Covina City Council
January 20, 2026

City of Covina,
a California municipal corporation
By:

Name: Chris Marcarello
Title: City Manager
ATTEST:

By:

Name: Fabian Velez
Title: Chief Deputy City Clerk
Vector Resources, Inc.
a California corporation
By:

Name: Dave Zuckerman
Title: President
By:

Name: Robert Messinger
Title: Executive Vice President
(Two signatures of corporate officers
required for corporations under
Corporations Code Section 313, unless
corporate documents authorize only one
person to sign this Agreement on behalf of
the corporation.)

EXHIBIT A

SCOPE OF WORK AND PAYMENT SCHEDULE

EXHIBIT B

CALIFORNIA LABOR CODE COMPLIANCE
(Labor Code §§ 1720 et seq., 1813, 1860, 1861, 3700)
If this Agreement calls for services that, in whole or in part, constitute “public works” as defined in the California Labor Code, then:

1. This Agreement is subject to the provisions of Division 2, Part 7, Chapter 1 (commencing with Section 1720) of the California Labor Code relating to public works and the awarding public agency (“City”) and Contractor agrees to be bound by all the provisions thereof as though set forth in full herein.

2. Contractor shall be registered with the Department of Industrial Relations (“DIR”) in accordance with California Labor Code Section 1725.5 and has provided proof of registration to City prior to the Effective Date of this Agreement.

3. Contractor shall comply with the provisions of California Labor Code Sections 1771, 1774 and 1775 concerning the payment of prevailing rates of wages to workers and the penalties for failure to pay prevailing wages. The applicable prevailing wage determination(s) may be obtained at
(http://www.dir.ca.gov/OPRL/DPreWageDetermination.htm), are on file with City, and are available to any interested party upon request. Contractor shall, as a penalty to City, forfeit not more than two-hundred dollars ($200) for each calendar day, or portion thereof, for each worker paid less than the prevailing rates as determined by the Director of Industrial Relations for the work or craft in which the worker is employed for any public work done under this Agreement by Contractor or by any subcontractor.

4. Pursuant to California Labor Code Section 1771.4, Contractor’s services are subject to compliance monitoring and enforcement by the Department of Industrial Relations. Contractor shall post job site notices as prescribed by DIR regulations and agrees to furnish the records specified in California Labor Code Section 1776 directly to the Labor Commissioner in the manner prescribed by California Labor Code Section 1771.4(a)(3) and (c)(2).

5. Contractor shall comply with the provisions of California Labor Code Section 1776 which, among other things, require Contractor and each subcontractor to: (1) keep accurate payroll records, (2) certify and make such payroll records available for inspection as provided by Section 1776, and (3) inform City of the location of the records. Contractor is responsible for compliance with Section 1776 by itself and all of its subcontractors.

6. Contractor shall comply with the provisions of California Labor Code Section 1777.5 concerning the employment of apprentices on public works projects, and further agrees that Contractor is responsible for compliance with Section 1777.5 by itself and all of its subcontractors.

7. Contractor shall comply with the provisions of California Labor Code Section 1813 concerning penalties for workers who work excess hours. Contractor shall, as a penalty to City, forfeit twenty-five dollars ($25) for each worker employed in the execution of this Agreement by Contractor or by any subcontractor for each calendar day during which such worker is required or permitted to work more than eight (8) hours in any one calendar day and forty (40) hours in any one calendar week in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the California Labor Code.

8. California Labor Code Sections 1860 and 3700 provide that every contractor will be required to secure the payment of compensation to its employees. In accordance with the provisions of California Labor Code Section 1861, Contractor hereby certifies as follows:
“I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this Agreement.” Date _______________ Signature ____________________________________

EXHIBIT C

PERFORMANCE BOND
KNOW ALL PERSONS BY THESE PRESENTS that:

WHEREAS the City of Covina (“City”), has awarded to

(“Principal”) (Name and address of Contractor)
a contract (the “Contract”) for the Work described as follows:

COVINA RECREATION VILLAGE PROJECT – PHASE II – LIBRARY BUILDING -

NETWORK
(Project Description/ Name)
WHEREAS, Principal is required under the terms of the Contract to furnish a Bond for the faithful performance of the Contract.

NOW, THEREFORE, we, the undersigned Principal, and

(Name and address of Surety)
(“Surety”) a duly admitted surety insurer under the laws of the State of California, as Surety, are held and firmly bound unto the City in the penal sum of Dollars ($ ), this
amount being not less than the total Contract Price, in lawful money of the United States of America, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors executors and administrators, jointly and severally, firmly by these presents.

THE CONDITION OF THIS OBLIGATION IS SUCH THAT, if the hereby bounded Principal, his, her or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the Contract and any alteration thereof made as therein provided, on the Principal’s part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless the City, its officers, agents and employees, as therein stipulated, then this obligation shall become null and void; otherwise, it shall be and remain in full force and effect.

As a part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by City in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered. Surety hereby waives any statute of limitations as it applies to an action on this Bond.

The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Contract or of the Work to be performed thereunder or the specifications accompanying the same shall in anywise affect its obligations under this Bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Contract or to the Work or to the specifications. Surety hereby waives the provisions of California Civil Code Sections 2845 and 2849. The City is the principal beneficiary of this Bond and has all rights of a party hereto.

IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Principal and Surety, on the date set forth below, the name of each corporate party being hereto affixed and these presents duly signed by its undersigned representative(s) pursuant to authority of its governing body.

Dated:

“Principal”
By:

Its
By:

Its
(Seal)
“Surety”
By:

Its
By:

Its
(Seal)
Note: This Bond must be executed in duplicate and dated, all signatures must be notarized, and evidence of the authority of any person signing as attorney-in-fact must be attached. DATE OF BOND MUST NOT BE BEFORE DATE OF CONTRACT. IF CONTRACTOR IS A PARTNERSHIP, ALL PARTNERS MUST EXECUTE BOND. DATE OF BOND MUST NOT BE PRIOR TO DATE OF CONTRACT. Surety companies executing Bonds must appear on the Treasury Department’s most current list (Circular 570 as amended) and be authorized to transact business in the State where the project is located.

EXHIBIT D

PAYMENT BOND
(LABOR AND MATERIALS)
KNOW ALL PERSONS BY THESE PRESENTS that:

WHEREAS the City of Covina (“City”), State of California, has awarded to

(“Principal”)
(Name and address of Contractor)
a contract (the “Contract”) for the Work described as follows:

COVINA RECREATION VILLAGE PROJECT – PHASE II – LIBRARY BUILDING -

NETWORK
(Project Description/Name)
WHEREAS, under the terms of the Contract, the Principal is required before entering upon the performance of the Work, to file a good and sufficient payment Bond with the City to secure the claims to which reference is made in Title 3 (commencing with Section 9000) of Part 6 of Division 4 of the Civil Code.

NOW, THEREFORE, we, the undersigned Principal, and
(Name and address of Surety)
(“Surety”) a duly admitted surety insurer under the laws of the State of California, as Surety, are held and firmly bound unto the City and all contractors, subcontractors, laborers, material suppliers, and other persons employed in the performance of the Contract and referred to in Title 3 (commencing with Section 9000) of Part 6 of Division 4 of the Civil Code in the penal sum of
Dollars ($ ), for materials
furnished or labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to this Work or labor, that the Surety will pay the same in an amount not exceeding the amount hereinabove set forth, and also in case suit is brought upon this Bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by City in successfully enforcing this obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered.

It is hereby expressly stipulated and agreed that this Bond shall inure to the benefit of any and all persons, companies, and corporations entitled to file claims under Title 3 (commencing with Section 9000) of Part 6 of Division 4 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this Bond.

Upon expiration of the time within which the California Labor Commissioner may serve a civil wage and penalty assessment against the principal, any of its subcontractors, or both the principal and its subcontractors pursuant to Labor Code Section 1741, and upon expiration of the time within which a joint labor management committee may commence an action against the principal, any of its subcontractors, or both the principal and its subcontractors pursuant to Labor Code Section 1771.2, if the condition of this Bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect.

The Surety hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the Contract or the Specifications accompanying the same shall in any manner affect its obligations on this Bond, and it does hereby waive notice of any such change, extension, alteration or addition.

IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Principal and Surety, on the date set forth below, the name of each corporate party being hereto affixed and these presents duly signed by its undersigned representative(s) pursuant to authority of its governing body.

Dated:

“Principal”
By:

Its
By:

Its
(Seal)
“Surety”
By:

Its
By:

Its
(Seal)
Note: This Bond must be executed in duplicate and dated, all signatures must be notarized, and evidence of the authority of any person signing as attorney-in-fact must be attached. DATE OF BOND MUST NOT BE BEFORE DATE OF CONTRACT. IF CONTRACTOR IS A PARTNERSHIP, ALL PARTNERS MUST EXECUTE BOND. DATE OF BOND MUST NOT BE PRIOR TO DATE OF CONTRACT. Surety companies executing Bonds must appear on the Treasury Department’s most current list (Circular 570 as amended) and be authorized to transact business in the State where the project is located.

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 8
Meeting: January 20, 2026
Title: Consideration of Resolutions Relating to Covina's General Municipal Election to be Held on June 2, 2026
Presented by: Fabian Velez, Chief Deputy City Clerk
Recommendation: 1. Adopt Resolution CC 2026-09 calling for and giving notice of the holding of a General Municipal Election to be held on Tuesday, June 2, 2026, for the election of certain officers as required by the provisions of the laws of the State of California relating to General Law Cities and requesting the Registrar of Voters of the County of Los Angeles to conduct said Election and canvass the results;

2. Adopt Resolution CC 2026-10 requesting the Board of Supervisors of the County of Los Angeles to consolidate a General Municipal Election to be held on June 2, 2026, with the Statewide Primary Election to be held on the date pursuant to §10403 of the Elections Code; and

3. Adopt Resolution CC 2026-11 adopting regulations for candidates for elective office pertaining to candidates' statements submitted to the voters at an Election to be held on Tuesday, June 2, 2026.

EXECUTIVE SUMMARY:

On May 18, 2021, City Council adopted Ordinance 21-04, changing the date of Covina's General Municipal Election to the date of the Statewide Primary Election in even-numbered years, commencing with the June 7, 2022 General Municipal Election. This was in response to Senate Bill (SB) 970, a requirement of the California Voter Participation Rights Act.

On January 18, 2022, City Council also adopted Ordinance 22-01 which established five Council districts and the election order of each district for the City of Covina. Residents may visit mapcovina.org under "Selected Maps" to view the district map, identifying the boundaries and number of each district, to locate which district they are in. The map has also been attached for reference (Attachment D).

For the June 2, 2026, City of Covina General Municipal Election (Election), voters in Districts 1, 3, and 5 will have the opportunity to vote for one Councilmember which lives in their district for a full, four-year term and voters within City jurisdiction will have the opportunity to vote at-large for the citywide offices of City Clerk and City Treasurer for a full four-year term.

DISCUSSION:

In preparation for this Election, it is necessary for the City Council to adopt resolutions calling the General Municipal Election (Attachment A), requesting consolidation and rendering of services by the County of Los Angeles (Attachment B), and adopting regulations for candidates' statements (Attachment C).

The candidate nomination filing period for this election cycle is set for Monday, February 9, 2026, through Friday, March 6, 2026. If nomination documents for an incumbent are not filed by 5:00 p.m. on March 6, 2026, the nomination period shall be extended until March 11, 2026, at 5:00 p.m. for persons other than the incumbent for that seat only.

Pursuant to Assembly Bill (AB) 571, a state contribution limit will by default apply to City Candidates when the City has not enacted a contribution limit on such candidates. The City of Covina has not enacted a contribution limit, and therefore, candidates will be subject to AB 571. The default limit for contributions for City Candidates subject to AB 571 for 2025-2026 are set at $5,900 per contributor (individual, business entity, or committee/PAC), per election. Beginning in January of 2025, Senate Bill (SB) 1243 amended the Levine Act (Government Code §84308) requirements to prohibit local elected officials from receiving contributions exceeding $500 from a party to or participant in a proceeding, or their agents, while such a proceeding is pending and for 12 months after the final decision in the proceeding.

FISCAL IMPACT:

The estimated cost of the election is approximately $225,000. Funding was included and approved in the 2025-2026 Fiscal Year Budget (Account No. 1010-0600).

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

ATTACHMENT A
RESOLUTION CC 2026-09

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

CALIFORNIA, CALLING FOR AND GIVING NOTICE OF THE HOLDING

OF A CITY OF COVINA GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, JUNE 2, 2026, FOR THE ELECTION OF CERTAIN

OFFICERS AS REQUIRED BY THE PROVISIONS OF THE LAWS OF

THE STATE OF CALIFORNIA RELATING TO GENERAL LAW CITIES

AND REQUESTING THE REGISTRAR OF VOTERS OF THE COUNTY

OF LOS ANGELES TO CONDUCT SAID ELECTION AND CANVASS

THE RESULTS

THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. Pursuant to the requirements of the laws of the State of California relating to General Law Cities, there is called and ordered to be held in the City of Covina, California, on Tuesday, June 3, 2026, a General Municipal Election (Election for the purpose of electing three Members of the City Council (one each from Districts 1, 3, and 5) , one City Treasurer (at-large), and one City Clerk (at-large) for full four-year terms as provided by law, and for possibly presenting a ballot measure or measures for consideration by the voters of the City.

SECTION 2. Pursuant to the provisions of Section 10002 of the Elections Code of the State of California, this City Council hereby requests the Registrar of Voters of the County of Los Angeles to conduct the General Municipal Election for the City of Covina.

SECTION 3. The ballots to be used at the election shall be in form and content as required by law.

SECTION 4. The Elections Official is authorized, instructed and directed to coordinate with the County of Los Angeles Registrar-Recorder/County Clerk to procure and furnish any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election.

SECTION 5. The vote centers for the election shall be open on the day of the election between the hours that the governing body determines, but not less than eight consecutive hours, pursuant to Election Code § 10242, except as provided in § 14401 of the Elections Code of the State of California.

SECTION 6. A filing fee of twenty-five dollars ($25) shall be paid by each candidate upon the filing of their nomination papers Pursuant to Elections Code Section 10228.

SECTION 7. In all particulars not recited in this resolution, the election shall be held and conducted as provided by law for holding municipal elections in a general law

Resolution CC 2026-09 Page 2 of 3
city.

SECTION 8. Notice of the time and place of holding the Election is given and the Elections Official is authorized, instructed and directed to give further or additional notice of the Election, in time, form and manner as required by law.

SECTION 9. The City Council of Covina requests and authorizes that the Los Angeles County Registrar of Voters canvass the results of the said Election.

SECTION 10. The City of Covina shall reimburse the County of Los Angeles Registrar of Voters for the cost of services performed relative to the conduct of the General Municipal Election, after completion of all work and upon presentation to the City of a properly detailed bill.

SECTION 11. The City Council authorizes the City Clerk to administer said Election and all reasonable and actual Election expenses shall be paid by the City upon presentation of a properly submitted bill.

SECTION 12. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

SECTION 13. The City Clerk is hereby directed to forward a certified copy of this Resolution to said Los Angeles County Registrar of Voters.

PASSED, APPROVED and ADOPTED at a Regular Meeting of the City Council of the City of Covina on this 20th day of January, 2026.

City of Covina, California
BY:

VICTOR LINARES, Mayor
ATTEST:

FABIAN VELEZ, Chief Deputy City Clerk

Resolution CC 2026-09 Page 3 of 3

CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2026-09 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of January, 2026, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:

FABIAN VELEZ, Chief Deputy City Clerk

ATTACHMENT B
RESOLUTION CC 2026-10

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

CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE

COUNTY OF LOS ANGELES TO CONSOLIDATE A CITY OF COVINA
GENERAL MUNICIPAL ELECTION TO BE HELD ON JUNE 2, 2026,

WITH THE STATEWIDE PRIMARY ELECTION TO BE HELD ON THE
DATE PURSUANT TO SECTION § 10403 OF THE ELECTIONS CODE
WHEREAS, the City Council of the City of Covina, California, called a General Municipal Election (Election) to be held on Tuesday, June 2, 2026, for the purpose of the election of three Members of the City Council (one each from Districts 1, 3, and 5), one City Treasurer (at-large), and one City Clerk (at-large), for full four-year terms of office and for the purposes of submitting one or more ballot measures for consideration by the voters; and
WHEREAS, it is desirable that the General Municipal Election be consolidated with the Statewide Primary Election to be held on the same date and that within the City the precincts, voting centers, and election officers of the two elections be the same, and that the Los Angeles County Elections Official canvass the returns of the General Municipal Election, and that the election be held in all respects as if there were only one election.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. Pursuant to the requirements of Section 10403 of the Elections Code, the Board of Supervisors of the County of Los Angeles is hereby requested to consent and agree to the consolidation of a City of Covina General Municipal Election with the Statewide Direct Primary Election to be conducted by the County of Los Angeles on Tuesday, June 2, 2026.

SECTION 2. The City Council requests that the Board of Supervisors of the County of Los Angeles (“Board of Supervisors”) issue instructions to direct the RegistrarRecorder/County Clerk for the County of Los Angeles (“County Registrar”) to administer, manage and oversee all facets of the June 2, 2026, City of Covina General Municipal Election and further direct the Registrar-Recorder/County Clerk to perform all necessary functions, services and tasks related to the complete and successful conduct of the election; the provision of all election materials and equipment; the hiring, training and supervision of vote center workers and other election personnel; the printing and distribution of ballot materials; the translation of ballot materials; the collection of submitted ballots; the tallying of votes; canvassing and the certification of election results.

SECTION 3. Pursuant to Elections Code Section 10002, the City shall reimburse the County Registrar of the County of Los Angeles for costs incurred in providing all of

Resolution CC 2026-10 Page 2 of 3
the services, tasks, equipment, materials, and personnel required by the County Registrar to administer and conduct the June 2, 2026, City of Covina General Municipal Election upon receipt of a bill stating the amount due as determined by the County Registrar or upon such payment terms and conditions as may otherwise be set forth by the County Registrar or the Board of Supervisors. The City Manager and City Clerk are authorized to enter into such contracts as are necessary for the administration of the Election.

SECTION 4. In all particulars not otherwise specifically provided in this Resolution, the Election shall be held and conducted as provided by law.

SECTION 5. The County Elections Department is authorized to canvass the returns of the General Municipal Election. The Election shall be held in all respects as if there were only one election, and only one form of ballot shall be used.

SECTION 6. This Resolution shall rescind, supersede, and take the place of all provisions of all previous and existing Resolutions, orders, and policies of the City pertaining to the subject matter to the extent that they conflict with this Resolution.

SECTION 7. The City Clerk is hereby directed to file a certified copy of this Resolution with the Los Angeles County Board of Supervisors and with the Los Angeles County Elections Official.

SECTION 8. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.

PASSED, APPROVED and ADOPTED at a Regular Meeting of the City Council of the City of Covina on this 20th day of January, 2026.

City of Covina, California
BY:

VICTOR LINARES, Mayor
ATTEST:

FABIAN VELEZ, Chief Deputy City Clerk

Resolution CC 2026-10 Page 3 of 3

CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2026-10 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of January, 2026, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:

FABIAN VELEZ, Chief Deputy City Clerk

ATTACHMENT C
RESOLUTION CC 2026-11

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

CALIFORNIA, ADOPTING REGULATIONS FOR CANDIDATES FOR
ELECTIVE OFFICE PERTAINING TO CANDIDATES’ STATEMENTS

SUBMITTED TO THE VOTERS AT THE CITY OF COVINA GENERAL
MUNICIPAL ELECTION TO BE HELD ON TUESDAY, JUNE 2, 2026
WHEREAS, §13307 of the Elections Code of the State of California provides that the governing body of any local agency shall adopt regulations pertaining to materials prepared by any candidate for a municipal election, including costs of the candidate’s statement.

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

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

SECTION 1. GENERAL PROVISIONS. Pursuant to Section 13307 of the Elections Code of the State of California, each candidate for elective office to be voted for at a General Municipal Election to be held in the City of Covina on June 2, 2026, may prepare a candidate’s statement on an appropriate form provided by the Elections Official.

The Statement may include the name, age, and occupation of the candidate and a brief description of no more than 200 words of the candidate’s own education and qualifications expressed by the candidate themselves. The Statement shall not include party affiliation of the candidate, nor membership or activity in partisan political organizations. The Statement shall be filed in typewritten form in the Office of the City Clerk at the time the candidate’s nomination papers are filed. The Statement may be withdrawn, but not changed, during the period for filing nomination papers and until 5:00 p.m. of the next working day after the close of the nomination period.

SECTION 2. Pursuant to Section 13307(c) of the California Elections Code, the governing body of the City of Covina authorizes the preparation of candidate statements for nonpartisan elective office for the purpose of electronic distribution. Candidates will prepare statements for electronic distribution pursuant to Section 13307(a) of the Elections Code. A statement prepared pursuant to this subdivision shall be posted on the internet website of the County Elections Official. Pursuant to Section 13307.7(a) of the Elections Code, candidates shall provide payment of the requisite fee to cover the duties and procedures set forth in Sections 13307(b) and (d) of the Elections Code.

SECTION 3. FOREIGN LANGUAGE POLICY.

A. Pursuant to the Federal Voting Rights Act, candidates’ statements will be translated into all languages required by the County of Los Angeles. The County is required to translate candidates’ statements into the following languages: Spanish.

B. The County will print and mail sample ballots and candidates’ statements to all voters in English. The County will print and mail separate sample ballots and candidates’ statements in Spanish to only those voters who are on the County voter file

Resolution CC 2026-11 Page 2 of 4
as having requested a sample ballot in a particular language. The County will make the sample ballots and candidates statements in the required languages available at all voting centers, on the County’s website, and in the Elections Official’s office.

SECTION 4. PAYMENT.

A. Translations:

1. The candidate shall be required to pay for the cost of translating the candidate’s statement into any required foreign language as specified in (A) and/or (B) of Section 3 above pursuant to Federal and\or State law.

2. The candidate shall be required to pay for the cost of translating the candidate’s statement into any foreign language that is not required as specified in (A) and/or (B) of Section 3 above, pursuant to Federal and\or State law, but is requested as an option by the candidate.

B. Printing:

1. The candidate shall be required to pay for the cost of printing the candidate’s statement in English in the main voter pamphlet.

2. The candidate shall be required to pay for the cost of printing the candidate’s statement in a foreign language required in (A) of Section 3 above, in the main voter pamphlet.

3. The candidate shall be required to pay for the cost of printing the candidate’s statement in a foreign language requested by the candidate per (B) of Section 3 above, in the main voter pamphlet.

4. The candidate shall be required to pay for the cost of printing the candidate’s statement in a foreign language required by (A) of Section 3 above, in the facsimile voter pamphlet.

The Elections Official shall estimate the total cost of printing, handling, translating, and mailing the candidates’ statements filed pursuant to this section, including costs incurred as a result of complying with the Voting Rights Act of 1965 (as amended), and require each candidate filing a statement to pay in advance to the local agency their estimated pro rata share as a condition of having their statement included in the voter’s pamphlet.

In the event the estimated payment is required, the estimate is just an approximation of the actual cost that varies from one election to another election and may be significantly more or less than the estimate, depending on the actual number of candidates filing statements. Accordingly, the Elections Official is not bound by the estimate and may, on a pro rata basis, bill the candidate for additional actual expense or refund any excess paid depending on the final actual cost. In the event of underpayment, the Elections Official may require the candidate to pay the balance of the cost incurred. In the event of overpayment, the Elections Official shall prorate the excess amount among the candidates and refund the excess amount paid within 30 days of the election.

SECTION 5. MISCELLANEOUS.

A. All translations shall be provided by professionally-certified translators.

B. The Elections Official shall comply with all recommendations and standards set forth by the California Secretary of State regarding occupational designations and other

Resolution CC 2026-11 Page 3 of 4
matters relating to elections.

SECTION 6. ADDITIONAL MATERIALS. No candidate will be permitted to include additional materials in the sample ballot.

SECTION 7. The Elections Officials shall provide each candidate or the candidate’s representative a copy of this Resolution at the time nominating petitions are issued.

SECTION 8. All previous resolutions establishing Council policy on payment for candidates’ statements are repealed.

SECTION 9. That this Resolution shall apply only to the City of Covina General Municipal Election to be held on June 2, 2026 and shall then be repealed.

SECTION 10. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.

PASSED, APPROVED and ADOPTED at a Regular Meeting of the City Council of the City of Covina on this 20th day of January, 2026.

City of Covina, California
BY:

VICTOR LINARES, Mayor
ATTEST:

FABIAN VELEZ, Chief Deputy City Clerk

Resolution CC 2026-11 Page 4 of 4

CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2026-11 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of January, 2026, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:

FABIAN VELEZ, Chief Deputy City Clerk

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 9
Meeting: January 20, 2026
Title: City-Wide Pavement Management Program Update – Project No. P2603 – Final Acceptance and Filing Notice of Completion
Presented by: Rafael M. Fajardo, Director of Public Works/City Engineer Recommendation: 1. Accept the work performed by Bucknam Infrastructure Group, Inc; and

2. Authorize the City Clerk to file a Notice of Completion for the Pavement Management Program Update – Project No. P2603.

EXECUTIVE SUMMARY/BACKGROUND:

On July 1, 2025, the City Council approved a contract with Bucknam Infrastructure Group, Inc. in an amount not-to-exceed $60,275 for a project scope that included updating the City-Wide Pavement Management Program (PMP). The PMP is a requirement by the Metropolitan Transportation Authority (Metro) to develop and adopt a pavement management program every two years as a condition of state grant eligibility and the disbursement of transportation-related funds (California Streets and Highway Code, Section 2108.1).

Covina’s PMP was recently completed and the overall Pavement Condition Index (PCI) score for the City conveys a 77.3 score out of 100, which equates to a “Good” condition rating. This rating is an increase from the City’s prior overall PCI of 73.4 and can be attributed to the City’s continued investments into local roadways. The completed PMP is available for dissemination and a copy has been submitted to Metro in order to comply with mandated funding requirements. City staff recommends acceptance of the work performed by Bucknam Infrastructure, Inc. and to authorize the City Clerk to file a Notice of Completion (Attachment A) for City-Wide Pavement Management Program Update – Project No. P2603.

FISCAL IMPACT:

Project funding for the City-Wide Pavement Management Program Update – Project No. P2603 was allocated as follows:

Source of Project Funds Amount Account
Measure R $70,000 2410-2200-51005-P2603
Total $70,000
The following table represents the final project summary:

Item Actual
Project Appropriations $70,000
Bucknam Infrastructure Group, Inc. – (Contract
Amount) ($59,318.60)
Total Expenditures ($59,318.60)
Total UNDER/OVER BUDGET $10,681.40

Project savings from this project will be returned to the Measure R Fund – Fund Balance for use towards future projects.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

This project has been determined to be categorically exempt under CEQA in accordance with Title 14, Chapter 3, Class 1, Sections 15301 and 15302. This exemption includes the minor alteration of existing public facilities involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The project involves negligible or no expansion of an existing use.

