13 Section 2 ‒ Federal Changes and Initiatives | 2024
Equipment
Typing/
Identification
and Use
Subrecipients that allocate HSGP funds towards equipment are required to type and identify the capability associated with that equipment. The FEMA Resource Typing Library
Tool (RTLT) can be used to help determine the type and
capability.
Per FEMA policy, the purchase of weapons and weapon
accessories are not allowed with HSGP funds. Special rules apply to pharmaceutical purchases, medical
countermeasures, and critical emergency supplies; refer to page A-10 of the FEMA Preparedness Grants Manual for
additional information.
Expenditures for general purpose equipment are allowable if they align to and support one or more core capabilities identified in the NPG, and in addition, are
deployable/sharable through the Emergency
Management Assistance Compact and allowable under
6 U.S.C. § 609. Refer to the NOFO and Preparedness Grants Manual for examples of allowable general-purpose
equipment.
Equipment
Maintenance/
Sustainment
Use of HSGP funds for maintenance contracts, warranties, repair or replacement costs, upgrades, and user fees are allowable as described in FEMA IBs 336 and 379, as well as Grant Programs Directorate (GPD) Policy FP-205-402-125-1.
Emergency
Communications
Projects
All Subrecipient emergency communications projects must comply with the SAFECOM Guidance on Emergency
Communications Grants and describe in their FMFW how
such activities align with the goals of the Statewide
Communications Interoperability Plan.
Telecom
Equipment and
Services
Prohibitions
Effective August 13, 2020, section 889(f)(2)-(3) of the John S. McCain National Defense Authorization Act for FY 2019 (NDAA) and 2 C.F.R. § 200.216, 200.471, and Appendix II to 2 C.F.R. Part 200 prohibit DHS/FEMA Recipients and
Subrecipients (including their contractors and
subcontractors) from using any FEMA funds under open or new awards for the following telecommunications
equipment or services:
EXHIBIT F
14 Section 2 ‒ Federal Changes and Initiatives | 2024
Telecom
Equipment and
Services
Prohibitions Cont.
1) Telecommunications equipment produced by Huawei
Technologies Company or ZTE Corporation, (or any
subsidiary or affiliate of such entities);
2) For the purpose of public safety, security of government facilities, physical security surveillance of critical
infrastructure, and other national security purposes,
video surveillance and telecommunications equipment
produced by Hytera Communications Corporation,
Hangzhou Hikvision Digital Technology Company, or
Dahua Technology Company (or any subsidiary or
affiliate of such entities);
3) Telecommunications or video surveillance services
provided by such entities or using such equipment; or
4) Telecommunications or video surveillance equipment or services produced or provided by an entity that the
Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an
entity owned or controlled by, or otherwise connected
to, the People’s Republic of China.
Additional guidance is available in FEMA Policy #405-143- 1, Prohibitions on Expending FEMA Award Funds for
Covered Telecommunications Equipment or Services
Prohibited and
Controlled
Equipment
Effective May 25, 2022, Executive Order (EO) 14074,
Advancing Effective, Accountable Policing and Criminal
Justice Practices to Enhance Public Trust and Public Safety, Section 12(a) of EO 14074 directs the Department of
Homeland Security (DHS) to review its grant programs and, consistent with applicable law, prohibits the use of grant funding to purchase certain types of military equipment by state, local, tribal, and territorial law enforcement
agencies (LEAs).
For all awards issued on or after January 1, 2023, the policy directly prohibits certain types of equipment outright
(prohibited equipment), whereas other types of equipment may be controlled, or LEAs are required to submit
certifications prior to purchase.
Even if equipment is listed as controlled equipment and is not outright prohibited, that does not automatically
EXHIBIT F
15 Section 2 ‒ Federal Changes and Initiatives | 2024
Prohibited and
Controlled
Equipment Cont.
make it allowable under a particular FEMA program.
Subrecipients should refer to applicable program
guidance or contact your Grants Analyst to determine if a particular type of equipment is allowable under that
program.
Additional information regarding Prohibited and Controlled Equipment is available on FEMA Policy 207-22-0002.
Small Unmanned
Aircraft Systems
All requests to purchase Small Unmanned Aircraft Systems (SUAS) with FEMA grant funding must comply with FEMA
Policy 207-22-0002 and include copies of the policies and procedures in place to safeguard individuals’ privacy, civil rights, and civil liberties of the jurisdiction that will purchase, take title to, or otherwise use the SUAS equipment. The Authorized Equipment Listing for 03OE-07-SUAS details
questions that must be included in the Aviation Request justification. Reference the Presidential Memorandum:
Promoting Economic Competitiveness While Safeguarding
Privacy, Civil Rights, and Civil Liberties in Domestic Use of Unmanned Aircraft Systems for additional information.
Subrecipients must submit Cal OES’ UAS-Drone Request
Form, Controlled Equipment Self-Certification Form and
FEMA’s Controlled Equipment Request Form for FEMA
approval. Requests for drone/UAS accessories follow the same UAS process that requires FEMA review and
approval.
FEMA approval is required before a SUAS can be
purchased with HSGP grants funds.
Emergency
Operations Plans
Subrecipients should update their Emergency Operations
Plan (EOP) at least once every two years to remain
compliant with the Comprehensive Preparedness Guide
101 version 2.0.
EXHIBIT F
16 Section 2 ‒ Federal Changes and Initiatives | 2024
Conflict of
Interest
To eliminate and reduce the impact of conflicts of interest in the subaward process, Subrecipients and pass-through entities must follow their own policies and procedures
regarding the elimination or reduction of conflicts of
interest when making subawards. Subrecipients and passthrough entities are also required to follow any applicable federal, state, local, and tribal statutes or regulations governing conflicts of interest in the making of subawards.
Subrecipients must disclose to their Grants Analyst, in writing, any real or potential conflict of interest as defined by the federal, state, local, or tribal statutes or regulations, which may arise during the administration of the HSGP
subaward within five days of learning of the conflict of interest.
Build America,
Buy America Act
(BABAA)
Under FEMA financial assistance programs, the BABAA
requirements apply to:
• New awards made on or after January 2, 2023,
• New funding that FEMA obligates to existing awards or through renewal awards on or after January 2, 2023;
and
• Infrastructure projects.
Funds provided under this program may not be used for a project for infrastructure unless the iron and steel,
manufactured products, and construction materials used
in that infrastructure are produced in the United States.
The Buy America preference only applies to articles,
materials, and supplies that are consumed in, incorporated into, or affixed to an infrastructure project. As such, it does not apply to tools, equipment, and supplies, such as
temporary scaffolding, brought to the construction site and removed at or before the completion of the
infrastructure project. Additionally, the Buy America
preference does not apply to equipment and furnishings, such as movable chairs, desks, and portable computer
equipment, that are used at or within the finished
infrastructure project but are not an integral part of the structure or permanently affixed to the infrastructure
project.
EXHIBIT F
17 Section 2 ‒ Federal Changes and Initiatives | 2024
Build America,
Buy America Act
(BABAA) Cont.
When necessary, Subrecipients may apply for a waiver
from these requirements. Additional information regarding the BABAA can be found on FEMA’s website under
Buy America Preference Buy America Preference.
