications and processing Covina Residential Rehabilitation Grant/Loan requests.

7. Ineligible Contractors
a. The Homeowner shall not award any contract for rehabilitation work, to be paid for in whole or in part with proceeds from a Covina Housing Rehabilitation Loan/Grant, to any Contractor who:

1. Does not have a current California license as a B
Contractor

2. Cannot produce evidence of current Workman's
Compensation and Liability Insurance coverage, and who
has been placed on HUD's, CSLB’s or any other federal,
state or local Debarred Contractors list.
b. Any member of the Homeowner's family is considered
ineligible, regardless of credentials or license. Any ineligible Contractor found working at the job site will be removed immediately, without compensation. If payment was inadvertently made to an ineligible Contractor, the Homeowner will be held responsible for immediate repayment of the funds to the CITY, and for any and all costs incurred related to the correction and the rectification of the problem.

Family is defined as parents, children, siblings, uncles/aunts and

Page 287 of 518 ends

February, 2024
27 cousins.

8. Homeowner as Contractor
Homeowner can do the work on their home, except in those areas where the building and other applicable codes require a licensed contractor. If Homeowner does the work, reimbursement can ONLY be received for cost of materials. Material purchases MUST BE pre-approved by CITY.

C. Review of Bids

1. All bids are provided to the Homeowner by the Contractors. Once all bids are received, the bids are then turned in to the CITY. The CITY must check the documents for completeness, insuring that they are dated and properly signed by an officer of the Contractor’s firm. a. A bid comparison sheet, itemizing each item of work will be prepared by the CITY for comparison of prices when reviewing bids.
b. All bids received are reviewed with the Homeowner.

Recommendation can be made by the CITY based on the lowest and most responsible bid and the Contractor's past performance.

However, it is the Homeowner’s responsibility to review the bids and Contractor and to decide on a Contractor. The City will inspect the work performed by the Contractor and ensure that it complies with the Covina Municipal Code. However, City makes no guarantee as to the quality or workmanship of the Contractor’s work and assumes no responsibility of liability for such issues. c. Homeowner decides on a Contractor and signs the Choice of Contractor letter.

2. The selected bidder (Contractor) must provide the following:
a. Tax identification number (Social and/or IRS No.) by completing Form W-9 and California Form 590
b. For each Homeowner’s rehabilitation, Contractors are checked on www.cslb.ca.gov/onlineservices/checklicenseii/checklicense.aspx website for current license and workers’ compensation insurance.

Any Contractor with lapsed insurance or Contractor's license shall not be considered for the job or shall be removed from the job until he/she is able to provide proof of current insurance and/or license.
c. Contractors are also checked on the federal debarred website www.sam.gov for debarment from Federal projects (CDBG
Bulletin 13-0002) and on any state or local debarred website.

Page 288 of 518 ends

February, 2024
28 d. Proof of Covina Business License.

3. Should the Homeowner insist that the contract be awarded to a Contractor other than the low bidder, a statement of justification signed by the Homeowner will be included in the file.

4. In cases in which the Homeowner selects a Contractor whose estimated costs are so low that they may not cover the actual cost of improvements, it is incumbent upon the CITY to discuss with Homeowner the problems which often arise with such bids and attempt to dissuade Homeowner from accepting the bid.

5. Homeowner Contributions
a. Homeowner contributions for the purpose of choosing a Contractor that is not the lowest cost will be considered.

Requests must be accompanied by a written justification from the Homeowner and a statement signed by the Homeowner revealing the source of the additional funds and the Homeowner repayment schedule.
c. If approved by the CITY, the Homeowner shall pay the amount of the Homeowner's contribution directly to the Contractor.

D. Agreement for Rehabilitation
The CITY shall obtain a copy of the Contract between the Contractor and Homeowner. The completed contract between the Homeowner and the Contractor shall consist of an Agreement and the Contractor's Bid for Rehabilitation.

II. PRE-CONSTRUCTION CONFERENCE
The CITY, the Homeowner, and the Contractor shall meet at a Pre-Construction Conference to review all phrases pertinent to the documentation of the grant/loan, rehabilitation work authorized, change orders, inspections, payments, contingency money, contract extensions, deviations, "side-deals" and Final Close Out of the loan.

Other points covered in the discussion will include items in the contract, the scope of the work to be performed, and the nature of the potential inconvenience to the property

Page 289 of 518 ends

February, 2024
29 owner. The CITY and Homeowner shall clarify terminology in the standard contract, such as paint grade and paint selection.

The Homeowner and the Contractor shall sign an acknowledgement stating that both parties understand the terms and conditions of all Program requirements as presented during the mandatory Pre-Construction Conference, and acknowledging receipt of their copy of the Covina Residential Rehabilitation Gran/Loan Program Handbook, Section

3. Additionally, all parties involved in the rehabilitation should understand the following:

A. Responsibilities
The contractor is to furnish all material, equipment and labor to complete the work in a workmanlike manner as per the practice of the trade.

The Contractor shall be fully responsible to the Homeowner for the acts and omissions of all Sub-contractors and/or persons directly or indirectly employed by him/her.

The Contractor shall be responsible for coordinating the operations of all trades, Subcontractors and material persons engaged upon the Contract. Contractor shall guarantee to each of his/her Subcontractors the locations and measurements which they may require for their work. Contractor shall verify on job site, all specifications of the project and immediately notify the City and Homeowner of any discrepancies. Contractor shall be held responsible for all such verifications. Any item of work not specifically set forth in the scope of services attached as part of Contract as “Contractor’s Proposal”, but which is necessary for the completion of the project, shall be supplied and set in place at the expense of the contractor as though it has been shown or indicated on “Contractor’s proposal”.

Color, model, style, and manufacturer of all fixtures, appliances, hardware and all other products used in the rehabilitation work which has not been specified in the “Contractor’s Proposal” shall be approved and/or selected by Homeowner.

B. Permits and Codes
Contractor shall be responsible for securing all applicable work permits from appropriate agencies and a City of Covina Business License prior to commencing work. All work shall be accomplished per City of Covina and applicable Building and Safety and Health codes and/or State of California Housing Codes. Contractor represents and warrants that they possesses a valid contractor’s license issued by the State of California, as well as any specialty licenses required for the project.

C. General Guarantee and Warranty
The Contractor warrants that all materials, fixtures, and equipment furnished by Contractor and the Subcontractors shall be new of good quality, and of good title. Further, that all manufacturers and supplier’s written guarantees and warranties shall be delivered to the Homeowner. Neither the final payment nor

Page 290 of 518 ends

February, 2024
30 partial or entire use of the material, fixture or equipment repaired or supplied by the Contractor shall constitute an acceptance of work done in accordance with Contract or relieve the Contractor of liability in respect to any expressed warranties or responsibility for faulty materials or workmanship. The Contractor shall promptly remedy any defects in the work, and pay for any damage to other work resulting therefrom, which may appear within a period of one year from the date of final acceptance of the work unless a longer period is specified. The Homeowner shall give written notice of observed defects to the City and Contractor with reasonable promptness.

D. Conflicts
The Contractor and Homeowner is/are responsible for resolving any conflicts that arise during the performance of the rehabilitation. Only after the Contractor and Homeowner have made a good faith effort to resolve their differences should the CITY representative be called upon to assist. The CITY representative shall review all facts carefully and objectively, and all parties must agree to abide by the findings or pursue formal mediation.

Any controversy or claim arising out of or relating to the Homeowner's rehabilitation contract, or the breach thereof, may be settled in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment upon the award may be entered in any court having jurisdiction thereof. It is, however, the Homeowner’s responsibility to attempt to resolve or minimize all disputes relating to the quality of the work or time performance.

E. Breach of Conditions
Notwithstanding any other provision in the contract between the Contractor and the Homeowner, the following terms shall govern: In the event the Contractor shall fail or refuse to complete the work as set forth in the approved Bid, or fails or refuses to use due diligence in performing the required alterations and improvements, and in the further event that such failure, refusal or default continues for 24 hours after delivery to Contractor of a written notice to cure such default, then the Homeowner may terminate this contract by written notice to Contractor, and upon delivery of such notice, Contractor shall immediately surrender possession of the premises and remove all of his/her equipment and material there-from. Contractor shall, upon such termination, deliver material and labor lien releases, executed by all persons, and firms supplying labor and/or materials to premises, and CITY shall be obligated to pay Contractor only for each individual portion of the work completed by Contractor and accepted by Homeowner to the date of termination. Full payment shall be made to Contractor only after the total job has been completed and under the terms and conditions as set forth in this Agreement.

In the event of such termination, the Homeowner may, in addition to all other remedies, call upon Contractor’s bonding company to complete the work

Page 291 of 518 ends

February, 2024
31 provided a bond has been procured. No payment made under contract shall act as a waiver of the right of Homeowner to require fulfillment of all of the terms of the Contract.

F. Hold Harmless
As an independent Contractor, of the Homeowner and recipient of program funds, the Contractor holds no claim against the CITY of Covina, their agents, employees and officers from any and all claims, liabilities, damages, and losses arising from the rehabilitation work performed herein by Contractor including the materialmen, laborers and any other person, firm or corporation furnishing or supplying work, services, materials, or supplies in connection with the rehabilitation work under this Agreement and from any claims, liabilities, damages and losses for worker’s compensation arising from the performance of the rehabilitation work under this Agreement by the Contractor or any Subcontractor.