Respectfully submitted,

ATTACHMENT A

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NAME City of Covina
STREET ADDRESS 125 E College Street
CITY Covina

STATE CA
ZIP CODE 91723
SPACE ABOVE THIS LINE FOR RECORDER’S USE

NOTICE OF COMPLETION
Notice pursuant to Civil Code Section 9204, must be filed within 15 days after completion. (See reverse side for complete requirements.) Notice is hereby given that:

1. The undersigned is owner or corporate officer of the owner of the interest or estate stated below in the property hereinafter described:

2. The full name of the owner is The City of Covina .

3. The full address of the owner is 125 E College Street, Covina, CA 91723 .

4. The nature of the interest or estate of the owner is: In fee. (If other than Fee, strike “in fee” and insert, for example, “purchaser under contract of purchase”, or “Lessee”)

5. The full names and full addresses of all persons, if any, who hold title with the undersigned as joint tenants or as tenants in common are:

NAMES ADDRESSES

6. The full names and full addresses of all the predecessors in interest of the undersigned, if the property was transferred subsequent to the commencement of the work or improvements herein referred to:

NAMES ADDRESSES

7. A work of improvement on the property hereinafter described was completed on: January 8, 2026 . The work done was:

City-Wide Pavement Management Program Update – Project No. P2603

8. The names of the contractor, if any, for such work improvement was:

Bucknam Infrastructure Group, Inc. July 1, 2025
(If no contractor for work of improvement as a whole, insert “None”) (Date of Contract)

9. The property on which said work of improvement was completed in the City of: Covina County of Los Angeles , State of CA , and is described as follows:

City-Wide Pavement Management Program Update – Project No. P2603

10. The street address of said property is City-Wide
(If no street address has been officially signed, insert “None”.) Dated January 20, 2026
Fabian Velez, Chief Deputy City Clerk, City of Covina

VERIFICATION
I, the undersigned, say: I am the City Engineer The declarant of the foregoing Notice of Completion; (President of, Manager of, Partner of, Owner of)
I have read said Notice of Completion and know the contents thereof; the same is true to my own knowledge. I declare under penalty of perjury that the foregoing is true and correct.

Executed on January 20, , 2026 at Covina , California .

Rafael M. Fajardo, City of Covina

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 10
Meeting: January 20, 2026
Title: Resolution Authorizing Signer for Caltrans Funds Presented by: Brian K. Lee, Deputy City Manager/Community Development Director Rafael Fajardo, Public Works Director/City Engineer
Recommendation: Adopt Resolution CC 2026-02.

EXECUTIVE SUMMARY:

As part of the authorization process to receive federal funds, Caltrans requires that the City submit a City Council Resolution authorizing an individual to execute the right-of-way certification. The Council will consider approving the resolution to move forward with the required steps for funding authorization.

The funds were appropriated to the City of Covina during the 2024 federal fiscal year to facilitate the Covina Metrolink Access and Connectivity Project.

BACKGROUND:

Caltrans requires that Exhibit 13-A of the authorization process, entitled Right-of-Way Certification, be submitted and that the City Council approve a designated city representative via a resolution to execute the exhibit to proceed with the E-76 authorization for construction. Exhibit 13-A is required for projects that do not require right-of-way acquisition, relocation assistance, have no railroad involvement, and have no or little utility relocation involvement. The request for construction authorization for Project HIPL-5118(0123), Covina Metrolink Access and Connectivity Project, consists of improvements on Front Street between Citrus and Barranca, bike facilities, and pedestrian improvements, and as such is subject to this requirement.

FISCAL IMPACT:

There is no fiscal impact associated with approving the resolution. However, if the resolution is not approved, Caltrans will not process the spending authorization for the project, and Four Million ($4M) in federal appropriation monies will be at risk of rescission.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Exempt.

Respectfully submitted,

ATTACHMENT A
RESOLUTION CC 2026-02

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

CALIFORNIA, TO AUTHORIZE THE PUBLIC WORKS DIRECTOR TO
CERTIFY CALTRANS EXHIBIT 13-A, RIGHT OF WAY CERTIFICATION FOR FEDERAL PROJECT NO. HIPL-5118(023), COVINA METROLINK

ACCESS AND CONNECTIVITY PROJECT
WHEREAS, the City of Covina is eligible to receive Federal and/or State funding for certain Transportation Projects through the California Department of Transportation (Caltrans); and
WHEREAS, Caltrans requires that the Local Public Agency (fund recipient) designate an individual in the organization to execute the right-of-way certification by way of an adopted Resolution; and
WHEREAS, Caltrans requires right-of-way certification to be approved regardless of the need for right-of-way acquisition prior to encumbering federal funds; and WHEREAS, the City Council of the City of Covina wishes to delegate the authority to execute the right-of-way certification to the Public Works Director or their designee.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. The City Council of the City of Covina does hereby authorize the Public Works Director or their designee to execute the Right of Way Certification for Federal Project No. HIPL-5118(023).

SECTION 2. The City Clerk shall certify to the adoption of this resolution.

APPROVED and PASSED this 20th day of January, 2026.

City of Covina, California
BY:

VICTOR LINARES, Mayor
ATTEST:
___________________________________________
FABIAN VELEZ, Chief Deputy City Clerk

Resolution CC 2026-02 Page 2 of 2

CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2026-02 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of January, 2026, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
_____________________________________
FABIAN VELEZ, Chief Deputy City Clerk

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 11
Meeting: January 20, 2026
Title: First Amendment to Agreement with Civiltec Engineering, Inc. for Preparation of a Water Master Plan Update
Presented by: Rafael M. Fajardo, Director of Public Works/City Engineer Recommendation: 1. Authorize the City Manager to execute the First Amendment to Agreement with Civiltec Engineering, Inc., increasing the not-to-exceed compensation to $181,800; and

2. Adopt Resolution CC 2026-06 to amend the Fiscal Year 2025-2026 Capital Improvement Program Budget to increase funding by $15,000 for the Water Master Plan and Water Rate Study and appropriate the necessary funds from the available Water Utility Fund balance.

EXECUTIVE SUMMARY/BACKGROUND:

As part of its operations strategy, the City of Covina Water Utility develops a Water Master Plan every five years. A Water Master Plan was completed in 2020, and therefore the five year Plan Update was initiated in 2025. On May 6, 2025, the City Council approved a Professional Services Agreement with Civiltec Engineering, Inc. to complete the Water Master Plan Update for an amount not to exceed $166,800. The PSA term expires on June 30, 2026, with the option to extend for one additional year.

Since contract award in May 2025, the Public Works Department has been working in collaboration with Civiltec Engineering, and presently, the majority of the Water Master Plan Update has been completed. Throughout the collaboration, additional effort has been dedicated to the development of an equitable timeline for future water system CIP projects; a level of effort beyond Civiltec’s original scope of work. The proposed First Amendment increases Civiltec’s contract amount by $15,000, for a new not-to-exceed contract amount of $181,800. If approved, the proposed increase will serve as a contingency amount should it be needed for the additional consulting effort necessary in designing a balanced CIP project timeline for the 10-year outlook.

DISCUSSION:

In order to meet the demands of the City’s water customers, and maintain an efficient and reliable infrastructure, the Covina Water Utility prepares a Water Master Plan every five years. The need for this master planning effort is driven by the City’s aging infrastructure, the regional water supply, increasing costs, recurrent drought conditions, and increasing water conservation regulations. The water industry is ever changing and dynamic in many ways, and the City’s Water Utility is committed to providing dependable service to its customers.

On May 6, 2025, the Public Works Department entered into a Professional Services Agreement with Civiltec Engineering to complete a Water Master Plan Update. The work effort is currently underway, and key highlights include:
 Analysis of the infrastructure that delivers water to customers  Evaluation of the current water system demands
 Analysis of the regional water supply
 Assessment of operations and maintenance needs

 Development of the capital improvement program
Development of the capital improvement program has been a significant focus of the Water Master Plan Update. Civiltec has been developing various scenarios by which the City’s water system can accomplish very necessary infrastructure upgrades over the next 10 years. The various scenarios give priority to the most critical CIP projects, while balancing capital costs across the years. Each scenario is being incorporated into a Water Rate Model for consideration, which will ultimately determine the customer rate revenue that may be needed in the coming years. Approximately five CIP scenarios have been developed by Civiltec in collaboration with City staff, resulting in a consulting effort beyond the original scope of work.

The Department of Public works proposes the attached First Amendment to the Agreement with Civiltec Engineering, increasing the contract amount by $15,000, for a new not-to-exceed contract amount of $181,800. If approved, the proposed increase (as needed) will cover the additional consulting effort currently underway for design and presentation of varying and equitable CIP project timelines.

FISCAL IMPACT:

There is no impact to the General Fund. The proposed First Amendment with Civiltec Engineering will increase the consultant’s contract amount to $181,800. There is adequate fund balance in the Water Fund. Resolution CC 2026-06 will appropriate to 6010-5000-51005-W2504 the $15,000 contingency amount that may be needed to complete the additional work.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

1 ATTACHMENT A

FIRST AMENDMENT TO AGREEMENT BETWEEN THE CITY OF COVINA AND CIVILTEC ENGINEERING, INC.

FOR PREPARATION OF A WATER MASTER PLAN UPDATE
THIS FIRST AMENDMENT is made and entered into as of January 20, 2026 by and between the City of Covina, a California municipal corporation (hereinafter referred to as “City”), and Civiltec Engineering, Inc., a Corporation (hereinafter referred to as "Consultant"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows:

1. This FIRST Amendment is made with the respect to the following facts and purposes:
a. On May 6, 2025, the City and Consultant entered into that certain Professional Services Agreement for preparation of a Water Master Plan Update in the amount of $166,800.
b. The parties now desire to increase the compensation in the amount of $15,000 for a new total agreement amount not to exceed $181,800 and to amend the Agreement as set forth in this Amendment.

2. Paragraph A of Section 2 of the Agreement entitled “COMPENSATION” is hereby amended to read as follows:

A. Compensation. As full compensation for Consultant’s
services provided under this Agreement, City shall pay Consultant a sum not to exceed One Hundred Eighty One Thousand, Eight Hundred Dollars ($181,800) (the “maximum compensation”), based on the hourly rates set forth in the Approved Fee Schedule, attached hereto as Exhibit A. Any terms in Exhibit A, other than the payment rates and schedule of payment, are null and void.

3. Except for the changes specifically set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect.

The parties, through their duly authorized representatives, are signing this FIRST Amendment on the date stated in the introductory clause.

2 City:

City of Covina,
a California municipal corporation
By:

Name:

Title:

ATTEST:

By:

Name: Fabian Velez
Title: Chief Deputy City Clerk
Consultant:

Civiltec Engineering, Inc.,
a Corporation
By:

Name:

Title:

By:

Name:

Title:
(Two signatures of corporate officers
required for corporations under
Corporations Code Section 313, unless
corporate documents authorize only one
person to sign this Agreement on behalf of
the corporation.)
Chris Marcarello
City Manager
David Byrum
President
Diana Occhipinti
Corporate Secretary

3 EXHIBIT A

APPROVED FEE SCHEDULE

4

5

ATTACHMENT B
RESOLUTION CC 2026-06

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, TO AMEND THE FISCAL YEAR 2025/2026 CAPITAL
IMPROVEMENT PROGRAM BUDGET AND APPROPRIATE $15,000

FROM THE AVAILABLE WATER UTILITY FUND BALANCE FOR USE

TOWARD THE WATER MASTER PLAN UPDATE AND WATER RATE
STUDY
WHEREAS, the City of Covina is a municipal corporation duly organized and existing pursuant to the Constitution and laws of the State of California (“City”); and WHEREAS, the Fiscal Year 2026 Operating Budget & Capital Improvement Plan (CIP) was approved on May 6, 2025; and
WHEREAS, the approved Operating Budget and Capital Improvement Plan (CIP) is in accordance with all applicable ordinances of the City and all applicable statutes of the State; and
WHEREAS, the City of Covina wishes to amend the 2025/2026 Capital Improvement Program Budget and appropriate $15,000 from the available Water Utility Fund Balance for use toward the Water Master Plan Update and Water Rate Study.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. Amend the Fiscal Year 2025/2026 Capital Improvement Program Budget and appropriate $15,000 from the available Water Utility Fund Balance for use toward the Water Master Plan Update and Water Rate Study Account No. Account Description Amount
($)
Increase/Decrease
6010-5000-
51005-
W2504
Water-Water AdminConsulting Fees-Water
Master Plan and Rate
Study
$15,000 Increase
SECTION 2. The City Clerk shall certify to the passage and adoption of this resolution and shall enter the same in the Book of Original Resolutions.

APPROVED and PASSED this 20th day of January, 2026.

City of Covina, California
BY:

VICTOR LINARES, Mayor

Resolution CC 2026-06 Page 2 of 2
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 2026-06 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of January, 2026, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
_____________________________________
FABIAN VELEZ, Chief Deputy City Clerk

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 12
Meeting: January 20, 2026
Title: Recognized Obligation Payment Schedule (ROPS 26-27), Covering July 1, 2026 through June 30, 2027
Presented by: Theresa Franke, Director of Finance
Brian K. Lee, Community Development Director
Recommendation: Approve the Recognized Obligation Payment Schedule (ROPS 26-27) covering July 1, 2026, through June 30, 2027.

EXECUTIVE SUMMARY/BACKGROUND:

Pursuant to Health and Safety Code (HSC) Section 34177, and Senate Bill 107, the Successor Agency to the Covina Redevelopment Agency is required to submit an annual Recognized Obligation Payment Schedule (ROPS) for the upcoming fiscal year to the California State Department of Finance (DOF) for approval in order to obtain sufficient funds to meet authorized financial obligations of the Agency.

Effective July 1, 2018, the Oversight Board to the Successor Agency to the Covina Redevelopment Agency was disbanded and all Oversight Board matters are currently considered by the Consolidated Oversight Board (COB) for Supervisorial District 1, which includes the City of Covina. In order to submit the ROPS to DOF by the required February 1, 2026, date, the staff report and ROPS were submitted to the COB for review and approval at their meeting on January 12, 2026.

DISCUSSION:

In order for the Successor Agency to the Covina Redevelopment Agency (SACRA) to receive sufficient funding to meet its financial obligations, the First District Consolidated Oversight Board, which oversees former redevelopment agencies, must approve the ROPS. The ROPS must be adopted for each successive annual fiscal period, pursuant to Senate Bill 107, signed on September 22, 2015.

The ROPS 26-27 was approved by the COB on January 12, 2026. It includes funding for the disposal of the last properties owned by the Agency. Administrative costs will not be requested this year as the Agency does not qualify under HSC section 34717. “Other Funds” remaining in the fund were utilized for the ROPS 26-27, therefore no Redevelopment Property Tax Trust Funds (RPTTF) were requested.

With COB approval, the resolution is forwarded to DOF for their consideration and approval.

FISCAL IMPACT:

In order for the Successor Agency to meet its financial obligations during this period, an approved ROPS must be filed with the Los Angeles County Auditor-Controller, the State of California Controller and the State of California Department of Finance. For July 1, 2026, through December 31, 2026, period (ROPS 26-27A), the Successor Agency is projecting expenditures of $31,500 and for January 1, 2027, through June 30, 2027, period (ROPS 26-27B) the request is for $31,500.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not Applicable.

Respectfully submitted,

Recognized Obligation Payment Schedule (ROPS 26-27) - Summary Filed for the July 1, 2026 through June 30, 2027 Period Successor Agency: Covina
County: Los Angeles
Current Period Requested Funding for Enforceable
Obligations (ROPS Detail)
26-27A Total
(July -
December)
26-27B Total
(January -
June)
ROPS 26-27
Total
A Enforceable Obligations Funded as Follows (B+C+D) $ 31,500 $ 31,500 $ 63,000 B Bond Proceeds - - -
C Reserve Balance - - -
D Other Funds 31,500 31,500 63,000
E Redevelopment Property Tax Trust Fund (RPTTF) (F+G) $ - $ - $ -

F RPTTF - - -
G Administrative RPTTF - - -
H Current Period Enforceable Obligations (A+E) $ 31,500 $ 31,500 $ 63,000 Certification of Oversight Board Chairman:

Name Title
Pursuant to Section 34177 (o) of the Health and Safety
code, I hereby certify that the above is a true and
accurate Recognized Obligation Payment Schedule for
the above named successor agency. /s/
Signature Date

ATTACHMENT A
Covina
Recognized Obligation Payment Schedule (ROPS 26-27) - ROPS Detail July 1, 2026 through June 30, 2027

A B C D E F G H I J K L M N O P Q R S T U V W
Item
# Project Name Obligation Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired
ROPS
26-27
Total
ROPS 26-27A (Jul - Dec)
26-27A
Total
ROPS 26-27B (Jan - Jun)
26-27B
Total
Fund Sources Fund Sources
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin RPTTF
Bond
Proceeds
Reserve
Balance
Other
Funds
RPTTF
Admin
RPTTF
$63,000 $63,000 $- $- $31,500 $- $- $31,500 $- $- $31,500 $- $- $31,500 39 Administration Admin
Costs
07/01/
2017
06/30/2018 City of
Covina
Administration 1&2 - N $- - - - - - $- - - - - - $-
44 LRPMP
Property
Disposition
Property
Dispositions
07/01/
2017
06/30/2018 Various Costs for
Property
Disposition
1&2 63,000 N $63,000 - - 31,500 - - $31,500 - - 31,500 - - $31,500

Covina
Recognized Obligation Payment Schedule (ROPS 26-27) - Report of Cash Balances July 1, 2023 through June 30, 2024
(Report Amounts in Whole Dollars)
Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.

A B C D E F G H
ROPS 23-24 Cash Balances
(07/01/23 - 06/30/24)
Fund Sources
Comments
Bond Proceeds Reserve Balance Other Funds RPTTF
Bonds issued
on or before
12/31/10
Bonds issued
on or after
01/01/11
Prior ROPS
RPTTF and
Reserve
Balances retained
for future
period(s)
Rent, grants,
interest, etc.

Non-Admin
and Admin
1 Beginning Available Cash Balance (Actual 07/01/23)
RPTTF amount should exclude "A" period distribution
amount.
- - 2,854,694 864,616 174,957 Funds from Columns C & D in previous year moved Column F "Other Funds" due to bond
debts being fully paid off.
2 Revenue/Income (Actual 06/30/24)
RPTTF amount should tie to the ROPS 23-24 total
distribution from the County Auditor-Controller
- - 26,250 274,416 68,435
3 Expenditures for ROPS 23-24 Enforceable Obligations
(Actual 06/30/24)
2,880,944 151,250 158,348
4 Retention of Available Cash Balance (Actual 06/30/24) RPTTF amount retained should only include the amounts
distributed as reserve for future period(s)
- - 456,516 32,987
5 ROPS 23-24 RPTTF Prior Period Adjustment
RPTTF amount should tie to the Agency's ROPS 23-24 PPA
form submitted to the CAC
No entry required 52,057
6 Ending Actual Available Cash Balance (06/30/24)
C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5)
$- $- $- $531,266 $-

Covina
Recognized Obligation Payment Schedule (ROPS 26-27) - Notes July 1, 2026 through June 30, 2027
Item # Notes/Comments
39 44

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 13
Meeting: January 20, 2026
Title: To Authorize the Executive Director to Execute the Professional Services Agreement between the Covina Housing Authority and RSG, Inc. and the Deposit Agreement with Cienega Gardens Preservations LP
Presented by: Brian K. Lee, AICP, Deputy City Manager/Director of Community Development Alice Leung, Management Analyst
Recommendation: 1. Authorize the Executive Director to execute the Professional Services Agreement and any related documents between the Covina Housing Authority and RSG, Inc.;

2. Authorize the Executive Director to execute the Deposit Agreement and any related documents between the Covina Housing Authority and Cienega Gardens Preservations LP, for receipt of funds to be deposited into Account 2020-0000- 22250; and

3. Adopt Resolution CC 2026-03 to authorize the Executive Director to Execute the Deposit Agreement for the receipt of funds to be deposited into Account 2020-0000-22250 for the annual compliance monitoring services for the affordability covenants at the 180-unit multifamily apartment building at 1121 North Lyman Avenue in the City of Covina known as the Cienega Gardens Apartments.

EXECUTIVE SUMMARY/BACKGROUND:

On April 2, 2002, the City and the former Redevelopment Agency Board agreed to provide assistance to develop affordable housing 1211 North Lyman Avenue, and made a $1.4 million loan to the Cienega Gardens Preservation Limited Partnership, which has since repaid in full. The former Agency and Cienega Gardens Preservation Limited Partnership agreed that 40% of 178 of the rental units (two units are reserved for managers) shall be available for very low-income households, and the balance of the units are to be available for low-income households, for 55 years.

In August 2017, in order to rehabilitate the property and the affordable rental units, Cienega Gardens Preservation Limited Partnership applied for a new round of funding, as the initial qualified tax credit investment period expired. The City of Covina conducted a Tax Equity and Fiscal Responsibility Act Hearing in consideration of tax-exempt bond financing by the California Statewide Communities Development Authority for the benefit of Cienega Gardens Preservation Limited Partnership. Following the close of the TEFRA hearing, the City of Covina authorized and approved the issuance of the Bonds for the financing of the Project as the applicable elected representative of the public. A public notice was published on June 29, 2017.

The affordable housing covenants on this property, which are now under the oversight of the Covina Housing Authority, remain superior to the new 55-year covenants which were instituted under the new tax credit funding. Cienega Gardens Preservation Limited Partnership agreed to pay for the annual compliance monitoring for the affordability covenants at Cienega Gardens Apartments, as the issuance of bonds provides financing for projects that also includes reimbursement expenditures.

DISCUSSION:

In accordance with Section 3.3 (d) (2) of the Declaration of Conditions, Covenants and Restrictions (CC&R) recorded October 10, 2002, for the property located at 1211 North Lyman Avenue, Covina; an annual recertification is required for each tenant occupying the affordable unit. The annual recertifications process ensures that designated units are maintained as rental housing and occupied only by income-qualified households.

In prior years, City Staff monitored tenant recertification forms and supporting documentation related to household income and size to ensure compliance. However, as staff workload has increased, the use of a specialized consultant has become necessary to ensure continued compliance with affordability requirements in a timely and effective manner.

The City has previously contracted with RSG, Inc. to provide affordable housing compliance monitoring services. RSG, Inc. has over 40 years of experience in the housing industry and possesses extensive experience in conducting affordability compliance monitoring. Staff has found RSG, Inc. to be highly professional and responsive with a demonstrated record of effective performance. Based on the consultant’s proven performance and familiarity with the City’s affordable housing compliance monitoring requirements, Staff recommends renewing the contract with RSG, Inc. to continue providing these services for a five-year term.

To fund the affordable housing compliance monitoring services, Staff recommends that the Executive Director execute a Deposit Agreement between the Covina Housing Authority and Cienega Gardens Preservations LP for the receipt of funds to be deposited into Account 2020-0000-22250.

FISCAL IMPACT:

There is no fiscal impact to the City General Fund. The approval of Resolution CC 2026-03 (Attachment A) is to execute a deposit agreement with Cienega Gardens Preservations LP (Attachment C), to pay for the costs associated with the agreement between Covina Housing Authority and RSG, Inc. (Attachment B). Funds will be received to deposit and pay out of Account 2020-0000-22250.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

This action is not a project within the meaning of Section 15378 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.

Respectfully submitted,

ATTACHMENT A
RESOLUTION CC 2026-03

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

CALIFORNIA, AUTHORIZING THE EXECUTIVE DIRECTOR TO

EXECUTE THE DEPOSIT AGREEMENT FOR THE RECEIPT OF FUNDS
TO BE DEPOSITED INTO ACCOUNT NO: 2020-0000-22250 FOR THE

ANNUAL COMPLIANCE MONITORING SERVICES FOR THE
AFFORDABILITY COVENANTS AT THE 180-UNIT MULTIFAMILY
APARTMENT BUILDING AT 1121 NORTH LYMAN AVENUE IN THE

CITY OF COVINA KNOWN AS THE CIENEGA GARDENS

APARTMENTS
WHEREAS, the Cienega Gardens Preservations LP, a California limited partnership (“Owner”); and
WHEREAS, the Covina Housing Authority (“Authority”) desires to contract the Consultant for compliance monitoring for the affordability covenants at Cienega Gardens Apartments at 1211 North Lyman Avenue, Covina; and
WHEREAS, Cienega Gardens Preservations Limited Partnership agreed to pay for the annual compliance monitoring for the affordability covenants at Cienega Gardens Apartments; and
WHEREAS, the Owner, Cienega Gardens Preservations LP, will financially fund the expenses of the preparation of the necessary due diligence studies, reports and specialized assessments; and
WHEREAS, the Authority and Owner wish to execute a deposit agreement for the receipt of funds to be deposited into account number 2020-0000-22250 for the costs associated with the compliance monitoring services, and other due diligence required; and
WHEREAS, the Consultant, is a California corporation fully equipped to perform Compliance Monitoring Services as noted in the Professional Services Agreement attached as Attachment C.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. To authorize the Executive Director to execute the Deposit Agreement attached as Attachment B on behalf of the City of Covina, accepting the financial deposits of Cienega Gardens Preservations LP to Account No. 2020-0000- 22250 for the compliance monitoring services of the affordability covenants at the 180- unit multifamily apartment building at 1211 North Lyman Avenue in the City of Covina

Resolution CC 2026-03 Page 2 of 2
known as the Cienega Gardens Apartments, authorizing the City to utilize/spend the deposited funds in accordance with the attached Deposit Agreement.

SECTION 2. The City Clerk shall certify to the adoption of this Resolution.

APPROVED and PASSED this 20th day of January 2026.

City of Covina, California
BY: _______________________________
VICTOR LINARES, 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 2026-03 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of January 2026, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
____________________________________
FABIAN VELEZ, Chief Deputy City Clerk

ATTACHMENT B

CIENEGA GARDENS PRESERVATION, LP

DEPOSIT AGREEMENT FOR CIENEGA GARDENTS
(Behind this page)

DEPOSIT AGREEMENT
Between

COVINA HOUSING AUTHORITY
A public body, corporate and politic
and
Cienega Gardens Preservation
A California Limited Partnership Company

DEPOSIT AGREEMENT
This Deposit Agreement (“Agreement”) is made this 21st Day of January 2026, by and between the Covina Housing Authority, a public body, corporate and politic, hereinafter referred to as the (“Authority”), and Cienega Gardens Preservation LP, a California Limited Liability Company, hereinafter referred to as the (“Applicant”).

RECITALS
This Agreement is made with respect to the following facts.