EXHIBIT F
18 Section 3 ‒ State Changes and Initiatives | 2024
FY 2024
Investments
The State prioritized the following investment strategies for the FY 2024 subawards:
1. Enhance Information and Intelligence Sharing and
Cooperation with Federal Agencies, including DHS
(National Priority);
2. Enhance the Protection of Soft Targets/Crowded Places (National Priority);
3. Enhance Cybersecurity (National Priority);
4. Enhancing Community Preparedness and Resilience
(National Priority);
5. Combating Domestic Violent Extremism (National
Priority);
6. Strengthen Emergency Communications Capabilities
Through Planning, Governance, Technology, and
Equipment;
7. Enhance Medical and Public Health Preparedness;
8. Strengthen Information Sharing and Collaboration (nonFusion Center);
9. Enhance Multi-Jurisdictional/Inter-Jurisdictional AllHazards/Whole Community Incident Planning, Response & Recovery Capabilities;
10. Protect Critical Infrastructure and Key Resources
(includes Food and Agriculture); and
11. Enhance Election Security (National Priority).
EXHIBIT F
19 Section 3 ‒ State Changes and Initiatives | 2024
California
Homeland
Security Strategy
Goals
The State prioritized the following California Homeland Security Strategy Goals for the FY 2024 subawards:
1. Enhance Information Collection, Analysis, and Sharing, in Support of Public Safety Operations Across California;
2. Protect Critical Infrastructure and Key Resources from All Threats and Hazards;
3. Strengthen Security and Preparedness Across
Cyberspace;
4. Strengthen Communications Capabilities through
Planning, Governance, Technology, and Equipment;
5. Enhance Community Preparedness;
6. Enhance Multi-Jurisdictional/Inter-Jurisdictional AllHazards Incident Catastrophic Planning, Response, and Recovery Capabilities;
7. Improve Medical and Health Capabilities;
8. Enhance Incident Recovery Capabilities;
9. Strengthen Food and Agriculture Preparedness; and
10. Enhance Homeland Security Exercise, Evaluation, and Training Programs.
State Initiative
Funding
For FY 2024, Cal OES shall retain 20% of the SHSP and 17.3% of the UASI funding for state initiatives.
“On Behalf Of” Cal OES may, in conjunction with local approval authorities, designate funds “on behalf of” local entities who choose to decline or fail to utilize their subaward in a timely manner.
Public Alert and
Warning
Cal OES encourages Subrecipients to consider the use of this funding to assist their jurisdiction’s alignment with the State of California Alert and Warning Guidelines,
developed pursuant to Senate Bill 833 of the 2018
Legislative Session.
EXHIBIT F
20 Section 4 ‒ Required State Application Components | 2024 Financial
Management
Forms
Workbook
The FY 2024 Cal OES FMFW includes:
Grant Subaward Face Sheet – Use the Grant Subaward Face Sheet to apply for grant programs. The Grant Subaward Face Sheet must be signed and submitted in portrait format. An active UEI# (Formerly DUNS#) is required. UEI registration information is available sam.gov.
Authorized Body of 5 – Provide the contact information of Authorized Agents (AA), delegated via the Governing Body Resolution (GBR) or Signature Authorization Form, including staff related to grant activities. More than one person is
recommended for designation as the AA; in the absence of an AA, an alternate AA can sign requests.
Project Ledger – The project ledger is used in the application process to submit funding information and is used for submitting cash requests, Grant Subaward Modifications, and assists with the completion of the Biannual Strategy Implementation Report (BSIR).
Planning Tab – Provides detailed information on grant-funded planning activities with a final product identified.
Organization Tab – Provides detailed information on grant-funded organizational activities.
Equipment Tab – Detailed information must be provided under the equipment description for all grant-funded equipment. AEL numbers must be included for all items of equipment. Always refer to the AEL for a list of allowable equipment and conditions, if any.
Training Tab – Provides detailed information on grant-funded training activities. All training activities must receive Cal OES approval prior to starting the event, including a Training Feedback number. The Training Request Form must be submitted and approved to obtain a Training Feedback number and should be submitted at least 30 days in advance.
Exercise Tab – Provides detailed information on grant-funded exercises.
EXHIBIT F
21 Section 4 ‒ Required State Application Components | 2024 Financial
Management
Forms
Workbook
Cont.
M&A Tab – Provides information on grant-funded M&A activities.
Indirect Costs Tab – Provides information on indirect costs.
Consultant-Contractor Tab – Provides detailed information on grant-funded consultants and contractors.
Authorized Agent Page – The AA Page must be submitted with the application, all cash requests, and Grant Subaward
Modifications. The AA Page must include a valid signature on file with Cal OES and the date.
Subrecipient
Grants
Management
Assessment
Per 2 C.F.R. § 200.332, Cal OES is required to evaluate the risk of non-compliance with federal statutes, regulations, and grant terms and conditions posed by each Subrecipient of passthrough funding. The Subrecipient Grants Management Assessment Form contains questions related to an organization’s experience in the management of federal grant awards. It is used to determine and provide an appropriate level of technical assistance, training, and grant oversight to Subrecipients during the subaward. The questionnaire must be completed and
returned with the grant application.
Application
Attachments
Federal Funding Accountability and Transparency Act (FFATA) Financial Disclosure – Use the FFATA Financial Disclosure Form to provide the information required by the Federal Funding Accountability and Transparency Act of 2006.
Intelligence Analysts Certificates – Pursuant to the Preparedness Grants Manual, Cal OES must have certificates for completion of training for fusion center analytical personnel. Please provide copies of certificates for each intelligence analyst, if applicable.
UASI Footprint (UASIs Only) – The Urban Area Working Group (UAWG) establishes the ‘footprint’ of the UA. A map or list defining the footprint must be included with the application.
UAWG Member Roster (UASIs Only) – A list of all current UAWG members with positions or titles.
Indirect Cost Rate Agreement – If claiming indirect costs at a federally-approved rate, please provide a copy of the approved indirect cost rate agreement.
EXHIBIT F
22 Section 4 ‒ Required State Application Components | 2024 Standard
Assurances
The Standard Assurances list the requirements to which the Subrecipients will be held accountable. All Applicants will be required to submit an electronic signed, copy of the FY 2024 Standard Assurances as part of their FY 2024 HSGP application.
The required Standard Assurances can be found only in PDF format on the Cal OES website.
NOTE: Self-created Standard Assurances will not be accepted.
Program
Standard
Assurances
Addendum
The Program Standard Assurances Addendum specifies
additional requirements that Subrecipients must meet.
All Subrecipients must submit an electronic signed Program Standard Assurances Addendum as part of the FY 2024 HSGP application. The required Program Standard Assurances
Addendum can be found only in PDF format on the Cal OES website.
Operational
Areas and
Urban Areas
Governing Body Resolution – The GBR appoints AAs (identified by the individual’s name or by a position title) to act on behalf of the governing body and the Applicant by executing any actions necessary for each application and subaward. All Applicants are required to submit a copy of an approved GBR with their grant application. Resolutions may be valid for up to three grant years given the following:
• The resolution identifies the applicable grant program (e.g., EMPG and/or HSGP);
• The resolution identifies the applicable grant years, (e.g., FY 2024, FY 2025, FY 2026; and
• Adheres to any necessary elements required by local
protocols, rules, etc., if applicable.
Resolutions that only identify a single grant program will only be valid for that single program. Resolutions that do not identify applicable grant years will only be valid for the grant year in which the resolution was submitted.
Authorized Agent Information – For each person or position appointed by the governing body, identify the individual in the All changes in AA and contact information must be provided to Cal OES in writing. If the GBR identifies the AA by name, a new Resolution is needed when changes are made. If the GBR
identifies the AA by position and/or title, changes may be made
EXHIBIT F
23 Section 4 ‒ Required State Application Components | 2024 Operational
Areas and
Urban Areas
Cont.
by submitting a request on the entity’s letterhead, signed by an existing AA. Cal OES will not accept signatures of an AA’s designee, unless authorized by the GBR. A change to an AA's designee must be submitted on agency letterhead and signed by the AA, announcing the change to their designee.
