Duarte City Council
December 12, 2023

145
Exhibit A - Real Property
Item #
Carrying Value
of Asset
Total
square
footage
Is the
property
encumbere
d by a lowmod
housing
covenant?
Source
of lowmod
housing
covenant
b/
Date of
transfer
to
Housing
Success
or
Agency
Construction
or acquisition
cost funded
with Low-Mod
Housing Fund
monies
Constructi
on or
acquisition
costs
funded
with other
RDA funds
Constructi
on or
acquisition
costs
funded
with nonRDA funds
Date of
constructio
n or
acquisition
by the
former RDA
Interest in
real property
(option to
purchase,
easement,
etc.)
12 522,742 6,980 no Note 1 2/1/2012 522,742 $0 $0 5/14/2003 yes3 875,687 20,000 no Note 1 2/1/2012 875,687 $0 $0 12/19/2003 yes4 707,210 18,030 no Note 1 2/1/2012 707,210 $0 $0 4/2/2009 yes5 6,065 254 no Note 1 2/1/2012 6,065 $0 $0 1/18/2006 yes6 218,055 9,890 no Note 1 2/1/2012 218,055 $0 $0 4/3/2003 yes78 624,979 26,136 no Note 1 2/1/2012 624,979 $0 $0 4/8/1999 yes9 646,555 29,621 no Note 1 2/1/2012 646,555 $0 $0 1/12/2001 yes 10 1,388,040 26,136 no Note 1 2/1/2012 1,388,040 $0 - 10/5/2011 yes1112 Note: To the extent that DOF may determine any asset listed in this Exhibit A should be listed on another Exhibit, the Duarte Housing Successor Entity hereby incorporates those assets into that Exhibit.Note 1 - Authorized by Health and Safety Code section 33334.2, 33334.3 and other appliccble housing-related provisions fo the California Redevelopment Law and Hosuing Authority Law.

City of Duarte
Inventory of Assets Received Pursuant to Health and Safety Code section 34176 (a) (2) Type of
Asset
a/
a/ Asset types may include low-mod housing, mixed-income housing, low-mod housing with commercial space, mixed-income housing with commercial space. 2400-2404 Huntington Drive (Royal Mkt Liquor) APN 8604012910, 8604012911 Legal Desc. TR=13436 LOT 13, Null: TR=13436 LOT 14, Null; Square
footage
reserved
for lowmod
housing
b/ May include California Redevelopment Law, tax credits, state bond indentures, and federal funds requirements. 26,136 29,621 26,136
Legal Title and Description
6,980
20,000
Former Affordable Housing Fund1660 Huntington Drive (VFW Hall) APN 8530023913 Legal Desc. TR=13185 LOT 29 , null1423 Huntington Drive (Anita Motel), APN 8530004901 Legal Desc. M R 6-80-82 LAND DESC IN DOC 0076019, 010112,POR OF LOT 12 IN SEC 30 T1N R10W 18,030
254 9,890
1415 Huntington Drive (Burger King) APN 8530004069 Legal Desc. SUB OF THE RANCHO AZUSA DE DUARTE, LOT COM AT SW COR OF LOT 63 TR NO 29062 1305 Huntington Drive (Western Dental) APN 8530004903 Legal Desc. PM 96-80-81 LOT 2 Parking Lot Area - Rite Aid (Dunn Property) APN 8530-004-902 Legal Desc. PM 37-43 FOR DESC SEE ASSESSOR'S MAPS, POR OF LOT 1 Housing Authority Fund1700 Huntington Drive (Stratford Arm) APN 8530023912 Legal Desc. MR 6-80-82 LAND DESC IN DOC 955405, 030404 POR OF LOT 15 IN SEC 30 T1N R10W 1437 Huntington Drive (Duarte Trailer Park) APN 8530004900 Legal Desc. SUB OF RANCHO AZUSA DE DUARTE POR OF, LOT 12 IN SEC 30 T1N R10W LandLandLandLandLandLandLandLand

146
Exhibit B - Personal Property
Item #
Carrying Value
of Asset
Date of
transfer to
Housing
Successor
Agency
Acquisition
cost funded
with Low-Mod
Housing Fund
monies
Acquisition costs
funded with
other RDA funds
Acquisition
costs funded
with non-RDA
funds
Date of
acquisition by
the former RDA
123456789
1011121314151617181920
City of Duarte
Inventory of Assets Received Pursuant to Health and Safety Code section 34176 (a) (2) Type of Asset a/ Description
Nonea/ Asset types any personal property provided in residences, including furniture and appliances, all housing-related files and loan documents, office supplies, software licenses, and mapping programs, that were acquired for low and moderate income housing purposes, either by purchase or through a loan, in whole or in part, with any source of funds.

Note: To the extent that DOF may determine any asset listed in this Exhibit B should be listed on another Exhibit, the Duarte Housing Successor Entity hereby incorporates those assets into that Exhibit. 147
Exhibit C - Low-Mod Encumbrances
Item #
Contractual
counterparty
Total amount
currently
owed for the
Enforceable
Obligation
Is the property
encumbered by
a low-mod
housing
covenant?
Source of lowmod housing
covenant b/
Current
owner of
the property
Construction or
acquisition cost
funded with
Low-Mod
Housing Fund
monies
Construction or
acquisition costs
funded with
other RDA funds
Construction
or acquisition
costs funded
with non-RDA
funds
Date of construction
or acquisition of the
property
1 Southern California Presbyterian Homes
$1,200,000 yes, pursuant to OA/DDA Note 1 Former RDA, SA $1,200,000 $8,000,000 4/3/2003, 5/14/2003 23456789
1011121314151617181920
Note: To the extent that DOF may determine any asset listed in this Exhibit C should be listed on another Exhibit, the Duarte Housing Successor Entity hereby incorporates those assets into that Exhibit. a/ May include low-mod housing, mixed-income housing, low-mod housing with commercial space, mixed-income housing with commercial space.b/ May include California Redevelopment Law, tax credits, state bond indentures, and federal funds requirements.

City of Duarte
Inventory of Assets Received Pursuant to Health and Safety Code section 34176 (a) (2) Date contract for
Enforceable
Obligation was
executed
Type of housing built
or acquired with
enforceably
obligated funds a/
43 units of Senior
Affordable Housing 7/27/2010

148
Exhibit D - Loans/Grants Receivables
Item #
Amount of the loan
or grant
Date the loan or
grant was issued
Purpose for which the funds
were loaned or granted
Are there
contractual
requirements
specifying the
purposes for which
the funds may be
used?
Repayment date, if the funds are for a
loan
Interest rate
of loan
Current
outstanding
loan balance
1 12,000 03/07/96 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 12,000
2 12,500 04/11/96 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 12,500
3 12,000 02/28/96 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 12,000
4 11,000 05/07/96 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 11,000
5 10,000 02/02/96 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 10,000
6 13,000 02/08/96 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 13,000
7 7,500 12/26/95 Housing Assistance, silent second Yes
be required before that date, based on certain
circumstances Note 1 7,500
8 10,000 02/29/96 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 10,000
9 15,000 12/18/95 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
10 15,000 12/04/95 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
11 15,000 12/22/95 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
12 15,000 05/01/00 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
13 15,000 12/22/95 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
14 15,000 04/09/99 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
15 15,000 02/27/96 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
16 12,500 03/07/96 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 12,500
17 15,000 12/16/97 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
18 15,000 04/18/97 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
19 15,000 04/15/97 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
20 15,000 04/26/97 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
21 15,000 06/10/97 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
22 15,000 04/25/97 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
23 15,000 05/16/97 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
24 15,000 05/23/97 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
25 15,000 09/19/97 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
26 15,000 04/10/98 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
27 15,000 06/02/98 Housing Assistance, silent second Yes be required before that date, based on certain
circumstances Note 1 15,000
Note 1 - interest, if any, is calculated based on sale price of property and other factors, if the property is sold before date of forgiveness.Note 2 - To the extent that DOF may determine any asset listed in this Exhibit D should be listed on another Exhibit, the Duarte Housing Successor Entity hereby incorporates those assets into that Exhibit. yesyes
Homeowner
City of Duarte
Inventory of Assets Received Pursuant to Health and Safety Code section 34176 (a) (2) HomeownerHomeownerHomeownerHomeownerHomeownerHomeowner
yesyesyesyesyes
HomeownerHomeownerHomeownerHomeownerHomeownerHomeownerHomeownerHomeownerHomeownerHomeownerHomeownerHomeownerHomeownerHomeownerHomeowner Was the Low-Mod
Housing Fund
amount issued for a
loan or a grant?
Person or entity to whom
the loan or grant was
issued
yes Homeowneryesyesyesyes
Homeowner
yesyesyesyesyesyes
HomeownerHomeowner
yesyesyes
Homeowner
yesyesyesyesyesyes

149
Exhibit E - Rents/Operations
Item #
Type of property
with which they
payments are
associated b/
Property
owner
Entity that
collects the
payments
Entity to which
the collected
payments are
ultimately
remitted
Purpose for
which the
payments are
used
Is the property
encumbered
by a low-mod
housing
covenant?
Source of lowmod housing
covenant c/
Item # from Exhibit A the
rent/operation is
associated with (if
applicable)
123456789
1011121314151617181920
None
c/ May include California Redevelopment Law, tax credits, state bond indentures, and federal funds requirements.b/ May include low-mod housing, mixed-income housing, low-mod housing with commercial space, mixed-income housing with commercial space.a/ May include revenues from rents, operation of properties, residual receipt payments from developers, conditional grant repayments, costs savings and proceeds from refinancing, and principal and interest payments from homebuyers subject to enforceable income limits.Note: To the extent that DOF may determine any asset listed in this Exhibit E should be listed on another Exhibit, the Duarte Housing Successor Entity hereby incorporates those assets into that Exhibit.

City of Duarte
Inventory of Assets Received Pursuant to Health and Safety Code section 34176 (a) (2) Type of payment a/

150
Exhibit F - Rents
Item #
Type of property
with which the
payments are
associated b/
Property
owner
Entity that
collects the
payments
Entity to which
the collected
payments are
ultimately
remitted
Purpose for
which the
payments are
used
Is the property
encumbered
by a low-mod
housing
covenant?
Source of lowmod housing
covenant c/
Item # from Exhibit A
the rent is associated
with (if applicable)
123456789
1011121314151617181920
City of Duarte
Inventory of Assets Received Pursuant to Health and Safety Code section 34176 (a) (2) b/ May include low-mod housing, mixed-income housing, low-mod housing with commercial space, mixed-income housing with commercial space.c/ May include California Redevelopment Law, tax credits, state bond indentures, and federal funds requirements.

Type of payment a/
None
a/ May include rents or home loan payments.Note: To the extent that DOF may determine any asset listed in this Exhibit F should be listed on another Exhibit, the Duarte Housing Successor Entity hereby incorporates those assets into that Exhibit.