G. Property Access/Maintenance
Homeowner shall provide access to property Monday through Friday between 8:00am and 5:00pm. If Homeowner is not available during these hours, Homeowner will make necessary accommodations for access to the home, in order not to cause Contractor and delay in completing scheduled work.

Also,

1. The Homeowner is responsible for property maintenance during the time that rehabilitation work is being performed on the property.

2. The Homeowner must be advised that rehabilitation work shall not be impeded because of unmaintained property or general sloppiness, and those items of value, including pets, must be secured.

3. Contractor shall schedule and perform his work in such a manner as to cause minimum inconvenience to the Homeowner that continues to occupy the premises during proposed work. However, such occupant shall cooperate with and aid the Contractor by vacating work areas where required and assisting in the removal and replacement of rugs, coverings, and furniture as necessary. Notification to the occupants should be given at least twenty-four (24) hours in advance of request by Contractor.

4. The Contractor and his employees provide adequate protection to the Homeowner property, both interior and exterior, during rehabilitation process. This includes covering the furniture and protecting the flooring during sanding and painting, protecting plants during sandblasting and painting, etc. The Contractor shall not use the Homeowner personal property, such as towels, sheets, shovels, tools, etc.; the Contractor must supply his own tools, and furniture cover. The CITY's responsibility

Page 292 of 518 ends

February, 2024
32 includes notifying the Contractor that he/she will be held responsible for the repair and replacement of ruined property. The Contractor shall keep the premises clean and orderly during the course of work.

5. Surplus materials delivered to the job site and all materials, fixtures, and equipment removed as required by the work and not reused, shall remain or become the property of the Contractor and its Subcontractors. Such materials, as well as all rubbish and debris resulting from Contractor’s operation shall be removed from the job site promptly. On completion of the project, property is to be left in a clean manner and all debris from construction is to be removed and disposed of from property.

H. Sign Contracts
After mutual agreement with terms in Contract between the Contractor and Homeowner is reached, the Contractor and the Homeowner sign the Contract and provide a copy to the CITY. Work must begin within two (2) weeks of signing the Contract or Contractor risks the possibility of being substituted as described in Section III.2.J.

1. Time allowed for the rehabilitation process is as follows:

Contract less than $10,000 = 30 days
Contract between $10,000 - $15,000 = 45 days
Contract over $15,000 = 90 days
If the process is not completed by the time above, payment may be reduced pursuant to Section 3.III.B.2 below.

Exceptions: Time of year and nature of rehab work should be taken into consideration.

I. Change Orders

1. Change orders are the responsibility of the Contractor. The CITY shall review all change order requests, and reserves the right not to pay for any change order request it considers outside the scope and guidelines of the CITY's Covina Residential Rehabilitation Loan/Grant Program.

2. The CITY does not consider change order requests as standard rehabilitation procedure. Change order requests must be granted solely in cases where unforeseen circumstances arise during the rehabilitation process, (plumbing, faulty electrical, replacement of dry rot and termite infested lumber or other conditions which cannot be determined until the actual rehabilitation has begun). A CITY inspector shall make site inspections, when necessary, for clarification. Change orders may occur at any time during construction.

3. All change orders must be approved by the CITY before the CITY will pay for such work. No change order will be approved if submitted along with progress payment or final payment and are not approved by CITY

Page 293 of 518 ends

February, 2024
33 prior to payment request.

4. The CITY shall pay for no more than two change orders per job, provided those Change orders meet the above criteria. Change order requests will not be granted for "trade-offs" with the Homeowner.

Additional work negotiated between the property owner(s) and the Contractor shall not be covered by a change order, but may be accomplished through a separate financial arrangement between the Contractor and the Homeowner. This work must be done subsequent to the completion of the CITY rehabilitation contract.

5. The CITY must be cognizant of change order items that require permits.

Should a change order item require an additional permit, it is the CITY's responsibility to ensure that the Contractor obtains that permit subsequent to the item approval and prior to the commencement of work.

NOTE: The CITY does not allow Contractor overhead and profit on Change orders nor does it allow deletion of code items identified in the initial inspection by the CITY. The CITY does not allow a Change order request on any item previously paid to the Contractor.

6. A change order justification shall include:
a. Activity and item to be modified (deletion or addition) b. Cost or credit to property owner
c. Contractor's written and/or visual justification for change d. Signature of property owner(s) and Contractor prior to submittal to the CITY for approval
e. Change order number (#1, or #2).

7. When a change order item is modified and/or denied by the CITY, the Contractor shall notify the Homeowner of the modification and/or deletion.

8. Should a Change Order request exceed the contingency allowance, the Homeowner shall cover the excess amount by contributing their own funds. If they are unable to pay the additional money, the Homeowner shall scrutinize the Bid Work Write Up, prioritizing items in order to delete those items of less immediate need. Homeowner then shall decide what items to delete from Bid Work Write Up in order to move forward with the Change Order.

J. Substitution of Contractor
In the event that the Homeowner and the Contractor have a dispute that they cannot resolve, the Contractor may be released from any work not yet complete, as long as the Homeowner, Contractor and the CITY agree. A Change Order will be used to reduce the amount of money due the Contractor for any

Page 294 of 518 ends

February, 2024
34 unfinished/unpaid items.

In the event the Contractor shall fail or refuse to complete the work in a professional manner or fails to use due diligence in performing the required work, the Homeowner may terminate the Contract with the Contractor. Such termination shall be done in accordance with Section 3.II.E above. The Homeowner will be provided appropriate assistance from the CITY in completing the necessary termination notice.
a. No commencement by original Contractor-substitute Contractor:
(1) A note to the file is used to indicate, that the original Contractor will not be performing the rehabilitation and the reason(s) for which a substitution of Contractor is being requested.
(2) The Homeowner shall obtain a substitute Contractor willing to perform the rehabilitation (preferably the second lowest bidder).

The Homeowner is encouraged to negotiate the total or remaining contract balance with the new Contractor to assure that the contract does not exceed the available rehabilitation dollars. (3) A new Contract and Contract Bid Information, Contractor’s license, general liability and Workers’ Compensation Insurance, are prepared and filed in the Homeowner’s file.
b. Noncompliance by the original Contractor-substitute Contractor:
(1) The Homeowner must inspect the job, compiling a list of incomplete or unacceptable items to determine the extent of work to be completed by the substitute Contractor.
(2) The CITY is notified by means of a Homeowner generated memo or phone call that the original Contractor has not performed according to the Contract. The memo lists the initial steps taken by the Homeowner to resolve the problem. CITY will then try to resolve noncompliance related problems. If unsuccessful in resolving conflict/noncompliance, Homeowner will notify Contractor of termination as described in Section 3.II.E above. (3) A meeting must be held between the CITY, the Homeowner and the original Contractor (if possible) at which time a method of Contractor payment is established and a Change Order form is signed by both the Homeowner and the Contractor to terminate the contract. Justification for the substitution, the method of payment to the Contractor, and the amount of funds paid must be stipulated in memo form. Funds withheld from the original Contractor, until the rehabilitation is completed, must be discussed. Lien releases and invoices from the original Contractor and sub-Contractors must be attached to all payments

Page 295 of 518 ends

February, 2024
35 made.
(4) A revised Bid Work Write Up is prepared, based upon the Homeowner or CITY inspection findings, and a substitute Contractor is hired to do the remainder of the rehabilitation work.

The Homeowner is encouraged to negotiate the total contract with the new Contractor to assure that the new Contractor does not exceed available rehabilitation funds.
(5) The substitute Contractor must provide a Contract before beginning any work.
(6) No further rehabilitation is to commence until the Change Order, releasing the original Contractor from his contractual obligations, is on file at the CITY, and a new contract is drawn and signed between the substitute Contractor and the Homeowner.

The revised write-up shall contain only those items necessary to complete the job. The substitute Contractor must show proof that he/she is currently insured and licensed.
(7) The CITY shall be advised if the Homeowner encounters any problems in the resolution of the substitution of Contractor.

III. CONTRACTOR PAYMENT PROCEDURE
A. Rehabilitation Payments

1. Disbursement of Rehabilitation Funds. The Homeowner shall agree to permit the CITY, its agent or designee, to act as disbursement agent for funds granted/loaned through all Covina Residential Rehabilitation Grant/Loan Programs, and to permit the CITY, its agent, or designee, to disburse such funds in the form of a single party check payable to the Contractor.

The Homeowner does not have the option of determining when the Contractor shall be paid. The CITY will determine when payment is to be made to Contractor, in accordance with this Policy.

2. After the Contract is signed by the Homeowner and Contractor, the CITY shall enter the Contract amount as a Purchase Order into the financial system in order to encumber the funds.

3. The Contractor's request for payment is to be submitted to the CITY as an invoice only for items on the original bid that have been completed.

CITY staff reviews the invoice and processes the request for payment.