Operational
Areas Only
Approval Authority Body – OAs must appoint an Anti-Terrorism Approval Body (Approval Authority) to have final approval of the OA’s application for HSGP funds. Each member of the Approval Authority must provide written agreement with the OA’s
application for HSGP funds. The Approval Authority shall consist of the following representatives, and additional voting members may be added by a simple majority vote of the following standing members:
• County Public Health Officer or designee responsible for Emergency Medical Services
• County Fire Chief or Chief of Fire Authority
• Municipal Fire Chief (selected by the OA Fire Chiefs) • County Sheriff
• Chief of Police (selected by the OA Police Chiefs)
Urban Areas
Only
Urban Area Working Groups – Membership in the UAWG must provide either direct or indirect representation for all relevant jurisdictions and response disciplines (including law enforcement, fire service, EMS, hospitals, public health, and emergency management) that comprise the defined UA. It also must be inclusive of local Citizen Corps Council and tribal representatives.
The UAWG should also ensure the integration of local emergency management, public health, and health care systems into a coordinated sustained local capability to respond effectively to a mass casualty incident. Additional group composition criteria are found in the FEMA Preparedness Grants Manual.
Threat Hazard Identification and Risk Assessment – Subrecipients are required to submit a THIRA for all 32 core capabilities.
Beginning in 2019, UAs are required to submit a THIRA every three years. An annual capability assessment will still be required.
EXHIBIT F
24 Section 4 ‒ Required State Application Components | 2024 Urban Areas
Only Cont.
Stakeholder Preparedness Review – The SPR is an annual grant requirement for all states, territories, and UAs. It is an annual capability assessment, which helps jurisdictions identify capability gaps and prioritize investment requirements to reach the targets set in their THIRA.
Fusion
Centers Only
All fusion center investments must align to, and reference, specific performance areas of the assessment that the funding is intended to support.
Fusion Centers are also required to follow all Reporting and Administrative Metrics for California Fusion Centers, as set forth in the Governor’s Homeland Security Advisor/Cal OES Director’s letter dated March 16, 2016. These operational and administrative metrics set forth an integrated and coordinated approach for regular and proactive information and intelligence sharing between all fusion centers in the California State Threat Assessment System (STAS).
State
Agencies and
Tribes Only
State Agencies, and federally recognized tribes may submit the Signature Authorization Form in lieu of a GBR, signed by the most senior ranking official, such as the Secretary, Director, President, Chancellor, or Chairperson.
EXHIBIT F
25 Section 5 ‒ State Application Process | 2024
Application
Submission
Subrecipients must submit an electronic copy of their completed FMFW to their Grants Analyst for review. After the application is approved, a completed copy of the FMFW, along with all other application components must be submitted, with official signatures, by the application due date. During the application process, if it is determined not all allocated funds can be expended by the end of the period of performance, please inform a Grants Analyst as soon as possible. The completed application should be received by Cal OES no later than the date provided in the FY 2024 HSGP Timeline, referenced as Attachment B.
Late or
Incomplete
Application
Late or incomplete applications may be denied. If an application is incomplete, the Grants Analyst may request additional information. Requests for late submission of applications must be made in writing to the Grants Analyst prior to the application due date. Cal OES has sole discretion to accept or reject a late or incomplete grant application.
HSGP Contact
Information
The Grants Analyst Regional Assignments Map is linked and available on the Cal OES website under “Regional Assignments”.
Subaward
Approval
Subrecipients will receive a formal notification of award no later than 45 days after Cal OES accepts the federal grant award. The award letter must be signed, dated, and returned to Cal OES within 20 calendar days. Once the completed application, along with the signed award letter, is received and approved, reimbursement of eligible subaward expenditures may be
requested using the Cal OES FMFW.
EXHIBIT F
26 Section 6 ‒ Post Award Requirements | 2024
Payment Request
Process
To request an advance or cash reimbursement of HSGP
funds, Subrecipients must first complete a payment request using the Cal OES HSGP FMFW, returning it to the appropriate Grants Analyst. Subrecipients who fail to follow the workbook instructions may experience delays in processing the
payment request.
Payments can only be made if the Subrecipient has an
approved application.
Advances and
Interest Earned on
Advances
An Advance payment is a payment that is requested before Subrecipients have disbursed the funds for program purposes.
Subrecipients may be paid an advance, provided they
maintain a willingness and ability to maintain procedures to minimize the time elapsing between the receipt of funds and their disbursement. The timing and amount of advance
payments must be as close as administratively feasible to the actual disbursements by the Subrecipient for project costs.
Federal rules require advances to be deposited in interestbearing accounts. Interest earned in amounts up to $500 per year may be retained by Subrecipients for administrative expenses; any additional interest earned on federal advance payments must be returned annually to Cal OES.
Semi-Annual
Drawdown
Requirements
All Subrecipients must report expenditures and request funds at least semi-annually throughout the period of performance.
Semi-annual drawdowns should occur by March and
October of each calendar year following final approval of the subaward application, except for the final cash request, which must be submitted within 20 calendar days after the end of the period of performance.
Modifications Post-award budget and scope modifications must be requested using the Cal OES HSGP FMFW v1.24, signed by the Subrecipient’s AA, and submitted to the Grants Analyst.
The Subrecipient may implement grant modification
activities, and incur associated expenses, only after receiving written final approval of the modification from Cal OES.
EXHIBIT F
27 Section 6 ‒ Post Award Requirements | 2024
Modifications
Cont.
Subrecipients must provide a written justification with all modification requests. The justification may be included in the body of the e-mail transmitting the request, or in a document attached to the transmittal e-mail. Please reference GMM 2018-17 for additional information regarding modification requests.
Modifications to NP Projects have additional restrictions as indicated below:
Modifications which do not change the project scope and do not decrease the overall project budget can be
processed via regular modification request.
Modifications which change the project scope or decrease the overall project budget will require DHS/FEMA approval and must be requested on the National Priority Project
Modification Form.
Training
Requirements
All grant-funded training activities must receive Cal OES approval prior to starting the training event. Cal OES shall allow Subrecipients to develop a “placeholder” for future training conferences when an agenda has not been
established at the time Subrecipient applications are due.
Please work with a Grants Analyst and the Training Branch to identify a possible “placeholder” for these types of training activities.
When seeking approval of non-DHS/FEMA developed
courses, course materials must be submitted with the
approval requests. Conditional approvals are not offered.
Subrecipients must complete a Training Request Form and submit it electronically to the Cal OES Training Branch to be approved with a Training Feedback Number before
beginning any training activities. This includes project components like travel to, materials for, or attendance in training courses. Training Feedback Numbers should be
obtained no later than 30 days before the first day of the training or related activities. Requests that are submitted with less than 30 days prior to the start of the training or activity are not guaranteed to be approved in time and run the risk of training being unallowable. Training Feedback numbers must
EXHIBIT F
28 Section 6 ‒ Post Award Requirements | 2024
Training
Requirements
Cont.
be included on the FMFW Training Ledger to be considered for reimbursement.
For more information on this or other training-related inquiries, contact the Cal OES Training Branch at (916) 845-8745 or [email protected].
Exercises,
Improvement
Plans, and AfterAction Reporting
Subrecipients should engage stakeholders to identify longterm training and exercise priorities. These priorities should address capability targets and gaps identified through the THIRA and SPR process, real-world events, previous exercises, and national areas for improvement identified in the NPR.
Subrecipients must report on all exercises conducted with HSGP grant funds. An After-Action Report
(AAR)/Improvement Plan (IP) or Summary Report (for
Seminars and Workshops) must be completed and submitted to Cal OES within 90 days after exercise/seminars/workshops are conducted. It is acceptable to submit an Exercise
Summary Report for Seminars and Workshops in lieu of a full AAR/IP.
Please e-mail AAR/IPs and Summary Reports to:
• [email protected]
• [email protected]
• [email protected]
For exercise-related issues and/or questions, please email the Cal OES Exercise Team at [email protected].