151
Exhibit G - Deferrals
Item #
Fiscal year in
which funds
were deferred
Amount
deferred
Interest rate
at which
funds were
to be repaid
Current
amount owed
Date upon which
funds were to be
repaid
123456789
1011121314151617181920
City of Duarte
Inventory of Assets Received Pursuant to Health and Safety Code section 34176 (a) (2) Purpose for which
funds were deferred
None
Note: To the extent that DOF may determine any asset listed in this Exhibit G should be listed on another Exhibit, theDuarte Housing Successor Entity hereby incorporates those assets into that Exhibit.

152
ITEM: 9.A
Consideration to approve the City of Duarte's Community Development Block Grant (CDBG) Program - Proposed Program for Fiscal Year (FY) 2024-2025 (July 1, 2024 - June 30, 2025) Recommended Action:

It is recommended that the City Council 1) conduct a public hearing and receive public testimony, 2) allocate approximately $131,200 in FY 2024-2025 CDBG funds to implement a new FY 2024-2025 CDBG Project, Installation of ADA compliant curb ramps, 3) authorize the City Manager, or designee, to execute all necessary contract documents in a form approved by the City Attorney, and 4) authorize the staff the ability to make adjustments due to changes in CDBG funding allocations and/or as needed due to programmatic interpretations by the Los Angeles County Development Authority (LACDA).

Attachments:
9A - CDBG Program FY24-25.pdf
153
154
2 descriptions, budgets, and documentation of Council action and proof of public meeting notification. For purposes of budgeting, the estimated Fiscal Year (FY) 2024-2025 CDBG allocation will be approximately $131,200. The City’s final CDBG allocation will be announced by LACDA in spring 2024, and may vary within two to five percent, depending upon final federal budget appropriations.

DISCUSSION/ANALYSIS
Proposed 2024-2025 Duarte CDBG Project - Americans with Disabilities Act-Compliant (ADA) Curb Ramps
It is recommended that the City use $131,200 in FY 2024-2025 CDBG funds to initiate a new CDBG project, entitled, “Duarte Americans with Disabilities Act-Compliant (ADA) Curb Ramps”. Approximately 10-15 ADA-Compliant Curb Ramps are expected to be installed throughout the City.

Table 1 - Proposed Duarte ADA-Compliant Curb Ramps CDBG Project and Budget 2024-2025 CDBG Funds $131,200
*Total CDBG Program Funding $131,200
*Note: Staff requests that the City Council’s recommendation include language giving staff the ability to make adjustments to projects, due to programmatic interpretations by LACDA and final funding allocations.

A portion of the total CDBG Project budget will be used for CDBG Administration and federal labor standard compliance services. The City will continue to use LDM Associates, Inc., a qualified consulting firm, to provide professional CDBG Program Administration and federal labor standards compliance services to ensure that federal CDBG Program requirements are met.

RECOMMENDATION
Staff recommends that the City Council:

1. Allocate $131,200 in 2024-2025 CDBG funds to implement a new CDBG Project, entitled, “Installation of Americans with Disabilities Act-Compliant (ADA) Curb Ramps”;

2. Authorize the City Manager, or designee, to execute all necessary contract documents in a form approved by the City Attorney; and,

3. Authorize staff the ability to make adjustments due to changes in CDBG funding allocations and/or as needed due to programmatic interpretations by the Los Angeles County Development Authority (LACDA).

FISCAL IMPACT
Allocation of $131,200 in 2024-2025 CDBG Funds.
155
ITEM: 10.A
Receive and File the Audited Financial Statements for Fiscal Year 2022-23 Recommended Action:

It is recommended that the City Council receive and file the audited financial statements for Fiscal Year 2022-23.

Attachments:
10A - Audited Financial Statements FY22-23.pdf
156
157
158

CITY OF DUARTE, CALIFORNIA

FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Prepared by:

Finance Department
159

CITY OF DUARTE
For the Fiscal Year Ended June 30, 2023
Table of Contents
Page(s)
Independent Auditor’s Report .................................................................................................................... 1 Management’s Discussion and Analysis (Required Supplementary Information - Unaudited) ................ 4 Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position ................................................................................................................ 9 Statement of Activities .................................................................................................................. 10 Fund Financial Statements:

Balance Sheet – Governmental Funds ........................................................................................... 11 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ............................................................................................... 12 Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds ................................................................................................................ 13 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ............................................. 14 Notes to the Basic Financial Statements ............................................................................................. 15 Required Supplementary Information:

Budgetary Comparison Schedule – General Fund .............................................................................. 50 Schedule of the City’s Proportionate Share of the Net Pension Liability ........................................... 51 Schedule of Pension Contributions ..................................................................................................... 53 Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................. 55 Schedule of OPEB Contributions ....................................................................................................... 56 Note to Required Supplementary Information ......................................................................................... 57 Other Supplemental Information:

Budgetary Comparison Schedule - Community Improvement Capital Projects Fund ....................... 58 Combining and Individual Fund Statements and Schedules:

Combining Balance Sheet – Nonmajor Governmental Funds ............................................................ 59 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) – Nonmajor Governmental Funds .................................................... 64 Nonmajor Budgetary Comparison Schedules – Special Revenue Funds:

State Gasoline Tax .............................................................................................................................. 69 Lighting and Landscaping .................................................................................................................. 70 Community Development Block Grant .............................................................................................. 71 Supplemental Law Enforcement ......................................................................................................... 72 Air Quality Management Distribution ................................................................................................ 73 Measure M .......................................................................................................................................... 74 Quimby Act ........................................................................................................................................ 75 Proposition A Transit .......................................................................................................................... 76 Housing Authority .............................................................................................................................. 77 Proposition C Transit .......................................................................................................................... 78 PEG………………. ............................................................................................................................ 79 Measure R LR Transit ........................................................................................................................ 80 Park Development .............................................................................................................................. 81 Measure W .......................................................................................................................................... 82 160

CITY OF DUARTE
For the Fiscal Year Ended June 30, 2023
Table of Contents
Page(s)
Nonmajor Budgetary Comparison Schedules – Special Revenue Funds (Continued):

SB1/RMRA………………. ................................................................................................................ 83 Bicycle and Pedestrian………………. ............................................................................................... 84 Low and Moderate Housing………………. ...................................................................................... 85 Nonmajor Budgetary Comparison Schedules – Capital Projects Funds Inclusionary Housing .......................................................................................................................... 86

Nonmajor Budgetary Comparison Schedule – Debt Service Funds Town Center ....................................................................................................................................... 87 Infrastructure....................................................................................................................................... 88

161

PARTNERS COMMERCIAL ACCOUNTING & TAX SERVICES GOVERNMENTAL AUDIT SERVICES CRAIG A HARTZHEIM, CPA 8383 WILSHIRE BLVD., SUITE 800 5800 E. HANNUM, SUITE E HADLEY Y HUI, CPA BEVERLY HILLS, CA 90211 CULVER CITY, CA 90230 ALEXANDER C HOM, CPA TEL: 310.670.2745 TEL: 310.670.2745 ADAM V GUISE, CPA FAX: 310.670.1689 FAX: 310.670.1689
TRAVIS J HOLE, CPA www.mlhcpas.com www.mlhcpas.com

WILSON LAM, CPA
- 1 -
OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and City Council
City of Duarte, California
Opinions
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Duarte, California (City), as of and for the fiscal year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’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 financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City, 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.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these 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 whether the City’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.
162
- 2 -
Auditor’s Responsibility 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 auditor’s 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 generally accepted auditing standards 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 generally accepted auditing standards 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’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’s ability to continue as a going concern for a reasonable period of time.

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 budgetary comparison information for the General fund, the Schedule of Proportionate Share of the Net Pension Liability, the Schedule of Pension Contributions, the Schedule of Changes in Net OPEB Liability and Related Ratios, and the Schedule of OPEB Contributions on pages 4 through 8 and 53 through 58, be presented to supplement the basic financial statements. Such information, 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 auditing standards generally accepted in the United States of America, 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. 163
- 3 -
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual non-major fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 20, 2023, on our consideration of the City’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 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 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’s internal control over financial reporting and compliance.

Moss, Levy & Hartzheim, LLP
Culver City, California
November 20, 2023
164
4 City of Duarte
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2023
This discussion and analysis is intended to provide readers with a narrative overview of the City of Duarte’s (City’s) financial activities for the fiscal year ended June 30, 2023. This information should be considered in conjunction with the accompanying financial statements and the notes to those statements.

Financial Highlights
 At the close of the fiscal year, the City’s assets exceeded its liabilities by $85,602,828 (net position).

A significant part of assets is the estimated value of cash and investments and infrastructure, which has been capitalized in accordance with the requirements of GASB 34.  During the fiscal year, City program revenues exceeded expenses and the City’s net position reflects an increase of $10,758,136.
 The City’s governmental funds had ending fund balances of $46,102,780 which is an increase of $4,588,867 over the prior year fund balance of $41,513,913.  This fiscal year, the City’s General Fund experienced a net change in Fund Balance of $3,886,786.

This was primarily due to the increase in revenues such as property taxes, motor vehicle license fees and transient occupancy taxes related to the new City of Hope hotel. There were also reduced expenses due to delayed projects.
 The City’s debt increased by $334,149 during the fiscal year to $4,250,604 due to the leases and subscriptions that were added to Long Term Liabilities reporting due to the implementation of GASB 87 and GASB 96, thus increasing the total amount. See Note #8 for further details.  At June 30, 2023, the City reported a net pension liability of $17,488,020 and related deferred outflows of $7,049,101 and deferred inflows of $235,214. See Note #11 for further details.  At June 30, 2023, the City reported an OPEB liability of $4,342,659 and related deferred outflows of $2,346,251 and deferred inflows of $3,924,804. See Note #12 for further details.

Overview of the Basic Financial Statements
The City’s basic financial statements consist of three components: (1) government-wide financial statements, (2) fund financial statements, and (3) notes to the basic financial statements. In addition, required supplementary information is provided relating to the City’s budgets for major funds.

Government-wide Financial Statements
The government-wide financial statements are found on pages 9 and 10 of this report. They are designed to give readers an overview of the City’s financial position. These statements include all of the City’s assets and liabilities, using the full accrual basis of accounting, which is similar to accounting methods used by most private sector companies. All of a fiscal year’s revenues and expenses are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. As a result, assets, liabilities, and expenses are reported in these statements for some transactions that will result in cash flow in future fiscal periods.

The “Statement of Net Position” presents all of the City’s assets and liabilities, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator for determining whether the financial position of the City is improving or deteriorating. 165
5 The “Statement of Activities” presents information showing the City’s revenues and expenses for the fiscal year. Functional activities are identified in this statement; whereby direct and indirect functional costs are shown net of related program revenue. This statement shows the extent to which the various functions depend on general taxes and non-program revenues for support.

The government-wide financial statements encompass the activities of four different legal entities: the City of Duarte, the Duarte Housing Authority, the Duarte Community Facilities Financing Authority and the Duarte Public Financing Authority. This is in keeping with generally accepted accounting principles, as the City’s elected officials have a continuing oversight responsibility for all four entities.