All checks will be mailed to/or picked up by the Contractor. All payment checks shall be single party checks make payable directly to the

Page 296 of 518 ends

February, 2024
36 Contractor. Estimated turn-around time for Contractor payment is fourteen (14) days.

Circumstances may arise in which turn-around exceeds normally scheduled fourteen (14) days; these occasions will be exceptions, not the rule.

All payment packages must include:
a. Request for Payment or itemized invoice from the Contractor b. Completed Certificate and Release of Lien.
c. Completed List of Sub-Contractors and/or Material-Men form accompanied by material and labor releases from all subContractors and materials suppliers. d. Contractor shall have CITY Inspector sign the Bid Work Write Up - Inspection form or itemized invoice indicating that the items completed have been inspected by CITY Inspector. A copy of the Bid Work Write Up - Inspection or itemized invoice with CITY Inspector signature shall accompany each payment request. e. Certifications and Warranties, if applicable
f. Permits/Plans
The CITY requires that all pertinent permits be obtained prior to the commencement of the rehabilitation. A copy of
permit/Inspection card shall be included as part any payment package. It is the CITY’s responsibility to review payment package for completeness, prior to submission to accounts payable for payment, to avoid delay in processing and duplication of work and effort.

In addition to permits, the Contractor must submit a copy of preliminary drawings for projects requiring a room addition. A copy of the final plans approved by the CITY Building department must also be submitted to the CITY.
g. Payments
Incomplete packages shall be returned to the Contractor for completion prior to processing.

4. When a Contractor payment request is submitted to the CITY for payment, the CITY will ensure that all work is in accordance with applicable Codes, as evidenced by CITY Inspector signature on accompanying Bid Work Write Up – Inspection or itemized invoice. If

Page 297 of 518 ends

February, 2024
37 the rehabilitation involves an addition, progress payments will only be made when at least one-third (1/3) of the major construction is completed.

5. Job Site Inspection/Quality Control
a. The CITY shall inform the Homeowner of their responsibility to permit inspection for compliance with the CITY's Municipal Code, by the CITY, its agents or designees, on the property to be rehabilitated. The Homeowners shall also permit any additional inspections necessary by CITY personnel and the Building department, relative to the property, the rehabilitation work, all contracts, material, equipment, payrolls and conditions of employment pertaining to the work.
b. CITY personnel shall take pictures of all completed work for the file and visually inspect the work done to ensure that work that was quoted has been done.
c. The CITY Inspector from the Building department shall inspect all work that requires a permit and a copy of the permit card shall be turned in with each request for payment by the Contractor. It is the Contractor’s responsibility to get the Building inspector to inspect and indicate this with a signature.
d. The CITY shall require the Homeowner to sign a Completion Notice form indicating satisfaction or dissatisfaction with the completed job for all rehabilitation jobs for which payment has been requested. In addition, CITY shall perform inspections without Homeowner notification, and shall make random or specific inspections when deemed necessary for quality
control.

B. Time Extension of Agreement for Rehabilitation

1. Part of the CITY’s monitoring function is to insure that the job does not exceed the time period allocated for completion; it is the Homeowner’s and CITY's responsibility to be aware of overdue completion dates.

2. If the Contractor does not finish in the time defined in in Section 3.II.H., for each day that the Contractor does not finish, one percent (1%) will be deducted from the final payment.

3. The CITY recognizes that there are extenuating circumstances, which warrant a Time Extension of Agreement. The Contractor must provide written justification to the CITY and the Homeowner explaining the delay.

CITY determines whether the extension is approved or disapproved.

Page 298 of 518 ends

February, 2024
38 4. Only one (1) extension will be allowed by the CITY per Contractor. If more than one (1) extension is requested the Contractor will be cited for non-compliance with CITY Procedures and may be removed and substituted.

C. Monitoring

1. The Monitoring Program is a mandated function required by HUD. The CITY has monitoring responsibilities designed to measure and evaluate performance.
a. The CITY's monitoring responsibilities related directly to the Contractor and rehabilitation. CITY personnel operate as quality control agent whose primary monitoring functions are to:
(1) Insure that all work performed by the Contractor is performed in compliance with the CITY's Municipal Code, and the Contract.
(2) Be familiar with all aspects of the rehabilitation to preclude expensive repairs and added expense occurring down-theline due to lack of monitoring and quality control. Ask for guidance from CITY inspector where needed, to gain an
understanding of the repair.
(3) Periodically make unannounced inspection of the job site to ensure that the Contractor is on the job and that the work is progressing according to schedule.
(4) Conduct spot inspections to insure professional and satisfactory workmanship by the Contractor and those
materials used in the rehabilitation are standard grade or better.
(5) Inspect the job site prior to request for Contractor payment to insure that the Contractor has completed all the work for which payment has been requested.
b. Since job site inspections and familiarity with all aspects of the rehabilitation are mandatory functions of the monitoring process, CITY personnel shall be responsible for detecting deviations from the Rehabilitation Contract and for deterring "side deals" between Contractors and Homeowner during the contract period.

Additional monitoring responsibilities are as follows:
(1) Mediate disputes occurring between the Contractor and the Homeowner during the contract period. CITY shall be appraised, by means of a Homeowner generated memo to
file, as to the character of the dispute and its resolution.

Page 299 of 518 ends

February, 2024
39 (2) Insure that the Contractor, prior to the beginning of the rehabilitation work, pulls all pertinent permits.
(3) Insure that all Contractors have proof of current California B licenses, worker's compensation and liability insurance.

If any Contractor is working without a current license or with lapsed worker's compensation or liability insurance, the Homeowner is obligated to pull the Contractor off all jobs in progress until the Contractor can supply the CITY with proof that the above is current.

D. Rehabilitation Final Payment
When the rehabilitation is completed, the Contractor obtains Final sign-off from Building and Safety, and the CITY inspector performs a Final inspection of the rehabilitation to assure that the work has been completed as set forth in this Policy and the Covina Municipal Code. If the completed work is satisfactory and the Homeowner has signed the Owner’s Completion Notice, a Request for Final Payment may be submitted to the CITY by the Contractor. The Request for Final Payment includes:

1. Invoice/request for payment.

2. Bid Work Write Up - Inspection form signed by CITY Inspector.

3. Certificate and Unconditional Release of Lien form signed by the Contractor. Certificate and Release of Lien and any applicable work permits evidencing that the job has been inspected by the appropriate agency and "signed off" or “finaled”.

Certificate of Unconditional Release of Lien will set forth the undisputed balance due from City and Homeowner, if applicable, under the Contract and Change Orders; a certification that the work under the Contract and Change Orders has been performed in accordance with the terms thereof, and that there are no unpaid claims for materials, supplies or equipment, and no claims of laborers or mechanics for unpaid wages arising out of the performance of the contract; and a statement that in consideration of the contract, Contractor releases the Homeowner from any and all such claims arising under or by virtue of the Contract. If the Homeowner has a balance due, Contractor shall identify on the Certificate of Release of Lien the amount remaining outstanding, and provide a lien release to the Homeowner upon payoff.

4. List of Subcontract and/or Material-Men form accompanied by material and labor releases from all sub-Contractors and material suppliers, i.e., lumber companies, home improvement centers, etc.

Page 300 of 518 ends

February, 2024
40 5. Certification and Warranties, if applicable.

6. Copy of CITY/HCD issued Inspection Card.

7. Signed Owner Completion Notice (Obtained by CITYpersonnel).

E. CITY Inspection at Final
CITY personnel shall make an independent inspection of the job site upon the completion of the project. This inspection shall be coordinated with the Homeowner, which arranges access to the job site for CITY personnel. Pictures will be taken of items completed and Owner Completion Notice will be obtained.

If there are any items that need to be corrected by the Contractor, CITY personnel will be responsible for coordinating the communication with the Homeowner and Contractor on these items.

IV. CLOSEOUT OF THE PROJECT
A. Disbursement Printout Sheet
The CITY will prepare a detailed disbursement sheet which will reside in each Homeowner’s file. This will detail each payment made for the project and total the amount paid by the CITY on behalf of the Homeowner.

B. Close Out Letter
Once the CITY is satisfied with Contractor’s performance and has the Owner Completion Notice letters signed by the Homeowner, the CITY will mail a cover letter to the Homeowner along with document copies of the rehabilitation grant/loan. These documents include all recorded documents, warranties and guaranties, releases and other pertinent documents.

C. Close Out in LACDC.org
Once the CITY has made all payments on Homeowner project, the Contractors and payment amounts are entered into the LACDC.org system. This will then forward the projects to the LACDC for inclusion as a completed project for the Quarterly Performance Report prepared.

Page 301 of 518 ends

February, 2024
41 SECTION 4

TABLE OF CONTENTS

REPORTING PROCEDURES
PAGE
SECTION 4 – CITY REPORTING PROCEDURES................ .......... .......... ..... 41 I. FUNDING REQUEST.. .......... .......... .................... .......... .......... ..... 42 A. Preparation........ .......... .......... .................... .......... .......... ..... 42 B. Submission........ .......... .......... .................... .......... .......... ..... 42 C. Receipt of reimbursed fund by LACDC ........ .......... .......... ..... 42 II. REMITTANCE OF REPAID LOANS AND INTEREST AMOUNTS ..... 42 III. QUARTERLY PERFORMANCE REPORTS TO LACDC .. .......... ..... 42 IV. TRACKING OF OUTSTANDING LOANS .............. .......... .......... ..... 42

Page 302 of 518 ends

February, 2024
42 SECTION 4

CITY FUNDING REQUEST/REPORTING PROCEDURES
I. CITY FUNDING REQUEST
A. Preparation
Financial system reports will be used for preparation of monthly funding requests. Copies of all invoices and payment checks will be maintained in project file behind each month’s funding request copy.