Exercise costs will not be considered for reimbursement until an AAR/IP is received by Cal OES.
Procurement
Standards and
Written
Procedures
Subrecipients are required to conduct procurement activities in with documented procurement procedures that align with federal procurement standards outlined in 2 C.F.R. Part 200. In cases where there is a conflict between the local procedures and federal standards, the more stringent requirements must be followed. Additionally, subrecipients must implement written conflict of interest policies that govern the actions of employees involved in the selection, award, and
administration of contracts. These policies should include provisions for disciplinary actions in the event of violations.
EXHIBIT F
29 Section 6 ‒ Post Award Requirements | 2024
Procurement
Thresholds
Under 2 C.F.R. Part 200, procurement thresholds are defined as follows:
• Micro-purchase threshold: This is the maximum amount for which purchases can be made without requiring
competitive quotes or formal procurement processes,
provided the price is reasonable. The micro-purchase
threshold is set at $10,000.
• Simplified acquisition threshold: This sets the maximum amount for which federal procurement procedures may be
simplified. The threshold is $250,000. For purchases at or below this amount, subrecipients may use streamlined
methods, such as obtaining competitive price or rate
quotations from an adequate number of qualified sources.
Purchases exceeding $250,000 require more formal
procurement procedures, including sealed bids or
competitive proposals.
Subrecipients must adhere to these thresholds and, in cases of conflict between local procurement procedures and
federal requirements, must apply the more stringent
threshold.
Procurement
Documentation
Subrecipients must maintain records that document the
procurement process, including the rationale for the
procurement method, contract type, contractor selection or rejection, and the basis for the contract price. To be
allowable, costs must be properly documented. Acceptable documentation includes, but is not limited to:
• Solicitation materials (e.g., requests for quotes, bids, or proposals)
• Responses to solicitations (e.g., quotes, bids, or proposals) • Independent cost estimates and post-solicitation cost/price analyses, if applicable
• Contract documents and amendments
• Evidence of required contract provisions
• Other documents mandated by federal regulations at the time the grant was awarded
EXHIBIT F
30 Section 6 ‒ Post Award Requirements | 2024
Noncompetitive
Procurement
All noncompetitive procurements exceeding the simplified acquisition threshold requires Cal OES prior written approval to be eligible for reimbursement. This method of procurement must be approved by the local Purchasing Agent prior to submitting a request for Cal OES approval. A copy of the Purchasing Agent’s approval must be included with the
Cal OES Request for Noncompetitive Procurement
Authorization form. Cal OES may request additional
documentation that supports the procurement effort.
Cal OES will not reimburse for any noncompetitive
procurement contracts for any HSGP terrorism-related
training, regardless of the cost of the training. Exceptions to this policy may be approved in limited circumstances, e.g., related to a procurement effort that has resulted in
inadequate competition. Please refer to GMM2017-01A and GMM2021-05 for additional guidance.
Performance
Bond
Due to the risks associated with delays in vendor delivery of large equipment procurements, DHS/FEMA allows
Subrecipients to obtain a “performance bond” for items that are paid for up front to ensure delivery of the equipment within the grant period of performance.
Cal OES requires Subrecipients to obtain a performance bond when procuring any equipment item over $250,000, or for any vehicle, aircraft, or watercraft that requires full or partial payment prior to receiving the final product(s).
Performance Bond Waivers may be granted on a case-bycase basis and must be submitted to Cal OES prior to procurement.
Environmental
Planning and
Historic
Preservation (EHP)
DHS/FEMA is required to ensure all activities and programs that are funded by the agency comply with federal
Environmental Planning and Historic Preservation (EHP)
regulations. Subrecipients proposing projects or activities (including, but not limited to, training, exercises, the installation of equipment, and construction or renovation projects) that have the potential to impact the environment, or a historic structure must participate in the EHP screening process. EHP Screening Memos must include detailed project information, explain the goals and objectives of the proposed
EXHIBIT F
31 Section 6 ‒ Post Award Requirements | 2024
Environmental
Planning and
Historic
Preservation (EHP)
Cont.
project and include supporting documentation.
DHS/FEMA may also require the Subrecipient to provide a confidential California Historical Resources Information System (CHRIS) report in addition to the EHP Screening Form.
Determination on the necessity of a CHRIS report is based upon information disclosed on the form. GrantAnalysts will provide additional instructions should this report be required.
EHP Screening Requests should be submitted to Cal OES as early as possible. All projects/activities triggering EHP must receive DHS/FEMA written approval prior to commencement of the funded activity.
Updated information may be referenced in the FEMA GPD
EHP Policy Guidance.
Construction and
Renovation
When applying for construction activity at the time of
application, including communication towers, Subrecipients must submit evidence of approved zoning ordinances,
architectural plans, any other locally required planning permits, and a notice of federal interest. Additionally, Subrecipients are required to submit an SF-424C Budget and Budget Detail that cites project costs. Communication tower construction requests also require evidence that the Federal Communications Commission’s Section 106 review process
was completed.
Subrecipients using funds for construction projects must comply with the Davis-Bacon Act. Subrecipients must ensure that their contractors or subcontractors for construction projects pay workers no less than the prevailing wages for laborers and mechanics employed on projects of a
character like the contract work in the civil subdivision of the state in which the work is to be performed.
Project construction using SHSP and UASI funds may not
exceed $1,000,000 or 15% of the grant subaward (for the purposes of limitations on funding levels, communications towers are not considered construction).
EXHIBIT F
32 Section 6 ‒ Post Award Requirements | 2024
Construction and
Renovation Cont.
Written approval for construction must be provided by
DHS/FEMA prior to the use of any HSGP funds for construction or renovation. No construction activities (including site preparation, utility installations, and any groundbreaking activities) or equipment installations on existing structures, may begin until the EHP review process is complete.
Inventory Control
and Property
Management
Subrecipients must use standardized resource management concepts for resource typing and credentialing, in addition to maintaining an inventory by which to facilitate the effective identification, dispatch, deployment, tracking, and recovery of resources.
Subrecipients must have an effective inventory management system, to include:
• Property records that document description, serial/ID number, fund source, title information, acquisition date, cost, federal cost share, location, use, condition, and ultimate disposition;
• A physical inventory conducted at least every two years; • A control system to prevent loss, damage, and theft of grant purchased equipment and supplies; and
• Adequate maintenance procedures to keep the property
in good condition.
Equipment
Disposition
When original or replacement equipment acquired under the HSGP is no longer needed for program activities, the
Subrecipient must contact the Grants Analyst to request disposition instructions. See 2 C.F.R. § 200.313€.
Performance
Reporting
Subrecipients must complete a BSIR each Winter and Summer using the DHS/FEMA Grants Reporting Tool (GRT) for all
awards prior to FY 2024. All subsequent BSIR reports will be submitted in FEMA GO. BSIR must be completed for the
duration of each subaward period of performance or until all grant activities are completed and the subaward is formally closed by Cal OES. Failure to submit a BSIR could result in subaward reduction, suspension, or termination.
Access to the BSIR for all awards prior to FY 2024 may be obtained through the GRT. To create a new account, please click the link that reads, “Register for an account” and follow the instructions provided. The Subrecipient will be required to
EXHIBIT F
33 Section 6 ‒ Post Award Requirements | 2024
Performance
Reporting Cont.
ensure up-to-date project information is entered. The Project Ledger in the FMFW may assist with the BSIR data entry
process. For additional assistance with the GRT, please contact your Grants Analyst.