A. The Applicant is the owner of that certain real property (“Property”) located within the City of Covina, County of Los Angeles, California. The property is more particularly described as an area on the north side of Covina Boulevard and West of North Lyman Avenue, specifically at 1211 North Lyman Avenue.

B. To provide the Authority with the needed expertise and information necessary for the Authority ’s review process concerning the Project, it is or may become necessary for the Authority to retain the services of certain outside legal, compliance monitoring and other experts for the Project (“Consultants”).

C. As a condition to the City’s authorization for issuance of the Bonds for financing of the Project, the Applicant has agreed to reimburse the Authority for the Consultants’ costs and expenses related to the Authority ’s monitoring of affordability compliance for residents of the subject property in compliance with the recorded property restrictions set forth in this Agreement. The Applicant’s Deposit of Authority under this Agreement will ensure that the City has the necessary resources to diligently and efficiently process the Applicant’s Project.

TERMS
NOW, THEREFORE, in consideration of the following mutual promises and agreements, Authority and Applicant agree as follows:

1. Incorporation of Recitals. The parties agree that the Recitals constitute the factual basis upon which the Authority and the Applicant have entered into this Agreement. The Authority and the Applicant each acknowledge the accuracy of the Recitals and agree that the Recitals are incorporated into this Agreement as though fully set forth at length.

2. Authority to Retain Consultants. As a necessary and
indispensable part of its factfinding process relating to the review of the Applicant's proposed Project and uses of the Property, the Authority shall retain the services of Consultants as set forth in Section 4 of this Agreement to provide advice as the Authority

may deem necessary in its reasonable and sole discretion. The Authority reserves the right, in its reasonable and sole discretion, to amend the scope of work as it deems necessary and appropriate to the Authority's proper review and consideration of the Applicant's Project.

The Applicant agrees that, notwithstanding the Applicant’s Deposit obligations under this Agreement, Consultants shall be the contractors exclusively of the Authority and not of the Applicant. Except for those disclosures required by law, including, without limitation, the Public Records Act, all conversations, notes, memoranda, correspondence and other forms of communication by and between the Authority and the Consultants shall be, to the extent permissible by law, privileged and confidential and not subject to disclosure to the Applicant. The Applicant agrees that it shall have no claim to, nor shall it assert any right in any reports, correspondence, plans, maps, drawings, news releases or any and all other documents or work product produced by the Consultants.

3. Applicant to Cooperate with Consultants. The Applicant agrees to cooperate in good faith with the Consultants. The Applicant agrees that it will instruct its agents, employees, consultants, contractors and attorneys to reasonably cooperate with the Consultants and to provide all necessary documents or information reasonably requested of them by the Authority and/or the Consultants; provided, however, that the foregoing shall not require the disclosure of any documents or information of the Applicant which by law is privileged, proprietary, confidential, and exempt from disclosure under the Public Records Act.

4. Authority’s Selection of Consultants. The Authority has preliminarily decided to retain RSG, Inc. as Consultants pursuant to this Agreement, but shall have the right to retain any additional consultants or sub-consultants pursuant to this Agreement.

5. Applicant’s Deposit of Fees, Costs, and Expenditures. The Applicant shall reimburse the Authority for one hundred percent (100%) of the actual fees, costs, and other expenditures incurred by the Authority relative to the Consultants (“Costs”). The Authority has reviewed the scope of work required and has estimated the Costs to be approximately Sixty-Eight Thousand Three Hundred Twenty Dollars and Thirty-Five Cents ($68,320.35) for compliance monitoring (Acct No. 2020-0000-22250) from July 1, 2025 to June 30, 2030. Applicant shall pay to Authority a good faith deposit in one (1) installment payment in the amount of the (“Estimated Costs”), which amount the Authority shall account for in Project deposit account 2020-0000-22250). As the Consultants invoice the Authority for fees, costs, and expenditures associated with the Project, the Authority shall draw upon the Deposit Account to make payments to the Consultants.

The Authority may incur aggregate Consultant costs up to the Estimated Consultants Costs without consulting the Applicant. The Authority shall use reasonably good faith efforts to consult with the Applicant prior to amending any scope of services

to be provided by the Consultants and incurring Costs which exceed the Estimated Costs (“Excess Costs”). The Applicant’s obligation to reimburse the Authority for the Excess Costs shall be contingent upon the Authority providing the Applicant with written notice of the amendment of the scope of services to be performed by any Consultants and the estimated cost thereof prior to the commencement of work. Once the Authority expends such Costs provided above, Authority has no obligation to proceed with, or to instruct any Consultant to proceed with, any work that will result in Excess Costs unless and until Applicant pays an additional good faith deposit in the full amount of the estimated Excess Costs into the Deposit Account. In the event Applicant fails to make a required deposit, Authority shall have the right to consider Applicant's Project applications as withdrawn and Authority may cease processing such applications.

The Authority shall maintain accurate records of invoices received from, and payments made to, the Consultants resulting from the Project, and will provide a payment summary to Applicant within a reasonable time upon request. In the event that excess funds remain in the Deposit Account upon conclusion of the Project and after all final payments to the Consultants have been made, the Authority agrees to refund that excess amount, if any, to Applicant within fifteen (15) working days of final payment to the Consultants. Alternatively, if the Costs of the services of the Consultants exceed the Estimated Costs and Excess Costs, if any, then Applicant shall remain obligated to pay for all such costs. Applicant shall pay any such amount within ten (10) calendar days of demand for payment by Authority.

6. Term. The term of this Agreement shall commence on the date that this Agreement is fully executed by the parties, and shall terminate when all services required for the Project by Consultants have been completed to the Authority’s reasonable satisfaction and the Applicant has satisfied all of its obligations under this Agreement. For purposes of this section, Applicant’s obligations shall include, but shall not be limited to, its obligation to reimburse the Authority for Estimated Costs and Excess Costs, whether or not paid by the Authority to Consultants prior to the date of termination. The Applicant’s obligation to reimburse the Authority as provided in this Agreement shall survive the termination of this Agreement pursuant to Section 7.

7. Early Termination

7.1 By Authority. The Authority may, in its reasonable and sole discretion, terminate this Agreement prior to the term set forth in Section 6 above, without cost or liability to the Authority, upon thirty (30) days prior written notice to the Applicant in the event that Applicant either: (1) fails to satisfy any obligation of this Agreement; or (2) fails to reasonable prosecute its application(s) for the Project. In the event of such termination, Applicant shall be deemed to have withdrawn its application(s) for the Project.

7.2 By Applicant. The Applicant may, in its reasonable and sole discretion, terminate this Agreement prior to the end of the term set forth in Section

6 above, upon thirty (30) days prior written notice to the Authority; provided, however, that Applicant’s right to so terminate this Agreement is expressly contingent upon Applicant satisfying both of the following: (1) Applicant shall give Authority written notice withdrawing its application(s) for the Project; and (2) Applicant shall satisfy all of its obligations under this Agreement up through the proposed effective date of termination.

For purposes of this section, Applicant’s obligations shall include, but shall be limited to, its obligation to reimburse the Authority for Estimated Costs and Excess Costs, whether or not paid by the Authority to Consultants prior to the date of termination.

Within two (2) working days following either the Authority’s decision to terminate this Agreement or the Authority’s receipt of written notice indicating the Applicant’s decision to terminate this Agreement, the Authority shall notify all Consultants and instruct them to cease work on the Project. Consultants shall also be instructed to bill the Authority for any services completed prior to the date of termination.

8. Authority to Retain Absolute Discretion. The Applicant acknowledges and agrees that notwithstanding the Applicant’s deposit obligation under this Agreement, the Authority is not obligated to approve any or all of the proposed uses for the Property, to approve any environmental documents which may be required for any of the uses contemplated for the warrants and represents that no Authority official, officer, employee, agent or attorney has represented, expressly or impliedly, that the Authority will approve any proposed use of the Property. The Applicant understands that there will be numerous legislative and adjudicatory decisions made by the Authority, with regard to the development of the Property. All such decisions of the Authority with regard to the Property and the contemplated uses of the Property shall be made only after full compliance with all the Authority’s statutory and other legal obligations and after considering all appropriate information and evidence, including such evidence which may cause the Authority to disapprove any or all of the contemplated uses of the Property.

Notwithstanding anything in the Agreement to the contrary, the Authority retains all authority and discretion granted to it by law to either approve, disapprove or modify any of the proposed uses of the Property. The Applicant agrees that the Authority may approve, or approve with modifications, any or all components of the Applicant’s proposed Project.

The Applicant agrees that the Authority shall not be bound by any recommendations or conclusions reached by the Consultants and that the Authority may accept or reject, in whole or in part, any such recommendations or conclusions which the Authority in its reasonable and sole discretion deems to be unreasonable or contrary to the Authority’s land use ordinances and regulations or State statutes or regulations.

9. Nonwaiver of Rights or Remedies. The failure of a party to exercise any one or more of its rights or remedies under this Agreement shall not constitute a waiver of that party’s right to enforce that right or seek that remedy in the future. No course of conduct or act of forbearance on any one or more occasions shall be deemed to be an implied modification of the terms of this Agreement.

10. Assignability. This Agreement may not be assigned by either party without the prior and express written consent of the other party, which consent shall not be unreasonably withheld. In determining whether to approve a request by the Applicant to assign this Agreement, the Authority may consider, among other things, the proposed assignee’s financial status and commitment to the Project. Any attempted assignment of this Agreement not in compliance with the terms of this Agreement shall be null and void and shall confer no rights or benefits upon the assignee.

11. Oral Modifications. This Agreement represents the entire understanding of the Authority and the Applicant, and supersedes all other prior or contemporaneous written or oral agreements pertaining to the subject matter of this Agreement. This Agreement may be modified, only by a writing signed by both the authorized representatives of both the Authority and the Applicant. All modifications to this Agreement must be approved by the City Council of the City of Covina.

12. Binding Upon Successors. This Agreement and each of its terms shall be binding upon the Authority, the Applicant and their respective officers, elected officials, employees, agents, contractors, and permitted successors and assigns.

13. Legal Challenges. Nothing herein shall be construed to require Authority to defend any third party claims and suits challenging any action taken by the Authority with regard to any procedural or substantive aspect of the Authority’s approval of development of the Property, the environmental process, or the proposed Project. The Applicant may, however, in its sole and absolute discretion, appear as real party in interest in any such third party action or proceeding, and in such event, it and the Authority shall defend such action or proceeding and the Applicant shall be responsible and reimburse the Authority for whatever legal fees and expert or other costs, in their entirety, including actual attorney’s fees, which may be incurred by the Authority in defense of such action or proceeding. This Authority shall have the absolute right to retain such legal counsel as the Authority deems necessary and appropriate, and the Applicant shall reimburse the Authority for any and all attorney’s fees and expert or other costs incurred by the Authority as a result of such third-party action or proceeding.

Applicant may, at any time, notify Authority in writing of its decision to terminate such deposit obligation and, thereafter, the Authority may choose, in its sole discretion, to defend or not defend such third-party action or proceeding. In the event that the Authority decides not to continue the defense of such third-party action or proceeding, Applicant shall be obligated to reimburse Authority for any and all costs, fees, penalties or damages associated with dismissing the action or proceeding. In the event that the Authority decides to continue the defense of such third-party action or proceeding, Applicant shall have no further obligation to reimburse Authority for its attorney fees and expert or other costs.

14. Attorney’s Fees. In the event that any action or proceeding is commenced by either the Authority or the Applicant against the other to establish the validity of this Agreement or to enforce any one or more of its terms, the prevailing party in any such action or proceeding shall be entitled to recover from the other, in addition

to all other legal and equitable remedies available to it, its reasonable attorneys’ fees and costs of litigation, including, without limitation, filing fees, service fees, deposition costs, and expert witness fees, including actual costs and attorneys’ fees on appeal.

15. Jurisdiction and Venue. This Agreement is executed and is to be performed in the City of Covina, County of Los Angeles, State of California. Any action or proceeding brought relative to this Agreement shall be heard in the appropriate court in the County of Los Angele, State of California. The Authority and the Applicant each consent to the personal jurisdiction of the court in any such action or proceeding.

16. Severability. If any term or provision of this Agreement is found to be invalid or unenforceable, the Authority and the Applicant both agree that they would have executed this Agreement notwithstanding the invalidity of such term or provision.

The invalid term or provision may be severed from the Agreement and the remainder of the Agreement may be enforced in its entirety.

17. Headings. The headings of each Section of this Agreement are for the purposes of convenience only and shall not be construed to either expand or limit the express terms and language of each Section.

18. Representations of Authority. Each party signing this Agreement on behalf of a party which is not a natural person hereby represents and warrants to the other party that all necessary legal prerequisites to that party’s execution of this Agreement have been satisfied and that he or she has been authorized to sign this Agreement and bind the party on whose behalf he, she, or they signs.

19. Notices. Notices required under this Agreement shall be sent to the following:

If to the Authority: Chris Marcarello
Executive Director
125 E College Ave
Covina, CA 91723
If to the Applicant: William E. Szymczak
Manager
Cienega Gardens Preservation LP
21515 Hawthorne Blvd Ste 150
Torrance, CA 90503
Notices given pursuant to this Agreement shall be deemed received as follows:

1. If sent by United States Mail – five (5) calendar days after deposit into the United States Mail, first class postage prepaid.

2. If by facsimile – upon transmission and actual receipt by the receiving party.

3. If by express courier service or hand delivery – on the date of receipt by the receiving party.

The addresses for notices set forth in this Section 19 may be changes upon written notice of such change to either the Authority or the Applicant, as appropriate. [SIGNATURES ON THE FOLLOWING PAGES]

SIGNATURE PAGES TO

DEPOSIT AGREEMENT
IN WITNESS WHEREOF, the Authority and the Applicant have signed and entered into this Agreement as of the Effective Date first above written by and through the signatures of their authorized representative(s) set forth below:

COVINA HOUSING AUTHORITY
By: ________________________________
Chris Marcarello
Executive Director
ATTEST:

By: ________________________________
Fabian Velez
Secretary
Cienega Gardens Preservation Partners LLC,
a CALIFORNIA LIMITED LIABILITY COMPANY
Its Administrative General Partner
By: ________________________________
William E. Szymczak
Manager
ATTEST:

By: ________________________________
Notary

PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement (“Agreement”) is dated January 21st, 2026 (“Effective Date”) and is between the Covina Housing Authority, a California municipal corporation (“Authority”) and RSG, Inc., a California corporation (“Consultant”). Authority and Consultant are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.

RECITALS
A. Authority desires to utilize the services of Consultant as an independent contractor to provide Affordable Housing Compliance Monitoring Services for an income restricted 180-unit multifamily apartment building at 1211 Lyman Avenue in the City of Covina known as the Cienega Gardens Apartments.

B. Consultant represents that it is fully qualified to perform such services by virtue of its experience and the training, education and expertise of its principals and employees.

C. Authority desires to retain Consultant and Consultant desires to serve Authority to perform these services in accordance with the terms and conditions of this Agreement.

The parties therefore agree as follows:

1. Term of Agreement. The term of this Agreement shall be from the Effective Date through June 1, 2031, unless sooner terminated as provided in Section 14 of this Agreement.

2. Compensation.

A. Compensation. As full compensation for Consultant’s services provided under this Agreement, Authority shall pay Consultant a sum not to exceed Fifty Nine Thousand Four Hundred Nine Dollars ($59,409) (the “maximum compensation”) based on the hourly rates set forth in the Approved Fee Schedule, attached hereto as Exhibit A. Any terms in Exhibit A, other than the payment rates and schedule of payment, are null and void.

B. Expenses. The amount set forth in paragraph A shall include reimbursement for all actual and necessary expenditures reasonably incurred in the performance of this Agreement.

C. Additional Services. Authority shall not allow any claims for additional services performed by Contractor, unless the Authority Council and the Contractor Representative authorize the additional services in writing prior to Contractor’s performance of the additional services or incurrence of additional expenses. Any additional services or expenses authorized by the Authority Council shall be compensated at the rates set forth in Exhibit A, or, if not specified, at a rate mutually agreed to by the parties. Authority shall make payment for additional services and expenses in accordance with Section 4 of this Agreement.

3. Consultant’s Services.

A. Scope of Services. Consultant shall perform the services described in the Scope of Services, attached as Exhibit B. Authority may request, in writing, changes in the scope of services to be performed. Any changes mutually agreed upon by the parties, and any increase or decrease in compensation, shall be incorporated by written amendments to this Agreement.

B. Party Representatives. For the purposes of this Agreement, the Authority Representative shall be the Executive Director of the Covina Housing Authority, or such other person designated in writing by the Executive Director (the “Authority Representative”). For the purposes of this Agreement, the Consultant Representative shall be Tara Matthews, Principal (the “Consultant Representative”). The Consultant Representative shall directly manage Consultant’s services under this Agreement. Consultant shall not change the Consultant Representative without Authority’s prior written consent.

C. Time for Performance. Consultant shall commence the services on the Effective Date and shall perform all services by the deadline established by the Authority Representative or, if no deadline is established, with reasonable diligence.

C. Standard of Performance. Consultant shall perform all services under this Agreement in accordance with the standard of care generally exercised by like professionals under similar circumstances and in a manner reasonably satisfactory to Authority.

D. Personnel. Consultant has, or will secure at its own expense, all personnel required to perform the services required under this Agreement. All of the services required under this Agreement shall be performed by Consultant or under its supervision, and all personnel engaged in the work shall be qualified to perform such services. Consultant shall determine the means, methods, and details by which Consultant’s personnel will perform the services under this Agreement. Consultant shall be solely responsible for the satisfactory work performance of all personnel engaged in performing the services and compliance with the customary professional standards.

E. Compliance with Laws. The Consultant shall keep itself informed of all local, state and federal ordinances, laws and regulations which in any manner affect those employed by it or in any way affect the performance of its service pursuant to this Agreement. The Consultant shall at all times observe and comply with all such ordinances, laws and regulations. The Authority and its agents shall not be liable at law or in equity occasioned by failure of the Consultant to comply with this section.

F. Permits and Licenses. Consultant shall obtain and maintain during the Agreement term all necessary licenses, permits and certificates required by law for the provision of services under this Agreement, including a business license.

4. Method of Payment.

A. Invoices. Consultant shall submit to Authority an invoice, on a monthly basis or less frequently, for actual services performed pursuant to this Agreement. Each invoice shall itemize the services rendered during the billing period, hourly rates charged, if applicable, and the amount due. If Authority disputes any of Consultant's fees, it shall give written notice to

Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice.

B. Payment. Authority shall pay all undisputed invoice amounts within thirty (30) calendar days after receipt up to the maximum compensation set forth in Section 2 of this Agreement. Authority shall not withhold federal payroll, state payroll or other taxes, or other similar deductions, from payments made to Consultant. For all reimbursements authorized by this Agreement, Consultant shall provide receipts on all reimbursable expenses in excess of Fifty Dollars ($50) in such form as approved by the Finance Director.

C. Audit of Records. Consultant shall make all records, invoices, time cards, cost control sheets and other records maintained by Consultant in connection with this agreement available during Consultant’s regular working hours to Authority for review and audit by Authority.

5. Ownership of Documents. Upon completion of, or in the event of termination or suspension of this Agreement, all original documents, designs, drawings, maps, models, computer files containing data generated for the work, surveys, notes, and other documents prepared in the course of providing the services to be performed (“written products”) pursuant to this Agreement shall become the sole property of the Authority without restriction or limitation upon its use and may be used, reused, disseminated or otherwise disposed of by the Authority without the permission of the Consultant. With respect to computer files containing data generated for the work, Consultant shall make available to the Authority, upon reasonable written request by the Authority, the necessary computer software and hardware for purposes of accessing, compiling, transferring and printing computer files. Consultant may take and retain copies of the written products as desired, but the written products shall not be the subject of a copyright application by Consultant.

6. Independent Contractor.

A. Consultant is, and shall at all times remain as to Authority, a wholly independent contractor and not an employee of Authority. The personnel performing the services under this Agreement on behalf of Consultant shall also not be employees of Authority and shall at all times be under Consultant's exclusive direction and control. Consultant shall have no power to incur any debt, obligation, or liability on behalf of Authority. Neither Authority nor any of its agents shall have control over the conduct of Consultant or any of Consultant’s employees. Consultant shall not, at any time, or in any manner, represent that it or any of its officers, agents or employees are in any manner employees of Authority. Consultant and Consultant’s personnel shall not supervise any of Authority’s employees; and Authority’s employees shall not supervise Consultant’s personnel. Consultant’s personnel shall not wear or display any Authority uniform, badge, identification number, or other information identifying such individual as an employee of Authority; and Consultant’s personnel shall not use any Authority e-mail address or Authority telephone number in the performance of any of the services under this Agreement. Consultant shall acquire and maintain, at its sole cost and expense, such vehicles, equipment, and supplies as Consultant’s personnel require to perform any of the services required by this Agreement.

Consultant shall perform the services off of Authority premises at locations of Consultant’s choice,

except as otherwise may from time to time be necessary in order for Consultant’s personnel to receive projects from Authority, review plans on file at Authority, pick up or deliver any work product related to Consultant’s performance of the services under this Agreement, or as may be necessary to inspect or visit Authority locations and/or private property to perform the services.

Authority may make a computer available to Consultant from time to time for Consultant’s personnel to obtain information about or to check on the status of projects pertaining to the services under this Agreement.

B. No employee benefits shall be available to Consultant in connection with the performance of this Agreement. Except for the fees paid to Consultant as provided in the Agreement, Authority shall not pay salaries, wages, or other compensation to Consultant for performing services hereunder for Authority. Authority shall not be liable for compensation or indemnification to Consultant for injury or sickness arising out of performing services hereunder.

Consultant shall be responsible for and pay all wages, salaries, benefits and other amounts due to Consultant’s personnel in connection with their performance of the services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: Social Security taxes, other retirement or pension benefits, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. Notwithstanding any other agency, state, or federal policy, rule, regulation, statute or ordinance to the contrary, Consultant and any of its officers, employees, agents, and subcontractors providing any of the services under this Agreement shall not become entitled to, and hereby waive any claims to, any wages, salaries, compensation, benefit or any incident of employment by Authority, including, but not limited to, eligibility to enroll in, or reinstate to membership in, the California Public Employees Retirement System (“PERS”) as an employee of Authority, and entitlement to any contribution to be paid by Authority for employer contributions or employee contributions for PERS benefits.

C. Consultant shall indemnify and hold harmless Authority and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of Authority officials, from any and all liability, damages, claims, costs, and expenses of any nature to the extent arising from, caused by, or relating to Consultant’s personnel practices. or to the extent arising from, caused by, or relating to the violation of any of the provisions of this Section 6. In addition to all other remedies available under law, Authority shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to Authority from Consultant as a result of Consultant’s failure to promptly pay to Authority any reimbursement or indemnification arising under this Section 6. This duty of indemnification is in addition to Consultant’s duty to defend, indemnify, and hold harmless as set forth in any other provision of this Agreement.

7. PERS Compliance and Indemnification.

A. General Requirements. The parties acknowledge that Authority is a local agency member of PERS, and as such has certain pension reporting and contribution obligations to PERS on behalf of qualifying employees. Consultant agrees that, in providing its employees and any other personnel to Authority to perform the services under this Agreement, Consultant shall assure compliance with the Public Employees’ Retirement Law, commencing at Government Code

Section 20000, the regulations of PERS, and the Public Employees’ Pension Reform Act of 2013, as amended. Without limitation to the foregoing, Consultant shall assure compliance with regard to personnel who have active or inactive membership in PERS and to those who are retired annuitants and in performing this Agreement shall not assign or utilize any of its personnel in a manner that will cause Authority to be in violation of the applicable retirement laws and regulations.

B. Indemnification. Consultant shall defend (with legal counsel approved by Authority, whose approval shall not be unreasonably withheld), indemnify, and hold harmless Authority, and its Authority and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of Authority officials, from any and all liability, damages, claims, costs, and expenses of any nature to the extent arising from, caused by, or relating to Consultant’s violation of any provisions of this Section 7. This duty of indemnification is in addition to Consultant’s duty to defend, indemnify, and hold harmless as set forth in any other provision of this Agreement.

8. Confidentiality. All data, documents, discussion, or other information (collectively “data”) developed or received by Consultant or provided for performance of this Agreement are deemed confidential. Consultant shall keep all data confidential and shall not disclose any data to any person or entity without Authority’s prior written consent. Authority shall grant such consent if disclosure is legally required. Consultant shall return all data to Authority upon the expiration or termination of this Agreement. Consultant’s covenant under this Section 8 shall survive the expiration or termination of this Agreement.

9. Conflicts of Interest. Consultant and its officers, employees, associates and subcontractors, if any, shall comply with all conflict of interest statutes of the State of California applicable to Consultant’s services under this Agreement, including the Political Reform Act (Gov.

Code, § 81000 et seq.) and Government Code Section 1090. During the term of this Agreement, Consultant may perform similar services for other clients, but Consultant and its officers, employees, associates and subcontractors shall not, without the Authority Representative’s prior written approval, perform work for another person or entity for whom Consultant is not currently performing work that would require Consultant or one of its officers, employees, associates or subcontractors to abstain from a decision under this Agreement pursuant to a conflict of interest statute. Consultant shall incorporate a clause substantially similar to this Section 9 into any subcontract that Consultant executes in connection with the performance of this Agreement.

10. Indemnification.

A. Indemnities for Third Party Claims.
1) To the fullest extent permitted by law, Consultant shall, at its sole cost and expense, defend, hold harmless and indemnify Authority and its elected officials, officers, attorneys, agents, employees, designated volunteers, successors, assigns and those Authority agents serving as independent contractors in the role of Authority officials (collectively “Indemnitees”), from and against any and all damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens and losses of any

nature whatsoever, including fees of accountants, attorneys or other professionals, and all costs associated therewith, and the payment of all consequential damages (collectively “Liabilities”), in law or equity, whether actual, alleged or threatened, which arise out of, are claimed to arise out of, pertain to, or relate to the acts or omissions of Consultant, its officers, agents, servants, employees, subcontractors, materialmen, contractors or their officers, agents, servants or employees (or any entity or individual that Consultant shall bear the legal liability thereof) in the performance of this Agreement, including the Indemnitees’ active or passive negligence, except for Liabilities arising from the sole negligence or willful misconduct of the Indemnitees, as determined by final arbitration or court decision or by the agreement of the parties. Consultant shall defend the Indemnitees in any action or actions filed in connection with any Liability with counsel of the Indemnitees’ choice, and shall pay all costs and expenses, including all attorneys’ fees and experts’ costs actually incurred in connection with such defense. Consultant shall reimburse the Indemnitees for any and all legal expenses and costs incurred by Indemnitees in connection therewith.
2) Consultant shall pay all required taxes on amounts paid to Consultant under this Agreement, and indemnify and hold Authority harmless from any and all taxes, assessments, penalties and interest asserted against Authority by reason of the independent contractor relationship created by this Agreement. Consultant shall fully comply with the workers’ compensation law regarding Consultant and Consultant’s employees. Consultant shall indemnify and hold Authority harmless from any failure of Consultant to comply with applicable workers’ compensation laws. Authority may offset against the amount of any fees due to Consultant under this Agreement any amount due to Authority from Consultant as a result of Consultant’s failure to promptly pay to Authority any reimbursement or indemnification arising under this Subparagraph A. 2).
3) Consultant shall obtain executed indemnity agreements with provisions identical to those in this Section 10 from each and every subcontractor or any other person or entity involved by, for, with or on behalf of Consultant in the performance of this Agreement. If Consultant fails to obtain such indemnity obligations, Consultant shall be fully responsible and indemnify, hold harmless and defend the Indemnitees from and against any and all Liabilities in law or equity, whether actual, alleged or threatened, which arise out of, are claimed to arise out of, pertain to, or relate to the acts or omissions of Consultant’s subcontractor, its officers, agents, servants, employees, subcontractors, materialmen, contractors or their officers, agents, servants or employees (or any entity or individual that Consultant’s subcontractor shall bear the legal liability thereof) in the performance of this Agreement, including the Indemnitees’ active or passive negligence, except for Liabilities arising from the sole negligence or willful misconduct of the Indemnitees, as determined by final arbitration or court decision or by the agreement of the parties.