B. Submission
CITY funding requests are to be submitted a minimum of once a month.

C. Receipt of reimbursed funds by LACDC to CITY
When funds are electronically deposited, Finance Manager will forward notice and Management Analyst over CDBG program will prepare a cash receipt with account numbers to be given to CITY cashier for entry into financial system.

II. Remittance of Repaid Loans and Interest Amounts
Return Funds Transmittal Form will be completed for any payments being returned to LACDC. A copy of the Transmittal form will be enclosed with payment check. Upon receipt, LACDC will credit the CITY’s CDBG funds. Remittance will be completed at least once a month, using CDBG Bulletin 13-0014, if there is anything to return.

III. Quarterly Performance Reports to LACDC
Once a quarter, a description of what has transpired during the quarter will be entered into the LACDC QPR automated system.

IV. Tracking of the Outstanding Loans
At the request of the homeowner no more than one per year, City Staff will prepare a letter notifying them of any interest that has accrued and what their current loan balance is.

Page 303 of 518 ends

February, 2024
43 APPENDICES

TABLE OF CONTENTS
PAGE
APPENDICES ........ .......... ......... .......... .......... .................... .......... .......... ..... 43

1. MARKETING RESIDENTIAL REHABILITATION PROGRAM ..... .........

2. PRELIMINARY APPLICATION......... .................... .......... .......... .........

3. APPLICATION COVER LETTER...... .................... .......... .......... .........

4. APPLICATION.. ......... .......... .......... .................... .......... .......... .........

5. CERTIFICATION – INCOME TAX RETURN NOT FILED .......... .........

6. ACKNOWLEDGEMENT LBP/ACM... .................... .......... .......... .........

7. A CONSUMER GUIDE TO ASBESTOS................ .......... .......... .........

8. PROTECT YOUR FAMILY FROM LEAD IN YOUR HOME......... .........

9. WATCH OUT FOR LEAD-BASED PAINT POISONING... .......... .........

10. CDBG BULLETIN 2013 INCOME GUIDELINES ... .......... .......... .........

11. WHAT TO EXPECT AND WHAT NOT TO EXPECT........ .......... .........

12. PRELIMINARY EQUITY ESTIMATION ................. .......... .......... .........

13. CHECKLIST FOR CDBG HOUSING REHABILITATION. .......... .........

14. APPROVAL LETTER. .......... .......... .................... .......... .......... .........

15. CDBG BULLETING 07-0002 ELIGIBILITY GUIDELINES .......... .........

16. PRE-INSPECTION REQUEST FORM ................. .......... .......... .........

17. PHOTOGRAPHY PERMISSION FORM............... .......... .......... .........

18. BID WORK WRITE UP......... .......... .................... .......... .......... .........

19. NOTICE OF ASBESTOS/LEAD HAZARD EVALUATION .......... .........

20. SAMPLE LBP/ACM REPORTS FROM BARR & CLARK .......... .........

21. DEED OF TRUST...... .......... .......... .................... .......... .......... .........

22. PROMISSORY NOTE .......... .......... .................... .......... .......... .........

23. RESIDENTIAL GRANT & LOAN AGREEMENT... .......... .......... .........

24. CHOICE OF CONTRACTOR .......... .................... .......... .......... .........

25. CONTRACT & COVER LETTERS... .................... .......... .......... .........

26. COUNTY LOBBYIST CERTIFICATION................ .......... .......... .........

27. ASBESTOS SAMPLING DISCLOSURE FORM ... .......... .......... .........

28. LIST OF SUB-CONTRACTORS AND/OR MATERIAL-MEN ...... .........

29. CERTIFICATE AND RELEASE OF LIEN ............. .......... .......... .........

30. BID WORK WRITE UP - INSPECTION ............... .......... .......... .........

31. INSPECTION CARD.. .......... .......... .................... .......... .......... .........

32. COMPLETION NOTICE ....... .......... .................... .......... .......... .........

33. CLOSE OUT LETTER .......... .......... .................... .......... .......... .........

Page 304 of 518 ends

September, 2013

COVINA RESIDENTIAL

REHABILITATION

GRANT/LOAN PROGRAM

HANDBOOK
(Funded using Community Development
Block Grant (CDBG) Funds)
This project has been funded in part by the U.S.

Department of Housing and Urban Development
through the CDBG Program.
(PROGRAM POLICY MANUAL)
Adopted: 09/19/1995
Revision #1: 03/16/1998
Revision #2: 10/16/2001
Revision #3: 02/17/2009
Revision #4: 09/17/2013
Revision #5: ______/2014
City of Covina
Housing/CDBG Division
125 East College Street
Covina, CA 91723
(626) 384-5443

Page 305 of 518 ends

ATTACHMENT B
September, 2013
1 COVINA RESIDENTIAL REHABILITATION GRANT/LOAN

PROGRAM

POLICIES & PROCEDURES

TABLE OF CONTENTS
PAGE
POLICIES AND PROCEDURES. .......... .......... .................... .......... .......... ....... 2 SECTION 1 – General Provisions and Conditions....... .......... .......... ....... 2 SECTION 2 - Determining Eligibility ...... .................... .......... .......... ..... 13 SECTION 3 – Inspection/Contractor Payment Procedures .... .......... ..... 25 SECTION 4 – Reporting Procedures...... .................... .......... .......... ..... 42 APPENDICES........ .......... ......... .......... .......... .................... .......... .......... ..... 44

Page 306 of 518 ends

September, 2013
2 SECTION 1

TABLE OF CONTENTS

Page 307 of 518 ends

September, 2013
3 CITY OF COVINA

RESIDENTIAL REHABILITATION GRANT/LOAN PROGRAM

GENERAL PROVISIONS & CONDITIONS
SECTION 1
The CITY of Covina (CITY) is a recipient of the Federal Government's Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) funds which are targeted to benefit very-low, low, and moderate-income persons to eliminate slum and blight. These funds are received through a partnership with the Los Angeles Community Development Commission (LACDC). As a disbursing agent for these funds, the CITY administers a grant/loan program designed to assist eligible Homeowners in maintaining the existing housing stock of the incorporated areas of the CITY through home rehabilitation. This program consists of the Covina Residential Rehabilitation Grant/Loan Program for Very Low-,Low- and Moderate-Income Residents (Rehab Program) as defined in CDBG Bulletin Annual Income Guidelines (as revised each year).

This program was begun by the Covina Redevelopment Agency in 1990 at which time, the

Page 308 of 518 ends

September, 2013
4 maximum allowable expenditure was $5,000. This was amended in 1995 to include a $4,000 grant with an additional $3,000 loan available. This was amended in 2001 to increase the additional loan amount available to $6,000, for a total allowable expenditure of $10,000 per single family home and a maximum of $3,000 for mobile homes and a maximum interest rate to apply to loans of 3%. This was amended in 2009 which increased the grant to $10,000 and the additional loan amount available to $20,000, for a total allowable expenditure of $30,000. The amount available to mobile home owners increased to a maximum of $8,000, which is a grant.

General Provisions and Conditions for program are delineated herein.

Grant for Mobile Home Rehabilitation
A grant of up to $8,000 is available.

Marketing
The CITY shall use any marketing strategies it sees fit as part of the overall marketing strategy to contact all property owners eligible for program.

Page 309 of 518 ends

September, 2013
5 multiple ownership, the signature of each titleholder is required on all appropriate documents. Income for all members of the household and/or any person(s) listed on title of the property in question, as defined by Section 61 of the IRS Code of 1954, as amended, governs grant/loan eligibility.

2. Applicants who have participated in the program previously must wait a minimum of ten (10) years prior to applying for assistance again.

Applicants who have been participants at any time in the past shall be subject to restrictions on the total amount available as described in Section I.G.

C. Property Eligibility Requirements

1. Homeowner shall have sufficient equity in the home to secure the grant/loan. Equity will be calculated based on using estimated value of the home as listed in www.zillow.com or any other comparable tool and by subtracting all outstanding amounts due in any lien on the home.

4. Owner shall not have any restrictions or encumbrances that would unduly restrict the good and marketable nature of the ownership interest

Page 310 of 518 ends

September, 2013
6 as determined by the CITY. Example: Non-Revocable Trust.

5. Homeowner shall be current in mortgage payments to lender, or be able to show that regular monthly payments are being made.

Room Additions – as funds are limited, room additions will not be considered except in extreme conditions.

2. Type of work:
a. Appliances:

Appliances will be considered only if the gas or electrical company determines an existing built-in stove or oven to be inoperable.