The City of Duarte provides an array of services to the public similar to those of other municipal governments. These include police protection, parks and recreation, planning and development, public works, code enforcement, animal control, transit services, and refuse collection. The Housing Authority is responsible for promoting the development of low and moderate-income housing. The function of both Financing Authorities is to facilitate the issuance of debt by both the City and the Housing Authority.

Fund Financial Statements
The fund financial statements can be found on pages 11 and 13 of this report. 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. Fund accounting is used to demonstrate compliance with finance related legal requirements. All of the funds of the City of Duarte can be divided into two categories: governmental 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. Unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on the 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 City maintains twenty-one individual governmental funds. Three of these funds are considered “major” and, according to generally accepted accounting principles, are reported separately in the fund financial statements. The remaining eighteen funds are reported on a consolidated basis.

Because the focus of fund financial statements is narrower than that of the government-wide financial statements, it can be useful to compare the two. Comparisons may give readers a better understanding of the long-term impact of the City’s near-term financial decisions. On pages 12 and 14 of this report, statements are provided reconciling the “Governmental Fund Balance Sheet” and the “Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances” to the government-wide financial statements.

Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government.

Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City of Duarte’s own programs. The Successor Agency Fund is a fiduciary fund; the City budgets for this fund to reflect the operations of the Successor Agency. Trust funds are set up to account for the resources held for bond payments and for recording transactions performed by appointed trustees. The City does not budget for the trustee activities. Please note that the Successor Agency was dissolved as of April 2022.

Notes to the Basic Financial Statements
This report includes notes to the basic financial statements. They provide additional information that is important to set a complete understanding of the data contained in the government-wide and fund financial statements. The notes can be found on pages 15 through 49 of the report. 166
6 Government-wide Financial Analysis
The government-wide financial analysis focuses on net position and changes in net position for the City’s governmental activities. A summary of net position as of June 30, 2023, is as follows:

Net Position
Governmental Activities
2022 2023
Current and other assets $ 45,483,298 $ 49,183,626
Capital assets 57,455,899 60,331,043
Total assets $102,939,197 $109,514,669
Deferred Outflows of Resources $ 7,352,601 $ 9,395,352
Current and other liabilities $ 3,231,604 $ 2,762,263
Long-term debt outstanding 22,101,799 26,081,283
Total liabilities $ 25,333,403 $ 28,843,546
Deferred Inflows of Resources $ 10,081,184 $ 4,463,647
Net assets (liabilities):

Net Investment in capital assets $ 54,916,313 $ 57,168,359 Restricted 15,682,379 16,683,037
Unrestricted 4,278,519 11,751,432
Total net position $ 74,877,211 $ 85,602,828
As discussed earlier in this analysis, net position may serve as an indicator of the City’s financial position.

At the end of the fiscal year 2023, assets exceeded liabilities by $85,602,828.

The City’s primary assets were cash - $45,563,175, land held for resale - $3,620,451 and capital assets - $60,331,043. A significant portion of the City’s cash is comprised by reserves and special funds for restricted uses and therefore is unavailable to pay for current general activities. Land held for resale represents the value of properties held by the City for future development purposes. The capital assets figure is the estimated value of all the equipment, land, buildings, and infrastructure owned by the City. It conforms to accounting rules requiring such assets be inventoried, valued, and depreciated.

The City’s primary liabilities are its net pension liability - $17,488,020, its net OPEB liability - $4,342,659 and its long-term liabilities consisting of lease debt, subscription-based information technology arrangement debt, compensated absences, and bonded indebtedness - $4,250,604.

A summary of the changes in the City’s net position for the fiscal year ended June 30, 2023, is as follows:

Changes in Net Position
Governmental Activities
2022 2023
Revenues :

Program revenues :

Charges for services $8,678,501 $3,314,721
Operating grants 5,250,142 5,956,844
Capital grants 908,953 1,671,746
General revenues:

Taxes 15,350,977 15,695,783
167
7 Use of money and property 135,737 667,653
Intergovernmental 2,562,777 2,782,305
Miscellaneous 220,874 661,744
Total revenues 33,107,961 30,750,796
Expenses:

General government 6,702,912 5,763,754
Safety 7,376,278 6,232,272
Development 5,655,481 3,082,968
Recreation and culture 3,562,084 2,159,749
Transportation 2,414,223 2,684,548
Interest expense 70,092 69,369
Total expenses 25,781,070 19,992,660
Change in net position 7,326,891 10,758,136
Net position - beginning of fiscal year 67,517,801 74,844,692 Prior period adjustments 43,767
Net position – beginning of fiscal year, restated 67,561,568 Net position - end of fiscal year $74,844,692 $85,602,828 At fiscal year-end, the City’s net position had increased by $10,758,136.

City Fund Financial Analysis
The City fund analysis focuses on governmental fund balances and on any restrictions or commitments that limit the availability of fund balances for future use.

As of June 30, 2023, the City’s governmental funds had a total ending fund balance of $46,102,780. This amount represents an increase of $4,588,867, or 11% as compared to the prior fiscal year fund balance of $41,513,913.

As discussed earlier, the increase in the General Fund was largely due to the increased property and transient occupancy tax revenues and Motor Vehicle License Fees and delayed project expenses. While most of the Special Revenue Funds had minor changes in fund balance, the exceptions are noted as follows. The Measure M and Measure W Funds spent little or nothing on project expenditures and as a result contributed to the respective fund balances. The Measure R Fund completed a large project reducing fund balance and the Town Center Debt Service made its final payment and transferred any remaining balance out of the Fund.

Capital Asset and Debt Administration
Capital Assets
At fiscal year-end, the City had $60.3 million invested in a broad range of capital assets including buildings, parks, streets, sidewalks, traffic signals, sewers, storm drains, curbs and gutters, streetlights, vehicles, medians, leases, subscription-based information technology and other assets. This amount represents an overall increase (including additions, deductions and depreciation) of $2,540,822 as compared to the prior fiscal year. Additional information can be found in Note 6. 168
8 Debt Administration
At the end of the fiscal year, the City had both bonded and other long-term debt totaling $4,250,604. A summary of the City’s debt activity for the fiscal year ended is as follows:

Outstanding Debt at Year-end
Increase
2022 2023 (Decrease)
Certificates of participation $ 74,764 $ 0 $ (74,764)
US Bancorp Infrastructure Lease 2,438,140 2,276,306 (161,834) CA Energy Comm Loan 66,698 48,344 (18,354)
Leases & Subscriptions 326,825 838,034 511,209
Accrued vacation & sick leave 1,010,028 1,087,920 77,892 Total debt $ 3,916,455 $ 4,250,604 334,149
Additional information about the City’s debt may be found in Note 8 to the basic financial statements.

Economic Factors and Next Year’s Budget
The General Fund cash balance ended fiscal year 2022/23 with $29 million, which included $4.9 million in funds for special one-time projects to be identified by the City Council, $2 million in funds that are specifically restricted for improvements in the Town Center Specific Plan area, $240,000 for public art and $253,000 in restricted funds for storm drain, pension and vehicle replacement expenses.

This is a $3 million increase in General Fund cash balance. A good portion of the positive change in fund balance is the result of one-time projects being delayed, thus reducing expenses. However, we know that delayed projects will only cost more in the future, and ongoing expenses continue to increase. The good news is that ongoing revenues such as property and transient occupancy tax grew this year and interest earnings made a great recovery. The City is constantly working towards balancing operating expenses with revenues and this year ended with a balanced sustainable budget.

Requests for Information
These financial statements are designed to provide citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to demonstrate accountability for the money it receives.

If there are questions, or a need for more information, please contact the City of Duarte, 1600 Huntington Drive, Duarte, California, 91010, or call (626) 357-7931. 169

CITY OF DUARTE

STATEMENT OF NET POSITION
JUNE 30, 2023
Governmental
Activities
Assets:

Cash and investments $ 41,927,036
Receivables:

Accounts 107,669
Taxes 2,369,439
Notes and loans, net -
Accrued interest 275,007
Grants 410,257
Leases 314,594
Land held for resale 3,620,451
Restricted assets:

Cash and investments with fiscal agent 159,173
Capital assets not being depreciated 23,437,465
Capital assets, net of accumulated depreciation 36,893,578 Total Assets 109,514,669
Deferred Outflows of Resources:

Deferred OPEB related items 2,346,251
Deferred pension related items 7,049,101
Total Deferred Outflows of Resources 9,395,352
Liabilities:

Accounts payable 1,573,881
Accrued liabilities 116,138
Accrued interest 41,687
Unearned revenue 459,993
Retention payable 158,486
Deposits payable 412,078
Noncurrent liabilities:

Due within one year 458,035
Due in more than one year 3,792,569
Net OPEB liability 4,342,659
Net pension liability 17,488,020
Total Liabilities 28,843,546
Deferred Inflows of Resources:

Deferred OPEB related items 3,924,804
Deferred pension related items 235,214
Lease receivable 303,629
Total Deferred Inflows of Resources 4,463,647
Net Position:

Net investment in capital assets 57,168,359
Restricted for:

Development projects 10,034,456
Storm drains 93,704
Transportation 6,087,143
Pensions 159,173
Recreation and cultural 308,561
Unrestricted 11,751,432
Total Net Position $ 85,602,828
See Accompanying Notes to Financial Statements.
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170

CITY OF DUARTE

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Net (Expense)
Revenue
and Change in
Net Position
Primary
Government
Operating Capital
Functions/Programs Charges for Grants and Grants and Governmental Primary Government: Expenses Services Contributions Contributions Activities Governmental activities:

General government $ 5,763,754 $ 137,643 $ 959,885 $ - $ (4,666,226) Safety 6,232,272 416,459 2,930,284 - (2,885,529)
Development 3,082,968 2,404,354 252,208 28,400 (398,006) Recreation and cultural 2,159,749 356,265 - 19,294 (1,784,190) Transportation 2,684,548 - 1,814,467 1,624,052 753,971
Interest on long-term debt 69,369 - - - (69,369)
Total Governmental Activities 19,992,660 3,314,721 5,956,844 1,671,746 (9,049,349) Total Primary Government $ 19,992,660 $ 3,314,721 $ 5,956,844 $ 1,671,746 (9,049,349) General revenues:

Taxes:

Property taxes, levied for general purposes 3,305,032
Transient occupancy tax 736,148
Sales taxes 9,824,985
Franchise taxes 1,441,317
Business license taxes 388,301
Motor vehicle in lieu - unrestricted 2,782,305
Use of money and property 667,653
Other 661,744
Total general revenue 19,807,485
Change in net position 10,758,136
Net position, beginning of fiscal year 74,844,692
Net position, end of fiscal year $ 85,602,828
Program Revenues
See Accompanying Notes to Financial Statements.
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171

CITY OF DUARTE

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2023
Community
Improvement Other Total
Capital Governmental Governmental
General Projects Funds Funds
Assets:

Pooled cash and
investments $ 28,141,978 $ 995,044 $ 12,790,014 $ 41,927,036 Receivables:

Accounts 107,669 - - 107,669
Taxes 2,305,399 - 64,040 2,369,439
Notes and loans, Net - - - -
Accrued interest 275,007 - - 275,007
Grants 233,402 25,500 151,355 410,257
Leases 314,594 - - 314,594
Due from other funds 28,184 - - 28,184
Land held for resale 2,738,698 - 881,753 3,620,451
Restricted assets:

Cash and investments - fiscal agents 159,173 - - 159,173 Total assets $ 34,304,104 $ 13,887,162 1,020,544 $ 49,211,810 Liabilities:

Accounts payable $ 1,118,067 $ - $ 455,814 $ 1,573,881
Accrued liabilities 115,598 - 540 116,138
Unearned revenue 251,300 208,693 - 459,993
Retention payable 65,427 - 93,059 158,486
Deposits payable 412,078 - - 412,078
Due to other funds - - 28,184 28,184
Total liabilities 1,962,470 208,693 577,597 2,748,760
Deferred inflows of resources:

Unavailable revenues 56,641 - - 56,641
Lease 303,629 - - 303,629
Total deferred inflows of
resources 360,270 - - 360,270
Fund balances:

Nonspendable:

Land held for resale 2,738,698 - - 2,738,698
Lease receivable 10,965 - - 10,965
Restricted for:

Development projects 2,050,236 811,851 7,172,369 10,034,456 Recreation and culture - - 68,861 68,861
Transportation - - 6,087,143 6,087,143
Storm drains 93,704 - - 93,704
Pensions 159,173 - - 159,173
Public art 239,700 - - 239,700
Debt service - - - -
Committed to:

Vehicle replacement 58,408 - - 58,408
Assigned
Special projects 4,873,903 - - 4,873,903
Unassigned 21,756,577 - (18,808) 21,737,769
Total fund balances 31,981,364 811,851 13,309,565 46,102,780 Total liabilities, deferred inflows of
resources and fund balances $ 34,304,104 $ 1,020,544 $ 13,887,162 $ 49,211,810 See Accompanying Notes to Financial Statements.
-11-
172

CITY OF DUARTE

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
Fund balances of governmental funds $ 46,102,780
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets net of depreciation and right to use assets arising from leasing activities, and right to use assets for subscriptions have not been included as financial resources in the governmental fund activity. 60,331,043 Long-term debt and compensated absences have not been included in the governmental fund activity:

U.S. Bancorp lease $ (2,276,306)
CA Energy Commission loan (48,344)
Lease Liabilities (321,677)
Subscription Liabilities (516,357)
Compensated absences (4,250,604) (1,087,920)
Other post employment related debt applicable to the City 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 OPEB are only reported in the statement of net position as changes to these amounts only effect the government wide statements for governmental activities.

Deferred outflows of resources 2,346,251
Deferred inflows of resources (3,924,804)
Net OPEB liability (5,921,212) (4,342,659)
Accrued interest payable for the current portion of interest due on long-term debt has not been reported in the governmental funds. (41,687)
Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. 56,641
Governmental funds report all pension contributions as expenditures; however, in the statement of net position, the excess of the total pension liability over the plan fiduciary net position is reported as a net pension liability. Deferred outflows of resources and deferred inflows of resources related to pensions are only reported in the statement of net position as changes to these amounts only effect the government wide statements for governmental activities.

Net pension liability (17,488,020)
Deferred inflows related to pensions (235,214)
Deferred outflows related to pensions 7,049,101 (10,674,133) Net position of governmental activities $ 85,602,828
See Accompanying Notes to Financial Statements.
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173

CITY OF DUARTE

STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Community
Improvement Other Total
Capital Governmental Governmental
General Projects Funds Funds
Revenues:

Taxes $ 15,695,783 $ - $ - $ 15,695,783
Assessments - - 1,001,446 1,001,446
Licenses and permits 1,385,144 - - 1,385,144
Intergovernmental 5,894,732 582,046 3,922,748 10,399,526 Charges for services 441,546 - 31,951 473,497
Use of money and property 387,361 13,625 266,665 667,651 Fines and forfeitures 454,635 - - 454,635
Miscellaneous 601,234 - 60,510 661,744
Total revenues 24,860,435 595,671 5,283,320 30,739,426
Expenditures:

Current:

General government 6,456,386 - - 6,456,386
Safety 6,830,732 - 165,926 6,996,658
Development 2,695,700 - 1,345,584 4,041,284
Recreation and cultural 3,029,965 - - 3,029,965
Transportation - - 1,402,956 1,402,956
Capital outlay 2,473,505 114,000 1,819,102 4,406,607
Debt service:

Principal retirement 235,536 - 252,364 487,900
Interest and fiscal charges 12,763 - 60,197 72,960
Total expenditures 21,734,587 114,000 5,046,129 26,894,716 Excess (deficiency) of revenues
over (under) expenditures 3,125,848 481,671 237,191 3,844,710 Other financing sources (uses):

Lease and subscription proceeds 744,157 - - 744,157
Transfers in 773,739 - 757,011 1,530,750
Transfers out (756,958) - (773,792) (1,530,750)
Total other financing
sources (uses) 760,938 - (16,781) 744,157
Net change in fund balances 3,886,786 481,671 220,410 4,588,867 Fund balances, beginning of
fiscal year 28,094,578 330,180 13,089,155 41,513,913
Fund balances, end of fiscal year $ 31,981,364 $ 811,851 $ 13,309,565 $ 46,102,780 See Accompanying Notes to Financial Statements.
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174

CITY OF DUARTE

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Net change in fund balances - total governmental funds $ 4,588,867 Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays, lease acquisitions, and subscription liabilities as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives and reported as depreciation and amortization expense. The amount by which depreciation and amortization exceeded capital outlays in the current period:

Capital outlay $ 4,406,607
Donation of traffic signals 46,198
Construction in progress disposed during the year (116,689) Amounts not recorded as capital outlays that were capitlized 64,075 Depreciation and amortization (1,859,369) 2,540,822
Repayment of bond and loan principal and lease and subscription payments are expenditures in the governmental funds, but the repayment reduce long-term liabilities in the statement of net position.

Principal repayments 487,900
Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 3,591
Compensated absence expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. This is the net change for the current period. (77,892) Lease and subscription liabilities are considered to be acquisition of long-term debt and are reported as other financing sources in the governmental funds. In the statement of net position the amounts are reported as liabilities. (744,157) Other post employment benefits reported in the governmental funds includes cash payments made into the trust fund and payments on behalf of retirees. In the statement of activities, OPEB expense includes the change in the net OPEB liability, and related change in OPEB amounts for deferred outflows of resources and deferred inflows of resources. 149,335 Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental activities. (34,828)
Pension obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. 3,844,498
Change in net position of governmental activities $ 10,758,136 See Accompanying Notes to Financial Statements.
-14-
175

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 15 -
Note 1: Summary of Significant Accounting Policies
The City of Duarte, California (the City) was incorporated August 22, 1957. The City operates under a Council-Manager form of government. The City’s major operations include police, code enforcement, animal control, parks and recreation, planning and development, public works, transit services, refuse collection, and general administrative services.

The basic financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below.

Reporting Entity
The reporting entity, “City of Duarte”, is comprised of the various funds of the City of Duarte (City), the Duarte Public Finance Authority (Finance Authority), the Duarte Housing Authority (Housing Authority), and the Duarte Community Facilities Financing Authority (DCFFA). As required by generally accepted accounting principles in the United States of America, these financial statements present the City of Duarte (the primary government) and its component units. The component units discussed below are included in the City’s reporting entity because of the significance of their operational or financial relationship with the City.

These entities are legally separate from each other. However, the City of Duarte elected officials have a continuing oversight responsibility over the Finance Authority and Housing Authority.

An organization is fiscally dependent on the primary government if it is unable to adopt its budget, levy taxes or set rates or charges, or issue bond debt without approval by the primary government. In a blended presentation, a component unit’s balances and transactions are reported in a manner similar to the balances and transactions of the City. Component unites are presented on a blended basis when the component unit’s governing body is substantially the same as the City’s or the component unit provides services almost entirely to the City.

Blended Component Units
The Duarte Public Financing Authority (the Authority) was organized in 1988 for the specific purpose of facilitating the issuance of debt instruments. It has no separate existence and has acted as a conduit between the issuer (the City) and the underwriters. Separate financial statements of the Public Financing Authority were not prepared.

The Duarte Housing Authority (the Housing Authority) was established pursuant to California Housing Authorities Law (Health and Safety Code Sections 34200 et seq.) on March 22, 2011. The purpose of the Housing Authority is to provide safe and sanitary housing opportunities for Duarte residents. Although the Housing Authority is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Housing Authority. Separate financial statements of the Housing Authority were not prepared.
176

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 16 -
Note 1: Summary of Significant Accounting Policies (Continued) Organizations Other Than Component Units:

Other governmental agencies, such as the County of Los Angeles, the Duarte Unified School District, etc. provide services within the City. However, each of these agencies is governed by an independently elected governing board. Accordingly, their financial information is not included within the scope of this financial report, because the City Council does not have a continuing oversight responsibility over them, nor are their financial operation closely related thereto.

Government-wide and Fund Financial Statements
The City’s government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. All fiduciary activities are reported only in the fund financial statements. The City does not have any business-type activities; therefore, only governmental activities are reported.

These basic financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities present changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Certain types of transactions are reported as program revenues for the City in three categories: (1) charges for services, (2) operating grant and contributions and (3) capital grants and contributions. Certain eliminations have been made as prescribed by GASB Statement No. 34 in regard to interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated.

Government-wide and Fund Financial Statements
The City uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. These statements provide information about the government’s funds, including its fiduciary funds and blended component units. Separate statements for each fund category- governmental and fiduciary- are presented.

The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with separate self-balancing accounts that comprise its assets, deferred outflows, liabilities, deferred inflows, fund equity, revenues, and expenditures/expenses.

Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The minimum number of funds is maintained consistent with legal and managerial requirements.

Funds
The City reports the following major governmental funds:

General Fund - The General Fund is the general operating fund of the City which accounts for all or most of the City’s general activities and financial resources except those that are required to be accounted for in another fund. 177

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 17 -
Note 1: Summary of Significant Accounting Policies (Continued) Community Improvement Capital Projects Fund – This fund accounts for resources received from the ATP Cycle 4 Grant and the Measure M Grant, along with in lieu fees from the City of Hope. These funds will be used for PA&ED, PS&E and/or construction.

Additionally, the City reports the following fund types:

Special Revenue Funds – Special Revenue Funds are used to account for the revenues derived from specific revenue sources, which are restricted by law or administrative regulation for specified purposes.

Capital Projects Funds – Capital project funds are used to account for financial resources to be used for the acquisition and construction of capital assets.

Debt Service Funds – Debt Service Funds are used to account for the accumulation of resources for the periodic payment of principal and interest on long-term debt.

Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The City has presented all major funds that met those qualifications.