Extension
Requests
Extensions to the initial period of performance identified in the subaward will only be considered through formal, written requests to your Grants Analyst. Upon receipt of the extension request, Cal OES will:
1. Verify compliance with performance reporting
requirements by confirming the Subrecipient has
submitted all necessary performance reports;
2. Confirm the Subrecipient has provided sufficient
justification for the request; and
3. If applicable, confirm the Subrecipient has demonstrated sufficient progress in past situations where an extension was authorized by Cal OES.
Extension requests will be granted only due to compelling legal, policy, or operational challenges, must be projectspecific and will only be considered for the following reasons:
1. Contractual commitments with vendors that prevent
completion of the project within the period of
performance;
2. The project must undergo a complex environmental
review which cannot be completed within this timeframe;
3. Projects are long-term by design and therefore,
acceleration would compromise core programmatic
goals; and
4. Where other special circumstances exist.
To be considered, extension requests must be received no later than 60 days prior to the end of the Subrecipient’s period of performance and must contain specific and
compelling justifications as to why an extension is required. All extension requests must address the following:
1. Grant program, fiscal year, and award number;
2. Reason for delay;
3. Current status of the activity/activities;
4. Approved period of performance termination date and
new project completion date;
EXHIBIT F
34 Section 6 ‒ Post Award Requirements | 2024
Extension
Requests
Cont.
5. Amount of funds drawn down to date;
6. Remaining available funds, both federal and non-federal;
7. Budget outlining how remaining federal and non-federal funds will be expended;
8. Plan for completion, including milestones and timeframes for each milestone and the position/person responsible for implementing the plan for completion; and
9. Certification the activity/activities will be completed within the extended period of performance without any
modification to the original Project Scope.
General questions regarding extension requirements and the extension request form, should be directed to your Grants Analyst. For additional information, please see IB 379.
Extension requests for personnel and salaries do not meet the requirements of IB 379 and will not be granted. Subrecipients are expected to complete all grant-funded personnel
activities by the end of the subaward period of performance.
Progress Reports
on Grant
Extensions
All Subrecipients that receive Cal OES approval to extend their FY 2024 Grant Subaward period of performance may be required to submit progress reports indicating completed and future project milestones on all extended projects. Progress reports must be submitted electronically to the Subrecipient’s Grants Analyst. Deadlines for the submission of progress reports will be established at the time of extension approval.
Monitoring Cal OES Grants Monitoring actively monitors Subrecipients, through day-to-day communications, programmatic site
visits, desk, and on-site compliance assessments. The purpose of the compliance assessment is to ensure Subrecipients are in compliance with applicable state and federal regulations, grant guidelines, and programmatic requirements.
Monitoring activities may include, but are not limited to:
• Verifying entries recorded on the FMFW categories are properly supported with source documentation;
• Eligibility of and support for expenditures, typically covering two to three years of data;
• Comparing actual Subrecipient activities to those
approved in the grant application and subsequent
EXHIBIT F
35 Section 6 ‒ Post Award Requirements | 2024
Monitoring
Cont.
modifications, including the review of timesheets and
invoices as applicable;
• Procurements and contracts;
• Ensuring equipment lists are properly maintained and
physical inventories are conducted;
• Ensuring advances have been disbursed in accordance
with applicable guidelines; and
• Confirming compliance with Standard Assurances; and
• Information provided on performance reports and
payment requests
NOTE: It is the responsibility of all Subrecipients that pass down grant funds to other entities, to maintain and utilize a formal process to monitor the grant activities of their subawards. This requirement includes, but is not limited to, on-site verification of grant activities, as required. It is common for Subrecipients to receive findings in a programmatic site visit or compliance assessment, which require a Corrective Action Plan (CAP) to be submitted by Subrecipients. Those Subrecipients who fail to submit a CAP, as required, shall have a “hold” placed on any future reimbursements until the “finding” is resolved.
Failure to Submit
Required Reports
Periodic reporting is required by the grant. Subrecipients who miss a single reporting deadline may receive a letter
addressed to their Board of Supervisors informing them of the failure to report. County OAs and tribes who fail to report twice consecutively may have subsequent awards reduced
by 10% until timely reporting is reestablished; UASIs may have a “hold” placed on any future reimbursements.
Suspension/
Termination
Cal OES may suspend or terminate grant funding, in whole or in part, or other measures may be imposed for any of the following reasons:
• Failure to submit required reports.
• Failure to expend funds in a timely manner consistent with the grant milestones, guidance, and assurances.
• Failure to comply with the requirements or statutory
progress toward the goals or objectives of federal or state law.
• Failure to make satisfactory progress toward the goals or objectives set forth in the Subrecipient application.
• Failure to follow Grant Subaward requirements or Special
EXHIBIT F
36 Section 6 ‒ Post Award Requirements | 2024
Suspension/
Termination Cont.
Conditions.
• Proposing or implementing substantial plan changes to the extent that, if originally submitted, the application would not have been selected for funding.
• False certification in the application or document.
• Failure to adequately manage, monitor, or direct the
grant funding activities of their Subrecipients.
Before taking action, Cal OES will provide the Subrecipient reasonable notice of intent to impose corrective measures and will make every effort to informally resolve the problem.
Closeout
Cal OES will close-out Subrecipient awards when it
determines all applicable administrative actions and all required work of the federal award have been completed.
Subawards will be closed after:
• All funds have been requested and reimbursed, or
disencumbered;
• Receiving all applicable Subrecipient reports indicating all approved work has been completed, and all funds have
been distributed;
• Completing a review to confirm the accuracy of reported information;
• Reconciling actual costs to subawards, modifications, and payments; and
• Verifying the Subrecipient has submitted a final BSIR showing all grant funds have been expended.
Records Retention The records retention period is three years from the date of the Cal OES Grant Closeout letter, or until any pending litigation, claim, or audit started before the expiration of the three-year retention period has been resolved and final action is taken.
For indirect cost rate proposals, cost allocation plans, or other rate computation records, the start of the record retention period is dependent on whether the proposal, plan, or other computation is required to be submitted to the federal
government (or to the pass-through entity) for negotiation purposes. See 2 C.F.R. § 200.334(f).
EXHIBIT F
37 Section 6 ‒ Post Award Requirements | 2024
Records Retention
Cont.
In order for any cost to be allowable, it must be adequately documented per 2 C.F.R. § 200.403(g).
The Cal OES Grant Closeout Letter will notify the Subrecipient of the start of the records retention period for all
programmatic and financial grant-related records.
If the State Administrative Agency’s award remains open after the Subrecipient’s submission of the final BSIR, Cal OES will complete any additional BSIR reporting required under the award on behalf of the Subrecipient.
Closed grants may still be monitored and audited. Failure to maintain all grant records for the required retention period could result in a reduction of grant funds, and an invoice to return costs associated with the unsupported activities.
If documents are retained longer than the required retention period, FEMA, the DHS Office of Inspector General,
Government Accountability Office, and pass-through entity have the right to access these records as well. See 2 C.F.R. §§ 200.334, 200.336.