Replacement requests must be accompanied by written
justification and a gas/electrical company work order (code violations).
b. Driveways:

Driveways will be considered for grants/loans only if CITY determines that the present driveway constitutes a detriment to public health and a safety hazard. Driveway requests must be accompanied by written justification and pictures.
c. Sandblasting and Stucco Work:

Sandblasting or Stuccowork to the exterior will be considered for grants/loans only if the exterior is damaged to the extent that it is more expedient to sandblast or stucco.

Page 311 of 518 ends

September, 2013
7 d. Garages:

New construction of garages and carports will only be considered for grants/loans if the present garage or carport constitutes a detriment public health and a safety hazard.
e. Flooring:

Other areas of the home. Will be considered if occupant is handicapped and replacement of flooring makes it easier to ambulate within the home.

E. Ineligible Repairs
Ineligible rehabilitation repairs include cosmetic repairs, speculative income producing renovation work, luxury remodeling, and convenience repair work.

1. Barbecue Pits

2. Burglar Alarms

3. Flower Boxes or Planters

4. Greenhouses

5. Animal Kennels

6. Indoor/Outdoor Fireplaces or Hearths

7. Penthouses

8. Photo Murals

9. Stands (planters, room dividers, etc.)

10. Walls which serve as partial room dividers

11. Steam cleaning of exterior surfaces

12. Television Antenna

13. Tennis Courts

14. Tree Surgery

15. Drapes, Shades, Blinds

16. Exterior Window Awnings

17. Yard Sprinkler Systems

18. Storage Shed

19. Microwave Oven

20. Patios (except repairs if attached to home only and permit on file at CITY Building Department approving patio construction)

21. Wallpaper

Page 312 of 518 ends

September, 2013
8 22. Landscaping (planting flowers, plants or trees)

23. Water Purifier

24. Kitchen appliances which are designed and manufactured to be free standing and are not built-in and permanently affixed as an integral part of the kitchen in a residential structure.

25. Bathhouse, swimming pools, hot tubs, spas, jacuzzi or accessories for any of these

26. New construction except items that will remedy a public health and safety hazard

27. Purchase, installation, and repair of furniture

28. Any items considered “Luxury”

However, this amount may be increased based on the extent of rehabilitation necessary to achieve the desired Housing Quality Standards if approved by Finance Director.

The grant for mobile home rehabilitation will not accrue interest.

I. Loan Terms

1. General
a. The Grant/Loan shall be between the CITY and the Homeowner.

Page 313 of 518 ends

September, 2013
9 b. The Homeowner has the right to repay the loan portion at any time, in part or in full, without prepayment penalties. c. The Homeowner must pay in full the unpaid principal of the loan plus any accrued interest that is due on the loan at the time of refinancing the single family home. Under certain circumstances, the grant may become a part of the loan and subject to
repayment.

No monthly payments are required. However, the Homeowner, at any time, may elect to make a minimum monthly payment of $25.00 or more.

3. Repayment of Grant/Loan
a. Provided that the Homeowner continues to (i) hold title to the home, (ii) reside in the home as his or her principal residence, (iii) does not refinance the home and (iv) does not transfer the home to another person, whether by sale, gift, bequest or intestate succession (except as may be allowed by CITY under Section J.1. below), the principal and accrued interest on the loan shall not become due and payable by the Homeowner to CITY.
b. Additionally, the amount of any grant for a single family home shall be written off/forgiven at a rate of 20% for each 12-month period after the project completion date that the conditions in the last paragraph are met. If the conditions are met for a period of 5 years (60 months) the grant shall be fully written off and the Homeowner shall have no obligation to repay any portion of the grant.
c. If the above conditions are not met, the full unpaid principal amount of the loan plus accrued interest shall be immediately due and payable to the CITY. In addition, the grant amount will no longer continue to be written off and prior amounts written off may be reversed. The grant amount shall become a loan which shall accrue interest at the rate set forth above and shall also become immediately due and payable to CITY.
d. Recertification of continued principal residence occupancy may be

Page 314 of 518 ends

September, 2013
10 required to be completed for each of the five (5) years following the anniversary date of the completion of the rehabilitation.

J. Other Grant/Loan Conditions
Specific terms and conditions for a Covina Residential Rehabilitation Grant/Loan are incorporated in the Promissory Note, secured by a Deed of Trust.

Additionally, Homeowner shall agree to comply with following terms and conditions:

1. Assignment and Assumption:

Covina Residential Rehabilitation Grant/Loans are generally not assignable or assumable. But the CITY may consider the following exceptions:
a. The title to the home has not been sold or transferred except to the Homeowner's spouse (as a consequence of marriage,
dissolution of marriage, or death), or to a son, daughter and/or legal dependent that will own and occupy the home as his or her primary residence; and
b. The new Homeowner meets these eligibility criteria and his or her income is such that the loan could not be repaid by refinancing from another source without the new Homeowner exceeding his or her ability to afford his or her housing costs. Such evidence may include income verifications and written rejections or refinancing applications from lending institutions, which provide the reasons for rejection.
e. If it is determined by CITY that the new Homeowner is not eligible for assignment and assumption, the grant/loan shall be
immediately due and payable.

2. Fire Insurance Requirements
CITY verifies fire insurance coverage at the time of applying for the grant/loan and through any rehabilitation work done.

3. Refinancing – If Homeowner decides to refinance the home, any amount outstanding for the grant/loan must be repaid at that time, unless otherwise approved by the CITY.

4. Assets – Total assets (not including home to be rehabilitated) must not be more than $25,000.

K. Miscellaneous Conditions

1. All applicable work funded by a grant/loan shall conform to cost effective energy conservation standards.

2. In compliance with Part 570.611 of CDBG regulations, lead based paint

Page 315 of 518 ends

September, 2013
11 products shall not be used on any project funded by a grant/loan.

3. Contractor shall keep all records of funds received from the CITY and make them accessible for audit or examination for a period of five (5) years after final payments are issued and other pending matters are closed (24 CFR Part 84, Sec. 84.53). CITY shall maintain for a period of five (5) years after the expiration of the contract with the Homeowner, complete and adequate financial records and accounts as considered necessary by the Los Angeles County Community Development Commission (LACDC) to assure proper accounting for all program funds and to support all program expenditures.

The contractor shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contractor setting forth the provisions of this nondiscrimination clause.

Page 316 of 518 ends

September, 2013
12 7. Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701 et. Seq., requires that to the greatest extent feasible, opportunities for training and employment be given to lowerincome residents of the project area and contracts for work in connection with the project be awarded to business concerns, which are located in, or owned in substantial part, by persons residing in the area of the project.

9. Prohibition against discrimination on the basis of age under the Ave Discrimination Act of 1975, or with respect to an otherwise qualified handicapped individual, as provided in Section 504 of the Rehabilitation Act of 1973, shall also apply to any such program or activity.

Page 317 of 518 ends

September, 2013
13 SECTION 2

TABLE OF CONTENTS

Page 318 of 518 ends

September, 2013
14 SECTION 2

COVINA RESIDENTIAL REHABILITATION GRANT/LOAN

If the Homeowner is still interested in participating in the program, the Homeowner is then responsible for submitting all requested documentation to the CITY for approval.

1. Eligibility Determination
The CITY sends out the detailed application packet. Homeowner must supply the CITY with the following documents:
(a) Completed application
(b) Property tax statement
(c) Paycheck stubs, or other income documentation for the last 3 months
(d) AFDC, Social Security, Pension, dividends, interest for the last 3 months
(e) Income Tax Returns for 3 years or statement of non-filing Federal income tax returns for the previous three (3) years are required as the primary means of income verification for all grants/loans. If the Homeowner does not earn sufficient income to warrant the filing of a tax return, CITY will require a statement of non-filing, signed by the Homeowner in the place of the Federal income tax return.
(f) Current mortgage statement for all mortgages on the subject home
(g) Current fire insurance policy on the subject home

Page 319 of 518 ends

September, 2013
15 (h) Signed acknowledgement of receiving “A Consumer Guide to Asbestos”, “Protect Your Family From Lead in Your Home” and “Watch Out for Lead Based Paint Poisoning”
(i) Credit Authorization form

3. The Homeowner is advised that a Lead-Based Paint Inspection/Risk Assessment Report and an Asbestos Inspection Report will be required.

These reports are provided at the Homeowner’s expense; any costs resulting from these inspections will be incorporated into the grant/loan.

The Homeowner must sign and acknowledge receipt of these informational packets.

CITY shall provide a copy of each report to the Homeowner. The Homeowner acknowledges receipt of reports by signing “Notice of Asbestos Evaluation, Notice of Lead Hazard Evaluation” form which is maintained in Homeowner file.

C. Grant/Loan Review and Approval Process
The process for the review and approval of the application is described below:

1. Once all of the required documents are received, they are reviewed.

Page 320 of 518 ends

September, 2013
16 3. A visual inspection appointment is made with the Homeowner and CITY personnel as well as a Code Enforcement Officer in order to assess the needs of the Homeowner, based on the preliminary application.

D. Applicant Income Limits

1. Gross annual family income cannot exceed 80% of the annual family median income, adjusted for family size, established by HUD for Los Angeles County. Income limits are subject to change by HUD. Income is defined as the combined income of all members of the household, as defined in 24 CFR Part 5 (Part 5 annual income) annual income as reported under the census long form, as amended.