All governmental funds are accounted for on a spending or current financial resources measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balance presents increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in net current assets. The Reconciliations of the Fund Financial Statements to the Government-Wide Financial Statements if provided to explain the differences created by the integrated approach of GASB Statement No. 34.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Non-exchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year for which all eligibility requirements have been satisfied.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when a liability is incurred, except for principal and interest on long-term liabilities, claims and judgments, and employee leave benefits, which are recognized as expenditures when they are due and payable.
178

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 18 -
Note 1: Summary of Significant Accounting Policies (Continued) Property taxes, franchise taxes, licenses, intergovernmental revenue, charges for services, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. Amounts reported as program revenues include 1) charges to members, customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then use unrestricted resources as needed.

Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Equity Cash and Cash Equivalents
The City has defined cash and cash equivalents to include cash on hand, demand deposits, as well as cash with fiscal agents. Additionally, each fund’s equity in the City’s investment pool is treated as a cash equivalent because the funds can deposit or effectively withdraw cash at any time without prior notice or penalty.

Investments
Investments are stated at fair value, (generally quoted market prices). The City’s policy is to hold investments until maturity or until market values equal or exceed cost.

Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

Land Held for Resale
Land Held for Resale is an inventory of land purchased, which will be sold. The land is recorded at the lower of the acquisition cost or market.

Lease Receivable
The City’s lease receivables are measured at the present value of payments expected to be received during the lease term. Under the lease agreements, the City receives variable lease payments as each lease has an annual increase in payment of 1% to 4%. See Note #5.

Capital Assets
Capital assets, which include land, intangible assets (e.g., easements and rights of way), buildings, improvements, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the government-wide financial statements. Capital assets are defined by the City as assets with a purchase cost of over $5,000 and have a useful life of two years or more. Assets are recorded at actual historical cost or estimated historical cost. Donated capital assets are recorded at fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.
179

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
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Note 1: Summary of Significant Accounting Policies (Continued) Capital assets of the primary government are depreciated using the straight-line method over the following estimated useful lives:

Buildings 60 years
Sewer System 60 years
Machinery & Equipment 5 – 35 years
Improvements 10 – 20 years
Other infrastructure 10 – 50 years
GASB Statement No. 34 requires the City to report and depreciate new infrastructure assets. Infrastructure assets include roads, bridges, underground pipe (other than related to utilities), traffic signals, etc. These infrastructure assets are the largest asset class of the City.

Right to use assets
The City has recorded right to use lease assets as a result of implementing Governmental Accounting Standards Board Statement (GASB) Number 87 “Leases” and GASB Statement Number 96 “Subscription-Based Information Technology Arrangements” (SBITAs). The right to use assets are initially measured at an amount equal to the initial measurement of the related lease or subscription liability plus any lease or subscription payments made prior to the lease or subscription term, less lease or subscription incentives, and plus ancillary charges necessary to place the lease or subscription asset into service. The right to use assets are amortized on a straight-line basis over the life of the related lease or subscription asset.

Deferred Inflows and Outflows of Resources
In addition to assets, the Statement of Financial Position and Governmental Fund Balance Sheet will sometimes report a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has two items that qualify for reporting in this category. They are deferred outflows relating to the net pension obligation, and the net OPEB obligation reported in the government-wide statement of net position. These outflows are the results of contributions made after the measurement period, which are expensed in the following fiscal year, of adjustments due to difference in proportions which are deferred and amortized over the expected average remaining service lifetime, and the difference between the amortization on a straight-line basis of the deferred inflows related to leases over the lifetime of the lease agreement versus the payment schedule.

In addition to liabilities, the Statement of Financial Position and Governmental Fund Balance Sheet will sometimes reports separate section for deferred inflows of resources. The separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has two items that qualify for reporting in this category. Deferred inflows related to leases represent the difference between the actual payments received on the lease each fiscal year and the straight-line amortization over the lifetime of the lease. The deferred inflows of unavailable revenues arises only under a modified accrual basis of accounting. Accordingly, the item, unavailable revenue, is reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources:
sales taxes and grant revenues. These amounts are deferred and recognized as an inflow of resources in the period that amounts become available. In addition, the government has two items that qualify for reporting in this category which are deferred inflows in relation to the net pension obligation and the net OPEB obligation reported in the government-wide statements of net position. These inflows are the results of the 180

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
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Note 1: Summary of Significant Accounting Policies (Continued) net difference between projected and actual earnings on pension plan investments, difference between actual contributions and plan’s share of contributions, and adjustment due to differences in proportions.

These amounts are deferred and amortized over the expected remaining service life.

Property Tax Revenues
In general, property taxes in California are levied in accordance with Article 13B of the State Constitution at 1% of county-wide assessed valuations. This one percent is allocated pursuant to State law to the appropriate units of local government, including the City.

Property taxes are levied during July of each fiscal year and are due on November 1 and February 1. Property taxes become delinquent after December 10 and April 10 for the first and second installments, respectively.

The lien date is January 1. The City accrues property tax received within 60 days after fiscal year- end in the fund financial statements.

Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the Government-Wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied.

Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted sources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the Governmental Fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied.

It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance.

Unassigned fund balance is applied last.

Pension Plan
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS’ Financial Office. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website under Forms and Publications.
181

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 21 -
Note 1: Summary of Significant Accounting Policies (Continued) Other Postemployement Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Compensated Absences
The City accrues accumulated unpaid vacation, sick leave, and associated employee-related costs when earned (or estimated to be earned) by the employee. The amount estimated to be used in subsequent fiscal years for governmental funds is maintained separately and represents a reconciling item between the fund and government-wide presentations.

Interfund Activities
Interfund activity is reported as loans, services provided, reimbursements, or transfers. Loans are reported as interfund receivables and payables as appropriate and are subject to elimination upon consolidation. Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses.

Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as reimbursement. All other interfund transactions are treated as transfers.

Net Position and Fund Balances
In the government-wide financial statements, net position is classified in the following categories:

Net Investment in Capital Assets: This component of net position consists of capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

Restricted Net Position: This component of net position represents external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.

Unrestricted Net Position: This component of net position represents the net position that does not meet the definition of “restricted” or “net investment in capital assets.” In the fund financial statements, governmental funds are classified in the following categories:

Nonspendable Fund Balance – includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example: inventories, prepaid amounts, the portion of the lease receivable in excess of the deferred inflow of resources for the lease receivable, and long-term notes receivable.
182

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 22 -
Note 1: Summary of Significant Accounting Policies (Continued) Restricted Fund Balance – includes amounts that are restricted for specific purposes stipulated by external resources providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers.

Committed Fund Balance – includes amounts that can only be used for the specific purposes determined by a formal action of the City’s highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by the City taking the same formal action that imposed the constraint originally (for example: resolution).

Assigned Fund Balance – includes amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by (a) City Council or (b) a body (a budget, finance committee, or management (City Wide Leadership team, which consists of City Manager and Executive Department Heads)) to which the assigned amounts are to be used for specific purposes. Assigned amounts also include all residual amounts in governmental funds (except negative amounts) other than the General Fund that are not classified as nonspendable, restricted, or committed.

Unassigned Fund Balance – the residual classification for the General Fund and includes all amounts not contained in the other classifications. Governmental funds report residual negative balances as unassigned fund balance.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those estimates.

Deficit Fund Balances or Net Position
The following funds have a deficit fund balance at June 30, 2023:

The City expects to eliminate these deficits with anticipated future revenues from grants, deferred payments, and reimbursements.

Budgets
The following funds exceeded appropriations at the fund level and by amount of excess:

Supplemental Law Enforcement Special Revenue Fund $ 5,826 Measure R LR Transit Special Revenue Fund $ 2,882
Nonmajor Fund - Park Dev Special Revenue Fund $ 18,808
183

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 23 -
Note 1: Summary of Significant Accounting Policies (Continued) GASB Statement Number 96 “Subscription-Based Information Technology Arrangements” Implementation
GASB Statement No. 96 “Subscription-Based Information Technology Arrangements” provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users. Under this statement, a government should generally recognize a right-to-use subscription asset and a corresponding subscription liability. This statement had no impact on the opening balances of the City. Please see Note #6 and Note #8 for further information.

Future Accounting Pronouncements
GASB Statements listed below will be implemented in future financial statements.

The provisions for Statement Number 99, “Omnibus 2022” are effective for the fiscal year beginning after June 15, 2023.

The provisions of Statement Number 100 “Accounting Changes and Error Corrections – an amendment of GASB Statement No. 62” are effective for fiscal years beginning after June 15, 2023.

The provisions of Statement Number 101 “Compensated Absences” are effective for fiscal years beginning after December 15, 2023.

Note 2: Cash and Investments
Cash and Investments
Cash and investments as of June 30, 2023, are classified in the accompanying financial statements as follows:

Deposits
At June 30, 2023, the carrying amount of the City’s deposits was $6,512,841 and the bank balance was $6,652,095. The $139,254 difference represents the outstanding checks and outstanding deposits.

The California Government Code requires California banks and savings and loans associations to secure the City’s deposits by pledging government securities with a fair value of 110% of the City’s deposits.

California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes have a fair value of 150% of the City’s total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state-chartered banks is held in safekeeping by an authorized Agent of Depository recognized Statement of Net Position:

Cash on hand $ 3,025
Demand deposits 6,512,841
Investments 35,411,170
Restricted:

Cash and investments with fiscal agents 159,173
Total cash and investments Governmental Activities $ 42,086,209 184

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 24 -
Note 2: Cash and Investments (Continued)
Deposits (Continued)
by the State of California Department of Banking. The collateral of deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an “Agent of Depository” has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held or, and in the name of, the local government agency.

Investments
Investments Authorized by the California Government Code and the City’s Investment Policy The City’s Investment Policy is reviewed and adopted by the City Council each fiscal year. The investment policy does not address investment of debt proceeds held by a bond trustee investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. All investments held by a bond trustee are invested in U.S. Treasury Money Market Funds. The table below identifies the allowable investment types authorized by the California Government Code and the City’s adopted Investment Policy (the “Investment Policy”). The table also identifies certain restrictions related to interest rate risk and concentration of credit risk. The Investment Policy restricts the Treasurer to invest in only the types of investments listed herein, which is more restrictive than the Government Code
Information about the sensitivity of the fair values of the City’s restricted money market investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:

Investment Types Authorized
Authorized Investment by Investment
By State Law Policy CGC City CGC City CGC City
California State Bonds Yes 5 years 5 years None None None None Federal Agency and U.S-
Government Sponsored
Enterprise Obligations Yes 5 years 5 years None None None None U.S. Treasury Securities Yes 5 years 5 years None None None None Certificates of Deposit Yes 5 years 5 years 30% 30% None None Time Deposits Yes 5 years 5 years None None None None
Yes N/A N/A None None $ 75 million $ 75 million
Maximum Percentages
Maximum Maturity of Portfolio Maximum Investment
Local Agency Investment
Fund (LAIF)
Remaining Maturity
(in months)
Investment Type 6 Months or Less
Restricted Cash with fiscal agents:

U.S. Bank Money Market Mutual Fund $ 159,173
185

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 25 -
Note 2: Cash and Investments (Continued)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City’s LAIF investment of $35,411,170 does not have a rating provided by a nationally recognized statistical rating organization. The City’s restricted cash of $159,173 held in U.S. Bank Money Market Mutual Fund does not have a rating by a nationally recognized statistical rating organization.