EXHIBIT F
38 Attachment A ‒ FY 2024 HSGP Allocations | 2024
*SHSP allocations reflect National Priority Area project adjustments State Homeland Security Program (SHSP)
Operational Area Total Award Operational Area Total Award ALAMEDA 1,453,851 ORANGE 2,718,746
ALPINE 75,998 PLACER 420,772
AMADOR 108,571 PLUMAS 91,008
BUTTE 248,256 RIVERSIDE 2,130,587
CALAVERAS 112,830 SACRAMENTO 1,400,136
COLUSA 93,346 SAN BENITO 130,337
CONTRA COSTA 1,042,148 SAN BERNARDINO 1,913,858
DEL NORTE 97,417 SAN DIEGO 2,830,483
EL DORADO 234,278 SAN FRANCISCO 775,892
FRESNO 927,408 SAN JOAQUIN 737,499
GLENN 96,159 SAN LUIS OBISPO 316,482
HUMBOLDT 187,964 SAN MATEO 696,626
IMPERIAL 226,248 SANTA BARBARA 446,265
INYO 90,923 SANTA CLARA 1,664,434
KERN 839,747 SANTA CRUZ 295,835
KINGS 202,266 SHASTA 226,214
LAKE 127,354 SIERRA 77,691
LASSEN 98,828 SISKIYOU 111,698
LOS ANGELES 8,300,952 SOLANO 448,956
MADERA 208,274 SONOMA 477,966
MARIN 288,172 STANISLAUS 535,072
MARIPOSA 89,272 SUTTER 158,389
MENDOCINO 150,140 TEHAMA 129,162
MERCED 315,459 TRINITY 88,432
MODOC 82,186 TULARE 475,346
MONO 86,086 TUOLUMNE 121,004
MONTEREY 437,680 VENTURA 770,793
NAPA 188,460 YOLO 261,139
NEVADA 159,879 YUBA 144,674
*Total 37,165,648
EXHIBIT F
39 Attachment A ‒ FY 2024 HSGP Allocations | 2024
Fusion Centers
Region Total Award
SAN FRANCISCO BAY AREA 1,792,050
SACRAMENTO/CENTRAL VALLEY AREA 2,565,000
GREATER LOS ANGELES AREA 2,887,500
SAN DIEGO AREA 2,047,500
ORANGE AREA 835,000
*Total 10,127,050
* SHSP allocations reflect National Priority Area project adjustments Urban Areas Security Initiative (UASI)
*A minimum of 35% of UASI funding must be for Law Enforcement Terrorism Prevention Urban Area
Federal
Allocation to
State
Allocation to
UASI State Initiatives
ANAHEIM/SANTA ANA AREA 4,712,190 3,896,981 815,209
BAY AREA 32,754,895 27,088,298 5,666,597
LOS ANGELES/LONG BEACH AREA 59,395,378 49,119,978 10,275,400 RIVERSIDE AREA 3,500,484 2,894,900 605,584
SACRAMENTO AREA 3,410,728 2,820,672 590,056
SAN DIEGO AREA 14,760,877 12,207,245 2,553,632
Total 118,534,552 98,028,075 20,506,477
EXHIBIT F
40 Attachment B ‒ FY 2024 HSGP Timeline | 2024
DHS/FEMA Announcement of 2024 HSGP NOFO April 16, 2024
Cal OES Application Due to DHS June 24, 2024
DHS Award to California September 27, 2024
Subrecipient period of performance begins September 1, 2024 2024 HSGP California Supplement release November 2024
Subrecipient Workshops October 2024
Subrecipient Awards (45 days from DHS award) October 2024 Subrecipient Final Applications for FY24 Due to
Cal OES
February 10, 2024
Subrecipient period of performance ends May 31, 2027
Final Cash Requests due to Cal OES Within twenty (20) calendar days after end of grant
Cal OES’s period of performance ends August 31, 2027
EXHIBIT F
Attachment C: FY 2024 HSGP Application Checklist | 2024 UEI ☐ LETPA 35% or >☐ M&A 5% or <☐
Subrecipient: FIPS#:
Grants Analyst:
Financial Management Forms Workbook:
☐ Grant Award Face Sheet
☐ Authorized Body of 5
☐ Project Ledger
☐ Planning Tab
☐ Organization Tab
☐ Equipment Tab
☐ Training Tab
☐ Exercise Tab
☐ Consultant/Contractor Tab
☐ Management & Administration Tab
☐ Indirect Cost Tab
☐ Authorized Agent Sheet
Attachments:
☐ Original Counter-Signed Award Letter
☐ Governing Body Resolution (Certified)
☐ Standard Assurances
☐ Program Standard Assurance Addendum
☐ FFATA Certification
☐ Subrecipient Grant Management Assessment Form
☐ Indirect Cost Rate Negotiation Agreement
☐ Personnel Cap Waiver (If Applicable)
☐ Intelligence Analyst(s) Certificates (If Applicable)
UASI Only:
☐ UASI Footprint
☐ UAWG Roster
State Agencies and Tribes Only:
☐ Signature Authority Form (in lieu of Governing Body Resolution) For Cal OES Use Only
Reviewed by: Date:
Management Approval: Date:
EXHIBIT F
0.00
CC Regular Meeting
AGENDA ITEM REPORT
ITEM NO. CC 7
Meeting: February 17, 2026
Title: One Year Extension of the Agreement with Professional Account Management LLC
Presented by: Ric Walczak, Chief of Police
Recommendation: Approve the Fifth Amendment to the agreement with Professional Account Management LLC for a one (1) year extension to provide parking citation processing and collections services; and authorize the City Manager to execute the amendment.
EXECUTIVE SUMMARY:
Prior to 2017, the City of Covina contracted with the City of Inglewood to provide parking citation processing and collection services under the name "Inglewood Citation Management Services" (ICMS).
In April 2007, the City of Inglewood contracted with Professional Account Management LLC (PAM) a Duncan Solutions Company, to provide a new citation processing system, technical support services and expanded collection services to support the City's internal and external client agencies. In 2017, the City of Covina entered into an agreement with PAM for five (5) years, with an option to extend for five (5) additional one-year terms. It is recommended that the City Council consider authorizing the fifth one-year extension pursuant to the agreement.
DISCUSSION:
Since March 1, 2017, PAM has been directly providing citation processing and collection services to the City of Covina under a new 5-year agreement with the option to extend the agreement for five (5) additional one-year terms. Under this agreement the Police Department has been utilizing the following services:
• Hosted AutoProcess Parking Citation System
• Preparing and mailing courtesy/delinquent notices
• Telephone customer service system with payment by credit/debit cards • On-line payment system
• Lock-box payment processing
• Obtaining State/DMV registered owner information
• Providing hosted document management system for administrative reviews • Providing comprehensive delinquent citation collection services with DMV registration holds and Franchise Tax Board intercept liens
Continuing citation processing and collection services with PAM will ensure the City does not experience any disruption of service or delays in receiving parking citation revenues.
FISCAL IMPACT:
The annual cost of service provided by PAM is approximately $140,000 and is covered by funds generated by citations issued.
CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):
Not applicable.
Respectfully submitted,
1 12923/0001/1924106-1
ATTACHMENT A
FIFTH AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF COVINA AND
PROFESSIONAL ACCOUNT MANAGEMENT, LLC (PAM)
THIS FIFTH AMENDMENT to the Agreement to provide parking citation processing and collection services (Agreement) is made and entered into as of February 28, 2026 by and between the City of Covina, a California municipal corporation (hereinafter referred to as “City”), and Professional Account Management, a Wisconsin limited liability corporation (“PAM"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows:
1. This Fifth Amendment is made with the respect to the following facts and purposes:
A. The parties entered into that certain Professional Services Agreement for processing and collection of the City’s parking citation accounts with a term of March 1, 2017 through February 28, 2022 with the option to extend the agreement for five (5) additional one-year terms upon mutual agreement.
B. On February 28, 2022 the parties agreed to extend the term of the agreement for one year ending on February 28, 2023.
C. On February 28, 2023 the parties agreed to extend the term of the agreement for one year ending on February 28, 2024.
D. On February 28, 2024 the parties agreed to extend the terms of the agreement for one year ending on February 28, 2025.
E. On February 28, 2025 the parties agreed to extend the terms of the agreement for one year ending on February 28, 2026.
F. The parties now desire to extend the term of the agreement to February 28, 2027 and to amend the Agreement as set forth in this Amendment.
2. Section 1 of the Agreement entitles “Term” is hereby emended to read as follows:
“The term of this Agreement shall be from the Effective Date through February 28,
2027, unless sooner terminated as provided in Section 20 of this Agreement. In no
event shall the contract be extended beyond February 28, 2027.”