B. Workers’ Compensation Acts not Limiting. Consultant’s indemnifications and obligations under this Section 10, or any other provision of this Agreement, shall not be limited by the provisions of any workers’ compensation act or similar act. Consultant expressly waives its statutory immunity under such statutes or laws as to Authority, its officers, agents, employees and volunteers.

C. Insurance Requirements not Limiting. Authority does not, and shall not, waive any rights that it may possess against Consultant because of the acceptance by Authority, or the deposit with Authority, of any insurance policy or certificate required pursuant to this Agreement. The indemnities in this Section 10 shall apply regardless of whether or not any insurance policies are determined to be applicable to the Liability, tax, assessment, penalty or interest asserted against Authority.

D. Survival of Terms. Consultant’s indemnifications and obligations under this Section 10 shall survive the expiration or termination of this Agreement.

11. Insurance.

A. Minimum Scope and Limits of Insurance. Consultant shall procure and at all times during the term of this Agreement carry, maintain, and keep in full force and effect, insurance as follows:
1) Commercial General Liability Insurance with a minimum limit of Two Million Dollars ($2,000,000) per occurrence for bodily injury, personal injury and property damage and a general aggregate limit of Four Million Dollars ($4,000,000) per project or location.

If Consultant is a limited liability company, the commercial general liability coverage shall be amended so that Consultant and its managers, affiliates, employees, agents and other persons necessary or incidental to its operation are insureds.
2) Automobile Liability Insurance for any owned, non-owned or hired vehicle used in connection with the performance of this Agreement with a combined single limit of Two Million Dollars ($2,000,000) per accident for bodily injury and property damage. If Consultant does not use any owned, non-owned or hired vehicles in the performance of services under this Agreement, Consultant shall obtain a non-owned auto endorsement to the Commercial General Liability policy required under Subparagraph A. 1) of this Section 11. 3) Workers’ Compensation Insurance as required by the State of California and Employer’s Liability Insurance with a minimum limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease. If Consultant has no employees while performing services under this Agreement, workers’ compensation policy is not required, but Consultant shall provide an executed declaration that it has no employees. 4) Professional Liability Insurance with minimum limits of Two Million Dollars ($2,000,000) per claim and in aggregate.

B. Acceptability of Insurers. The insurance policies required under this Section 11 shall be issued by an insurer admitted to write insurance in the State of California with a rating of A:VII or better in the latest edition of the A.M. Best Insurance Rating Guide. Self insurance shall not be considered to comply with the insurance requirements under this Section 11.

C. Additional Insured. The commercial general and automobile liability policies shall contain an endorsement naming the Authority, its officers, employees, agents and volunteers as additional insureds.

D. Primary and Non-Contributing. The insurance policies required under this Section 11 shall apply on a primary non-contributing basis in relation to any other insurance or selfinsurance available to Authority. Any insurance or self-insurance maintained by Authority, its officers, employees, agents or volunteers, shall be in excess of Consultant’s insurance and shall not contribute with it.

E. Consultant’s Waiver of Subrogation. The insurance policies required under this Section 11 shall not prohibit Consultant and Consultant’s employees, agents or subcontractors from waiving the right of subrogation prior to a loss. Consultant hereby waives all rights of subrogation against Authority.

F. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be approved by Authority. At Authority’s option, Consultant shall either reduce or eliminate the deductibles or self-insured retentions with respect to Authority, or Consultant shall procure a bond guaranteeing payment of losses and expenses.

G. Cancellations or Modifications to Coverage. Consultant shall not cancel, reduce or otherwise modify the insurance policies required by this Section 11 during the term of this Agreement. The commercial general and automobile liability policies required under this Agreement shall be endorsed to state that should the issuing insurer cancel the policy before the expiration date, the issuing insurer will endeavor to mail thirty (30) calendar days’ prior written notice to Authority. If any insurance policy required under this Section 11 is canceled or reduced in coverage or limits, Consultant shall, within two (2) business days of notice from the insurer, phone, fax or notify Authority via certified mail, return receipt requested, of the cancellation of or changes to the policy.

H. Authority Remedy for Noncompliance. If Consultant does not maintain the policies of insurance required under this Section 11 in full force and effect during the term of this Agreement, or in the event any of Consultant’s policies do not comply with the requirements under this Section 11, Authority may either immediately terminate this Agreement or, if insurance is available at a reasonable cost, Authority may, but has no duty to, take out the necessary insurance and pay, at Consultant’s expense, the premium thereon. Consultant shall promptly reimburse Authority for any premium paid by Authority or Authority may withhold amounts sufficient to pay the premiums from payments due to Consultant.

I. Evidence of Insurance. Prior to the performance of services under this Agreement, Consultant shall furnish Authority’s Risk Manager with a certificate or certificates of insurance and all original endorsements evidencing and effecting the coverages required under this Section

11. The endorsements are subject to Authority’s approval. Consultant may provide complete, certified copies of all required insurance policies to Authority. Consultant shall maintain current endorsements on file with Authority’s Risk Manager. Consultant shall provide proof to Authority’s Risk Manager that insurance policies expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Consultant shall furnish such proof at least two (2) weeks prior to the expiration of the coverages.

J. Indemnity Requirements not Limiting. Procurement of insurance by Consultant shall not be construed as a limitation of Consultant’s liability or as full performance of Consultant’s duty to indemnify Authority under Section 10 of this Agreement.

K. Subcontractor Insurance Requirements. Consultant shall require each of its subcontractors that perform services under this Agreement to maintain insurance coverage that meets all of the requirements of this Section 11.

12. Mutual Cooperation.

A. Authority’s Cooperation. Authority shall provide Consultant with all pertinent data, documents and other requested information as is reasonably available for Consultant’s proper performance of the services required under this Agreement.

B. Consultant’s Cooperation. In the event any claim or action is brought against the Authority relating to Consultant’s performance or services rendered under this Agreement, Consultant shall render any reasonable assistance that Authority requires.

13. Records and Inspections. Consultant shall maintain full and accurate records with respect to all matters covered under this Agreement for a period of five (5) years. Consultant shall, without charge, provide Authority with access to the records during normal business hours. Authority may examine and audit the records and make transcripts therefrom, and inspect all program data, documents, proceedings and activities.

14. Termination or Suspension of Agreement.

A. Right to Terminate or Suspend. Authority may terminate or suspend this Agreement at any time, at will, for any reason or no reason, after giving written notice to Consultant at least seven (7) calendar days before the termination or suspension is to be effective. Consultant may terminate this Agreement at any time, at will, for any reason or no reason, after giving written notice to Authority at least sixty (60) calendar days before the termination is to be effective.

B. Obligations upon Termination. Consultant shall cease all work under this Agreement on or before the effective date of termination specified in the notice of termination. In the event of Authority’s termination of this Agreement due to no fault or failure of performance by Consultant, Authority shall pay Consultant based on the percentage of work satisfactorily performed up to the effective date of termination. In no event shall Consultant be entitled to receive more than the amount that would be paid to Consultant for the full performance of the services required by this Agreement.

15. Force Majeure. Consultant shall not be liable for any failure to perform its obligations under this Agreement if Consultant presents acceptable evidence, in Authority’s sole judgment, that such failure was due to strikes, lockouts, labor disputes, embargoes, acts of God, inability to obtain labor or materials or reasonable substitutes for labor or materials, governmental restrictions, governmental regulations, governmental controls, judicial orders, enemy or hostile governmental

action, civil commotion, fire or other casualty, or other causes beyond Consultant’s reasonable control and not due to any act by Consultant.

16. Notices. Any notices, consents, requests, demands, bills, invoices, reports or other communications which either party may desire to give to the other party under this Agreement must be in writing and conclusively deemed effective: (a) on personal delivery, (b) on confirmed delivery by reputable document delivery service or courier service during Consultant’s and Authority's regular business hours, or (c) five business days after deposit in the United States mail, by first class mail, postage prepaid, and addressed to the party to be notified as set forth below:

If to Authority: If to Consultant:

Attn: Alice Leung Tara Broughton
City of Covina – Special Projects Division RSG, Inc.
125 E. College Street 170 Eucalyptus Avenue, Suite 200
Covina, California 91723 Vista, CA 92084

17. Non-Discrimination and Equal Employment Opportunity. In the performance of this Agreement, Consultant shall not discriminate against any employee, subcontractor or applicant for employment because of race, color, religious creed, sex, gender, gender identity, gender expression, marital status, national origin, ancestry, age, physical disability, mental disability, medical condition, genetic information, sexual orientation or other basis prohibited by law.

Consultant will take affirmative action to ensure that subcontractors and applicants are employed, and that employees are treated during employment, without regard to their race, color, religious creed, sex, gender, gender identity, gender expression, marital status, national origin, ancestry, age, physical disability, mental disability, medical condition, genetic information or sexual orientation.

18. Prohibition of Assignment and Delegation. Consultant shall not assign any of its rights or delegate any of its duties under this Agreement, either in whole or in part, without Authority’s prior written consent. Authority’s consent to an assignment of rights under this Agreement shall not release Consultant from any of its obligations or alter any of its primary obligations to be performed under this Agreement. Any attempted assignment or delegation in violation of this Section 18 shall be void and of no effect and shall entitle Authority to terminate this Agreement.

As used in this Section 18, “assignment” and “delegation” means any sale, gift, pledge, hypothecation, encumbrance or other transfer of all or any portion of the rights, obligations, or liabilities in or arising from this Agreement to any person or entity, whether by operation of law or otherwise, and regardless of the legal form of the transaction in which the attempted transfer occurs.

19. No Third Party Beneficiaries Intended. Except as otherwise provided in Section 10, this Agreement is made solely for the benefit of the parties to this Agreement and their respective successors and assigns, and no other person or entity may have or acquire a right by virtue of this Agreement.

20. Waiver. No delay or omission to exercise any right, power or remedy accruing to Authority under this Agreement shall impair any right, power or remedy of Authority, nor shall it be construed as a waiver of, or consent to, any breach or default. No waiver of any breach, any failure of a condition, or any right or remedy under this Agreement shall be (1) effective unless it is in writing and signed by the party making the waiver, (2) deemed to be a waiver of, or consent to, any other breach, failure of a condition, or right or remedy, or (3) deemed to constitute a continuing waiver unless the writing expressly so states.

21. Exhibits. Exhibits A and B constitutes a part of this Agreement and are incorporated into this Agreement by this reference. If any inconsistency exists or arises between a provision of this Agreement and a provision of any exhibits, the provisions of this Agreement shall control.

22. Entire Agreement. This Agreement and all exhibits referred to in this Agreement constitute the final, complete and exclusive statement of the terms of the agreement between the parties pertaining to the subject matter of this Agreement and supersede all other prior or contemporaneous oral or written understandings and agreements of the parties. No party has been induced to enter into this Agreement by, nor is any party relying on, any representation or warranty except those expressly set forth in this Agreement.

23. Amendment of Agreement. This Agreement may be amended only by a writing signed by both parties. The Executive Director is authorized to sign an amendment to this Agreement on the Covina Housing Authority’s behalf and without the Covina Housing Authority’s prior approval to make the following non-substantive modifications to the Agreement: (a) name changes; (b) extensions of time; (c) non-monetary changes in the scope of work; and (d) termination of the Agreement.

24. Headings. The headings in this Agreement are included solely for convenience of reference and shall not affect the interpretation of any provision of this Agreement or any of the rights or obligations of the parties to this Agreement.

25. Word Usage. Unless the context clearly requires otherwise, (a) the words “shall,” “will” and “agrees” are mandatory and “may” is permissive; (b) “or” is not exclusive; and (c) “includes” or “including” are not limiting.

26. Time of the Essence. Time is of the essence in respect to all provisions of this Agreement that specify a time for performance; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period allowed in this Agreement.

27. Governing Law and Choice of Forum. This Agreement, and any dispute arising from the relationship between the parties to this Agreement, shall be governed by and construed in accordance with the laws of the State of California, except that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in interpreting this Agreement. Any dispute that arises under or relates to this Agreement (whether contract, tort or both) shall be resolved in a municipal, superior or federal court with geographic jurisdiction over the City of Covina.

28. Attorneys’ Fees. In any litigation or other proceeding by which on party seeks to enforce its rights under this Agreement (whether in contract, tort or both) or seeks a declaration of any rights or obligations under this Agreement, the prevailing party shall be shall be awarded reasonable attorneys’ fees together with any costs and expenses, to resolve the dispute and to enforce the final judgment.

29. Severability. If a court of competent jurisdiction holds any provision of this Agreement to be illegal, invalid or unenforceable for any reason, the validity of and enforceability of the remaining provisions of this Agreement shall not be affected and continue in full force and effect.

30. Authority to Execute Agreement. The person or persons executing this Agreement on behalf of Consultant warrants and represents that he or she has the authority to execute this Agreement on behalf of the Consultant and has the authority to bind Consultant to the performance of its obligations hereunder.
[SIGNATURE PAGE FOLLOWS]

The parties, through their duly authorized representatives, are signing this Agreement on the date stated in the introductory clause.

Authority:

Covina Housing Authority
By:

Name: Chris Marcarello
Title: Executive Director
ATTEST:

By:

Name: Fabian Velez
Title: Secretary
Consultant:

RSG, Incorporated
By:

Name: James C. Simon
Title: Principal and President
By:

Name: Tara Broughton
Title: Principal
(Two signatures of corporate officers required
for corporations under Corporations Code
Section 313, unless corporate documents
authorize only one person to sign this
Agreement on behalf of the corporation.)

EXHIBIT A

APPROVED FEE SCHEDULLE

EXHIBIT B

SCOPE OF WORK
Scope of Work:

Consultant shall perform the tasks necessary as mentioned in the proposal and contract as indicated.

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 14
Meeting: January 20, 2026
Title: Purchase Agreement/Purchase Order Authorization for Madvac LS175 Mini Vacuum/Mobile Cleaning Unit for the Department of Public Works – Streets Division
Presented by: Rafael M. Fajardo, Director of Public Works/City Engineer Recommendation: 1. Authorize the City Manager to execute a Purchase Agreement/Purchase Order Authorization with Haaker Equipment Company for the purchase of one (1) new Madvac LS175 Mini Vacuum/Wash Mobile Cleaning Unit in an amount not-toexceed $174,447.38; and

2. Approve Resolution CC 2026-08 appropriating $175,000 from available Fund Balance in the Environmental Fund, Impact Fees – Streets Fund, Municipal Parking District Fund, Sanitary Sewer Fund, and Proposition A Funds for use towards the purchase of the Mini Vacuum/Wash Mobile Cleaning Unit.

EXECUTIVE SUMMARY/BACKGROUND:

The Department of Public Works is requesting to purchase a City-owned Mini Vacuum/Wash Mobile Cleaning Unit, to supplement contracted City-wide street sweeping services to ensure consistent, responsive, and comprehensive upkeep of the City’s parking lots, business districts, bus stop zones and Public Works Yard. Differentiated from a traditional street sweeping unit, the proposed Mini Vacuum/Wash Mobile Cleaning unit is unique in that it can access limited space locations, helping the City to respond to environmental conditions, reducing safety hazards, preventing debris from entering stormwater systems, and help maintain a clean, professional appearance in high-visibility areas that directly impact residents, businesses, and visitors.

By supplementing existing contract street sweeping services with a small mini vacuum/wash unit, the City can optimize coverage, reduce long-term costs associated with emergency call-outs and infrastructure deterioration, and ensure a higher standard of cleanliness and maintenance across all municipal assets. This unit will be used regularly in local shopping districts, parking lots and pedestrianaccessible areas. As proposed, the purchase of a mini vacuum/wash mobile cleaning unit will be funded through the City’s environmental fund and special revenue funds.

DISCUSSION:

The City is proposing to purchase a new Madvac LS175 Mini Vacuum/Wash Mobile Cleaning Unit under Sourcewell Contract #093021-EXP, which is a contract negotiated by the State of California’s Department of General Services for Fleet Vehicles. The terms of the State contract convey negotiated pricing available to all public agencies from contracted dealerships in the State, including Haaker Equipment Company located in La Verne, CA (Attachment A). In accordance with the City’s Purchasing Policy, the City Council may use a competitive bid conducted by another public agency to purchase goods and services. Known as “piggybacking” onto another existing contract, this process allows the City to receive the same competitively bid price without having to spend a significant amount of staff resources to formally bid and purchase the same goods or services.

FISCAL IMPACT:

Funding for the Mini Vacuum/Wash Mobile Cleaning Unit purchase will be accomplished via the approval of Resolution CC 2026-08 and will be funded using the following funds below for a total budget allocation of $175,000:

Fund Amount
Environmental $75,000
Impact Fees – Streets $25,000
Municipal Parking District $25,000
Sanitary Sewer $25,000
Proposition A $25,000
Total $175,000
CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

Date 5/Jan/26 Lead Time (days):

PO #: Payment terms:

End User: City of Covina Freight:

Sourcewell M#: 93699 US Fed Tax ID#:

SHIP TO
City of Covina
534 N. Barranca Ave.

Covina, CA 91723
Hugo Guerrero
626-384-5222
Part # Unit Price Quantity Extended Price
K202618 $ 2,678 1 $ 2,678
K200640 $ 4,649 1 $ 4,649
K200636 $ 1,081 1 $ 1,081
K200637 $ 556 1 $ 556
K202597 $ 556 1 $ 556
K202506 $ 199 1 $ 199
K200641 $ 556 1 $ 556
WSEXP-1 $ - 1 $ -
Sub Total $ 155,156
Sales Tax 10.5% $16,291.38
Freight $ 3,000
Total USD $174,447.38
Special Notes Shipping Receiving Hours:

Fire extinguisher 2.2 lb (1 kg. dry powder)
Radio + CD + MP3 player system

SOLD TO
Cartridge filtration system - overall machine height 88'' Available Options
Description
Extended Warranty & Miscellaneous Options
Exprolink Inc. offers a 1-year (1000 hours) limited parts & labor WARRANTY ROG - Due Upon Receipt of Goods
QUOTE NO.

EXP-LS175-2601051318
LS175 Sub-Compact Sweeper
Pressure washer gun 1800 psi with 30' hose
Electric windshield defrost
Heated mirrors
Base Model
LS175 LS175 Sub-Compact Sweeper
Includes the following standard features:
* 58.5 HP Tier4 Hatz Engine
* Heating & air conditioning
* Rear-view camera - color monitor
* Gutter broom speed and down pressure in-cab control
* Audible engine warning system
* Emergency stop button
* Fully street legal lighting package including SMV emblem Exprolink Inc. offers a 1-year (1000 hours) limited parts & labor WARRANTY $ 144,881 1 $ 144,881
Ex Works (EXW)

BILL TO

CUSTOMER
Tire flat proofing - liquid sealant (all wheels)

ATTACHMENT A

Date 5/Jan/26 Lead Time (days):

PO #: Payment terms:

End User: City of Covina Freight:

Sourcewell M#: 93699 US Fed Tax ID#:

SHIP TO
City of Covina
534 N. Barranca Ave.

Covina, CA 91723
Hugo Guerrero
626-384-5222
Description
ROG - Due Upon Receipt of Goods
QUOTE NO.

EXP-LS175-2601051318
LS175 Sub-Compact Sweeper
Ex Works (EXW)

BILL TO

CUSTOMER
Quote valid 30 days
Applicable taxes, duties and tariffs not included
Approved and accepted by (Print Name) Signature Date approved - Purchase order to the attention of
Haaker Total Clean
2070 N. White Ave.

La Verne, CA 91750
909-598-2706, [email protected], 909-303-0147 - Payment via wire transfer
Please indicate on your purchase order:

Upon delivery, on-site operator and maintenance training provided by Exprolink or authorized Madvac dealer
Sourcewell members:
- Freight is included with the exception of Hawaii and Alaska - For Hawaii and Alaska, Exprolink will cover $1500 freight amount per machine, the rest will be paid by Sourcewell member (freight cost quoted upon shipment)
- Freight will be charged to all Sourcewell members for any consumables/parts-only orders Terms and Conditions
Special Instructions
- Sourcewell member number (if applicable)
- Exprolink Sourcewell contract number 093021-EXP (if applicable) - Exprolink quote number
- Complete bill-to and ship-to address with contact name and phone number - Specify if ship-to address has a loading dock for delivery (*important)

ATTACHMENT B
RESOLUTION CC 2026-08

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, TO AMEND THE FISCAL YEAR 2025-2026 BUDGET AND

REFLECT AN APPROPRIATION FROM AVAILABLE FUND BALANCE
IN THE ENVIRONMENTAL FUND, IMPACT FEES – STREETS FUND,

MUNICIPAL PARKING DISTRICT FUND, SANITARY SEWER FUND,
AND PROPOSITION A FUND IN THE AMOUNT OF $175,000 FOR THE PURCHASE OF (1) NEW MADVAC LS175 STREET SWEEPER
WHEREAS, the City of Covina is a municipal corporation duly organized and existing pursuant to the Constitution and laws of the State of California (“City”); and WHEREAS, the Fiscal Year 2025 Operating Budget & Capital Improvement Plan (CIP) was approved on May 6, 2025; and
WHEREAS, the approved Operating Budget and Capital Improvement Plan (CIP) is in accordance with all applicable ordinances of the City and all applicable statutes of the State; and
WHEREAS, the City of Covina wishes to amend the Fiscal Year 2025-2026 Budget and reflect an appropriation from available Fund Balance in the Environmental Fund, Impact Fees – Streets Fund, Municipal Parking District Fund, Sanitary Sewer Fund, and Proposition A Fund in the amount of $175,000 for the purchase of (1) New Madvac LS175 Street Sweeper.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. Amend the Fiscal Year 2025-2026 Budget for the purchase of (1) New Madvac LS175 Street Sweeper.

SECTION 2. Appropriate $175,000 from available Fund Balance in the Environmental Fund, Impact Fees – Streets Fund, Municipal Parking District Fund, Sanitary Sewer Fund, and Proposition A Fund as follows:

Account No. Account Description Amount
($)
Increase/Decre
ase
62005540-
55550
Environmental-Street
Sweeping-Motor
Vehicles
$75,000 Increase
27005540-
55550
Parking District-Street
Sweeping-Motor
Vehicles
$25,000 Increase
63005540-
55550
Sanitary Sewer-Street
Sweeping-Motor
Vehicles
$25,000 Increase

Resolution CC 2026-08 Page 2 of 2
47055540-
55550
Impact Fees – StreetsStreet Sweeping-Motor
Vehicles
$25,000 Increase
2400TO04-
55550
Prop A-Op Transit
Shelter-Motor Vehicles
$25,000 Increase
SECTION 3. The City Clerk shall certify to the passage and adoption of this resolution and shall enter the same in the Book of Original Resolutions.

APPROVED and PASSED this 20th day of January, 2026.

City of Covina, California
BY:

VICTOR LINARES, 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 2026-08 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of January, 2026, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
_______________________________________
FABIAN VELEZ, Chief Deputy City Clerk

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 15
Meeting: January 20, 2026
Title: Allocating Unallocated FY 25-26 Community Development Block Grant (CDBG) Funds to the "Residential Rehabilitation Program" Project D96164-25 Presented by: Brian K. Lee, AICP, Deputy City Manager/Director of Community Development Alice Leung, Management Analyst
Recommendation: 1. Adopt Resolution CC 2026-05, Authorizing and Increase to the FY 25-26 Community Development Block Grant for Projects D96164-25, and Amending the FY 2025-2026 Community Development Budget to reflect these changes; and

2. Authorize the City Manager or his designee to execute documents related to the FY 2025-2026 CDBG funds.

EXECUTIVE SUMMARY:

In July 2023, the City entered into a three-year participation agreement with the Los Angeles County Development Authority (LACDA), effective July 1, 2024. This agreement will remain in effect through June 30, 2027. At that time, the City of Covina (City) was a municipality with a population below 50,000, and the City was ineligible to receive CDBG funding directly from United States Department of Housing and Urban Development (HUD). Instead, the City receives CDBG funds from LACDA through the Urban County Program. Under this program, LACDA applies to HUD for CDBG funding, and then divides the funding amongst its subrecipients such as the City of Covina. The City’s CDBG funding is accounted for under the Community Development Department budget. All changes approved by the City Council are presented to the LACDA for approval and processing.

It is proposed that $68,833 of unallocated CDBG funds be allocated to an existing CDBG Project, “Residential Rehabilitation”. This change does not constitute a substantial amendment as the programs are existing and the funds are unallocated.

BACKGROUND:

On January 21, 2025, the Covina City Council approved the CDBG FY 25-26 program budget, as memorialized in Resolution CC 2025-06. At that time, the City was projected to receive $293,058 in New Year Funds for FY 25-26 for our annual HUD CDBG allocation. The final number allocated slightly increased to $296,629. Currently, there is $271,394 in unallocated CDBG funding available. Should Council approve Staff's recommendation, $68,833 will be available as unallocated funds for existing CDBG Project, Residential Rehabilitation Program (Project D96164-25), and $202,561 will be available as unallocated funds to be programmed at a later date.

DISCUSSION:

There are two general pools of CDBG funding which make up the available fund balance. Each year, the City is provided with New Year Funds from HUD via LACDA, as discussed above. These funds are programmed annually in January to be spent beginning July 1 of that same year. How this funding is spent must be determined in advance. Each year, however, it is common that some allocated funds go unspent for a variety of reasons. Since CDBG funding decisions are made annually, any allocated funds not spent in their programmed year are returned to our funding pool after the end of the fiscal year on June 30. These are referred to as “unallocated funds”.