Concentration of Credit Risk
The entire investment balance of the City is invested in the LAIF external investment pool.

Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another a party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision to deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a fair value of 150% of the secured public deposits.

As of June 30, 2023, $6,402,095 of the City’s deposits with financial institutions in excess of federal depository insurance limits was held in collateralized accounts. As of June 30, 2023, the Fiduciary trust fund’s deposits with financial institutions were not in excess of federal depository insurance limits.

Fair Value Measurements
Investments are stated as fair value and are valued on a yearly basis. The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles.

Securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Securities classified in Level 2 of the fair value hierarchy are valued using other observable inputs such as matrix pricing techniques or based on quoted prices for assets in markets that are not active. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. Level 3 are valued using the income approach such as discounted cash flow techniques.

Investment in an external government pool is not subject to reporting within the level hierarchy. The entire balance of investments is in an external government pool. Please see additional information in “Investment in State Investment Pool”.
186

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 26 -
Note 2: Cash and Investments (Continued)
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. The City’s LAIF balance at June 30, 2023 was $35,411,170 which reflected a loss of $545,517 for the current fiscal year.

The total amount invested by all public agencies in LAIF as of June 30, 2023, was $40.8 billion. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2023 has a balance of $168.1 billion (59.91% was invested in government securities). The average maturity of PMIA investments was 260 days as of June 30, 2023.

Note 3: Interfund Receivables, Payables, and Transfers
The composition of interfund balances as of June 30, 2023, is as follows:

Due to/Due from other funds:

The purpose of Due to/Due from is to eliminate negative cash balances at fiscal year-end in various funds.

Transfers In/Transfers Out:

Due From Due To
Other Funds Other Funds
Major Funds:

General $ 28,184 -
Nonmajor Special Revenue Funds:

Community Development Block Grant - 6,048
Park Development Grant - 22,136
Total $ 28,184 $ 28,184
General Nonmajor
Transfers In Fund Funds Total
General Fund $ - $ 773,739 $ 773,739
Nonmajor Funds 756,958 53 757,011
Total $ 756,958 $ 773,792 $ 1,530,750
(Transfers Out)
187

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 27 -
Note 3: Interfund Receivables, Payables, and Transfers (Continued) Transfers Out in the amount of $756,958 were made out of the General Fund into the Lighting and Landscaping Fund ($536,121) for capital and administrative costs, and the Infrastructure Debt Service fund ($220,837) for debt payment costs. Transfers In in the amount of $773,739 were made to reimburse the General Fund for expenditures paid on behalf of the Gas Tax Fund ($111,129), Lighting and Landscape Fund ($343,200), Proposition A Fund ($46,800), the Proposition C Transit Fund ($38,101), Measure R LR Transit Fund ($116,814) SB1/RMRA Fund ($83,507), and the Town Center Debt Fund ($34,188). Transfers In in the amount of $53 were made out of the SB1/RMRA Fund to pay for and reduce the negative fund balance to zero for a prior fiscal year expenditure posted to the Bicycle and Pedestrian Fund that was an eligible expenditure of the SB1/RMRA fund.

Note 4: Notes Receivable
Notes and loans receivables as of June 30, 2023, are comprised of the following:

Affordable Housing
As part of development agreements with certain builders and in order to assist those individuals and families who are the most in need, the Housing Authority of the City of Duarte provides loans to low-and-moderateincome level residents for the acquisition and rehabilitation of residences. As a part of the agreement, the Housing Authority accepted second trust deeds from eligible buyers so that the buyers could purchase the property. The second trust deeds are cancelable after 25 years should the buyers remain in the property. If the property is sold, the Housing Authority recovers its second trust deed and interest to be calculated within certain limits. Since the amount, if any, the Housing Authority will receive is unknown, the City has recorded an allowance for doubtful accounts for the full amount of the receivables. The City will record income if the property is sold. The City has $15,000 of these note receivables outstanding at June 30, 2023.

As part of the Estoppel Certificate, Consent & Agreement, a note was established on December 4, 2013, between the City, Southern California Presbyterian Homes, and Andres Duarte Terrace II. L.P. for the development of a 43-unit affordable housing project located within the City. The note will not be repaid for 57 years. The City recorded an allowance for doubtful accounts of $1,200,000 due to the large number of years until the balloon payment on the note is due.

The balance of all notes and loans receivable at June 30, 2023 is $1,215,000 with an allowance for doubtful accounts of $1,215,000 for net notes and loans receivable of $0 as of June 30, 2023.

Note 5: Leases Receivable
The City has 6 cell tower lease agreements in place as of June 30, 2023. Revenue recognition is in accordance with GASB Statement No. 87. Summarized information for each lease is as follows:

SBA - Buena Vista Lease
In October 2018, the City entered into a lease with Nextel to allow a portion of their property to be utilized for a cellular tower. The original lease term was for 5 years and includes five additional optional 5-year terms. When the 3rd option was exercised the City received a $10,000 one-time payment. If the fourth option is exercised, the lease would end in September 2033. The options to extend are exercised unless written notification of cancellation occurs within 90 days prior to the expiration of the existing term. Initial rent payments were $700 a month increasing by 4% each October under the terms of the lease. Payments received during the fiscal year were $1,725 from July 2022 through September 2022 and $1,794 from October 2022 through June 2023. The current 5-year term will expire in September 2028. 188

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 28 -
Note 5: Leases Receivable (Continued)
SBA - Otis Gordon Lease
In December 2004, the City entered into a lease with Nextel to allow a portion of their property to be utilized for a cellular tower. The original lease term was for 5 years and includes three additional optional 5-year terms. If the third option is exercised, the lease would end in November 2024. The options to extend are exercised unless written notification of cancellation occurs within 90 days prior to the expiration of the existing term. Initial rent payments were $1,900 a month increasing by 4% each December under the terms of the lease. Payments received during the fiscal year were $3,701 from July 2022 through November 2022 and $3,849 from December 2022 through June 2023. The current 5-year term will expire November 2024.

Verizon Wireless - Starcrest Lease
In October 2008, the City entered into a lease with Verizon to allow a portion of their property to be utilized for a cellular tower commencing in March 2009. The original lease term was for 5 years and includes three additional optional 5-year terms. If the third option is exercised, the lease would end in February 2029.

The options to extend are exercised unless written notification of cancellation occurs within 90 days prior to the expiration of the existing term. Initial rent payments were $1,200 a month increasing 4% each March under the terms of the lease. Payments received during the fiscal year were $2,539 from July 2022 through February 2022 and $2,641 from March 2023 through June 2023. The current 5-year term will expire in February 2024.

Verizon Wireless – Royal Oaks Lease
In April 2019, the City entered into a lease with Verizon to allow a portion of their property to be utilized for a cellular tower commencing in November 2019. The original lease term was for 5 years and includes four additional optional 5-year terms. If the fourth option is exercised, the lease would end in October 2044. The options to extend are exercised unless written notification of cancelation occurs within 90 days prior to the expiration of the existing term. Initial rent payments were $1,750 a month increasing 1% each November under the terms of the lease. Payments received during the fiscal year were $1,785 from July 2022 through October 2022 and $1,803 from November 2022 through June 2023. The current 5-year term will expire in October 2024.

AT&T Tower Lease
In February 2010, the City entered into a lease with AT&T to allow a portion of their property to be utilized for a cellular tower commencing in March 2010. The original lease term was for 5 years and includes three additional optional 5-year terms. If the third option is exercised, the lease would end in February 2030.

The options to extend are exercised unless written notification of cancellation occurs within 90 days prior to the expiration of the existing term. Initial rent payments were $1,200 a month and the City was prepaid $57,600 at the start of the lease. The monthly rent increased by 3% in the thirty-third month of the initial lease and annually thereafter each December. Payments received during the fiscal year were $1,613 from July 2022 through November 2022 and $1,661 from December 2022 through June 2023. The current 5- year term will expire in February 2025.

T-Mobile Tower Lease
In February 2010, the City entered into a lease with AT&T to allow a portion of their property to be utilized for a cellular tower commencing in March 2010. The original lease term was for 5 years and includes three 189

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 29 -
Note 5: Leases Receivable (Continued)
T-Mobile Tower Lease (Continued)
additional optional 5-year terms. If the third option is exercised, the lease would end in February 2030.

The options to extend are exercised unless written notification of cancellation occurs within 90 days prior to the expiration of the existing term. Initial rent payments were $1,200 and the monthly rent increases by 3% each March. Payments received during the fiscal year were $1,661 from July 2022 through February 2023 and $1,711 from March 2023 through June 2023. The current 5-year term will expire in February 2025.
190

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 30 -
Note 6: Capital Assets
A summary of changes in capital asset activity for the fiscal year ended June 30, 2023, is as follows:
*New category for the City’s subscription-based information technology arrangement assets, and the related accumulated amortization, have been added due to the implementation of GASB Statement No. 96, “Subscription-Based Information Technology Arrangements.” Governmental activities:

Capital assets, not being depreciated:

Land $ 21,737,333 $ - $ - $ - $ 21,737,333
Construction in progress 1,276,905 3,434,424 116,689 2,894,508 1,700,132 Total capital assets, not being depreciated 23,014,238 3,434,424 116,689 2,894,508 23,437,465 Capital assets, being depreciated:

Structures and improvements 9,808,619 - - 1,608,016 11,416,635 Machinery and equipment 3,151,464 266,801 250,874 - 3,167,391 Infrastructure 64,607,188 46,198 1,522,343 1,286,492 64,417,535 .

Total capital assets, being depreciated 77,567,271 312,999 1,773,217 2,894,508 79,001,561 Less accumulated depreciation:

Structures and improvements 4,249,445 190,277 - - 4,439,722 Machinery and equipment 1,482,936 201,080 242,367 - 1,441,649 Infrastructure 37,393,229 1,272,209 1,522,343 - 37,143,095 Total accumulated depreciation 43,125,610 1,663,566 1,764,710 - 43,024,466 Total capital assets, being depreciated, net 34,441,661 (1,350,567) 8,507 2,894,508 35,977,095 Lease Assets
Leased vehicles 303,702 138,944 - - 442,646
Leased office space 41,214 - 41,214 - -
Leased parking 24,199 - - - 24,199
Leased equipment 80,169 - - - 80,169
Total lease assets, being amortized 449,284 138,944 41,214 - 547,014 Less accumulated amortization:

Leased vehiclees 62,582 76,829 - - 139,411
Leased office space 24,728 16,486 41,214 - -
Leased parking 8,541 8,541 - - 17,082
Leased equipment 19,111 20,620 - - 39,731
Total accumulated amortization 114,962 122,476 41,214 - 196,224 Total lease assets, being amortized, net 334,322 16,468 - - 350,790 Subscription-Based Information Technology
Arrangements *
Subscription-Based Information Technology
Arrangements - 630,513 - - 630,513
Less accumulated amortization: - 64,820 - - 64,820
Total Subscription-Based Information
Technology Arrangements being
amortized, net - 565,693 - - 565,693
Governmental activities capital assets, net $ 57,790,221 $ 2,666,018 $ 125,196 $ - $ 60,331,043 July 1, 2022 Increases Decreases June 30, 2023
Balance Balance
Transfers
191

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 31 -
Note 6: Capital Assets (Continued)
Depreciation and amortization expense was charged to functions of the primary government as follows:

Right to Use Leased Assets
The City has recorded 16 leased cars, 1 leased building, 1 leased parking lot, and 2 leased office equipment right to use assets. The related leases are discussed in the long-term liabilities Note 8. The right to use leased assets are amortized on a straight-line basis over the terms of the related leases.