2 12923/0001/1924106-1
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 Fifth Amendment on the date stated in the introductory clause.
City of Covina,
a California municipal corporation
By:
Name:
Title:
ATTEST:
By:
Name: Fabian Velez
Title: Chief Deputy City Clerk
APPROVED AS TO FORM:
By:
Name: Kevin Ennis
Title: City Attorney
Professional Account Management
a Wisconsin LLC
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.)
CC Regular Meeting
AGENDA ITEM REPORT
ITEM NO. NB 1
Meeting: February 17, 2026
Title: Ordinance 26-01 Regulating the Sale and Distribution of Kratom Products Presented by: Ric Walczak, Chief of Police
Recommendation: Waive full reading and introduce Ordinance 26-01 into the City of Covina Municipal Code to Regulate the Sale and Distribution of Kratom Products, Making Related Updates to the Code, and Making Finding of Exemption under the California Environmental Quality Act.
EXECUTIVE SUMMARY:
Kratom (mitragyna speciosa) is a tropical tree native to Southeast Asia, and its leaves are often consumed in powdered or extract form for their stimulant and sedative effects. The active compounds in kratom include mitragynine and 7-OH. Health advisories have raised concerns over the safety of kratom products, particularly those with higher concentrations of 7-OH, which may increase the potential for abuse and harm to public health.
DISCUSSION:
Research has shown 7-OH has euphoric and mood-enhancing effects, particularly at higher doses, which can increase its appeal for recreational use. Research has also shown that 7-OH binds to opioid receptors in the brain with greater affinity than morphine, making it significantly more powerful in relieving pain. This greater potency raises significant concerns about its safety profile, especially regarding the potential for addiction, overdose, and adverse physical and psychological effects, including nausea, vomiting, and potential psychosis. These risks are compounded when products contain higher concentrations of 7-OH.
Health advisories have raised concerns over the safety of kratom products, particularly those with higher concentrations of 7-OH, which may increase the potential for abuse and harm to public health.
The United States Food and Drug Administration (FDA) has issued several warning letters to various companies for illegally marketing products containing enhanced levels of 7-OH, culminating in a formal request to the U.S. Drug Enforcement Administration (DEA) on July 29, 2025, to place 7-OH products on the controlled substance list.
As proposed, the City Council will consider adopting an ordinance to prohibit the sale, distribution, or possession of kratom and hydroxymitragynine (aka 7-OH) products within the City of Covina that contain more than two percent (2%) of 7-OH in the alkaloid fraction, recognizing the significant health risks associated with elevated concentrations of this alkaloid.
FISCAL IMPACT:
There is no direct impact to the general fund relating to the proposed ordinance.
CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):
Not applicable.
Respectfully submitted,
ATTACHMENT A
ORDINANCE 26-01
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, ADDING CHAPTER ____ TO THE COVINA MUNICIPAL
CODE REGULATING THE SALE AND DISTRIBUTION OF KRATOM
PRODUCTS
THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Findings and Purpose. It is the intent of the City Council of the City of Covina to prohibit the sale, distribution, or possession of kratom and hydroxymitragynine (also known as 7-OH) products within the City of Covina that contain more than two percent (2%) of 7-OH in the alkaloid fraction, recognizing the significant health risks associated with elevated concentrations of this alkaloid.
Kratom (mitragyna speciosa) is a tropical tree native to Southeast Asia, and its leaves are often consumed in powdered or extract form for their stimulant and sedative effects. The active compounds in kratom include mitragynine and 7-OH. While mitragynine is present in higher concentrations, 7-OH is more potent and is largely responsible for the stronger pain-relieving, sedative, and euphoric effects.
Research has shown 7-OH has euphoric and mood-enhancing effects, particularly at higher doses, which can increase its appeal for recreational use. Research has also shown that 7-OH binds to opioid receptors in the brain with greater affinity than morphine, making it significantly more powerful in relieving pain. This greater potency raises significant concerns about its safety profile, especially regarding the potential for addiction, overdose, and adverse physical and psychological effects, including nausea, vomiting, and potential psychosis. These risks are compounded when products contain higher concentrations of 7-OH.
Health advisories have raised concerns over the safety of kratom products, particularly those with higher concentrations of 7-OH, which may increase the potential for abuse and harm to public health. The United States Food and Drug Administration (FDA) has issued several warning letters to various companies for illegally marketing products containing enhanced levels of 7-OH, culminating in a formal request to the U.S. Drug Enforcement Administration (DEA) on July 29, 2025, to place 7-OH products on the controlled substance list.
Health officials, including the FDA, have raised concerns over the safety of kratom products, particularly those with higher concentrations of 7-OH, which may increase the potential for abuse and harm to public health.
At least one county in California, and several cities in California, have recently taken steps to regulate or ban kratom products, recognizing the need to protect public safety, especially among vulnerable populations.
Ordinance 26-01 Page 2 of 4
The City Council, in its commitment to safeguarding the health and well-being of its residents by ensuring that products available for sale do not pose undue health risks, hereby restricts the sale and distribution of kratom and 7-OH products containing more than two percent (2%) of 7-OH in the alkaloid fraction, thereby reducing potential risks to public health and safety.
SECTION 2. Authority. This ordinance is enacted pursuant to the City’s police powers to protect public safety, health, and welfare.
SECTION 3. Definitions. For purposes of this chapter, the following terms shall have the following meanings:
a. 7-OH product means a product containing hydroxymitragynine. b. Attractive to children means any of the following:
1. Use of images that are attractive to children, including, but not limited to, images of any of the following, except as part of required health warnings:
o Cartoons, toys, or robots
o Any real or fictional humans
o Fictional animals or creatures
o Fruits or vegetables, except when used to accurately describe ingredients or flavors contained in a product
2. Likeness to images, characters, or phrases that are popularly used to advertise to children.
3. Imitation of candy packaging or labeling, or other packaging and labeling of cereals, sweets, chips, or other food products typically marketed to children.
4. The terms “candy” or “candies” or variants in spelling such as “kandy” or “kandee.”
5. Brand names or close imitations of brand names of candies, cereals, sweets, chips, or other food products typically marketed to children.
6. Any other image or packaging that is easily confused with commercially available foods that do not contain kratom and are typically marketed to children.
7. Any other packaging used that is attractive to children considering all relevant facts and circumstances.
c. Kratom leaf means the leaf of the kratom plant, also known as mitragyna speciosa, in any form.
d. Kratom leaf extract means the material obtained by extraction of kratom leaves by any means.
e. Kratom product means a product consisting of kratom leaf, kratom leaf extract, or both; any part of a leaf of the plant mitragyna speciosa in fresh, dehydrated, or dried form; or a kratom extract; or any product that contains any kratom alkaloid or metabolite. f. Total kratom alkaloids means the sum of mitragynine, speciociliatine, speciogynine, paynantheine, and 7-OH in a kratom product.
Ordinance 26-01 Page 3 of 4
g. Synthesized means an alkaloid or alkaloid derivative that has been created by chemical synthesis or biosynthetic means (including but not limited to fermentation, recombinant techniques, or yeast-derived enzymatic techniques) rather than traditional food preparation techniques such as heating or extracting. It also includes alkaloids that have been further exposed to chemicals or processes that would confer a structural change in the alkaloids contained within the extract.