Some CDBG programs are able to carry over funds from one program year to the next, however the Residential Rehabilitation Program is not eligible for this action. Therefore, unspent FY 24-25 CDBG funds previously allocated to this program have been returned to the unallocated CDBG fund.

Unallocated CDBG funds must be programmed within the same fiscal year in which they will be spent.

That is why we are requesting to allocate these unallocated funds to an existing project as an amendment to the CDBG annual budget.

The Residential Rehabilitation Program provides up to $40,000 as a grant-loan combination to eligible single-family homeowners and up to $8,000 in grants to eligible mobile-home owners for necessary home repairs, such as roof replacement and plumbing repairs. Cosmetic upgrades are not eligible for this program. The demand for this program is high, and there is currently a waitlist of pre-applicants.

As it stands, there is enough funding to assist one family with one small project. With the addition of $68,833 to the program budget, 2 single-family and 1 mobile-home owner can be assisted this fiscal year.

The table below shows the funding allocated with FY 25-26 New Year Funds, the unallocated funding amount being requested, and the proposed total budget for the program.

Project Name Approved Funds Requested
Unallocated
Funding
Proposed Program
Budget
Residential Rehabilitation
Program Project D96164-25
$23,412 $68,833 $92,245
FISCAL IMPACT:
$68,833 in unallocated CDBG funds is available for programming under fund 2100, as detailed in attached Resolution CC 2026-05. This action does not impact the General Fund.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

This activity will not result in a reasonably foreseeable change to the physical environment; it is exempt from CEQA under State CEQA Guidelines 15061 (b) (2) and (3) and does not constitute a project.

Respectfully submitted,

ATTACHMENT A
RESOLUTION CC 2026-05

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, AUTHORIZING AN INCREASE TO THE FY 2025-2026

COMMUNITY DEVELOPMENT BLOCK GRANT RESIDENTIAL
REHABILITATION PROGRAM, PROJECT D96164-25, AND AMENDING THE COMMUNITY DEVELOPMENT BUDGET FOR FISCAL YEAR 2025-
2026
WHEREAS, the Community Development Block Grant (CDBG) Program has operated since 1974 to provide local governments with the resources necessary to meet the needs of persons of low-and moderate-income; and
WHEREAS, the City of Covina contracts with the Los Angeles County Development Authority (LACDA) for the disbursement of Community Development Block Grant Funds, through the Urban County Program; and
WHEREAS, the budget for the City of Covina for fiscal year commending July 1, 2025, and ending June 30, 2026, was approved on May 6, 2025; and WHEREAS, the approved budget is in accordance with all applicable ordinances of the City and all applicable statutes of the State; and WHEREAS, the allocation of the appropriations between departmental activities may be made by the City Manager and amendments (increases/decreases) to the adopted budget shall be by approval and Resolution of the City Council; and WHEREAS, the City of Covina wishes to allocate $68,833 of unallocated funding to an existing program; Project D96164-25 - Residential Rehabilitation.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. The City Council approves an increase to Project D96164-25, “Residential Rehabilitation” in the amount of $68,833, and instructs staff to submit the necessary documentation to the Los Angeles County Development Authority.

SECTION 2. The City Council authorizes City staff to amend the FY 2025-2026 City of Covina operating budget and establish and amend the necessary accounts as follows:

Account
Number
Description Project Name Original
Budget
Increase
/Decrea
se
Amended
Amount
2100-4850-
42050-
85000
Intergovernment
al/CDBG
Residential
Rehabilitation
$23,41
2 Increase
$68,833
$92,245

Resolution CC 2026-05 Page 2 of 2
2100-4850-
53750-
85000
Grant Award Residential
Rehabilitation
$10,00
0 Increase
$18,000
$28,000
2100-4850-
53760-
85000
Loan Award Residential
Rehabilitation
$13,41
2 Increase
$50,833
$64,245
SECTION 3. The City Manager or his designee is authorized to execute documents related to the Fiscal Year 2025-2026 CDBG program.

SECTION 4. The City Clerk shall certify to the passage and adoption of this resolution and shall enter the same in the Book of Original Resolutions.

APPROVED and PASSED this 20
th day of January, 2026.

City of Covina, California
BY:

VICTOR LINARES, 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 2026-05 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20
th day of January 2026, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
___________________________________
FABIAN VELEZ, Chief Deputy City Clerk

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 16
Meeting: January 8, 2025
Title: Award Contract to D&H Water Systems, Inc. for the Procurement & Installation of a Chloramine Boosting System (CBS) at Rancho Simi Reservoir Presented by: Rafael M. Fajardo, Director of Public Works/City Engineer Recommendation: 1. Approve Award Contract to D&H Water Systems, Inc. for the procurement & installation of new Chloramine Boosting System (CBS) Equipment for the Rancho Simi Reservoir in the amount of $62,004.87 and authorize the City Manager to execute the contract; and

2. Authorize a project contingency of $ 5,000 for unforeseen circumstances.

EXECUTIVE SUMMARY/BACKGROUND:

The City of Covina’s water suppliers began supplying the City with chloramine-only treated water in May 2015 and, since that time the City has diligently monitored possible nitrification in the water supply as nitrites are a byproduct of chloramines. Nitrification can degrade a distribution system’s water quality and negatively affect regulatory compliance and lead to health and safety concerns if not properly managed. Given the potential for serious water quality, health, and safety concerns that may result from nitrification, it is imperative to prevent nitrification from occurring or promptly remediate nitrification as soon as it is discovered.

Chloramine Boosting System (CBS) is an intelligent disinfectant boosting system that gives operators the ability to set and maintain residual levels in water storage tanks and key locations in the distribution system. CBS technology, coupled with operational methods such as regularly circulating the water in the Charter Oak reservoirs, are best management practices (BMPs) for mitigating the symptoms of nitrification. In August 2016, the City Council authorized the purchase of a Chloramine Boosting System (CBS), including a chemical feed system, water quality station, and smart controller, as a longer-term strategy at the City’s largest reservoir, Charter Oak. In May 2024, City Council authorized the purchase of a second CBS trailer for the Charter Oak Reservoir. The second trailer works in tandem with the first, allowing two of the four tanks to be treated simultaneously, decreasing the volume of chemicals required to maintain residuals, treatment time, and wear and tear on the trailer systems.

In an effort to continuously create uniformity across the water supply monitoring technology, the Public Works Department’s Water Division recommends retrofitting the existing Residual Control System technology to a Chloramine Boosting System technology and award an Equipment Purchase Agreement to D&H Water Supply Inc. in the amount of $62,004.87.

DISCUSSION:

A Chloramine Boosting System is a type of Residual Control System (RCS) specifically designed to use chloramines for residual maintenance. Alone, RCS technology manages the amount of disinfectant itself. In order to more directly monitor residuals, the Public Works Department Water Division seeks to retrofit the existing RCS technology currently used at the Rancho Simi Reservoir for the installation of CBS technology, thus matching that used at Charter Oak Reservoir. Retrofitting the existing technology at Rancho Simi allows for an easier and less costly transition to CBS technology as it requires less equipment than if staff were to have a completely new system installed. Furthermore, utilizing the same

technology at both sites allows for streamlined maintenance, uniformity in materials and replacement parts, and thus more overall cost-effective operations.

City staff obtained an informal cost proposal from D&H Water Systems, Inc. with a total purchase and installation price of $62,004.84 (Attachment A). D&H Water Systems, Inc. has maintained the CBS trailers at Charter Oak Reservoir for nearly 10 years, since the first installation in 2016, and have provided outstanding service to support City operations. Considering such specialized scope of work, City staff looked to D&H Water Systems, Inc. for the retrofit Rancho Simi Reservoir in order to standardize system maintenance across reservoirs, allowing for greater regulation across City water supplies. As such, City staff recommends executing an Equipment Agreement with D&H Water Systems, Inc. to sell, deliver, and install the requisite equipment (Attachment B).

Covina Municipal Code Section 2.20.080 allows for the procurement of equipment by non-competitive proposals when the “public exigency or emergency for the supply, service or equipment will not permit a delay resulting from competitive solicitation.” This procurement falls under Section 2.20.080.B.2 public exigency or emergency category, and Section 2.20.080.B.5, professional or specialized service as identified within CMC 2.20.175. As described above, this equipment is vital to ensure water quality and time is of the essence. The Water Division seeks to procure and install the software before the summer months heat water supplies, which could result in drastically low residual levels. Further, a similar competitive procurement at the Charter Oak Reservoir site in May 2024 yielded two proposals, with the lowest cost provided by D&H Water Systems in an amount roughly $54 thousand less than the other bidder. For these reasons, it is recommended that the Council authorize this procurement pursuant to Municipal Code Section 2.20.080.B.2 and 2.20.080.B.5 due to the fact that public exigency or emergency for the use of this equipment exists and that the specialized services are unique in nature.

FISCAL IMPACT:

Sufficient funding is available in the Fiscal Year 2025-2026 Public Works Department Operational Budget under Water Transmission & Distribution Fund, Account No. 60105080-55900.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

This project has been determined to be categorically exempt under CEQA in accordance with Section 15301(b) Existing Facilities (Class 1). The project involves negligible or no expansion of an existing use.

Respectfully submitted,

EQUIPMENT PURCHASE AND SERVICES AGREEMENT
This Equipment Purchase and Services Agreement (“Agreement”) is dated January 20, 2026 (“Effective Date”) and is between the City of Covina, a California municipal corporation (“City”) and Doane and Hartwig Water Systems, Inc., a California Corporation (“Vendor”). City and Vendor are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.

RECITALS
A. City desires to utilize the services of Vendor as an independent contractor to provide a retrofit of existing Residual Control System (RCS) at Rancho Simi Reservoir with for a Chloramine boosting system (CBS) including control panel, analyzers, transmitters, pumps, and tubing (collectively, the “Equipment”), and once paid the “CBS” system shall become the sole property of the City.

B. Vendor represents that it is fully qualified to provide such Equipment by virtue of its experience and the training, education, and expertise of its principals and employees.

C. City desires to retain Vendor and Vendor desires to serve City to perform these services and provide the Equipment in accordance with the terms and conditions of this Agreement.

The parties therefore agree as follows:

1. Term of Agreement. The term of this Agreement shall be from the Effective Date through June 30, 2026, and continue unless sooner terminated as provided in Section 14 of this Agreement.

2. Compensation.

A. Compensation. As full compensation for Vendor’s services and equipment provided under this Agreement, City shall pay Vendor a sum not-to-exceed Sixty-Two Thousand Four Dollars and Eighty-Seven Cents ($62,004.87) (the “maximum compensation”), based on the purchase proposal set forth in the Approved Fee Schedule, attached hereto as Exhibit A. Any terms in Exhibit A, other than the payment rates and schedule of payment, are null and void.

B. Expenses. The amount set forth in paragraph A shall include reimbursement for all actual and necessary expenditures reasonably incurred in the performance of this Agreement.

C. Additional Services. City shall not allow any claims for additional services performed by Vendor, unless the City Council and the Vendor Representative authorize the additional services in writing prior to Vendor’s performance of the additional services or incurrence of additional expenses. Any additional services or expenses authorized by the City Council shall be compensated at the rates set forth in Exhibit A, or, if not specified, at a rate mutually agreed to by the parties in writing. City shall make payment for additional services and expenses in accordance with Section 4 of this Agreement.

3. Vendor’s Services and Equipment.

A. Purchase and Sale of Equipment; Scope of Services. On and subject to the terms and conditions set forth in this Agreement, Vendor agrees to sell and deliver to City a complete

ATTACHMENT A

Chloramine boosting system (CBS) including including control panel, analyzers, transmitters, pumps, and tubing. Vendor shall perform deliver and perform the startup of the Equipment. City may request, in writing, changes in the scope of services to be performed. Any changes mutually agreed upon by the parties, and any increase or decrease in compensation, shall be incorporated by written amendments to this Agreement. At the end of the term of this Agreement or, if earlier, at such time as the City shall have paid $62,004.87 (i.e., the maximum compensation) in the aggregate under this Agreement, the City shall be the sole owner of the Equipment and Vendor shall have no rights or interests thereto.

B. Party Representatives. For the purposes of this Agreement, the City Representative shall be the City Manager, or such other person designated in writing by the City Manager (the “City Representative”). For the purposes of this Agreement, the Vendor Representative shall be Dan Hartwig, CEO (the “Vendor Representative”). The Vendor Representative shall directly manage Vendor’s services under this Agreement. Vendor shall not change the Vendor Representative without City’s prior written consent.

C. Time and Place of Delivery. The date and time of delivery of the Equipment shall be on or before March 1, 2026. The Equipment shall be delivered to the following location:

Rancho Simi Reservoir Site at 502 Rancho Simi Drive, Covina, CA 91724.

D. Standard of Performance. Vendor shall perform all services under this Agreement in accordance with the standard of care generally exercised by like professionals under similar circumstances and in a manner reasonably satisfactory to City.

E. Personnel. Vendor has, or will secure at its own expense, all personnel required to perform the services required under this Agreement. All of the services required under this Agreement shall be performed by Vendor or under its supervision, and all personnel engaged in the work shall be qualified to perform such services. Vendor shall determine the means, methods, and details by which Vendor’s personnel will perform the services under this Agreement. Vendor shall be solely responsible for the satisfactory work performance of all personnel engaged in performing the services and compliance with the customary professional standards.

F. Compliance with Laws. The Vendor shall keep itself informed of all local, state and federal ordinances, laws and regulations which in any manner affect those employed by it or in any way affect the performance of its service pursuant to this Agreement. The Vendor shall at all times observe and comply with all such ordinances, laws and regulations. The City and its agents shall not be liable at law or in equity occasioned by failure of the Vendor to comply with this section. This Agreement may call for services that, in whole or in part, constitute “public works,” as defined in the California Labor Code. Therefore, as to those services that may be “public works”, including construction, alteration, demolition, and installation work, Vendor shall comply in all respects with all applicable provisions of the California Labor Code, including those set forth in Exhibit B.

G. Permits and Licenses. Vendor shall obtain and maintain during the Agreement term all necessary licenses, permits and certificates required by law for the provision of services under this Agreement, including a business license.

H. Representation and Warranties of Vendor. Vendor makes the following representations and warranties to City:

1) Authority and Consents. Vendor has the right, power, legal capacity and authority to enter into and perform its obligations under this Agreement. No approvals or consents of any persons are necessary in connection with Vendor's execution, delivery and performance of this Agreement, except for such as have been obtained on or prior to the date hereof. The execution, delivery and performance of this Agreement by Vendor have been duly authorized by all necessary action on the part of Vendor and constitute the legal, valid and binding obligations of Vendor, enforceable against Vendor in accordance with their respective terms. 2) Title, License and Operating Condition. Vendor has good and marketable title to all of the Equipment. All of the Equipment is free and clear of any restrictions on or conditions to transfer or assignment, and at such time as the City shall have paid $62,004.87 (i.e., the maximum compensation) in the aggregate under this Agreement, City will acquire absolute title to all of the Equipment free and clear of mortgages, liens, pledges, charges, encumbrances, equities, claims, covenants, conditions and restrictions except for such as may be created or granted by City. All of the Equipment is in good operating condition, is free of any defects, and is in conformity with the specifications, descriptions, representations and warranties set forth in the Agreement. Vendor is aware that City is purchasing the Equipment for use as Residual Control System to enhance water quality in the storage tanks, and that City is relying on the warranties of the Vendor that the Equipment is fit for this purpose and the ordinary purposes for which the Equipment is normally used.
3) Warranty. Vendor hereby guarantees and warrants that the Equipment will be of quality and free from defects in design, engineering, material and workmanship for a period of twelve (12) months from the date of delivery of the Equipment. Vendor further warrants that any services provided in connection with the Equipment will be performed in a professional and workmanlike manner and in accordance with the highest industry standards. For any breach of the warranties contained herein Vendor will either repair or replace the Equipment, immediately after receiving notice from City, at City’s option and agreed to by Vendor, such agreement by Vendor not being unreasonably withheld, and at Vendor’s own expense and without cost to City. 4) Full Disclosure. None of the representations and warranties made by Vendor in this Agreement contains or will contain any untrue statements of a material fact, or omits to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading.

I. Title and Risk of Loss. Title to and the risk of loss, damage and destruction of the Equipment shall remain with the Vendor until after inspection and acceptance of the Equipment by City.

J. Inspection and Acceptance. City shall inspect the Equipment at the time and place of delivery. Such inspection may include reasonable tests and use of the Equipment by City. If, in the determination of City, the Equipment fails to conform to the Agreement IN ANY MANNER OR RESPECT, City shall so notify Vendor within ten (10) days of delivery of the Equipment to City. Failing such notice, the Equipment shall be deemed accepted by City as of the date of receipt.

K. Rejection. In the event of such notice of non-conformity by City pursuant to the section entitled "Acceptance" above, City may, at its option, (1) reject the whole of the Equipment, (2) accept the whole of the Equipment, or (3) accept any commercial unit or units of the Equipment and reject the remainder. The exercise of any of the above options shall be "without prejudice" and with full reservation of any rights and remedies of City attendant upon a breach. In the event

of such notice and election by City, City agrees to comply with all reasonable instructions of Vendor and, in the event that expenses are incurred by City in following such instructions, Vendor shall indemnify City in full for such expenses.

L. No Replacements of Cure. This Agreement calls for strict compliance. Vendor expressly agrees that both the Equipment tendered and the tender itself will conform fully to the terms and conditions of the Agreement on the original tender. In the event of rejection by City of the whole of the Equipment or any part thereof pursuant to the subsection K entitled "Rejection" above, City may, but is not required to, accept any substitute performance from Vendor or engage in subsequent efforts to affect a cure of the original tender by Vendor.

M. Vendor shall maintain the Equipment for the first 12 months from the date of delivery of the Equipment. In performing the maintenance of the Equipment, Vendor shall employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing similar services as are required of Vendor hereunder in meeting its maintenance obligations under this Agreement. Beginning the 13th month from the date of delivery of the Equipment, City shall be responsible for maintenance of the Equipment.

N. Survival of Representations and Warranties. All representations, warranties, and covenants of the parties contained in this Agreement shall survive the execution, delivery and performance of this Agreement.

4. Method of Payment.

A. Invoices. Vendor shall submit to City an invoice, on a monthly basis, for actual services performed and the Equipment rental pursuant to this Agreement. Each invoice shall itemize the services rendered during the billing period, hourly rates charged, if applicable, and the amount due. If City disputes any of Vendor's fees, it shall give written notice to Vendor within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice.

B. Payment. City shall pay all undisputed invoice amounts within thirty (30) calendar days after receipt up to the maximum compensation set forth in Section 2 of this Agreement. City shall not withhold federal payroll, state payroll or other taxes, or other similar deductions, from payments made to Vendor. Vendor
C. Audit of Records. Vendor shall make all records, invoices, time cards, cost control sheets and other records maintained by Vendor in connection with this agreement available during Vendor’s regular working hours to City for review and audit by City.

D. Payment Solely from Water Fund. Vendor understands and agrees the City will make payments under this Agreement from moneys in the City’s Water Fund appropriated therefor (as approved by the City Council), and such moneys shall be the sole source of moneys for such payments. The City has incurred no liability and shall have no responsibility to use any other funds or properties of the City for the payment obligations hereunder.

5. Ownership of Documents. Upon completion of, or in the event of termination or suspension of this Agreement, all original documents, designs, drawings, maps, models, computer files containing data generated for the work, surveys, notes, and other documents prepared in the course of providing the services to be performed (“written products”) pursuant to this Agreement shall become the sole property of the City without restriction or limitation upon its use and may

be used, reused, disseminated or otherwise disposed of by the City without the permission of the Vendor. With respect to computer files containing data generated for the work, Vendor shall make available to the City, upon reasonable written request by the City, the necessary computer software and hardware for purposes of accessing, compiling, transferring and printing computer files.

Vendor may take and retain copies of the written products as desired, but the written products shall not be the subject of a copyright application by Vendor.

6. Independent Contractor.

A. Vendor is, and shall at all times remain as to City, a wholly independent contractor and not an employee of City. The personnel performing the services under this Agreement on behalf of Vendor shall also not be employees of City and shall at all times be under Vendor's exclusive direction and control. Vendor shall have no power to incur any debt, obligation, or liability on behalf of City. Neither City nor any of its agents shall have control over the conduct of Vendor or any of Vendor’s employees. Vendor shall not, at any time, or in any manner, represent that it or any of its officers, agents or employees are in any manner employees of City.

Vendor and Vendor’s personnel shall not supervise any of City’s employees; and City’s employees shall not supervise Vendor’s personnel. Vendor’s personnel shall not wear or display any City uniform, badge, identification number, or other information identifying such individual as an employee of City; and Vendor’s personnel shall not use any City e-mail address or City telephone number in the performance of any of the services under this Agreement. Vendor shall acquire and maintain, at its sole cost and expense, such vehicles, equipment, and supplies as Vendor’s personnel require to perform any of the services required by this Agreement. Vendor shall perform the services off of City premises at locations of Vendor’s choice, except as otherwise may from time to time be necessary in order for Vendor’s personnel to receive projects from City, review plans on file at City, pick up or deliver any work product related to Vendor’s performance of the services under this Agreement, or as may be necessary to inspect or visit City locations and/or private property to perform the services. City may make a computer available to Vendor from time to time for Vendor’s personnel to obtain information about or to check on the status of projects pertaining to the services under this Agreement.

B. No employee benefits shall be available to Vendor in connection with the performance of this Agreement. Except for the fees paid to Vendor as provided in the Agreement, City shall not pay salaries, wages, or other compensation to Vendor for performing services hereunder for City. City shall not be liable for compensation or indemnification to Vendor for injury or sickness arising out of performing services hereunder. Vendor shall be responsible for and pay all wages, salaries, benefits and other amounts due to Vendor’s personnel in connection with their performance of the services under this Agreement and as required by law. Vendor shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: Social Security taxes, other retirement or pension benefits, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance.

Notwithstanding any other agency, state, or federal policy, rule, regulation, statute or ordinance to the contrary, Vendor and any of its officers, employees, agents, and subcontractors providing any of the services under this Agreement shall not become entitled to, and hereby waive any claims to, any wages, salaries, compensation, benefit or any incident of employment by City, including, but not limited to, eligibility to enroll in, or reinstate to membership in, the California Public Employees Retirement System (“PERS”) as an employee of City, and entitlement to any contribution to be paid by City for employer contributions or employee contributions for PERS benefits.

C. Vendor shall indemnify and hold harmless City and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of City officials, from any and all liability, damages, claims, costs, and expenses of any nature to the extent arising from, caused by, or relating to Vendor’s personnel practices. or to the extent arising from, caused by, or relating to the violation of any of the provisions of this Section 6. In addition to all other remedies available under law, City shall have the right to offset against the amount of any fees due to Vendor under this Agreement any amount due to City from Vendor as a result of Vendor’s failure to promptly pay to City any reimbursement or indemnification arising under this Section 6. This duty of indemnification is in addition to Vendor’s duty to defend, indemnify, and hold harmless as set forth in any other provision of this Agreement.

7. PERS Compliance and Indemnification.

A. General Requirements. The parties acknowledge that City is a local agency member of PERS, and as such has certain pension reporting and contribution obligations to PERS on behalf of qualifying employees. Vendor agrees that, in providing its employees and any other personnel to City to perform the services under this Agreement, Vendor shall assure compliance with the Public Employees’ Retirement Law, commencing at Government Code Section 20000, the regulations of PERS, and the Public Employees’ Pension Reform Act of 2013, as amended.

Without limitation to the foregoing, Vendor shall assure compliance with regard to personnel who have active or inactive membership in PERS and to those who are retired annuitants and in performing this Agreement shall not assign or utilize any of its personnel in a manner that will cause City to be in violation of the applicable retirement laws and regulations.

B. Indemnification. Vendor shall defend (with legal counsel approved by City, whose approval shall not be unreasonably withheld), indemnify, and hold harmless City, and its City and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of City officials, from any and all liability, damages, claims, costs, and expenses of any nature to the extent arising from, caused by, or relating to Vendor’s violation of any provisions of this Section 7. This duty of indemnification is in addition to Vendor’s duty to defend, indemnify, and hold harmless as set forth in any other provision of this Agreement.

8. Confidentiality. All data, documents, discussion, or other information (collectively “data”) developed or received by Vendor or provided for performance of this Agreement are deemed confidential. Vendor shall keep all data confidential and shall not disclose any data to any person or entity without City’s prior written consent. City shall grant such consent if disclosure is legally required. Vendor shall return all data to City upon the expiration or termination of this Agreement. Vendor’s covenant under this Section 8 shall survive the expiration or termination of this Agreement.

9. Conflicts of Interest. Vendor and its officers, employees, associates and subcontractors, if any, shall comply with all conflict of interest statutes of the State of California applicable to Vendor’s services under this Agreement, including the Political Reform Act (Gov. Code, § 81000 et seq.) and Government Code Section 1090. During the term of this Agreement, Vendor may perform similar services for other clients, but Vendor and its officers, employees, associates and subcontractors shall not, without the City Representative’s prior written approval, perform work for another person or entity for whom Vendor is not currently performing work that would require Vendor or one of its officers, employees, associates or subcontractors to abstain from a decision under this Agreement pursuant to a conflict of interest statute. Vendor shall incorporate a clause

substantially similar to this Section 9 into any subcontract that Vendor executes in connection with the performance of this Agreement.