Note 7: Deferred Inflows/Outflows of Resources
Unavailable revenues are deferred in accordance with GASB Statements No. 23 and No. 65. The City has unavailable revenues of intergovernmental receivables. The balance of unavailable revenues reported as deferred inflows of resources at June 30, 2023, was $56,641. The balance of lease receivables reported as deferred inflows of resources at June 30, 2023, was $303,629. This represents the amount of lease revenue deferred related to the receivable which is amortized on a straight-line basis for the life of the lease. For information about deferred inflows and outflows related to pensions, see Note 11. For information about deferred inflows and outflows related to OPEB, see Note 12.

Governmental activities:

General government $ 254,669
Safety 15,877
Development 12,498
Recreation and culture 325,666
Transportation 1,242,152
Total $ 1,850,862
192

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 32 -
Note 8: Long-Term Liabilities
The following is a summary of changes in long-term liabilities for the fiscal year ended June 30, 2023:

Debt service payments for direct placement and direct borrowings come due as follows:

Certificates of Participation
2013 Certificates of Participation (2001 Refunding)
In April 2013, the City of Duarte issued $1,337,750 in Certificates of Participation (Series A) with an interest rate of 2.01%. The City issued the bonds to refund $1,245,000 for the 2001 Certificates of Participation on a current basis and pay for issuance costs. The City pledged as collateral property consisting of the Duarte Civic Center Complex and a Senior Citizens/Community Center. The Civic Center consists of the City Hall, the Community Center, the Fitness Center, two swimming pools and a pool service building, totaling 28,600 square feet. The Senior Center is also located at the Civic Center Complex, and contains approximately 12,000 square feet, with multi-purpose rooms for classes meetings, recreational uses, and meals, and office space for on-site staff, and storage area. The Series A Certificates of Participation mature on August 1, 2022, and bear interest at 2.01% per annum. Interest on the bonds is payable semi-annually every August 1 and February 1. The liability as of June 30, 2023 is $0.

Balance Balance
Governmental Activities
General Obligation Bond
2013 COP $ 74,764 $ - $ 74,764 $ - $ -
U.S. Bancorp Infrastructure
Lease - 2,438,140 161,834 2,276,306 165,750
CA Energy Commission Loan 66,698 - 18,354 48,344 18,905 Total direct placement and
direct borrowings 2,579,602 - 254,952 2,324,650 184,655 Enterprise Leases 233,031 113,644 72,782 273,893 87,011 Canon Lease 56,116 - 17,973 38,143 18,190
Chamber Lease 16,849 - 16,849 - -
Edison Parking Lot Lease 15,504 - 8,673 6,831 6,831
Mail Meter Lease 5,325 - 2,515 2,810 2,591
Subscriptions** 630,513 - 114,156 516,357 111,240
Compensated Absences 1,010,028 578,607 500,715 1,087,920 43,517 Total Long term debt $ 3,916,455 $ 1,322,764 $ 988,615 $ 4,250,604 $ 454,035 ** New category for the City's subscription liabilities have been added due to the implementation of GASB Statement No. 96, "Subscription-Based Information Technology Arrangements ".

Due Within
July 1, 2022 Additions Deletions June 30, 2023 One Year 193

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 33 -
Note 8: Long-Term Liabilities (Continued)
U.S. Bancorp Infrastructure Lease
The City of Duarte entered into a lease/purchase agreement with U.S. Bancorp Government Leasing and Finance, Inc. on September 27, 2019, to fund a project to upgrade lighting systems, HVAC system installation, control upgrades, and to install a Solar PV system in various City buildings and structures for $2,750,427. The City pledged as collateral property consisting of the Duarte Civic Center Complex and a Senior Citizens/Community Center. The Civic Center consists of the City Hall, the Community Center, the Fitness Center, two swimming pools and a pool service building, totaling 28,600 square feet. The Senior Center is also located at the Civic Center Complex, and contains approximately 12,000 square feet, with multi-purpose rooms for classes meetings, recreational uses, and meals, and office space for on-site staff, and storage area. Lease payments are to be unconditional. In the event of a default, the City must provide the leased property back to the U.S. Bancorp or continue to make the lease payments until the property is provided to U.S. Bancorp. The lease matures on September 27, 2034, and bears interest at 2.95% per annum.

Interest and principal are due annually every September 27. The liability as of June 30, 2023, is $2,276,306.

California Energy Resources Conservation and Development Commission Loan The State of California Energy Resources Conservation and Development Commission issued a loan to the City for an Energy Efficiency project to be completed in July 2011. The Loan was issued in October 2011 in the amount of $218,847. The liability as of June 30, 2023 is $48,344. The loan matures on December 22, 2025, and bear interest at 3% per annum. Principal and Interest on the loan is payable semi-annually every December and June.

Fiscal year
ending
June 30, Principal Interest
2024 $ 165,750 $ 55,087
2025 169,762 51,075
2026 173,870 46,967
2027 178,078 42,759
2028 182,387 38,450
2029 - 2033 980,316 123,869
2034 - 2036 426,143 15,531
Totals $ 2,276,306 $ 373,738
U.S. Bankcorp Infrastructure Lease
Fiscal year ending
June 30, Principal Interest
2024 $ 18,905 $ 1,313
2025 19,480 739
2026 9,959 150
Totals $ 48,344 $ 2,202
CA Energy Commission Loan
194

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 34 -
Note 8: Long-Term Liabilities (Continued)
Enterprise Leases
On February 27, 2020, the City entered into a master lease agreement with Enterprise Fleet Management to replace all of the City’s vehicles. The City intends to replace the vehicles on a rolling basis on a 5-year schedule. Each fiscal year the City will trade in their owned vehicles as part of signing a lease for a new replacement vehicle. During the fiscal year 2020-2021 the City entered into 12 such lease agreements. During the fiscal year 2021-2022 the City entered into 1 such lease agreement. During the fiscal year 2022-2023 the City entered into 3 such lease agreements. Additional leases are expected over the next few fiscal years as per the City’s replacement plan. The vehicles are leased for 5-years and then will be traded in for new replacement vehicles. The interest rate on these leases range from 0.27% to 3.59%. The first payment is due upon delivery for each vehicle and payments continue for a total of 60 months.

Monthly payments range from $170 to $1,013 on a per vehicle basis. The debt matures as follows:

Canon Lease
On August 9, 2021, the City entered into a lease with Canon Solutions America, Inc. to lease a copy machine. The lease payments are $1,545 a month for 48 months with an interest rate of

1.20%. The debt matures as follows:

Fiscal year ending
June 30, Principal Interest
2024 $ 87,011 $ 4,258
2025 88,156 3,115
2026 57,257 1,970
2027 25,693 1,019
2028 15,776 253
Totals $ 273,893 $ 10,615
Enterprise Leases
Fiscal year ending
June 30, Principal Interest
2024 $ 18,190 $ 358
2025 18,409 138
2026 1,544 2
Totals $ 38,143 $ 498
Canon Lease
195

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 35 -
Note 8: Long-Term Liabilities (Continued)
Chamber Lease
On March 1, 2017 the City entered into a lease to rent office space on Huntington Drive for threeyears with the option to extend the lease for three additional one-year periods beginning on March 1, 2020 . The City exercised the option to renew on March 1, 2020, March 1, 2021, and on March 1, 2022. Monthly rent was $1,600. The lease term ended in February 2023 and the tenant is now renting month to month.

Edison Parking Lot Lease
The City has entered into several leases with Southern California Edison in 2006, 2011, 2016, and the latest lease on May 1, 2019 for land associated with a parking lot located at 1220 Highland Avenue. The term is for 5-years with the lease expiring on April 30, 2024. The quarterly rent is due on the 1st day of each quarter and begins at $2,048 increases to $2,305 for the final year of the lease. The City paid three payments of $2,109 for the beginning of the fiscal year and $2,173 for the last quarter of the fiscal year. The interest rate is 3%. The debt matures as follows:

Mail Meter Lease
On August 30, 2018, the City entered into a lease agreement with MailFinance to lease a postage meter commencing on May 22, 2019 for 63 months for a monthly payment of $220. The lease matures on August 21, 2024. The interest rate is 3%. The debt matures as follows:

Subscription-Based Information Technology Arrangements
The City has entered into subscription-based information technology arrangemnets (SBITAs) involving:

Productivity tools designed to facilitate collaboration and communication within the City.

Website hosting.

Fiscal year ending
June 30, Principal Interest
2024 $ 6,831 $ 86
Totals $ 6,831 $ 86
Edison Parking Lot Lease
Fiscal year ending
June 30, Principal Interest
2024 $ 2,591 $ 49
2025 219 1
Totals $ 2,810 $ 50
Mail Meter Lease
196

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 36 -
Note 8: Long-Term Liabilities (Continued)
Subscription-Based Information Technology Arrangements (Continued) Software utilized to identify persons involved in emergency incidents.

Public works permit software.

Building permit software.

Code enforcement and animal control software.

City Council meeting streaming software.

Online aerial maps.

Online bidding management software.

Accounting systems software.

The software arrangements mature as follows:

Compensated Absences
The City accrues accumulated unpaid vacation, sick leave and associated employee-related costs when earned (or estimated to be earned) by the employee as described in Note 1. The City at June 30, 2023, had an outstanding accrued balance of unpaid vacation, sick leave, and associated employee related costs of $1,087,920 that will be liquidated from various funding sources in future years.

Note 9: Liability, Worker’s Compensation, and Purchased Insurance Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City of Duarte is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 124 California public entities and is organized under a joint powers’ agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The Authority began Fiscal year ending
June 30, Principal Interest
2024 $ 111,240 $ 16,666
2025 121,711 12,580
2026 132,893 8,112
2027 150,513 3,150
Totals $ 516,357 $ 40,508
Subscriptions
197

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 37 -
Note 9: Liability, Worker’s Compensation, and Purchased Insurance Description of Self-Insurance Pool Pursuant to Joint Powers Agreement (Continued) covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.

Primary Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.

Primary Liability Program
Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers.

The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence.

Subsidence losses also have a $50 million per occurrence limit. The coverage is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/coverage/risk-sharing-pools.

Workers’ Compensation Program
Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.