2. The income limits for the Grant/Loan Program for Fiscal Year 2013-2014 per CDBG Bulletin 12-0034 are shown below:

Persons Deferred Loans
Per Family (80% Median Income)*
1 $46,400
2 53,000
3 59,650
4 66,250
5 71,550
6 76,850
7 82,150
8 87,450
*Income after adjustment for allowable inclusions and exclusions Note: When future legislative changes are made to the definition of annual income, the change will be published in the Federal Register and agencies will be given 60 (sixty) days from the date of publication to implement the changes.

3. Income Inclusions (CDBG Bulletin 07-0002)
a. Salary Income. The full amount before any payroll deductions of wages and salaries, overtime pay, commissions, fees, tips, and

Page 321 of 518 ends

September, 2013
17 bonuses, and other compensation for personal services b. Self-Employment Income. The net income from operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for
depreciation of assets used in a business or profession may be deducted, based on straight-line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family.
c. Personal Interest. Interest, dividends, and other net income of any kind from real or personal property:

Page 322 of 518 ends

September, 2013
18 (1) The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus (2) The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount
calculated under this paragraph shall be the amount
resulting from one application of the percentage.
g. Alimony/Child Support. Periodic and determinable allowance, such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling.
h. All regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is head of the family, spouse, or other person whose dependents are residing in the unit (but see paragraph (g) under Income Exclusions).
i. Rental Income. Income received from rental property. j. In-Home Supportive Services. Income earned by a
caregiver/caretaker providing in-home supportive services for a different household.

Page 323 of 518 ends

September, 2013
19 to the educational institution, and amounts paid by the Government to a veteran, for use in meeting the costs of tuition, fees, books, equipment, materials, supplies, transportation, and miscellaneous personal expenses of the student. Any amounts of such scholarships or payments to a veteran not used for the above purposes that are available for subsistence are to be included in income.
g. The special pay to a family member serving in the Armed Forces who is exposed to hostile fire.
h. Amounts received under training programs funded by HUD. i. Amounts received by a disabled person that is disregarded for a limited time for purposes of supplemental security income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS).
j. Amounts received by a participant in other publicly assisted programs that are specifically for or in reimbursement of out-ofpocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and that are made solely to allow participation in a specific program.
k. Temporary, nonrecurring, or sporadic income (including gifts). l. Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the 1937 Act. The following is a list of types of income that qualify for that exclusion (9/27/89 regulations):
(1) The value of the allotment provided to an eligible
household under the Food Stamp Act of 1977.
(2) Payments to volunteers under the Domestic Volunteer Service Act of 1973 (employment through VISTA, Retired
Senior Volunteer Program, Foster Grandparents Program,
youthful offenders incarceration alternatives, senior
companions).
(3) Payments received under the Alaska Native Claims
Settlement Act (43 U.S.C. 1626(a)).
(4) Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes (25 U.S.C. 259)(e).

Page 324 of 518 ends

September, 2013
20 (5) Payments or allowances made under the Department of Health and Human Services' Low-Income Home Energy
Assistance Program (42 U.S.C. 8624(f)).
(6) Payments received under programs funded in whole or in part under the Job Training Partnership Act.
(7) Income derived from the disposition of funds of the Grand River Band of Ottawa Indians.
(8) The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission
or the Court of Claims (25 U.S.C. 1407-1408) or from
funds held in trust for an Indian tribe by the Secretary of Interior (25 U.S.C. 117).
(9) Amounts of scholarships funded under Title IV of the Higher Education Act of 1985 including awards under the Federal work-study program or under the Bureaus of
Indian Affairs student assistance programs, that are made available to cover the costs of tuition fees, books,
equipment, materials, supplies, transportation, and
miscellaneous personal expenses of a student at an
educational institution (20 U.S.C. 1087 uu).
(10) Payments received from programs funded under Title V of the Older Americans Act of 1965 (42 U.S.C. 3056(f)).
(11) Any earned income tax credit to the extent it exceeds income tax liability.
(12) Payments received after January 1, 1989, from the Agent Orange Settlement Fund or any other funds established
pursuant to the settlement in the In Re Agent Orange
product liability litigation, MDL No. 381 (E.D.N.Y.).
(13) Payments received under the Maine Indian Claims
Settlement Act of 1980.

E. Initial Inspection to Determine Extent of Work

1. The CITY personnel and CITY Code Enforcement inspector are responsible for making an initial, on-site inspection of the property to be rehabilitated for identification of code violations (A items = code violations; B items = incipient violations, i.e., those items which must be corrected to meet codes) elimination of items creating a detriment to

Page 325 of 518 ends

September, 2013
21 public health and safety. Code violations are identified and defined in the Covina Municipal Code. A Pre-Inspection Request Form is given to Code Enforcement Officer for notes and signature and is filed in the Homeowner file.

F. Write-up of Rehabilitation
The CITY shall prepare a Bid Work Write Up for all its rehabilitation jobs.

Contingency Reserve Money

1. CITY permits a 10% contingency allowance, with exceptions, to cover unforeseen conditions arising during the rehabilitation process. An "unforeseen" circumstance means "not seen as a development beforehand" and encompasses items such as plumbing, faulty electrical, replacement of dry rot and termite infested lumber, unforeseen water damage or other conditions which cannot be determined until the actual rehabilitation has begun.

2. The 10% contingency allowance comprises 10% of the rehabilitation contract.

3. Request for use of contingency funds shall occur through the Change Order process (See Section 3.II.I) with CITY prior approval.

G. Application Approval/Rejection
If the application is approved, the Homeowner is notified of the approval along with a list of next steps that must be taken to continue in the program by issuing an Approval Letter.

If the loan is rejected, the Homeowner is notified of the reason for rejection.

Page 326 of 518 ends

September, 2013
22 If the application and all supporting documentation is not received by CITY from the Homeowner within four (4) weeks after Homeowner is sent the application, the grant/loan will automatically be rejected.

A copy is provided to the Homeowner and receipt of such is evidenced by the “Notice of Asbestos Evaluation, Notice of Lead Hazard Evaluation” form.

I. Deed Recording/Note Signing/Grant & Loan Agreement

J. Homeowner/Project Set Up in LACDC.org website

1. Historical Preservation/Environmental Impact Clearance a. Historical Preservation, Section 106, National Historic Preservation Act of 1966 as amended (16 U.S.C. 470) mandates that all activity in which the Federal Government is directly or indirectly involved be subject to review for compliance with Section 106. In order to comply with Section 106, CITY requires that clearance be submitted for review, accompanied by a set of four (4) photos, to a Basic Property Identification Form for loan amounts up to $24,999 and the property information. These photos will include:
(1) 1 front view of the dwelling to be rehabilitated
(2) 1 view each (total of 2) of the houses on each side of the dwelling to assess the architectural design of neighboring homes

Page 327 of 518 ends

September, 2013
23 (3) 1 view of the house directly across the street from the dwelling
b. Detailed Property Identification Form (DPI), the form must be submitted along with four photos, and property information for loan amounts at or above $25,000.
c. After receipt by LACDC, the form is forwarded to LACDC's CDBG Historic Preservation Planner for review and clearance. The loan consultant should allow approximately seven (7) days for clearance. In the interim, normal loan consultant processing of the loan may continue.
d. Should the CDBG Historic Preservation Planner's review establish that the structure may be eligible or placement into the National Register, the work write-up and completed research forms are sent to the State of California Historical Preservation Office (SHPO), for official determination of National Register eligibility.

K. Document Packaging
All grant/loan documents must be filed in hard file folders with the Homeowner name(s) indicated on the folder tab. The contents of each file will be laid out as indicated below.

LEFT SIDE (from top to bottom)
 1. Checklist for CDBG Housing Rehabilitation
 2. Approval Letter from CITY to Homeowner
 3. Historical Preservation/Environmental Service Clearance  4. CDBG Property ID Request
 5. HDL property information
 6. Code Enforcement Report
 7. Photography Permission
 8. Lead Based Paint and Asbestos Acknowledgment (Original)  9. Application for Rehabilitation – Approval page only  10. CDBG Income Limits Bulletin
 11. Application for Rehabilitation
 12. Supporting documentation
 13. Fire Insurance Policy (Copy)

Page 328 of 518 ends

September, 2013
24  14. Current Property Tax Bill (Copy)
 15. Current Property Loan Statement and Equity Calculation Worksheet  16. Preliminary Application for Rehabilitation

RIGHT SIDE
 17. Bid Work Write Up
 18. Contractor Bids for Work

LEFT SIDE
 19. Summary of Payments Made for Homeowner
 20. Copies of Checks and Invoices/supporting documents for Contractors  21. Copies of Inspection Cards/Signed Bid Work Write Up forms  22. Completion Notice signed by Homeowner for work being invoiced  23. Signed Choice of Contractor form
 24. Copy of Agreement between Homeowner and Contractor

RIGHT SIDE
 25. Signed Terms of Agreement Letter
 26. Recorded Deed of Trust
 27. Signed Promissory Note
 28. Signed Residential Grant and Loan Agreement
 29. Lead & Asbestos Reports