10. Indemnification.

A. Indemnities for Third Party Claims.
1) To the fullest extent permitted by law, Vendor shall, at its sole cost and expense, defend, hold harmless and indemnify City and its elected officials, officers, attorneys, agents, employees, designated volunteers, successors, assigns and those City agents serving as independent contractors in the role of City officials (collectively “Indemnitees”), from and against any and all damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, expenses, judgments, penalties, liens and losses of any nature whatsoever, including fees of accountants, attorneys or other professionals, and all costs associated therewith, and the payment of all consequential damages (collectively “Liabilities”), in law or equity, whether actual, alleged or threatened, which arise out of, are claimed to arise out of, pertain to, or relate to the acts or omissions of Vendor, its officers, agents, servants, employees, subcontractors, materialmen, contractors or their officers, agents, servants or employees (or any entity or individual that Vendor shall bear the legal liability thereof) in the performance of this Agreement, including the Indemnitees’ active or passive negligence, except for Liabilities arising from the sole negligence or willful misconduct of the Indemnitees, as determined by final arbitration or court decision or by the agreement of the parties. Vendor shall defend the Indemnitees in any action or actions filed in connection with any Liability with counsel of the Indemnitees’ choice, and shall pay all costs and expenses, including all attorneys’ fees and experts’ costs actually incurred in connection with such defense. Vendor shall reimburse the Indemnitees for any and all legal expenses and costs incurred by Indemnitees in connection therewith.
2) Vendor shall pay all required taxes on amounts paid to Vendor under this Agreement, and indemnify and hold City harmless from any and all taxes, assessments, penalties and interest asserted against City by reason of the independent contractor relationship created by this Agreement. Vendor shall fully comply with the workers’ compensation law regarding Vendor and Vendor’s employees. Vendor shall indemnify and hold City harmless from any failure of Vendor to comply with applicable workers’ compensation laws. City may offset against the amount of any fees due to Vendor under this Agreement any amount due to City from Vendor as a result of Vendor’s failure to promptly pay to City any reimbursement or indemnification arising under this Subparagraph A. 2).
3) Vendor shall obtain executed indemnity agreements with provisions identical to those in this Section 10 from each and every subcontractor or any other person or entity involved by, for, with or on behalf of Vendor in the performance of this Agreement. If Vendor fails to obtain such indemnity obligations, Vendor shall be fully responsible and indemnify, hold harmless and defend the Indemnitees from and against any and all Liabilities in law or equity, whether actual, alleged or threatened, which arise out of, are claimed to arise out of, pertain to, or relate to the acts or omissions of Vendor’s subcontractor, its officers, agents, servants, employees, subcontractors, materialmen, contractors or their officers, agents, servants or employees (or any entity or individual that Vendor’s subcontractor shall bear the legal liability thereof) in the performance of this Agreement, including the Indemnitees’ active or passive negligence, except for Liabilities arising from the sole negligence or willful misconduct of the Indemnitees, as determined by final arbitration or court decision or by the agreement of the parties.

B. Workers’ Compensation Acts not Limiting. Vendor’s indemnifications and obligations under this Section 10, or any other provision of this Agreement, shall not be limited by the provisions of any workers’ compensation act or similar act. Vendor expressly waives its statutory immunity under such statutes or laws as to City, its officers, agents, employees and volunteers.

C. Insurance Requirements not Limiting. City does not, and shall not, waive any rights that it may possess against Vendor because of the acceptance by City, or the deposit with City, of any insurance policy or certificate required pursuant to this Agreement. The indemnities in this Section 10 shall apply regardless of whether or not any insurance policies are determined to be applicable to the Liability, tax, assessment, penalty or interest asserted against City.

D. Survival of Terms. Vendor’s indemnifications and obligations under this Section 10 shall survive the expiration or termination of this Agreement.

11. Insurance.

A. Minimum Scope and Limits of Insurance. Vendor shall procure and at all times during the term of this Agreement carry, maintain, and keep in full force and effect, insurance as follows:
1) Commercial General Liability Insurance with a minimum limit of Two Million Dollars ($2,000,000) per occurrence for bodily injury, personal injury and property damage and a general aggregate limit of Two Million Dollars ($2,000,000) per project or location.

If Vendor is a limited liability company, the commercial general liability coverage shall be amended so that Vendor and its managers, affiliates, employees, agents and other persons necessary or incidental to its operation are insureds.
2) Automobile Liability Insurance for any owned, non-owned or hired vehicle used in connection with the performance of this Agreement with a combined single limit of Two Million Dollars ($2,000,000) per accident for bodily injury and property damage. If Vendor does not use any owned, non-owned or hired vehicles in the performance of services under this Agreement, Vendor shall obtain a non-owned auto endorsement to the Commercial General Liability policy required under Subparagraph A. 1) of this Section 11. 3) Workers’ Compensation Insurance as required by the State of California and Employer’s Liability Insurance with a minimum limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease. If Vendor has no employees while performing services under this Agreement, workers’ compensation policy is not required, but Vendor shall provide an executed declaration that it has no employees.

B. Acceptability of Insurers. The insurance policies required under this Section 11 shall be issued by an insurer admitted to write insurance in the State of California with a rating of A:VII or better in the latest edition of the A.M. Best Insurance Rating Guide. Self-insurance shall not be considered to comply with the insurance requirements under this Section 11.

C. Additional Insured. The commercial general and automobile liability policies shall contain an endorsement naming the City, its officers, employees, agents and volunteers as additional insureds.

D. Primary and Non-Contributing. The insurance policies required under this Section 11 shall apply on a primary non-contributing basis in relation to any other insurance or selfinsurance available to City. Any insurance or self-insurance maintained by City, its officers, employees, agents or volunteers, shall be in excess of Vendor’s insurance and shall not contribute with it.

E. Vendor’s Waiver of Subrogation. The insurance policies required under this Section 11 shall not prohibit Vendor and Vendor’s employees, agents or subcontractors from waiving the right of subrogation prior to a loss. Vendor hereby waives all rights of subrogation against City.

F. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be approved by City. At City’s option, Vendor shall either reduce or eliminate the deductibles or self-insured retentions with respect to City, or Vendor shall procure a bond guaranteeing payment of losses and expenses.

G. Cancellations or Modifications to Coverage. Vendor shall not cancel, reduce or otherwise modify the insurance policies required by this Section 11 during the term of this Agreement. The commercial general and automobile liability policies required under this Agreement shall be endorsed to state that should the issuing insurer cancel the policy before the expiration date, the issuing insurer will endeavor to mail thirty (30) calendar days’ prior written notice to City. If any insurance policy required under this Section 11 is canceled or reduced in coverage or limits, Vendor shall, within two (2) business days of notice from the insurer, phone, fax or notify City via certified mail, return receipt requested, of the cancellation of or changes to the policy.

H. City Remedy for Noncompliance. If Vendor does not maintain the policies of insurance required under this Section 11 in full force and effect during the term of this Agreement, or in the event any of Vendor’s policies do not comply with the requirements under this Section 11, City may either immediately terminate this Agreement or, if insurance is available at a reasonable cost, City may, but has no duty to, take out the necessary insurance and pay, at Vendor’s expense, the premium thereon. Vendor shall promptly reimburse City for any premium paid by City or City may withhold amounts sufficient to pay the premiums from payments due to Vendor.

I. Evidence of Insurance. Prior to the performance of services under this Agreement, Vendor shall furnish City’s Risk Manager with a certificate or certificates of insurance and all original endorsements evidencing and effecting the coverages required under this Section 11. The endorsements are subject to City’s approval. Vendor may provide complete, certified copies of all required insurance policies to City. Vendor shall maintain current endorsements on file with City’s Risk Manager. Vendor shall provide proof to City’s Risk Manager that insurance policies expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Vendor shall furnish such proof at least two (2) weeks prior to the expiration of the coverages.

J. Indemnity Requirements not Limiting. Procurement of insurance by Vendor shall not be construed as a limitation of Vendor’s liability or as full performance of Vendor’s duty to indemnify City under Section 10 of this Agreement.

K. Subcontractor Insurance Requirements. Vendor shall require each of its subcontractors that perform services under this Agreement to maintain insurance coverage that meets all of the requirements of this Section 11.

12. Mutual Cooperation.

A. City’s Cooperation. City shall provide Vendor with all pertinent data, documents and other requested information as is reasonably available for Vendor’s proper performance of the services required under this Agreement.

B. Vendor’s Cooperation. In the event any claim or action is brought against the City relating to Vendor’s performance or services rendered under this Agreement, Vendor shall render any reasonable assistance that City requires.

13. Records and Inspections. Vendor shall maintain full and accurate records with respect to all matters covered under this Agreement for a period of two (2) years. Vendor shall, without charge, provide City with access to the records during normal business hours. City may examine and audit the records and make transcripts therefrom, and inspect all program data, documents, proceedings and activities.

14. Termination or Suspension of Agreement.

A. Right to Terminate or Suspend. City may terminate or suspend this Agreement at any time, at will, for any reason or no reason, after giving written notice to Vendor at least seven (7) calendar days before the termination or suspension is to be effective. Vendor may terminate this Agreement at any time, at will, for any reason or no reason, after giving written notice to City at least sixty (60) calendar days before the termination is to be effective.

B. Obligations upon Termination. Vendor shall cease all work under this Agreement on or before the effective date of termination specified in the notice of termination. In the event of City’s termination of this Agreement due to no fault or failure of performance by Vendor, City shall pay Vendor based on the percentage of work satisfactorily performed up to the effective date of termination. In no event shall Vendor be entitled to receive more than the amount that would be paid to Vendor for the full performance of the services required by this Agreement.

15. Force Majeure. Vendor shall not be liable for any failure to perform its obligations under this Agreement if Vendor presents acceptable evidence, in City’s sole judgment, that such failure was due to strikes, lockouts, labor disputes, embargoes, acts of God, inability to obtain labor or materials or reasonable substitutes for labor or materials, governmental restrictions, governmental regulations, governmental controls, judicial orders, enemy or hostile governmental action, civil commotion, fire or other casualty, or other causes beyond Vendor’s reasonable control and not due to any act by Vendor.

16. Notices. Any notices, consents, requests, demands, bills, invoices, reports or other communications which either party may desire to give to the other party under this Agreement must be in writing and conclusively deemed effective: (a) on personal delivery, (b) on confirmed delivery by reputable document delivery service or courier service during Vendor’s and City's regular business hours, or (c) five business days after deposit in the United States mail, by first class mail, postage prepaid, and addressed to the party to be notified as set forth below:

If to City: If to Vendor:

Attn: Department of Public Works, Water Attn: David Hartwig City of Covina Doane and Hartwig Water Systems, Inc.
125 E. College Street 603 Seagaze Drive #241
Covina, California 91723 Oceanside, CA 92054

17. Non-Discrimination and Equal Employment Opportunity. In the performance of this Agreement, Vendor shall not discriminate against any employee, subcontractor or applicant for employment because of race, color, religious creed, sex, gender, gender identity, gender expression, marital status, national origin, ancestry, age, physical disability, mental disability, medical condition, genetic information, sexual orientation or other basis prohibited by law.

Vendor will take affirmative action to ensure that subcontractors and applicants are employed, and that employees are treated during employment, without regard to their race, color, religious creed, sex, gender, gender identity, gender expression, marital status, national origin, ancestry, age, physical disability, mental disability, medical condition, genetic information or sexual orientation.

18. Prohibition of Assignment and Delegation. Vendor shall not assign any of its rights or delegate any of its duties under this Agreement, either in whole or in part, without City’s prior written consent. City’s consent to an assignment of rights under this Agreement shall not release Vendor from any of its obligations or alter any of its primary obligations to be performed under this Agreement. Any attempted assignment or delegation in violation of this Section 18 shall be void and of no effect and shall entitle City to terminate this Agreement. As used in this Section 18, “assignment” and “delegation” means any sale, gift, pledge, hypothecation, encumbrance or other transfer of all or any portion of the rights, obligations, or liabilities in or arising from this Agreement to any person or entity, whether by operation of law or otherwise, and regardless of the legal form of the transaction in which the attempted transfer occurs.

19. No Third-Party Beneficiaries Intended. Except as otherwise provided in Section 10, this Agreement is made solely for the benefit of the parties to this Agreement and their respective successors and assigns, and no other person or entity may have or acquire a right by virtue of this Agreement.

20. Waiver. No delay or omission to exercise any right, power or remedy accruing to City under this Agreement shall impair any right, power or remedy of City, nor shall it be construed as a waiver of, or consent to, any breach or default. No waiver of any breach, any failure of a condition, or any right or remedy under this Agreement shall be (1) effective unless it is in writing and signed by the party making the waiver, (2) deemed to be a waiver of, or consent to, any other breach, failure of a condition, or right or remedy, or (3) deemed to constitute a continuing waiver unless the writing expressly so states.

21. Exhibits. Exhibits A and B constitute a part of this Agreement and are incorporated into this Agreement by this reference. If any inconsistency exists or arises between a provision of this Agreement and a provision of any exhibit, the provisions of this Agreement shall control.

22. Entire Agreement. This Agreement and all exhibits referred to in this Agreement constitute the final, complete and exclusive statement of the terms of the agreement between the parties pertaining to the subject matter of this Agreement and supersede all other prior or contemporaneous oral or written understandings and agreements of the parties. No party has been induced to enter into this Agreement by, nor is any party relying on, any representation or warranty except those expressly set forth in this Agreement.

23. Amendment of Agreement. This Agreement may be amended only by a writing signed by both parties. The City Manager is authorized to sign an amendment to this Agreement on the City Council’s behalf and without the City Council’s prior approval to make the following nonsubstantive modifications to the Agreement: (a) name changes; (b) extensions of time; (c) nonmonetary changes in the scope of work; and (d) termination of the Agreement.

24. Headings. The headings in this Agreement are included solely for convenience of reference and shall not affect the interpretation of any provision of this Agreement or any of the rights or obligations of the parties to this Agreement.

25. Word Usage. Unless the context clearly requires otherwise, (a) the words “shall,” “will” and “agrees” are mandatory and “may” is permissive; (b) “or” is not exclusive; and (c) “includes” or “including” are not limiting.

26. Time of the Essence. Time is of the essence in respect to all provisions of this Agreement that specify a time for performance; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period allowed in this Agreement.

27. Governing Law and Choice of Forum. This Agreement, and any dispute arising from the relationship between the parties to this Agreement, shall be governed by and construed in accordance with the laws of the State of California, except that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in interpreting this Agreement. Any dispute that arises under or relates to this Agreement (whether contract, tort or both) shall be resolved in a municipal, superior or federal court with geographic jurisdiction over the City of Covina.

28. Attorneys’ Fees. In any litigation or other proceeding by which on party seeks to enforce its rights under this Agreement (whether in contract, tort or both) or seeks a declaration of any rights or obligations under this Agreement, the prevailing party shall be shall be awarded reasonable attorneys’ fees together with any costs and expenses, to resolve the dispute and to enforce the final judgment.

29. Severability. If a court of competent jurisdiction holds any provision of this Agreement to be illegal, invalid or unenforceable for any reason, the validity of and enforceability of the remaining provisions of this Agreement shall not be affected and continue in full force and effect.

30. Authority to Execute Agreement. The person or persons executing this Agreement on behalf of Vendor warrants and represents that he or she has the authority to execute this Agreement on behalf of the Vendor and has the authority to bind Vendor to the performance of its obligations hereunder.
[SIGNATURE PAGE FOLLOWS]

The parties, through their duly authorized representatives, are signing this Agreement on the date stated in the introductory clause.

City:

City of Covina,
a California municipal corporation
By:

Name: Christopher Marcarello
Title: City Manager
ATTEST:

By:

Name: Fabian Velez
Title: Chief Deputy City Clerk
Vendor:

Doane and Hartwig Water Systems, Inc.,
a California Corporation
By:

Name: David Hartwig
Title: President
By:

Name: Brian Doane
Title: Secretary
(Two signatures of corporate officers required
for corporations under Corporations Code
Section 313, unless corporate documents
authorize only one person to sign this
Agreement on behalf of the corporation.)

EXHIBIT A

APPROVED FEE SCHEDULE

EXHIBIT B

CALIFORNIA LABOR CODE COMPLIANCE
(Labor Code §§ 1720 et seq., 1813, 1860, 1861, 3700)
If this Agreement calls for services that, in whole or in part, constitute “public works” as defined in the California Labor Code, then:

1. This Agreement is subject to the provisions of Division 2, Part 7, Chapter 1 (commencing with Section 1720) of the California Labor Code relating to public works and the awarding public agency (“City”) and Vendor agrees to be bound by all the provisions thereof as though set forth in full herein.

2. Vendor shall be registered with the Department of Industrial Relations (“DIR”) in accordance with California Labor Code Section 1725.5 and has provided proof of registration to City prior to the Effective Date of this Agreement.

3. Vendor shall comply with the provisions of California Labor Code Sections 1771, 1774 and 1775 concerning the payment of prevailing rates of wages to workers and the penalties for failure to pay prevailing wages. The applicable prevailing wage determination(s) may be obtained at (http://www.dir.ca.gov/OPRL/DPreWageDetermination.htm), are on file with City, and are available to any interested party upon request. Vendor shall, as a penalty to City, forfeit not more than two-hundred dollars ($200) for each calendar day, or portion thereof, for each worker paid less than the prevailing rates as determined by the Director of Industrial Relations for the work or craft in which the worker is employed for any public work done under this Agreement by Vendor or by any subcontractor.

4. Pursuant to California Labor Code Section 1771.4, Vendor’s services are subject to compliance monitoring and enforcement by the Department of Industrial Relations.

Vendor shall post job site notices as prescribed by DIR regulations and agrees to furnish the records specified in California Labor Code Section 1776 directly to the Labor Commissioner in the manner prescribed by California Labor Code Section 1771.4(a)(3) and (c)(2).

5. Vendor shall comply with the provisions of California Labor Code Section 1776 which, among other things, require Vendor and each subcontractor to: (1) keep accurate payroll records, (2) certify and make such payroll records available for inspection as provided by Section 1776, and (3) inform City of the location of the records. Vendor is responsible for compliance with Section 1776 by itself and all of its subcontractors.

6. Vendor shall comply with the provisions of California Labor Code Section 1777.5 concerning the employment of apprentices on public works projects, and further agrees that Vendor is responsible for compliance with Section 1777.5 by itself and all of its subcontractors.

7. Vendor shall comply with the provisions of California Labor Code Section 1813 concerning penalties for workers who work excess hours. Vendor shall, as a penalty to City, forfeit twenty-five dollars ($25) for each worker employed in the execution of this

Agreement by Vendor or by any subcontractor for each calendar day during which such worker is required or permitted to work more than eight (8) hours in any one calendar day and forty (40) hours in any one calendar week in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the California Labor Code.

8. California Labor Code Sections 1860 and 3700 provide that every contractor will be required to secure the payment of compensation to its employees. In accordance with the provisions of California Labor Code Section 1861, Vendor hereby certifies as follows:
“I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this Agreement.”
Date _______________ Signature ____________________________________

Rev. 09.20.23
603 Seagaze Drive #241, Oceanside, CA 92054 | (760) 722-6893 | www.dandhwatersystems.com

PROPOSAL
Date: 5 December2025
Project: CBS Panel Retrofit and Install
Owner: City of Covina
Contact: Mike Melinte
Thank you for your interest in products offered by D&H Water Systems, Inc. We are pleased to provide the following proposal for your consideration.

Qty Description Price Ext. Price
1 D&H Water Systems installation of CBS Equipment and Analyzer Installation and Procurement of BWWT CBS Control Panel
o Power Cord and other Connection Cables to be Provided Installation and Procurement of Prominent Chlorine Analyzer Model: DAC Total Cl, 10ppm pkg
o DAC controller: DACbW006VA1000000010EN
o Sensor Housing: DGMA401T010.
o Chlorine Sensor (CTE): 0 - 10 PPM
o pH Sensor: 150094
o Backboard Assembly to include:
o Backboard (30"W x 24"H)
o Pressure Regulating Valve
o Needle Valve
o Sample Valve
o Bubble Diffuser
o All Necessary wiring and tubing
All equipment fully assembled and tested at the factory prior to shipment.

Retrofitting Existing Equipment
Installation of [1] Pressure Guage and [1] Switch for Ammonia Line o 0-100 PSI; Glycerin Filled
Installation of [1] Pressure Guage and [1] Switch for Chlorine Line

ATTACHMENT B
Proposal | Page 2 of 3
Rev. 09.20.23
603 Seagaze Drive #241, Oceanside, CA 92054 | (760) 722-6893 | www.dandhwatersystems.com Qty Description Price Ext. Price
o 0-100 PSI; Halocarbon Filled
Installation of Level Transmitters
o Qty [2] Prominent Level Transmitter + Mounting Equipment Removal of Existing Blue-White Pumps + Installation of New BlueWhite Pumps o I/O Cables to be provided.
o Junction Box for CL2 and LAS Skid
** NO SCADA WORK TO BE PERFORMED **
1 Service – 2 Technicians (2 days on site)
Includes Travel Time and Site Time $9,180.00
1 Freight $600.00
$56,113.00
$5,891.87
Subtotal
Sales Tax 10.5%
Total Lot Price $62,004.87
All resulting purchase orders should be sent to D&H Water Systems, Inc., 603 Seagaze Dr, #241, Oceanside, CA 92054. We look forward to working with you on this project. If I can be of any further assistance, please do not hesitate to contact me.

Best,
Dan Hartwig
760-717-0209
[email protected]

Proposal | Page 3 of 3
Rev. 09.20.23
603 Seagaze Drive #241, Oceanside, CA 92054 | (760) 722-6893 | www.dandhwatersystems.com Conditions of Sale
D&H Water Systems is serving as an equipment supplier.

Payment terms (upon approved credit): Net 30 days after shipment of equipment with no retainage.

This quote is firm for 30 days.

Quotation does not include any taxes.

All Visa and Mastercard transactions will incur a 4% pass-through service charge.

Submittals provided 2-3 weeks after purchase order is fully executed by both parties.

Delivery will be made in approximately 6-8 weeks after submittal approval. (Subject to change based on component availability.)
D&H Water Systems reserves the right to adjust lead times.

This quotation is limited to the products and services as listed and excludes any item or service that is not specifically listed.

D&H Water Systems’ standard insurance package covers general liability, automotive, worker’s compensation, and umbrella liability. We do not provide professional liability. Any cost associated with additional insurance requirements will be passed on to buyer.

D&H Water Systems will not be held liable for any liquidated damages incurred during project.

This quotation EXCLUDES any permits, licenses, bonds, inspections, or fees.

This quotation EXCLUDES seismic calculation of any kind unless specifically noted in scope of supply.

This quotation EXCLUDES equipment tags/labels unless otherwise specified.

This quotation EXCLUDES any field wiring. Field wiring and any other installation service is to be performed by others.

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 17
Meeting: January 20, 2026
Title: Approval of Plans and Specifications, Authorization for Bid Advertisement and Authorization to Amend the City’s Community Workforce Agreement with the LAC/OC Building and Construction Trades to include the Wingate Park Regional EWMP Project
Presented by: Rafael M. Fajardo, Director of Public Works/City Engineer Recommendation: 1. Approve Plans and Specifications for the Wingate Park Regional EWMP Project – Project No. WM211 and authorize the Department of Public Works to solicit bids; and

2. Authorize an amendment to the City’s Community Workforce Agreement to include the Wingate Park Regional EWMP Project – Project No. WM211 as an eligible project.

EXECUTIVE SUMMARY:

The City of Covina is part of the Upper San Gabriel River Enhanced Watershed Management Group, which formed after 2012 and worked together to develop an Enhanced Watershed Management Program (EWMP) to address the Municipal Separate Storm Sewer System (MS4) Permit. The EWMP was used to look at existing Total Maximum Daily Loads and impairments within the group area. A water quality model was developed and calibrated based on available water quality data to understand what needed to be implemented to address water quality requirements.

The Wingate Park Regional EWMP Project was identified as a priority project in the Upper San Gabriel River Enhanced Watershed Management Plan. Following a preliminary feasibility study, it was determined that the Wingate Park site would be an ideal location to divert stormwater for a watershed area encompassing 1,000 acres in Covina, Glendora, San Dimas and County unincorporated areas.

Following this study, the City was successful in competitive grant efforts to secure $24.1 million in Los Angeles County Measure W funds for the design/construction of the project.

On November 4, 2025, a presentation was provided to the City Council on the Wingate Park Regional EWMP Project including the scope of work, estimated project duration, project benefits and grant resources. At this meeting, members of the Council requested that staff engage the Los Angeles/Orange County Building and Construction Trades to inquire about amending the City’s existing Community Workforce Agreement to include the Wingate Park EWMP project. Following successful conversations with the Los Angeles/Orange County Building and Construction Trades, an amendment has been drafted and is included for the City Council’s consideration.

DISCUSSION:

On October 20, 2020, the City Council approved an agreement with CWE for Design Engineering Services related to Regional Stormwater Collection Improvements at Wingate Park. In collaboration with City staff, CWE redesigned the easterly edge of Wingate Park to include a below ground infiltration chamber that will capture runoff from the cities of Covina, Glendora, San Dimas, and Unincorporated LA County from a total project drainage area of 1,100 acres. The storage capacity of the infiltration system is 25-acre feet per storm event. The total water supply and recharge benefit this project aims

to accomplish is 365-acre feet in an average rainfall year. Other elements included as a part of this project include a newly paved parking lot, new recreational field, new playground equipment, and various tree and plant installations throughout the park.

Moreover, as proposed, the Council will consider amending the City’s existing Community Workforce Agreement (“CWA”) to include the Wingate Park EWMP project. To date, the City has successfully implemented the CWA at the Recreation Village Project which is under construction and is expected to be completed in 2026. Key provisions in the existing CWA would remain, including local hire goals, priority hiring to Covina residents and disabled individuals/veterans and the inclusion of apprenticeships to help facilitate local workforce development. Per the CWA, Section 17, the proposed amendment has been drafted for the City Council’s consideration.

If authorized, staff will move forward with advertisement of the Wingate Park EWMP project and anticipates returning to the Council in spring for the consideration of an award of contract to complete construction work. It is expected that construction activities will take roughly 18 months to complete.

FISCAL IMPACT:

There is no fiscal impact for the approval of the plans and specifications pertaining to the Wingate Park Regional EWMP Project – Project No. WM211. There will be nominal bid advertising and document reproduction costs related to the solicitation of bids when this project goes out to bid, which will be paid for by the grant received for the project. All project costs are funded by a competitive grant award provided through the Los Angeles County Measure W funding program.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

This project has been determined to be categorically exempt under CEQA in accordance with Title 14, Chapter 3, Class 1, Sections 15301 and 15302. This exemption includes the minor alteration of existing public facilities involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The project involves negligible or no expansion of an existing use.

Respectfully submitted,

ATTACHMENT A
AMENDMENT #1

TO COMMUNITY WORKFORCE AGREEMENT
The City of Covina, a municipal corporation (“City”) and the Los Angeles/Orange Counties Building and Construction Trades Council (“Council”) on behalf of itself and on behalf of the Unions hereby, pursuant to Article 20 of their Community Workforce Agreement (“CWA”), do hereby supplement the CWA by adding to Article 2 Scope of the Agreement the Wingate Park Regional Enhanced Watershed Management Project.

The CWA remains in full force and effect. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Electronic signatures are to be deemed equivalent to original “wet ink” signatures under this Amendment.

Dated ________, 2026 CITY OF COVINA, a municipal
corporation
By: ___________________________
Chris Marcarello
City Manager
By: ___________________________
Fabian Velez
Chief Deputy City Clerk
Dated ________, 2026 LOS ANGELES/ORANGE COUNTIES

BUILDING AND CONSTRUCTION

TRADES COUNCIL
By: ___________________________
Ernesto Medrano
Executive Secretary

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 18
Meeting: January 20, 2026
Title: Annual Comprehensive Financial Report (ACFR) for Fiscal Year Ended June 30, 2025
Presented by: Theresa Franke, Director of Finance
Recommendation: Receive and file the following reports for Fiscal Year ended June 30, 2025: (1) Annual Comprehensive Financial Report (ACFR) and related Auditor Communications, and (2) Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit.