SECTION 4. Prohibition on Sale and Distribution of Kratom and 7-Oh Products. a. Except as otherwise authorized by law, no individual, business, or other entity shall sell, attempt to sell, offer, provide, or distribute a kratom product or 7-OH product to a person under twenty-one (21) years of age.
b. Except as otherwise authorized by law, no individual, business, or other entity shall sell, attempt to sell, offer, provide, or distribute a kratom product or 7-OH product with a level of 7-OH that is greater than two percent (2%) of the total kratom alkaloids in the product.
c. Except as otherwise authorized by law, no individual, business, or other entity shall sell, attempt to sell, offer, provide, or distribute a kratom product or 7-OH product that is attractive to children.
d. Any individual, business, or other entity that sells, attempts to sell, offers, provides, or distributes a kratom product or 7-OH product shall conduct age verification to ensure compliance with subdivision (a).
e. No person or entity shall offer for sale any kratom product that contains or is adulterated with synthesized or semi-synthesized kratom alkaloids or kratom constituents.
SECTION 5. Violations and Penalties. Any person or entity who violates this chapter is guilty of a misdemeanor and upon conviction thereof may be punished by a fine of not more than one thousand dollars ($1,000.00), or by imprisonment in the county jail for a period of not more than six (6) months, or by both such fine and imprisonment.
This section shall not serve to limit any other legal remedies or actions that the City may have to address violations of this chapter.
SECTION 6. Severability. If any section, subsection, paragraph, sentence, clause, phrase, or portion of this ordinance is held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed severable and such holding shall not affect the validity of the remaining portions. The City Council hereby declares that it would have adopted this ordinance irrespective of the invalidity of any particular portion and intends that the invalid portions be severed and the balance of the ordinance be enforced.
SECTION 7. Effective Date. This ordinance shall take effect thirty (30) days after its adoption.
SECTION 8. Publication and Posting. The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same or a summary thereof to be published and posted in the manner required by law.
Ordinance 26-01 Page 4 of 4
PASSED, APPROVED and ADOPTED this __ day of ________, 2026.
City of Covina, California
BY:
VICTOR LINARES, Mayor
ATTEST:
___________________________________________
FABIAN VELEZ, Chief Deputy City Clerk
APPROVED AS TO FORM:
________________________________
KEVIN ENNIS, City Attorney
CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, California, do hereby certify that Ordinance 26-01 was duly approved and adopted at a regular meeting of the City Council on the __ day of ________, 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. NB 2
Meeting: February 7, 2026
Title: Discussion Regarding the Statewide Statutory Cap on County/Local Transaction and Use Taxes and the Proposed County of Los Angeles General Half-Cent Sales Tax Ballot Measure in June 2026
Presented by: Chris Marcarello, City Manager
Recommendation: That the City Council review/discuss the Statewide County/Local Statutory Cap on sales taxes, the County of Los Angeles’ proposed half-cent sales tax measure for the June 2026 Ballot and provide direction related to future efforts that may maintain local control of tax resources for the direct benefit of residents and businesses within the City of Covina.
EXECUTIVE SUMMARY:
The County of Los Angeles recently authorized a ballot measure for June 2026 that will ask voters whether to increase the Countywide sales tax rate by a half-cent over the next five years to offset federal funding cuts to public health services. This development has prompted discussion amongst local agencies regarding existing sales tax rates, the statutory cap on County/Local sales taxes and the ongoing disparity of resources that are returned to cities relative to the total resources that are collected locally. As such, it is recommended that the City Council consider these topics and discuss future efforts, if any, to maintain local control of sales tax resources that are generated in Covina for the direct benefit of residents and businesses within the community.
BACKGROUND:
In Covina, the cumulative sales tax rate is 10.50%, which is comprised of the Statewide sales tax rate of 7.25% and County/Local Taxes totaling 3.25%. Although California Revenue and Taxation Code Section 7251.1 sets the maximum County/Local transaction and use tax, or statutory cap, at two percent (2%), several Countywide sales tax measures have been authorized utilizing special legislation to exempt them from the County/Local statutory sales tax cap. Among these exempt measures include LA County Measure R (1/2 cent sales tax), LA County Measure M (1/2 cent sales tax) and LA County Measure A (1/2 cent sales tax). With these exemptions, there is one-quarter percent (1/4%) in capacity that remains under the two percent (2%) County/Local statutory sales tax cap.
Voter approval of recent Countywide sales tax measures like Measure H and Measure A has prompted discussion among local agencies regarding the efficacy of these measures and the parity of local returns when compared to total tax resources that are generated within local jurisdictions. As an example, Measure H (approved in 2017 by approximately 69% of Countywide voters) levied a onequarter percent (1/4%) transactions and use tax for a period of ten (10) years. In Covina, it is estimated that this measure generated over $15 million prior to its repeal in 2024. Of these resources, roughly $500 thousand was returned to Covina for the creation of a local homeless plan, diversion/prevention programs and case management services. More recently, Measure A (approved in 2024 by approximately 58% of Countywide voters), repealed Measure H and levied a one-half percent (1/2%) transactions and use tax until voters decide to end it. In Covina, it is estimated that roughly $5 million is generated annually. According to the Measure A Allocation Methodology, at least fifteen percent (15%) will be allocated to cities, councils of governments and/or the County (for unincorporated areas) for homelessness prevention programs and affordable housing.
2026 Ballot Measure
On February 10, 2026, the Los Angeles County Board of Supervisors approved a June 2026 ballot measure ("June Measure”) that will ask voters whether to increase the County sales tax rate by a halfcent to offset federal funding cuts to public health services. If approved by voters, it is anticipated that the tax would generate $1 billion annually over a five-year period. As drafted, the June Ballot Measure would seek a legislative exemption from the existing 2% statutory cap on County/Local sales taxes and preserve one-quarter percent (1/4%) in sales tax capacity under the statutory cap. The proposed spending plan would allocate forty-seven percent (47%) for no-cost/reduced-cost health care services, five percent (5%) for school-based health programs, ten percent (10%) for public health programs, five percent (5%) for Medicaid outreach and enrollment programs, two-and-a-half percent (2.5%) for correctional health services, twenty-two percent (22%) for financial support to the Department of Health Services, five percent (5%) for non-profit hospitals, two-and-a-half percent (2.5%) for in-home supportive services and one percent (1%) for public health programs in Pasadena and Long Beach.
Without special legislation to exempt the June Measure from the two percent (2%) County/local statutory sales tax cap, passage of the June Measure would cause the sales tax to exceed that County/local cap and result in the Measure not being implemented at all or only up to the available cap which could then preclude the City from thereafter enacting its own local sales tax measure. Based on the foregoing, several cities have begun to consider the adoption of local tax measures to preserve resources for the direct benefit of their community. In 2024, voters in the cities of Azusa and Glendora approved one-quarter percent (1/4%) transactions and use taxes to retain local control of tax resources.
In these communities, voters determined that preserving local control of these tax resources was preferred as opposed to paying into future Countywide programs that may have limited local return and benefit. If both the June Measure and a local city sales tax measure are placed on the June ballot and both measures are passed by the voters, and the June Measure does not obtain special legislation to exempt it from the cap, the ability of the City to have its sales tax measure implemented in Covina is uncertain. The outcome may depend on which of the two measures receives the highest votes in Covina or which measure the California Department of Tax and Fee Administration agrees to implement, based on a determination by the California Attorney General.
Should the Council desire to pursue a similar path as our neighbors in Azusa and Glendora, it has several alternatives that it may consider. The City’s local election is scheduled for June 2026 and the Council could decide to adopt an ordinance enacting a one-quarter cent (1/4%) local transactions and use tax and resolutions pertaining to a local general tax measure to local voters on June 2, 2026.
Should the Council decide to pursue this option, it would need to adopt these documents no later than Friday, March 6, 2026. Alternatively, the Council may determine to consider these items for a future election, or not at all. With these factors in mind, it is recommended that the City Council consider its alternatives and provide additional direction on these topics.
FISCAL IMPACT:
There is no financial impact associated with the discussion of a tax measure.
Respectfully submitted,