Page 329 of 518 ends

September, 2013
25 SECTION 3

TABLE OF CONTENTS

INSPECTION/CONTRACTOR PAYMENT PROCEDURES
PAGE
SECTION 3 - INSPECTION/CONTRACTOR PAYMENT PROCEDURES... ......... ...... 25 I. INSPECTION/BID PROCESS/
AGREEMENT FOR REHABILITATION ............ .......... .......... ......... ...... 26 A. Inspection Process ....... .......... .................... .......... .......... ......... ...... 26 B. Bid Process ....... .......... .......... .................... .......... .......... ......... ...... 26 C. Review of Bids... .......... .......... .................... .......... .......... ......... ...... 28 D. Agreement for Rehabilitation... .................... .......... .......... ......... ...... 29 II. PRE-CONTRUCTION CONFERENCE................... .......... .. …. .. ......... ...... 29 A. Responsibilities.. .......... .......... .................... .......... .......... ......... ...... 30 B. Permits and Codes ....... .......... .................... .......... .......... ......... ...... 30 C. General Guarantee and Warranty ................ .......... .......... ......... ...... 30 D. Conflicts... ......... .......... .......... .................... .......... .......... ......... ...... 31 E. Breach of Conditions .... .......... .................... .......... .......... ......... ...... 31 F. Hold Harmless Clause .. .......... .................... .......... .......... ......... ...... 32 G. Property Access/Maintenance. .................... .......... .......... ......... ...... 32 H. Sign Contracts... .......... .......... .................... .......... .......... ......... ...... 33 I. Change Orders .. .......... .......... .................... .......... .......... ......... ...... 33 J. Substitution of Contractor......... .................... .......... .......... ......... ...... 34 III. CONTRACTOR PAYMENT PROCEDURE ............ .......... .......... ......... ...... 36 A. Rehabilitation Payments.......... .................... .......... .......... ......... ...... 36 B. Time Extension of Agreement for Rehabilitation...... .......... ......... ...... 38 C. Monitoring ......... .......... .......... .................... .......... .......... ......... ...... 38 D. Rehabilitation Final Payment... .................... .......... .......... ......... ...... 40 E. CITY Inspection at Final .......... .................... .......... .......... ......... ...... 41 IV. CLOSEOUT OF THE PROJECT....... .................... .......... .......... ......... ...... 41 A. Disbursement Printout Sheet... .................... .......... .......... ......... ...... 41 B. Close Out Letter .......... .......... .................... .......... .......... ......... ...... 41 C. Close Out in LACDC.org ......... .................... .......... .......... ......... ...... 41

Page 330 of 518 ends

September, 2013
26 SECTION 3

RESIDENTIAL REHABILITATION GRANT/LOAN PROGRAM

REHABILITATION INSPECTION/CONTRACTOR PAYMENT PROCEDURES I. INSPECTION/BID PROCESS/AGREEMENT FOR REHABILITATION
A. Inspection Process - The inspection process is described below.

Responsibility for inspection activities lies with the CITY and the CITY's inspector(s).

Code violations are identified and defined in the Covina Municipal Code.

2. During the course of the initial inspection, CITY personnel are obligated to take application measurements, and at least 10-12 photos of all rehabilitation to be corrected. Photos should include at least 1 full view of exterior of property, 1 photo of neighbor on each side of home as well as 1 photo of home on opposite side of street.

B. Bid Process
Each bid submitted must be for repairs and replacements that are for similar materials and replacement costs that currently exist in the home.

1. Requests for bids are solicited by the Homeowner. Each bid package that goes out for solicitation should include the Bid Work Write Up as described in Section 2.F.

3. The Homeowner is advised that they may invite a licensed California Contractor of his/her choice to participate in the bid process.

Page 331 of 518 ends

September, 2013
27 is choosing the Contractor.

5. Bonus, Commission, or Fee. The Homeowner(s) shall not pay any bonus, commission or fee, for the purpose of obtaining approval of the grant/loan application, or for any other approval or concurrence required by the CITY or its agents, to complete the rehabilitation work financed, in whole or in part, with the Covina Residential Rehabilitation Grant/Loan Program.

The Homeowner shall not receive any bonus, commission or fee, also known as a “kick-back”, for the purpose of choosing one Contractor over another.

1. Does not have a current California license as a B
Contractor

Page 332 of 518 ends

September, 2013
28 Family is defined as parents, children, siblings, uncles/aunts and cousins.

C. Review of Bids

Recommendation can be made by the CITY based on the lowest and most responsible bid and the Contractor's past performance.

Page 333 of 518 ends

September, 2013
29 c. Contractors are also checked on the federal debarred website www.sam.gov for debarment from Federal projects (CDBG
Bulletin 13-0002) and on any state or local debarred website. d. Proof of Covina Business License.

3. Should the Homeowner insist that the contract be awarded to a Contractor other than the low bidder, a statement of justification signed by the Homeowner will be included in the file.

5. Homeowner Contributions
a. Homeowner contributions for the purpose of choosing a Contractor that is not the lowest cost will be considered.

Requests must be accompanied by a written justification from the Homeowner and a statement signed by the Homeowner revealing the source of the additional funds and the Homeowner repayment schedule
b. Homeowner contributions, for the purpose of upgrading items and materials and the addition of items considered “luxury items” in the rehabilitation contract may be considered. CITY will consider Homeowner contributions on a case-by-case basis. Requests must be accompanied by a written justification from the Homeowner and a statement signed by the Homeowner revealing the source of the additional funds and the Homeowner repayment schedule.
c. If approved by CITY, the Homeowner shall pay the amount of the Homeowner's contribution directly to the Contractor.

II. PRE-CONSTRUCTION CONFERENCE
The CITY, the Homeowner, and the Contractor shall meet at a Pre-Construction Conference to review all phrases pertinent to the documentation of the grant/loan,

Page 334 of 518 ends

September, 2013
30 rehabilitation work authorized, change orders, inspections, payments, contingency money, contract extensions, deviations, "side-deals" and Final Close Out of the loan.

Other points covered in the discussion will include items in the contract, the scope of the work to be performed, and the nature of the potential inconvenience to the property owner. The CITY and Homeowner shall clarify terminology in the standard contract, such as paint grade and paint selection. Additionally, all parties involved in the rehabilitation should understand the following:

A. Responsibilities
The contractor is to furnish all material, equipment and labor to complete the work in a workmanlike manner as per the practice of the trade.

The Contractor shall be fully responsible to the Homeowner for the acts and omissions of all Sub-contractors and/or persons directly or indirectly employed by him/her.

B. Permits and Codes
Contractor shall be responsible for securing all applicable work permits from appropriate agencies and a City of Covina Business License prior to commencing work. All work shall be accomplished per City of Covina and applicable Building and Safety and Health codes and/or State of California Housing Codes. Contractor represents and warrants that he/she possesses a valid contractor’s license issued by the State of California, as well as any specialty licenses required for the project.

Page 335 of 518 ends

September, 2013
31 partial or entire use of the material, fixture or equipment repaired or supplied by the Contractor shall constitute an acceptance of work done in accordance with Contract or relieve the Contractor of liability in respect to any expressed warranties or responsibility for faulty materials or workmanship. The Contractor shall promptly remedy any defects in the work, and pay for any damage to other work resulting therefrom, which may appear within a period of one year from the date of final acceptance of the work unless a longer period is specified. The Homeowner shall give written notice of observed defects to the City and Contractor with reasonable promptness.

In the event of such termination, the Homeowner may, in addition to all other

Page 336 of 518 ends

September, 2013
32 remedies, call upon Contractor’s bonding company to complete the work provided a bond has been procured. No payment made under contract shall act as a waiver of the right of Homeowner to require fulfillment of all of the terms of the Contract.

Also,

1. The Homeowner is responsible for property maintenance during the time that rehabilitation work is being performed on the property.

2. The Homeowner must be advised that rehabilitation work shall not be impeded because of unmaintained property or general sloppiness, and those items of value, including pets, must be secured.

Page 337 of 518 ends

September, 2013
33 property, such as towels, sheets, shovels, tools, etc.; the Contractor must supply his own tools, and furniture cover. CITY's responsibility includes notifying the Contractor that he/she will be held responsible for the repair and replacement of ruined property. The Contractor shall keep the premises clean and orderly during the course of work.

H. Sign Contracts
After mutual agreement with terms in Contract between the Contractor and Homeowner is reached, the Contractor and the Homeowner sign the Contract and provide a copy to City. Work must begin within two (2) weeks of signing the Contract or Contractor risks the possibility of being substituted as described in Section III.2.J.

1. Time allowed for the rehabilitation process is as follows:

Exceptions: Time of year and nature of rehab work should be taken into consideration.

I. Change Orders

1. Change orders are the responsibility of the Contractor. CITY shall review all change order requests, and reserves the right not to pay for any change order request it considers outside the scope and guidelines of CITY's Covina Residential Rehabilitation Loan/Grant Program.