EXECUTIVE SUMMARY:

Annually, following the completion of an independent and certified audit, the Finance Department prepares and publishes the City’s Annual Comprehensive Financial Report (ACFR). This is an extensive report summarizing the financial activities of the City that occurred from July 1, 2024 through June 30, 2025. Attached is the June 30, 2025 ACFR and related reports.

BACKGROUND:

The ACFR is prepared in compliance with the Governmental Accounting Standards Board (GASB) requirements and is attached hereto as Attachment A. Pursuant to GASB guidelines, the City’s ACFR is divided into three sections: Introductory, Financial, and Statistical. The Introductory Section provides a brief overview of the City and contains a Letter of Transmittal, Organizational Chart and List of Principal Officials. The Financial Section contains the Independent Auditors’ Report, Management’s Discussion and Analysis (MD&A) and the Basic Financial Statements including Notes to the Financial Statements. The Statistical Section presents a variety of reports useful in analyzing the City’s financial and operational history as well as evaluating the City’s financial stability.

DISCUSSION:

The audit firm of CliffordLarsonAllen LLP has issued an unmodified (“clean”) opinion on the financial statements as presented in the ACFR for the fiscal year ended June 30, 2025. This means that their examination, testing and audit procedures allowed them to conclude that the financial statements present fairly the financial position of the City. This is the best opinion the City can receive from its auditors.

In addition, the independent auditors performed procedures to assist the City in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution, which requires that California cities establish an annual appropriations limit (the “Gann Limit”).

In conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and Budget Uniform Guidance, the auditors also perform an annual single audit when required. In Fiscal Year ended June 30, 2025, a Single Audit was required and will be presented to the City Council upon completion.

The ACFR, the Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheet No. 6 for Fiscal Year ended June 30, 2025, and related auditor communications are attached.

FISCAL IMPACT:

None.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

Annual Comprehensive
Financial Report
For the Year Ended June 30, 2025

ATTACHMENT A

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CITY OF COVINA, CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

WITH REPORT ON AUDIT

BY INDEPENDENT

CERTIFIED PUBLIC ACCOUNTANTS
YEAR ENDED JUNE 30, 2025
PREPARED BY:

CITY OF COVINA FINANCE DEPARTMENT

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025

INTRODUCTORY SECTION
ELECTED AND ADMINISTRATIVE OFFICIALS i
LETTER OF TRANSMITTAL ii
ORGANIZATION CHART viii

FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS (REQUIRED
SUPPLEMENTARY INFORMATION) 5

FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 24
STATEMENT OF ACTIVITIES 25

FUND FINANCIAL STATEMENTS
BALANCE SHEET – GOVERNMENTAL FUNDS 27

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION 28

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS 29

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF

REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES 30
STATEMENT OF NET POSITION – PROPRIETARY FUNDS 31

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET
POSITION – PROPRIETARY FUNDS 32
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS 33
STATEMENT OF FIDUCIARY NET POSITION – FIDUCIARY FUNDS 35 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION –
FIDUCIARY FUNDS 36
NOTES TO FINANCIAL STATEMENTS 38

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND
RELATED RATIOS – MISCELLANEOUS 83
SCHEDULE OF CONTRIBUTIONS – MISCELLANEOUS 85

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION
LIABILITY – SAFETY 87
SCHEDULE OF CONTRIBUTIONS – SAFETY 89

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND
RELATED RATIOS 91
SCHEDULE OF CONTRIBUTIONS – OPEB 92
BUDGETARY COMPARISON SCHEDULE – GENERAL FUND 93
BUDGETARY COMPARISON SCHEDULE – MEASURE W SPECIAL
REVENUE FUND 94
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION 95

SUPPLEMENTARY INFORMATION

OTHER GOVERNMENTAL FUNDS
DESCRIPTION OF OTHER GOVERNMENTAL FUNDS 99
COMBINING BALANCE SHEET 102

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES 108

SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE – BUDGETARY COMPARISON SCHEDULES

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SPECIAL
REVENUE FUND 114
PROPOSITION A SPECIAL REVENUE FUND 115
LAW ENFORCEMENT SPECIAL REVENUE FUND 116
NARCOTICS SEIZURE SPECIAL REVENUE FUND 117
STATE GAS TAX SPECIAL REVENUE FUND 118
PROPOSITION C SPECIAL REVENUE FUND 119
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND 120

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025
MUNICIPAL PARKING SPECIAL REVENUE FUND 121
LIGHTING ASSESSMENT SPECIAL REVENUE FUND 122
LANDSCAPING ASSESSMENT SPECIAL REVENUE FUND 123

COMMUNITY FACILITIES DISTRICT ASSESSMENT SPECIAL
REVENUE FUND 124
SHOPPERS LANE PARKING DISTRICT SPECIAL REVENUE FUND 125 MEASURE M SPECIAL REVENUE FUND 126
ROAD MAINTENANCE AND REHABILITATION SPECIAL REVENUE FUND 127 PEG ACCESS TELEVISION SPECIAL REVENUE FUND 128
HOUSING AUTHORITY SPECIAL REVENUE FUND 129
MEASURE R SPECIAL REVENUE FUND 130
OTHER GRANTS SPECIAL REVENUE FUND 131

CAPITAL PROJECTS FUNDS
GENERAL PROJECTS FUND 132
COVINA REVITALIZATION PROJECTS FUND 133
TRANSPORTATION CAPITAL PROJECTS FUND 134
PARK DEVELOPMENT CAPITAL PROJECTS FUND 135

NONMAJOR ENTERPRISE FUNDS
DESCRIPTION OF NONMAJOR ENTERPRISE FUNDS 136
COMBINING STATEMENT OF NET POSITION 137

COMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION 138
COMBINING STATEMENT OF CASH FLOWS 139

INTERNAL SERVICES FUNDS
DESCRIPTION OF INTERNAL SERVICE FUNDS 141
COMBINING STATEMENT OF NET POSITION 142

COMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION 143

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025
COMBINING STATEMENT OF CASH FLOWS 144

CUSTODIAL FUNDS
DESCRIPTION OF CUSTODIAL FUNDS 146
COMBINING STATEMENT OF FIDUCIARY NET POSITION 147

COMBINING STATEMENT OF CHANGES IN FIDUCIARY
NET POSITION 148

STATISTICAL SECTION (UNAUDITED)
DESCRIPTION OF STATISTICAL SECTION CONTENTS 151

FINANCIAL TRENDS
NET POSITION BY COMPONENT 153
CHANGES IN NET POSITION 154
FUND BALANCES OF GOVERNMENTAL FUNDS 157
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS 158

REVENUE CAPACITY
GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE 160
ASSESSED VALUE OF TAXABLE PROPERTY 161
ASSESSED VALUE OF TAXABLE PROPERTY BY USE 162
PROPERTY TAX RATES 163
PRINCIPAL PROPERTY OWNERS 164
PROPERTY TAX LEVIES AND COLLECTIONS 165

DEBT CAPACITY
RATIOS OF OUTSTANDING DEBT BY TYPE 166
RATIOS OF NET GENERAL BONDED DEBT OUTSTANDING 167

DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES BONDED
DEBT 168
LEGAL DEBT MARGIN INFORMATION 169
PLEDGED-REVENUE BOND COVERAGE – WATER UTILITY FUND
INSTALLMENT AGREEMENT AND REVENUE BONDS 170

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025
PLEDGED-REVENUE BOND COVERAGE – SEWER FUND REVENUE
BONDS 171

DEMOGRAPHIC AND ECONOMIC STATISTICS
DEMOGRAPHIC AND ECONOMIC STATISTICS 172

OPERATING INFORMATION
PRINCIPAL EMPLOYERS 173

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY
FUNCTION 174
OPERATING INDICATORS BY FUNCTION 175
CAPITAL ASSET STATISTICS BY FUNCTION 177

DEBT CONTINUING DISCLOSURE
WATER SYSTEM 178
WASTEWATER SYSTEM 179

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INTRODUCTORY SECTION

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CITY OF COVINA, CALIFORNIA

ELECTED AND ADMINISTRATIVE OFFICIALS
2024-2025
i
Elected Officials Term Expires
Mayor:

Victor Linares June 2026

Mayor Pro Tem:

Hector Delgado June 2026

Council Members:

Walter Allen, III March 2028
Patricia Cortez March 2028
John C. King June 2026

City Clerk:

Andrew Aleman June 2026

City Treasurer:

Neil Polzin June 2026

Administrative Staff Date of Hire
City Manager:*
Chris Marcarello January 2017

Assistant City Manager, Human Resources, Risk Mgmt:

Angel Carrillo May 2015
City Attorney:*
Candice Lee May 2015

Finance Director:

Theresa Franke – Interim Director June 2015

Police Chief:

Ric Walczak January 1996

Fire Chief:**
Anthony C. Marrone February 2023

Public Works Director:

Rafael Fajardo January 2019

Parks and Recreation/Library Services Director:

Lisa Evans July 1989

Community Development Director/Deputy City Manager:

Brian Lee June 2015

Chief Deputy City Clerk:

Fabian Velez June 2018

*Appointed by City Council
**Appointed by Los Angeles County Fire District

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ii
January 7, 2026
Honorable Mayor and City Council
City of Covina
Covina, California
The Annual Comprehensive Financial Report for the City of Covina (City), California, as of June 30, 2025 and for the year then ended, is submitted herewith. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position, results of operations and cash flows of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included.

The financial statements are the responsibility of the City’s management. Completeness and reliability of the information contained in this report is based upon a comprehensive framework of internal controls that is established for this purpose. The costs of internal control should not exceed the anticipated benefits. The objective of internal controls is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.

The Management’s Discussion and Analysis (MD&A) interprets the financial reports by analyzing trends and by explaining changes, fluctuations, and variations in the financial data. In addition, the MD&A is intended to disclose any known significant events or decisions that affect the financial condition of the City. MD&A complements this letter of transmittal and should be read in conjunction with it.

Independent Audit. City policy requires that its financial statements be audited by a certified public accountant. CliftonLarsonAllen, Certified Public Accountants, have issued an unqualified (“clean”) opinion on the City’s financial statements for the fiscal year ended June 30, 2025. The auditor’s report on the basic financial statements and required supplementary information is included in the financial section of this report.

The City is legally obligated to conduct an annual single audit in accordance with the Single Audit Act of 1984 and the U.S. Office of Management and Budget's Uniform Guidance for

iii
Audits of State and Local Governments, if total federal grant expenditures exceed $750,000 in a single year. The City of Covina is a recipient of federal, state and county assistance, and for Fiscal Year 2024-25 it is subject to the requirements of a Single Audit as it did have Federal expenditures greater than the $750,000 threshold.

Profile of the City of Covina
The City is a mature, suburban city located twenty-three miles east of downtown Los Angeles in the eastern portion of the San Gabriel Valley. The City encompasses an area of approximately seven square miles and is virtually built out. The current population is 51,090 according to the State of California Department of Finance.

The City is a general law city, incorporated in 1901. The City Council is composed of five members elected biannually at large to four-year alternating terms. The Mayor and Mayor Pro Tem are selected by the City Council annually.

The City has a Council/Manager form of government. The City Manager is appointed by the City Council to manage the daily affairs of the City and to implement policies established by the City Council.

This report includes all the funds of the City. The City provides a full range of services including police and fire protection (via a contract with the Los Angeles County Fire Department); construction and maintenance of highways, streets and infrastructure; library and recreational services; public transportation; planning and economic development; housing; and administrative services. In addition to general municipal activities, the City provides water and sewer services.

The Council is required to adopt a final budget by June 30th of each fiscal year. The annual budget serves as the foundation for the City’s financial planning and control. The budget is prepared by fund, program (e.g., public safety), and activity (e.g., police patrol). Department heads may transfer resources within each activity as needed. The City Manager may transfer resources between activities within a fund. Transfers between funds require approval from the City Council.

In accordance with the reporting entity definition of the Governmental Accounting Standards Board, the City has included the Covina Public Financing Authority, the Successor Agency for the former Covina Redevelopment Agency (as of February 1, 2012), and the Covina Housing Authority in the financial report.

Several state and county agencies, as well as school districts, provide services to the City but do not meet the established criteria for inclusion, and accordingly are excluded from this report.

Economic Condition and Outlook
Much of the local development of the City occurred during the post-World War II building boom, which took place from the late 1940’s through the 1960’s. Prior to the building boom, the City was a major citrus producing area.

iv
The character of the City is one of predominantly low to medium density residential and lowintensity commercial and light industrial uses. Single-family residential properties are the most common use. In addition, there are many commercial establishments, particularly community and neighborhood shopping centers, and a relatively large number of small to medium-sized professional offices and light manufacturing operations. The local economy is based on a variety of service, retail, and light manufacturing businesses as well as government agencies.

The City’s economy always has been healthy, though relatively small in population and area.

The City consistently ranks high in retail sales tax generation and sales tax per capita among San Gabriel Valley cities. This is primarily due to the mix of retail businesses located in the City as well as a voter-approved transaction and use tax. Despite being in the middle of the wellestablished San Gabriel Valley, Covina retains a small-town atmosphere. The City is connected to other areas of metropolitan Los Angeles by the nearby San Bernardino, Foothill, and Orange Freeways, as well as the Southern California Regional Rail Authority Metrolink Commuter Rail Line.

Long-term Financial Planning
As part of a financial strategic plan, the City Council developed the following budget policy guidelines for budgetary and financial planning purposes:

Estimated Revenues
• Estimated revenues will be identified by fund, program and activity • Fund types include general, special revenue, debt service, capital projects, enterprise, agency and internal service funds
• Identify recurring vs. nonrecurring revenues
• Identify general revenues vs. restricted revenues
Appropriations
• Each program will identify activities and the recommended appropriations • Identify recurring vs. nonrecurring appropriations
• Identify general vs. restricted appropriations
• Continuing appropriations for year-end
o Encumbrances and contractual commitments
o Grant, restricted donation and capital project appropriations are considered life-cycle appropriations
o All other appropriations shall lapse at year-end unless carried forward by City Council action

v
Fund Balances/Working Capital
• Budget will calculate available fund balances and/or working capital available in the various funds
• Budget will establish adequate reserves
o Capital needs
o Offset economic hard times
o Stabilize fluctuations in cash flow requirements
o Emergency situations
• General Fund
o Minimum of 20% of operating expenses-reserve shall be maintained o Excess reserves will be designated for nonrecurring activities or capital improvements
• Internal Service Funds
o Maintain general liability and worker's compensation reserves based on actuarial recommendations.
o Maintain sufficient reserves to fund equipment replacement at the end of its useful life
• Enterprise Funds
o Maintain reserves as recommended by applicable rate studies • Restricted Funds
o Reserves can be used for only designated purposes
o Excess reserves can be designated for recurring and nonrecurring activities or capital improvements depending on the nature of the fund Community Needs Assessment, Monitoring and Reporting
• Identifying community needs for essential services
o Describing the programs required to provide the essential services o Identifying the purpose of activities performed in delivering services  Identifying resources required to perform program activities and accomplish goals and objectives
• Monitoring standards to measure and evaluate
o Output and outcomes of program activities
o Accomplishment of program activities
o Staffing levels

vi
o Program activity revenue and appropriations
 Make budgetary and financial decisions on conservative estimates of revenues, expenditures and other financing sources and uses  The greater the uncertainty and/or volatility of the budgetary and financial estimates, the more conservative the estimates
Changes in Service Levels
• The base budget is the required appropriation level needed to maintain the previous year’s budget service level
• Change in service is the proposed increase or decrease in service level • Increase in services shall be offset with new revenue or a corresponding decrease in other program services
• Grants shall not have a negative impact on General Fund services • Future operating grants will not be funded by the General Fund unless there is a new revenue source or decrease in other program services
Budget Shall Be Balanced
• Ongoing and recurring costs shall be funded with ongoing and recurring revenues • One-time and nonrecurring costs shall be funded with excess ongoing revenues, available one-time revenues or excess reserves
• One-time or nonrecurring revenues shall not fund ongoing costs • Current costs shall be recognized and funded in the current year, not deferred or funded in future years whenever possible
• Budget sufficient funding levels to maintain current City services • The General Fund shall try to maintain a minimum $100,000 operating contingency for unanticipated events
• Make conscious decisions about cost recovery and/or general tax subsidy of those services that benefit only a portion of the tax paying public • Formalize a five-year capital improvement program to identify priorities, service levels, funding sources and future impacts of decisions made today.

Infrastructure Maintenance
• Identify preventive maintenance of infrastructure to minimize future expenditures o Make conscious effort to amortize capital costs
 Replacing or expanding existing facilities and equipment  With respect to equipment, rates shall be established to recover the replacement cost of each item at the end of its useful life

viii

CITY OF COVINA

ORGANIZATIONAL CHART
FISCAL YEAR 2024-2025

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FINANCIAL SECTION

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

CliftonLarsonAllen LLP
CLAconnect.com
(1)
INDEPENDENT AUDITORS’ REPORT
Honorable Mayor and
Members of City Council
City of Covina
Covina, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the businesstype 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, 2025, and the related notes to the financial statements, which collectively comprise the City of Covina’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Covina as of June 30, 2025, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

We did not audit the financial statements of the Covina Valley Water Company which represents 14% of the assets of the water enterprise fund and 10% of the assets of the business-type activities as of June 30, 2025. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amount included as an investment in the Covina Valley Water Company in the water enterprise fund, is based solely on the report of the other auditors.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Covina and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
As discussed in Note 20 to the financial statements, the City made restatements to beginning fund balance/net position resulting from correction of errors. Our opinions are not modified with respect to these matters.

Honorable Mayor and
Members of City Council
City of Covina
(2)
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Covina’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Covina’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Covina’s ability to continue as a going concern for a reasonable period of time.

Honorable Mayor and
Members of City Council
City of Covina
(3)
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the miscellaneous plan schedule of changes in the net pension liability and related ratios and the schedule of contributions, the safety plan schedule of proportionate share of the net pension liability and the schedule of contributions, the other postemployment benefit plan schedule of changes in the net OPEB liability and related ratios and the schedule of contributions - OPEB and the budgetary comparison schedules for the General Fund, and Measure W Fund be presented to supplement the basic financial statements. Such information, is the responsibility of management and although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Covina’s basic financial statements. The individual fund schedules and combining financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the individual fund schedules and combining financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Honorable Mayor and
Members of City Council
City of Covina
(4)
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 7, 2026, on our consideration of the City of Covina’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Covina’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Covina’s internal control over financial reporting and compliance.

CliftonLarsonAllen LLP
Irvine, California
January 7, 2026

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(5)
The following discussion and analysis of the City of Covina’s (the City) financial performance provides an overview of the City’s financial activities for the fiscal year ended June 30, 2025. This report is prepared in conjunction with the accompanying transmittal letter and basic financial statements and notes.

FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of the City exceeded its liabilities and deferred inflows at the close of the fiscal year by $169,633,978. The Governmental Activities have a deficit unrestricted net position of $34,784,865. Business-type Activities have an unrestricted net position of $8,099,670.
• The City’s net position for governmental and business-type activities increased by $25,392,657 or 17.91% from the previous fiscal year.
• The total cost of all City activities was $82,829,030 for the current fiscal year. Net cost of all activities was $29,823,872.
• During the current fiscal year, the City’s governmental activities net revenues exceeded net expenditures by $24,071,793.
• In the City’s business-type activities, net revenues exceeded net expenditures by $1,374,864. • The total fund balance of the City’s governmental funds was $71,775,215 at the close of the fiscal year. This includes $36,136,378 fund balance of the General Fund, $23,064,662 of which is unassigned and is available for spending at the City’s discretion (see Note 14 of Notes to the Financial Statements).
• General Fund expenditures exceeded revenues and other financing sources (uses) by $2,178,445 for the fiscal year.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. The report also contains required supplementary information and other supplementary information in addition to the basic financial statements.

Government-Wide Financial Statements
The government-wide financial statements are designed to provide a broad overview of the City’s finances, in a manner similar to private-sector business.

Statement of Net Position
The Statement of Net Position presents information on all of the City’s assets, deferred outflows, liabilities and deferred inflows, the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(6)
Statement of Activities
The Statement of Activities presents information showing how the City’s net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) and from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities include General Government, Public Safety, Public Works, Culture and Recreation, Community Development, Transit, Redevelopment and Housing, and Interest on Long-Term Debt. The business-type activities include Water Utility, Environmental Protection, Theater, and Sewer.

The government-wide financial statements include not only the City itself (known as the primary government) but also the blending of the legally separate Covina Public Financing Authority, and Covina Housing Authority for which the City is financially accountable. These component units are, therefore, included as an integral part of the primary government.

Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided in three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements.

The focus of governmental funds is narrower than that of the government-wide financial statements; it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This will provide a better understanding of the long-term impact of the City’s near-term financing decisions. The Governmental Fund Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(7)
The City maintains 28 individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund and Other Grants Fund which are considered to be major funds.

Information from the other nonmajor governmental funds is combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements in the supplementary information section of the report.

The City adopts an annual appropriated budget for all of the governmental funds. Budgetary comparison schedules have been provided in the required supplementary information section for the General Fund to demonstrate compliance with the budget. Budgetary comparison schedules have been provided in the supplementary information section for the nonmajor governmental funds.

Development Impact Fees Funds
This fund accounts for the collection of development impact fees from developers pursuant to Government Code §66006. The City of Covina collects various types of impact fees, which include General Government, Library, Police, Park, Streets, and Fire. Revenues received in these funds fluctuate based on the level and timing of development activity within the City. Revenue for fiscal year 2024-25 was $687,000, an increase of $497,000 over fiscal year 2023-24. The increase in revenue was due to development projects and increase of fees. There were zero expenditures for the fiscal year, resulting in a net increase to Impact fees for an ending fund balance of $2.6 million. As required by Government Code §66006, the City issues a separate annual report detailing the status and use of Development Impact Fees, which is available on the City’s website (Covinaca.gov).

Development Impact Fees Fund Balances
Gen Gov't Library Police Parks Street Fire Total
Beginning Balance $ 340,761 $ 245,828 $ 142,462 $ 146,656 $ 846,853 $ 163,622 $ 1,886,182 Receipts 23,150 16,828 147,948 21,360 445,870 31,882 687,038 Expenditures - - - - - - -
Ending Balance $ 363,911 $ 262,656 $ 290,410 $ 168,016 $ 1,292,723 $ 195,504 $ 2,573,220 Proprietary Funds
The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City’s enterprise funds account for the Water Utility, Environmental Protection, Theater, and Sewer.

Internal service funds are used to accumulate and allocate costs internally among various City functions. The City’s internal service funds account for Information Technology, Central Equipment, Workers’ Compensation, Building Maintenance, and Public Liability. These services predominately benefit governmental and have been allocated within the governmental activities in the governmentwide financial statements.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(8)
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water Utility, Environmental Protection, and Sewer. Water and Sewer funds are considered to be major funds of the City. Conversely, all Central Equipment, Information Technology, Workers’ Compensation, Building Maintenance, and Public Liability internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in the supplementary information section of this report.

Fiduciary Funds
Fiduciary funds (private-purpose trust fund and custodial fund) are used to account for the assets and activities for which the City acts as trustee. The Statement of Fiduciary Net Position reports the assets and liabilities of the fund and the net position is reported as “held in trust for others”. The governmentwide financial statements exclude fiduciary funds.

Notes to the Financial Statements
The Notes to the Financial Statements provide additional information that is essential to the full understanding of the data provided in the government-wide and fund financial statements.

GOVERNMENT-WIDE FINANCIAL ANALYSIS
Total Net Position
Net position reflects the excess of assets and deferred outflows of resources over liabilities and deferred inflows of resources and may serve over time as a useful indicator of the City’s financial position.

As detailed in the Government-Wide Financial Statements-Statement of Net Position, the City’s total net position for governmental and business-type activities was $169.6 million at the close of the fiscal year, which is an increase of $25.8 million or 17.91% from the previous fiscal year.

The largest portion of that net position, $152.8 million, is in capital assets (land, buildings and structures, infrastructure, and machinery and equipment) less any related debt outstanding used to acquire those assets. Capital assets are acquired for the purpose of providing services and infrastructure and are unavailable for future spending. Resources needed to repay related debt outstanding must be provided from other sources before liquidating capital assets to satisfy these liabilities.

Additionally, $43.5 million of the City’s total net position represents resources that are subject to external restrictions such as public safety, transit, and capital projects. Those restrictions are designated by certain federal, state, and local statutes and may not be used by the City for ongoing obligations to citizens and creditors. This leaves the City with a deficit unrestricted net position of $26.7 million.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(9)
Governmental Activities
This analysis focuses on the net position and changes in net position of the City’s governmental activities, as presented in the Statement of Net Position.

The net position of the governmental activities represents 67.08% of the City’s total net position. As reflected in the following table, restricted governmental activities net position increased by $12.1 million (38.42%) from the previous fiscal year. This portion of net position is subject to external restrictions relating to public safety, public works, community development, culture and recreation, transit and redevelopment and housing.

Governmental Activities Net Position
2025 2024
Assets:

Current and Other Assets $ 108,145,734 $ 102,549,897
Capital Assets 113,056,916 97,584,565
Total Assets 221,202,650 200,134,462
Deferred Outflows of Resources 15,260,101 25,855,578
Liabilities:

Long-Term Liabilities Outstanding 97,516,820 102,686,260 Other Liabilities 11,214,356 12,395,347
Total Liabilities 108,731,176 115,081,607
Deferred Inflows of Resources 13,946,072 21,413,837
Net Position:

Net Investment in Capital Assets 105,096,553 90,168,855 Restricted 43,473,815 31,407,858
Unrestricted (34,784,865) (32,082,117)
Total Net Position $ 113,785,503 $ 89,494,596

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(10)
The following table compares fiscal year changes in revenues and expenses in governmental activities that comprise net position, as found in the Statement of Activities.

Governmental Activities Change in Net Position
2025 2024
Revenues:

Program Revenues:

Charges for Services $ 9,107,701 $ 8,834,709
Operating Grants and Contributions 19,702,447 20,963,432 Capital Grants and Contributions 6,394,822 1,697,052
General Revenues:

Property Taxes 19,629,507 17,707,380
General Sales Tax 11,342,980 10,701,878
Transaction and Use Tax 8,693,965 8,535,570
Utility Users Taxes 6,315,245 6,024,393
Other Taxes 3,321,573 3,304,190
Investment Earnings 4,195,491 4,149,726
Miscellaneous 189,994 88,194
Total Revenues 88,893,725 82,006,524
Expenses:

General Government 3,264,852 3,607,340
Public Safety 38,200,980 38,426,544
Public Works 4,560,337 12,272,245
Culture and Recreation 6,220,553 6,428,184
Community Development 9,217,288 4,229,689
Transit 1,653,967 1,595,151
Redevelopment and Housing 466,564 728,375
Interest on Long-Term Debt 1,291,391 1,315,414
Total Expenses 64,875,932 68,602,942
Change in Net Position 13,403,582 24,017,793
Net Position - Beginning of Year 89,494,596 76,091,014
Error Correction 273,114 -
Net Position - End of Year $ 113,785,503 $ 89,494,596
As reflected above, the City’s total revenues exceeded total expenses of governmental activities by $24 million. Compared to the previous year, 2025 revenues show an increase of $6.9 million while expenses decreased by $3.7 million.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(11)
The revenue increased in Charges for Services of $273,000 includes an increase of $484,000 in Public Works Engineering Services as well as an increase in Property Rental Fee revenue of $358,000, primarily due to the newly acquired Kia dealership. Street Development Impact Fees increased by $344,000 mainly due to project at Cutter Way. These increases were partially offset by revenue decreases in Building Plan Reviews of $260,000 due to a decrease in Building Plan Checks as well as several major projects in FY24 producing higher than usual revenues. Court Fines had a decrease of $248,000 partially due to the cessation of the Red Light Camera program as well as a decrease in citations issued by the City. Lighting and Landscape district revenue show a combined decrease of $337,000 due to a reclassification of such revenues to “Property Tax” revenue.

Operating Grants decreased by $1.3 million This difference is due in large part to the $3.1 million decrease in Public Safety revenue as most of American Rescue Plan Act (ARPA) Grant was used in previous years. And the decrease is partially offset by increased Public Works Measure W (Stormwater) grant revenue of $1.4 million and state public assistance grant revenue of $309,000.

Capital Grants increased by $4.7 million. This is due in part to a $2.7 million increase in grant awards, including those for the Covina Recreation Village (CRV). Also contributing was the Hollenbeck Park Urban Greening Project as well CRV, each receiving $1.3 million in grants.

Property tax revenue increased by $1.9 million. Sales and transaction and use taxes revenue increased by $800,000, growth consistent with the budget. Utility users tax increased by $291,000 which also was consistent with budgeted amounts.

Changes in other revenue sources include a $95,000 decrease in transient occupancy taxes and a $57,000 increase in property transfer taxes. In addition, there is a $37,000 increase in franchise taxes and investment earnings increase of $46,000 (reflecting higher interest rates and increased market value of City investments).

Net expenses reflected on the Statement of Activities are good indications of the extent to which the services provided by the City are financed from taxes paid by the citizens (general revenues) as opposed to recovering the cost of these services with user fees and other contributions (program revenues). Revenues from Transit, Public Works, Culture & Recreation, and Redevelopment & Housing were sufficient to cover related expenditures. General Government, Public Safety, and Community Development required general revenues to subsidize expenditures. Expenses and associated program revenues for each governmental function are reflected on the following table.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(12)
As reflected on the following graph, taxes, grants and contributions, and charges for services provide 100% of the overall revenue sources of the governmental activities. Taxes include property, sales, transaction and use, utility users, and other taxes (transient occupancy, property transfer, business license, and franchise).

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(13)
The next graph demonstrates governmental activity expenses by function/program. Note that public safety and public works represent 65.9% of the governmental activities’ expenditures; this is consistent with the City’s highest priority of citizen safety and well-being. Culture and recreation represent 9.6% of governmental activities as the City is committed to providing valuable programs to the community.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(14)
Business-Type Activities
The analysis of business-type activities focuses on the net position and changes in net position of the City’s Water Utility, Environmental Protection, Theater, and Sewer functions. The following table summarizes the business-type net position for fiscal years 2024 and 2025. Current year detail can be found in the Government-Wide Financial Statements, Statement of Net Position.

Business-Type Activities Net Position
2025 2024
Assets:

Current and Other Assets $ 23,848,038 $ 26,159,205
Capital Assets 64,365,205 62,997,021
Total Assets 88,213,243 89,156,226
Deferred Outflows of Resources 1,343,479 2,329,262
Liabilities:

Long-Term Liabilities Outstanding 30,879,670 33,651,218 Other Liabilities 2,293,083 2,786,407
Total Liabilities 33,172,753 36,437,625
Deferred Inflows of Resources 535,494 672,168
Net Position:

Net Investment in Capital Assets 47,748,805 43,484,788
Unrestricted 8,099,670 10,890,907
Total Net Position $ 55,848,475 $ 54,375,695

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(15)
The net position of the business-type activities represents 32.92% of the City’s total net position and increased by $1.5 million from the previous year. Restricted net position reflects amounts established for emergency needs and bond proceeds which are restricted to capital projects. The revenue and expense activity which generated the change in business type net position is reflected on the following table.

Business-Type Activities Change in Net Position
2025 2024
Revenues:

Program Revenues:

Charges for Services 17,800,188 $ 16,539,480 $
Operating Grants and Contributions - 31,572
Capital Grants and Contributions - 2,999,768
General Revenues:

Investment Gain (Loss) 1,543,231 1,611,110
Miscellaneous 88,134 93,959
Total Revenues 19,431,553 21,275,889
Expenses:

Water Utility 12,901,969 12,037,535
Environmental Protection 1,435,210 1,432,770
Theater 530,467 557,360
Sewer 3,058,559 2,454,092
Total Expenses 17,953,098 16,454,864
Change in Net Position Before Transfers 4,821,025 1,478,455 Transfers In (Out) (103,591) 15,594
Change in Net Position $ 4,836,619 1,374,864 $
As reflected above, the City’s business-type program expenses exceeded charges for services revenues by $153,000. Total business-type program revenues decreased by $1.8 million from the prior fiscal year. Water revenue increased by $936,000, Sewer Utility revenue increased by $335,000 and Environmental Protection service charges increased by $26,000. Theater revenue was $3 million less than the prior year, as the prior year’s revenue included a $2.9 million grant reflecting a transfer of the Theater building from the general fund to the Theater fund.

Business-type expenses attributable to Water increased by $864,000 due in large part to increased water supply costs ($466,000), production and storage ($164,000) and general and administrative expenses ($190,000) which include negotiated wage/benefit increases. Sewer utilities expenditures increased by $604,000 from the previous fiscal year due in large part to increased operating expenses of $598,000. Environmental Protection and Theater expenses remained relatively constant, with increases of $2,400 and $27,000, respectively.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(16)
Water charges for services were sufficient to cover operating expenses for the respective functions during the fiscal year. Sewer Utility charges for services were $27,000 less then operating expenses, and Environmental Protection’s expenses exceeded program revenue by $281,000. Theater expenses, although relatively constant, exceeded revenue by $434,200.

Expenses and associated program revenues for each business-type function are reflected on the following table.
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
Expenses
Program
Revenues
Expenses and Program Revenues-Business-type Activities
Water Utility Environmental
Protection
Theater Sewer
As reflected on the following chart, charges for services are the major source of revenue to be used for business-type activity operating and capital maintenance costs. Water Utility Charges for Services include water sales, service fees, connection fees, and other miscellaneous charges. Environmental protection charges include fees for refuse and recycling services, compressed Natural Gas (CNG), and permit fees for storm water and industrial waste. Theater charges for services include fees for facility use, property rental, ticket sales, and antenna rental. Sewer charges for services include fees established to recover the cost of operating the sewer system throughout the City. Other revenues reflect investment earnings.

Charges for
services
92% Other revenues
8%
Revenues by Source - Business-type Activities

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(17)
The next chart demonstrates business-type activity expenses by function/program. Water comprises the majority of expenses, which includes water source and supply resale, administration, and depreciation.

FINANCIAL ANALYSIS OF THE CITY FUNDS
The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The fund financial statements focus on individual parts of City government, reporting City operations in more detail than government-wide statements.

Governmental Funds
The focus of governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. This information assesses the City’s financing requirements. Unassigned fund balance is a measure of the City’s net resources available for designation or spending at the end of the fiscal year.

As of June 30, 2025, the City’s governmental funds reported combined fund balances of $71.8 million, an increase of $3 million from the prior fiscal year. There is $19.6 million of Unassigned fund balance available for designation and/or future spending at the City’s discretion. The remaining fund balance is nonspendable, restricted, committed or assigned and is not available for spending at the City’s discretion, as detailed in Note 14 of Notes to the Financial Statements.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(18)
The following is a summary of fund balances of the governmental funds for fiscal years 2020-2025:

The General Fund is the chief operating fund of the City. As displayed in the Governmental Fund Financial Statements-Balance Sheet, the fund balance of the General Fund at the end of Fiscal Year 2024-25 was $36.1 million and is classified as follows: $215,000 non-spendable, $12.5 million committed, $3,000 assigned, and $23.1 million unassigned. In keeping with the City Council’s Reserve Policy, the committed emergency contingency fund balance meets the City’s Emergency Contingency Reserve requirement of 20% of General Fund expenditures.

The fund balance of the General Fund decreased by $3.1 million during the fiscal year. Adequate revenues existed to fund the expenditures increase of $11.1 million. The increased expenditures which included increases to Public Safety fire protection service charges ($2.8 million), PERS unfunded liability ($698,000), and indirect cost allocation ($453,000). The $5.1 million purchase of Kia property also increased expenditures. Other items contributing to a decrease in fund balance include transfers out to Capital Improvement Programs of $1.8 million for projects including the Covina Recreation Village and other building improvements. It also includes transfers to the Lighting Assessment fund ($185,000), Public Liability fund ($696,000), and fund balance restatements as reflected in Note 20 of these financial statements.

Proprietary Funds
The City’s proprietary funds financial statements provide the same type of information found in the government-wide statements, but provide detail specific to the City’s water utility, environmental, theater, and sewer enterprises.

Net position of the Water Utility fund is $41.5 million, an increase of $1.8 million from the prior fiscal year. Of that, $10.6 million is unrestricted. Environmental Protection and Theater have combined net positions of $5.3 million with unrestricted net position decreasing to -$2.8 million from $-2.4 million in the prior year. The net position of the Sewer fund remains $10.4 million. Of that, $1.6 million is unrestricted. Other factors concerning the finances of these three funds are addressed in the discussion of the business-type activities.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(19)
General Fund Budgetary Highlights
Appropriation differences between the original budget and the final budget are $23.2 million which represents a 36% increase. The increase reflects additional funding appropriated for various projects including Kia land purchase ($5.1 million), fund transfer into the general CIP fund for the114 E. Italia restaurant remodel project ($754,000), fund transfer into Public Liability fund ($696,000), fund transfer into Parks fund for the Covina Recreation Village project ($7.5 million), and fund transfer into Building Maintenance fund for the PD Locker Room Renovation project ($547,000). An additional transfer out of $7 million from Measure CC to the General Fund is reflected on the budget. Mid-year budget adjustments included reductions to budgeted sales tax and Utility User Tax, franchise, and fines and forfeitures revenue, while increasing property tax, permitting, and other charges for service revenue.

Appropriations were increased reflecting changes for ongoing projects, city services and programs such as, Royal Oak Middle School Urban Greening Project, Covina Skate Park Solar Lighting Project, and Building Permit software. In addition, there was also an increase to the Public Liability fund, ensuring adequate funding for City legal needs.

CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City’s investment in capital assets for governmental and business-type activities as of June 30, 2025, is $177.4 million (net of accumulated depreciation). Capital assets include buildings and structures, improvements other than buildings, domain infrastructure, water system infrastructure, sanitary sewer infrastructure, machinery and equipment, and construction in progress. The following table is a summary of capital assets (net of accumulated depreciation) at June 30, 2025 and 2024.

Capital Assets
(Net of Depreciation)
2025 2024
Governmental Activities:

Land 17,451,887 $ 12,335,553 $
Buildings and Structures 26,641,826 25,257,168
Improvements Other Than Buildings 12,993,668 9,844,678
Public Domain Infrastructure 41,038,937 39,833,645
Sanitary Sewer Infrastructure 1,522,957 1,583,343
Machinery and Equipment 4,065,106 3,085,708
Construction in Progress 9,163,398 5,286,758
Right-to-Use Assets 179,137 357,712
Total Governmental Activities 113,056,916 97,584,565
Business-Type Activities:

Land 377,408 377,408
Buildings and Structures 14,341,684 14,718,952
Improvements Other Than Buildings 2,954,339 2,961,521
Water System Infrastructure 44,090,164 41,401,856
Machinery and Equipment 2,335,192 1,698,387
Construction in Progress 262,956 1,831,974
Right-to-Use Assets 3,462 6,923
Total Business-Type Activities 64,365,205 62,997,021
Total Capital Assets 177,422,121 $ 160,581,586 $

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(20)
Total capital assets, net of depreciation, increased from the prior year by $16.8 million. The $5.1 million Kia property purchase contributed to this increase. Capital improvement projects which contributed to this increase include Covina Recreation Village ($5.4 million), Hollenbeck Park Urban Greening Revitalization project ($1.8 million), street resurfacing ($2.9 million) and water main replacement ($1.1 million). Note 9 of Notes to the Financial Statements provide additional capital asset information.

Debt Administration
At the end of the fiscal year, the City had total long-term debt outstanding of $128.4 million. This includes notes, leases, revenue bonds payable, other postemployment benefits and net pension liabilities. On the following page is a summary of the outstanding debt (net of unamortized charges) at June 30, 2025 and 2024.

Outstanding Debt
(Net of Unamortized Charges)
2025 2024
Governmental Activities:

Compensated Absences 3,841,996 $ 4,619,632 $
Claims and Judgments 8,524,139 8,476,693
Certificates of Participation Payable (COP) 4,201,832 4,433,391 Pension Obligation Bonds 47,664,820 50,101,430
Lease Payable 160,561 203,417
Subscription Payable 1,330 129,180
Section 108 Loan 1,625,000 1,750,000
Postemployment Benefit Obligation 4,609,635 4,806,311
Net Pension Liability 26,887,507 28,166,206
Total Governmental Activities 97,516,820 102,686,260
Business-Type Activities:

Compensated Absences 739,519 742,837
Capital Lease Payable 3,565 7,076
Water Installment Agreement 13,642,755 14,828,173
Revenue Bonds Payable 4,760,000 5,645,000
Pension Obligation Bonds 6,815,180 7,163,570
Postemployment Benefit Obligation 1,626,690 1,694,719
Net Pension Liability 3,291,961 3,569,843
Total Business-Type Activities 30,879,670 33,651,218
Total Outstanding Debt 128,396,490 $ 136,337,478 $
The $5.2 million long-term debt decrease in governmental activities from 2024 to 2025 is due to decreases in compensated absences ($777,000), subscriptions payable ($128,000) and net pension liability ($1.3 million). Only claims and judgments was increased ($47,000). All other long-term debt in governmental activities decreased. The decrease of $2.8 million in business-type activities is due to decreases in postemployment benefit obligation ($68,000), net pension liability ($278,000) and other business-type activities decreases of $2.5 million.

CITY OF COVINA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
(21)
The Covina Public Financing Authority received an “A+” S&P Global rating for the wastewater revenue bonds.

Additional information on the City’s long-term debt and other long-term liabilities can be found in Note 10, Note 13, and Note 16 of the Notes to the Financial Statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The City applied sound budgeting practices and considered new development, consumer spending, and other relevant factors in formulating a balanced budget for Fiscal Year 2025-26. Prudent, costsaving budget practices, including pro-active debt management, will continue into future years.

The conservative budget policies put in place by Council direction, emphasized by the City Manager and supported by staff, as well as the voter approved transaction and use tax measure have enabled the City of Covina to remain fiscally solvent. As reflected on Note 14 of Notes to the Financial Statements, the City’s emergency contingency reserve meets the 20% of General Fund expenditures requirements established as the Council’s goal set forth in the City’s budget policy.

The City continues to be cautiously conservative in revenue and expenditure projections. With that in mind, the Fiscal Year 2025-26 budget projects an overall increase in revenues in comparison to Fiscal Year 2024-25. FY 2025-2026 is projected to show modest increases in Property Tax, Sales Tax and Utility User's Tax. Furthermore, increases are projected in Licenses and Permits, Intergovernmental, Fines and Forfeitures and Other Revenues. Ongoing Charges for services are also projected to steadily increase.

Increases to budgeted departmental expenditures reflect negotiated salary and benefit increases as well as increases to unfunded pension liability costs. The projections also include an increase of supplies and services, contract services as well as capital outlay and indirect costs.

REQUESTS FOR INFORMATION
This financial report is intended to provide a general overview of the City’s finances. A copy of the financial report is available for review at the Covina Public Library, 234 North Second Avenue, Covina, California 91723. You may also find a copy of the report online at www.covinaca.gov. Questions concerning any of the information provided in this report should be addressed to City of Covina Finance Department, 125 East College Street, Covina, California 91723.

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FINANCIAL STATEMENTS

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CITY OF COVINA

STATEMENT OF NET POSITION
JUNE 30, 2025
See accompanying Notes to Financial Statements.
(24)
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and Investments 86,626,490 $ 22,417,317 $ 109,043,807 $ Cash With Fiscal Agent 783 - 783
Receivables:

Accounts, Net 437,757 2,312,196 2,749,953
Due from Other Governments 17,197,509 37,975 17,235,484 Other 807,779 21,460 829,239
Loans and Notes 307,112 - 307,112
Leases 1,046,581 292,644 1,339,225
Internal Balances 1,354,142 (1,354,142) -
Inventories 69,436 93,057 162,493
Prepaid Items and Deposits 298,145 27,531 325,676
Capital Assets:

Not Being Depreciated/Amortized 26,615,285 640,364 27,255,649 Being Depreciated/Amortized, Net 86,441,631 63,724,841 150,166,472 Total Assets 221,202,650 88,213,243 309,415,893

DEFERRED OUTFLOWS OF RESOURCES
Deferred Amount on Refunding - 50,284 50,284
OPEB Related 680,176 260,682 940,858
Pension Related 14,579,925 1,032,513 15,612,438
Total Deferred Outflows of Resources 15,260,101 1,343,479 16,603,580

LIABILITIES
Accounts Payable 3,976,564 655,542 4,632,106
Accrued Liabilities 1,247,625 22,053 1,269,678
Deposits Payable 2,195,556 1,343,302 3,538,858
Interest Payable 53,354 186,229 239,583
Due to Other Governments 307,112 - 307,112
Unearned Revenue 3,434,145 85,957 3,520,102
Noncurrent Liabilities:

Due Within One Year 6,424,089 2,513,963 8,938,052
Due in More Than One Year:

Long-Term Liabilities 59,595,589 23,447,056 83,042,645
Net Other Postemployment Benefit Liability 4,609,635 1,626,690 6,236,325 Net Pension Liability 26,887,507 3,291,961 30,179,468
Total Liabilities 108,731,176 33,172,753 141,903,929

DEFERRED INFLOWS OF RESOURCES
Deferred Amount on Refunding - 100,478 100,478
Deferred Inflow Leases 2,442,216 253,977 2,696,193
OPEB Related 462,810 181,039 643,849
Pension Related 11,041,046 - 11,041,046
Total Deferred Inflows of Resources 13,946,072 535,494 14,481,566

NET POSITION
Net Investment in Capital Assets 105,096,553 47,748,805 152,845,358 Restricted for:

Public Safety 687,094 - 687,094
Public Works 32,727,337 - 32,727,337
Community Development 134,809 - 134,809
Culture and Recreation 1,432,882 - 1,432,882
Transit 5,611,072 - 5,611,072
Redevelopment and Housing 2,880,621 - 2,880,621
Unrestricted (Deficit) (34,784,865) 8,099,670 (26,685,195) Total Net Position $ 113,785,503 $ 55,848,475 $ 169,633,978

CITY OF COVINA

STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2025
See accompanying Notes to Financial Statements.
(25)
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions

GOVERNMENTAL ACTIVITIES
General Government 3,264,852 $ 2,538,802 $ 19,292 $ - $ Public Safety 38,200,980 1,937,926 2,871,305 63,647
Public Works 4,560,337 1,375,688 12,206,125 5,795
Culture and Recreation 6,220,553 703,211 119,234 5,898,844 Community Development 9,217,288 1,846,092 - 54,664
Transit 1,653,967 222,101 4,217,269 371,872
Redevelopment and Housing 466,564 483,881 269,222 -
Interest on Long-Term Debt 1,291,391 - - -
Total Governmental Activities 64,875,932 9,107,701 19,702,447 6,394,822

BUSINESS-TYPE ACTIVITIES
Water Utility 12,901,969 13,491,391 - -
Environmental Protection 1,435,210 1,154,155 - -
Theater 557,360 123,200 - -
Sewer Utility 3,058,559 3,031,442 - -
Total Business-Type Activities 17,953,098 17,800,188 - - Total 82,829,030 $ 26,907,889 $ 19,702,447 $ 6,394,822 $

GENERAL REVENUES
Taxes:

Property Taxes (Net of Pass-Through Payments)
General Sales Tax
Transaction and Use Tax
Transient Occupancy Taxes
Property Transfer Taxes
Business License Taxes
Utility Users Taxes
Franchise Taxes
Investment Earnings (Loss)
Miscellaneous
Transfers
Total General Revenues

CHANGES IN NET POSITION
Net Position - Beginning of Year, as Previously Reported Correction of Error
Net Position - Beginning of Year, as Restated

NET POSITION - END OF YEAR

CITY OF COVINA

STATEMENT OF ACTIVITIES (CONTINUED)
YEAR ENDED JUNE 30, 2025
See accompanying Notes to Financial Statements.
(26)
Governmental Business-Type
Activities Activities Total
$ (706,758) $ - $ (706,758)
(33,328,102) - (33,328,102)
9,027,271 - 9,027,271
500,736 - 500,736
(7,316,532) - (7,316,532)
3,157,275 - 3,157,275
286,539 - 286,539
(1,291,391) - (1,291,391)
(29,670,962) - (29,670,962)
- 589,422 589,422
- (281,055) (281,055)
- (434,160) (434,160)
- (27,117) (27,117)
- (152,910) (152,910)
(29,670,962) (152,910) (29,823,872)
19,629,507 - 19,629,507
11,342,980 - 11,342,980
8,693,965 - 8,693,965
157,193 - 157,193
251,463 - 251,463
423,249 - 423,249
6,315,245 - 6,315,245
2,489,668 - 2,489,668
4,195,491 1,543,231 5,738,722
86,403 88,134 174,537
103,591 (103,591) -
53,688,755 1,527,774 55,216,529
24,017,793 1,374,864 25,392,657
89,494,596 54,375,695 143,870,291
273,114 97,916 371,030
89,767,710 54,473,611 144,241,321
$ 113,785,503 $ 55,848,475 $ 169,633,978
Net Revenue (Expense) and
Changes in Net Position

CITY OF COVINA

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2025
See accompanying Notes to Financial Statements.
(27)
Other Total
General Park Governmental Governmental
Fund Measure W ARPA Development Funds Funds
ASSETS
Cash and Investments 37,236,555 $ 17,124,651 $ - $ 23,056 $ 14,442,881 $ 68,827,143 $ Cash and Investments With Fiscal Agent - - - - 783 783
Receivables:

Interest 379,016 - - - 7,049 386,065
Utility User Tax - 421,469 - - - 421,469
Accounts 325,448 - - - 27,365 352,813
Leases 592,127 - - - 432,800 1,024,927
Loans - - - - 307,112 307,112
Due from Other Governments 3,784,617 8,580,082 - 3,976,563 856,247 17,197,509 Due from Other Funds 78,498 - - - - 78,498
Prepaid Items 214,729 - - - 9,684 224,413
Total Assets 43,032,459 $ 25,704,733 $ - $ 3,999,619 $ 16,083,921 $ 88,820,732 $

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES,

AND FUND BALANCES

LIABILITIES
Accounts Payable 1,100,365 $ 319,680 $ - $ 1,011,603 $ 1,009,584 $ 3,441,232 $ Accrued Liabilities 1,231,502 - - 15,975 148 1,247,625
Deposits Payable 2,151,886 - - - 43,670 2,195,556
Due to Other Funds - - - - 78,498 78,498
Due to Other Governments - - - - 307,112 307,112
Unearned Revenue 374,043 - - 2,682,510 377,592 3,434,145 Total Liabilities 4,857,796 319,680 - 3,710,088 1,816,604 10,704,168

DEFERRED INFLOWS OF

RESOURCES
Deferred Inflows - Leases 2,002,412 - - - 422,066 2,424,478 Unavailable Revenue 35,873 - - 3,567,896 313,102 3,916,871 Total Deferred Inflows of
Resources 2,038,285 - - 3,567,896 735,168 6,341,349

FUND BALANCES
Nonspendable 214,729 - - - 9,684 224,413
Committed 12,532,800 - - - - 12,532,800
Restricted 321,667 25,385,053 - - 13,751,574 39,458,294 Assigned 2,520 - - - - 2,520
Unassigned 23,064,662 - - (3,278,365) 19,557,188 (229,109) Total Fund Balances (Deficits) 25,385,053 36,136,378 - 13,532,149 (3,278,365) 71,775,215 Total Liabilities, Deferred
Inflows of Resources,
and Fund Balances 43,032,459 $ 25,704,733 $ - $ 3,999,619 $ 16,083,921 $ 88,820,732 $

CITY OF COVINA

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION
JUNE 30, 2025
See accompanying Notes to Financial Statements.
(28)
Total Fund Balances - Governmental Funds $ 71,775,215
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets, net of accumulated depreciation, used in governmental activities are not current financial resources and, therefore, are not reported in the fund financial statements. This amount does not include $3,799,210 of internal service funds net capital assets.

Capital Assets Not Being Depreciated 26,615,285 $
Capital Assets Being Depreciated 221,136,131
Accumulated Depreciation (138,493,710) 109,257,706
Long-term liabilities applicable to the City’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the statement of net position. Balances at June 30, 2025 are:

Loan Payable (1,625,000)
Bonds Payable (4,040,000)
Pension Obligation Bonds (45,675,040)
Bond Premium (161,832)
Leases (137,255)
Subscriptions (1,330)
Compensated Absences (3,638,875)
Accrued Interest (55,312,893) (33,561)
Pension and OPEB related debt applicable to the City’s governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to pensions and OPEB are only reported in the statement of net position as the changes in these amounts affect only the government-wide statements for governmental activities.

Deferred Outflows of Resources - Pension Related 14,223,887 Deferred Inflows of Resources - Pension Related (11,041,046) Net Pension Liability (25,752,347)
Deferred Outflows of Resources - OPEB Related 572,515
Deferred Inflows of Resources - OPEB Related (401,821)
Net OPEB Liability (26,469,324) (4,070,512)
Internal service funds are used by management to charge the costs of certain activities involved in rendering services to departments within the City. The assets and liabilities of the internal service funds are included in governmental in the statement of net position. 10,617,928 Receivables that are measurable but not available are recorded as deferred inflows of resources under the modified accrual basis of accounting. 3,916,871 Net Position of Governmental Activities as Reported on the Statement of Net Position $ 113,785,503