2. CITY does not consider change order requests as standard rehabilitation procedure. Change order requests must be granted solely in cases where unforeseen circumstances arise during the rehabilitation process, (plumbing, faulty electrical, replacement of dry rot and termite infested lumber or other conditions which cannot be determined until the actual rehabilitation has begun). A CITY inspector shall make site inspections, when necessary, for clarification. Change orders may occur at any time during construction.

Page 338 of 518 ends

September, 2013
34 3. All change orders must be approved by CITY before CITY will pay for such work. No change order will be approved if submitted along with progress payment or final payment and are not approved by CITY prior to payment request.

4. CITY shall pay for no more than two change orders per job, provided those Change orders meet the above criteria. Change order requests will not be granted for "trade-offs" with the Homeowner. Additional work negotiated between the property owner(s) and the Contractor shall not be covered by a change order, but may be accomplished through a separate financial arrangement between the Contractor and the Homeowner. This work must be done subsequent to the completion of the CITY rehabilitation contract.

5. The CITY must be cognizant of change order items that require permits.

NOTE: CITY does not allow Contractor overhead and profit on Change orders nor does it allow deletion of code items identified in the initial inspection by the CITY. CITY does not allow a Change order request on any item previously paid to the Contractor.

6. A change order justification shall include:
a. Activity and item to be modified (deletion or addition) b. Cost or credit to property owner
c. Contractor's written and/or visual justification for change d. Signature of property owner(s) and Contractor prior to submittal to CITY for approval
e. Change order number (#1, or #2).

7. When a change order item is modified and/or denied by the CITY, the Contractor shall notify the Homeowner of the modification and/or deletion.

J. Substitution of Contractor

Page 339 of 518 ends

September, 2013
35 In the event that the Homeowner and the Contractor have a dispute that they cannot resolve, the Contractor may be released from any work not yet complete, as long as the Homeowner, Contractor and the CITY agree. A Change Order will be used to reduce the amount of money due the Contractor for any unfinished/unpaid items.

The Homeowner is encouraged to negotiate the total or remaining contract balance with the new Contractor to assure that the contract does not exceed the available rehabilitation dollars. (3) A new Contract and Contract Bid Information, Contractor’s license, general liability and Workers’ Compensation Insurance, are prepared and filed in the Homeowner’s file.
b. Noncompliance by the original Contractor-substitute Contractor:
(1) The Homeowner must inspect the job, compiling a list of incomplete or unacceptable items to determine the extent of work to be completed by the substitute Contractor.
(2) CITY is notified by means of a Homeowner generated memo or phone call that the original Contractor has not performed according to the Contract. The memo lists the initial steps taken by the Homeowner to resolve the problem. CITY will then try to resolve noncompliance related problems. If unsuccessful in resolving conflict/noncompliance, Homeowner will notify Contractor of termination as described in Section 3.II.E above. (3) A meeting must be held between the CITY, the Homeowner and the original Contractor (if possible) at which time a method of Contractor payment is established and a Change Order form is signed by both the Homeowner and the Contractor to terminate the contract. Justification for the substitution, the method of

Page 340 of 518 ends

September, 2013
36 payment to the Contractor, and the amount of funds paid must be stipulated in memo form. Funds withheld from the original Contractor, until the rehabilitation is completed, must be discussed. Lien releases and invoices from the original Contractor and sub-Contractors must be attached to all payments made.
(4) A revised Bid Work Write Up is prepared, based upon the Homeowner or CITY inspection findings, and a substitute Contractor is hired to do the remainder of the rehabilitation work.

The Homeowner is encouraged to negotiate the total contract with the new Contractor to assure that the new Contractor does not exceed available rehabilitation funds.
(5) The substitute Contractor must provide a Contract before beginning any work.
(6) No further rehabilitation is to commence until the Change Order, releasing the original Contractor from his contractual obligations, is on file at CITY, and a new contract is drawn and signed between the substitute Contractor and the Homeowner.

The revised write-up shall contain only those items necessary to complete the job. The substitute Contractor must show proof that he/she is currently insured and licensed.
(7) CITY shall be advised if the Homeowner encounters any problems in the resolution of the substitution of Contractor.

III. CONTRACTOR PAYMENT PROCEDURE
A. Rehabilitation Payments

The Homeowner does not have the option of determining when the Contractor shall be paid. The CITY will determine when payment is to be made to Contractor, in accordance with this Policy.

2. After the Contract is signed by the Homeowner and Contractor, CITY shall enter the Contract amount as a Purchase Order into the financial system in order to encumber the funds.

Page 341 of 518 ends

September, 2013
37 3. The Contractor's request for payment is to be submitted to CITY as an invoice only for items on the original bid that have been completed. CITY staff reviews the invoice and processes the request for payment. All checks will be mailed to/or picked up by the Contractor. All payment checks shall be single party checks make payable directly to the Contractor. Estimated turn-around time for Contractor payment is fourteen (14) days.

Circumstances may arise in which turn-around exceeds normally scheduled fourteen (14) days; these occasions will be exceptions, not the rule.

All payment packages must include:
a. Request for Payment or itemized invoice from the Contractor b. Completed Certificate and Release of Lien.
c. Completed List of Sub-Contractors and/or Material-Men form accompanied by material and labor releases from all subContractors and materials suppliers. d. Contractor shall have CITY Inspector sign the Bid Work Write Up - Inspection form or itemized invoice indicating that the items completed have been inspected by CITY Inspector. A copy of the Bid Work Write Up - Inspection or itemized invoice with CITY Inspector signature shall accompany each payment request. e. Certifications and Warranties, if applicable
f. Permits/Plans
CITY requires that all pertinent permits be obtained prior to the commencement of the rehabilitation. A copy of
permit/Inspection card shall be included as part any payment package. It is the CITY’s responsibility to review payment package for completeness, prior to submission to accounts payable for payment, to avoid delay in processing and duplication of work and effort.

In addition to permits, the Contractor must submit a copy of preliminary drawings for projects requiring a room addition. A copy of the final plans approved by CITY Building department must also be submitted to CITY.
g. Payments

Page 342 of 518 ends

September, 2013
38 Incomplete packages shall be returned to the Contractor for completion prior to processing.

4. When a Contractor payment request is submitted to CITY for payment, the CITY will ensure that all work is in accordance with applicable Codes, as evidenced by CITY Inspector signature on accompanying Bid Work Write Up – Inspection or itemized invoice. If the rehabilitation involves an addition, progress payments will only be made when at least one-third (1/3) of the major construction is completed.

5. Job Site Inspection/Quality Control
a. The CITY shall inform the Homeowner of their responsibility to permit inspection for compliance with CITY's Municipal Code, by the CITY, its agents or designees, on the property to be rehabilitated. The Homeowners shall also permit any additional inspections necessary by CITY personnel and the Building department, relative to the property, the rehabilitation work, all contracts, material, equipment, payrolls and conditions of employment pertaining to the work.
b. CITY personnel shall take pictures of all completed work for the file and visually inspect the work done to ensure that work that was quoted has been done.
c. The CITY inspector from the Building department shall inspect all work that requires a permit and a copy of the permit card shall be turned in with each request for payment by the Contractor. It is the Contractor’s responsibility to get the Building inspector to inspect and indicate this with a signature.
d. The CITY shall require the Homeowner to sign a Completion Notice form indicating satisfaction or dissatisfaction with the completed job for all rehabilitation jobs for which payment has been requested. In addition, CITY shall perform inspections without Homeowner notification, and shall make random or specific inspections when deemed necessary for quality
control.

B. Time Extension of Agreement for Rehabilitation

2. If the Contractor does not finish in the time defined in in Section 3.II.H., for each day that the Contractor does not finish, one percent (1%) will be

Page 343 of 518 ends

September, 2013
39 deducted from the final payment.

CITY determines whether the extension is approved or disapproved.

4. Only one (1) extension will be allowed by CITY per Contractor. If more than one (1) extension is requested the Contractor will be cited for noncompliance with CITY Procedures and may be removed and substituted.

C. Monitoring

1. The Monitoring Program is a mandated function required by HUD. The CITY has monitoring responsibilities designed to measure and evaluate performance.
a. The CITY's monitoring responsibilities related directly to the Contractor and rehabilitation. CITY personnel operate as quality control agent whose primary monitoring functions are to:
(1) Insure that all work performed by the Contractor is performed in compliance with CITY's Municipal Code, and the Contract.
(2) Be familiar with all aspects of the rehabilitation to preclude expensive repairs and added expense occurring down-theline due to lack of monitoring and quality control. Ask for guidance from CITY inspector where needed, to gain an
understanding of the repair.
(3) Periodically make unannounced inspection of the job site to ensure that the Contractor is on the job and that the work is progressing according to schedule.
(4) Conduct spot inspections to insure professional and satisfactory workmanship by the Contractor and those
materials used in the rehabilitation are standard grade or better.
(5) Inspect the job site prior to request for Contractor payment to insure that the Contractor has completed all the work for which payment has been requested.
b. Since job site inspections and familiarity with all aspects of the rehabilitation are mandatory functions of the monitoring process, CITY personnel shall be responsible for detecting deviations from the Rehabilitation Contract and for deterring "side deals"

Page 344 of 518 ends

Covina City CouncilFebruary 6, 2024

Covina City Council
February 6, 2024