For 2022-23 the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer’s Liability losses from $5 million to $10 million are pooled among members. 198

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 38 -
Note 9: Liability, Worker’s Compensation, and Purchased Insurance (Continued) Purchased Insurance
Pollution Legal Liability Insurance
The City participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.

Property Insurance
The City participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City property is currently insured according to a schedule of covered property submitted by the City to the Authority. City property currently has all-risk property insurance protection in the amount of $26,451,901. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.

Earthquake and Flood Insurance
The City purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City property currently has earthquake protection in the amount of $6,085,875. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.

Crime Insurance
The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.

Special Event Tenant User Liability Insurance
The City further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on City property. The insurance premium is paid by the tenant user and is paid to the City according to a schedule. The City then pays for the insurance.

The insurance is facilitated by the Authority.

Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2022-23.

Note 10: Deferred Compensation Plan
The City has made available to its employees a deferred compensation plan, whereby employees authorize the City to withhold funds from salaries to be invested in individual investment accounts. Funds may be withdrawn by participants upon termination of employment or retirement. The City makes no contributions under the plan. The amount held by trustees for the employees at June 30, 2023, was $3,208,911. These amounts are not recorded in the books of the City and as such not included in these financial statements. 199

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 39 -
Note 11: Retirement Plan
Plan Description
All qualified employees are eligible to participate in the City’s Miscellaneous Employee Pension Plan, cost-sharing multiple employer defined benefit pension plan administered by the California Public Employees Retirement System (CalPERS). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues a publicly available report that includes a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS’ website.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 or 52 with statutorily reduced benefits depending on the retirement tier.

All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan’s provisions and benefits in effect at June 30, 2023, are summarized as follows:

Tier 1* Tier 2 PEPRA
Hire date/CalPers Prior to After After
Enrollment Date January 1, 2010 January 1, 2010 January 1, 2013 Benefit formula 2.5% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age minimum 50 yrs minimum 50 yrs minimum 52 yrs Monthly benefits as a % of 50 yrs - 63+ yrs 50 yrs - 63+ yrs 52 yrs - 67+ yrs eligible compensation 1.425% - 2.418% 1.092% - 2.418% 1.000% - 2.500% Required employee
contribution rates 7.96% 6.92% 7.25%
Required employer
contribution rates 12.99% 9.30% 7.73%
* Plan closed to new entrants
200

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 40 -
Note 11: Retirement Plan (Continued)
Contribution Description
Section 20814 (c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employees be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the fiscal year, with an additional amount to finance any unfunded accrued liability.

The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

For the fiscal year ended June 30, 2023, the contributions recognized as part of pension expense for the Plan were as follow:

Miscellaneous
Contributions – employer $ 1,552,245
Pension Liabilities, Pension Expense, and Deferred Outflows, and Deferred Inflows of Resources Related to Pensions
As of June 30, 2023, the City reported net pension liabilities for its proportionate share of the net position liability of the Plan as follows:

Proportionate Share of
Net Pension Liability
Miscellaneous $ 17,488,020
The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability.

The net pension liability of the Plan is measured as of June 30, 2022, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 201 rolled forward to June 30, 2022 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

The City’s proportionate share of the net pension liability for the Plan as of June 30, 2021 and 2022 was as follows:

Miscellaneous
Proportion – June 30, 2021 0.27327%
Proportion – June 30, 2022 0.24768%
Change - Decrease 0.000256%
For the fiscal year ended June 30, 2023, the City recognized pension income of $3,844,498. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
201

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 41 -
Note 11: Retirement Plan (Continued)
$1,702,553 reported as deferred outflows of resources related to contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2023.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions and will be recognized as pension expense as follows:

Actuarial Methods and Assumptions Used to Determine Total Pension Liability The total pension liabilities were determined by rolling forward the total pension liability determined in the June 30, 2021 actuarial valuation to June 30, 2022. The June 30, 2022, total pension liability was based on the following actuarial methods and assumptions:

Deferred Deferred
Outflows of Inflows of
Resources Resources
Contributions made after the measurement date $ 1,702,553 $- Difference between expected and actual experience 351,194 - Change in assumptions 1,792,013 -
Difference in actual to proportionate share
contribution - 235,214
Net difference between projected and actual earnings
on pension plan investments 3,203,341 -
Total $ 7,049,101 $ 235,214
Deferred
Fiscal year ending Outflows (Inflows)
June 30, of Resources
2024 $ 1,333,057
2025 1,168,068
2026 650,936
2027 1,959,273
Totals $ 5,111,334
202

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 42 -
Note 11: Retirement Plan (Continued)
Valuation date June 30, 2021
Measurement date June 30, 2022
Actuarial cost method Entry age normal cost method
Actuarial assumptions
Discount rate 6.90%
Inflation 2.30%
Payroll growth Varies by entry age/service
Projected salary increases Varies by age/service
Investment rate of return 6.90%
Mortality Data for all Funds (1)
(1) The mortality table used was developed based on CalPERS’ specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS’ website.

Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plans fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projects benefit payments to determine the total pension liability.

In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with the risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return.

The expected real rates of return by asset class can be found in CalPERS’ Annual Comprehensive Financial Report (CAFR) for the fiscal year ended June 30, 2022.

The following presents the net pension liability/(asset) of the Plan as of the measurement date, calculated using the discount rate of 6.90%, as well as what the net pension liability/(asset) would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate:

Miscellaneous

1.0% Decrease 5.90%
Net Pension Liability $ 25,346,584
Current Discount Rate 6.90%
Net Pension Liability $ 17,488,020

1.0% Increase 7.90%
Net Pension Liability $ 11,022,373
203

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 43 -
Note 11: Retirement Plan (Continued)
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Note 12: Other Post-Employment Benefits
Plan Description
The City has established a retiree healthcare plan (HC Plan) The HC Plan provides employees healthcare coverage under the California Public Employees Medical and Hospital Care Act (PEMCHA) as a singleemployer defined-benefit post-employment healthcare plan. PEMCHA governs health care provided to employees and retirees under health care plans administered by CalPERS. All public agencies providing health care to their active employees through CalPERS PEMCHA plans are also required to offer health care under those plans to their retirees. The rules regarding retiree health care are found in sections 22892 and 22893 of the Government Code.

Under PEMCHA, the City will provide medical insurance coverage for retirees and their dependents though the PERS system. To be eligible, employees must retire within one hundred and twenty days of their separation from employment with the City on or after age 50 (age 52 for PEPRA new hires) with at least 5 years of CalPERS service. Eligible employees receive up to a maximum amount determined each year as a contribution toward the cost of monthly health premiums if the eligible retiree is covered in a CalPERS’ health plan. As of June 30, 2023, the maximum coverage rates are $738.49 a month, $1,477.00 a month, and $1,920.11 a month for a retiree only, retiree plus 1, and retiree family tiers, respectively. The same equal benefit must be provided to retirees as active employees. Benefits are paid for the lifetime of the retiree as long as he or she continues to participate in PEMCHA, with continuation to the surviving spouse, if any.

The City also pays an administrative fee of 0.31% of premium on behalf of all active employees and retirees.

Retirees who waive medical insurance coverage and provide proof of other coverage will be reimbursed by the City in a tiered schedule ranging from $218 to $566 per month.

The City joined the Public Agencies Post-Retirement Health Care Plan Trust (Trust) in September of 2007 for the purpose of prefunding other post-employment benefits for past services. The Trust is a public agency multiple-employer trust that was established to provide member public agencies economies of scale and efficiency of administration in the funding of each agency’s respective other post-employment benefit obligation.

As of the June 30, 2023 actuarial valuation, the Plan was providing benefits to 97 beneficiaries consisting of 52 active employees and 45 inactive employees or their beneficiaries.

A direct employer payment toward the cost of OPEB benefits is referred to as an “explicit subsidy”. In addition, if claims experience of employees and retirees are pooled when determining premiums, retiree premiums are based on a pool of members which, on average, are younger and healthier. For certain types of coverage such as medical insurance, this results in an “implicit subsidy” of retiree premiums by active employee premiums since the retiree premiums are lower than they would have been if retirees were insured separately. GASB Statement No. 75 and Actuarial Standards of Practice generally require that an implicit subsidy of retiree premium rates be valued as an OPEB liability. 204

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 44 -
Note 12: Other Post-Employment Benefits (Continued)
Contributions
The City Council establishes health care coverage rates each fiscal year by Memoranda of Understanding with the applicable employee bargaining units. The City currently pays the benefits as they come due on behalf of the beneficiaries. In addition, the City makes an additional voluntary contribution to the Trust at a rate set during the budget process. During FY 2022- 2023 the City paid $459,831 in post-employment healthcare costs directly to PERS and an additional contribution of $572,000 into the Trust during FY 2022- 2023 for a total contribution amount of $1,031,831.

Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2023, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2023. Standard actuarial update procedures were used to project/discount from valuation to measurement date. The total OPEB liability was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless other specified:

Salary increases 3.00%
Investment rate of return 6.00%
Inflation 2.50%
Healthcare cost trend rates
Pre-Medicare 5.00%
Medicare 10.55%
Actuarial Methods and Assumptions
Demographic actuarial assumptions used in the valuation are based on the CalPERS’ 2021 Experience Study report issued in November 2021. The mortality improvement scale was updated from 80% Scale MP 2020 (published by the Society of Actuaries) to MacLeod Watts Scale, reflecting continued updates in available information. There were no changes between the measurement date and the report date that are expected to have a significant effect on the total OPEB liability.

The Trust published an expected return of 5.89% to 6.0%, reflecting updated long-term rates of returned provided by PARS in June 2023. The return rate was determined using a building-block method and bestestimate ranges of expected future real rates of return for each major asset class (expected returns, net of OPEB plan investment expense and inflation). These ranges are combined to produce the long-term expected rate of return by weighting the expected real rates of return by the target asset allocation percentage and by adding expected inflation. To achieve the goal set by the investment policy, plan assets will be managed to earn, on a long-term basis, a rate of return equal to or in excess of the target rate.

Discount Rate and Long-Term Expected Rate of Return
GASB Statement No. 75 allows the use of a discount rate that is up to the expected long-term rate of return on the assets in the OPEB trust set aside to pay benefits, if the plan sponsor makes regular contributions to the trust such that the assets are not depleted at any point in the future. If the OPEB plan’s actuary determines that contributions are not sufficient to keep the trust funded, a blend of the long-term rate of return and the yield or index rate for 20-year, tax-exempt municipal bonds will be used for the periods when the trust funds are not sufficient to cover benefit payments. Based on this requirement, the discount rate used to measure the total OPEB liability is 6.00%.
205

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 45 -
Note 12: Other Post-Employment Benefits (Continued)
Changes in the OPEB Liability
The following table shows the changes in the net OPEB liability as follows:

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the Net OPEB liability of the City, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.00%) or 1 percentage point higher (7.00%) than the current discount rate:

Sensitivity of the Net OPEB Liability to Changes in the Health Care Trend Rates The following presents the net OPEB liability, as well as what the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage point lower (9.95% graded down to 2.90%) than the healthcare trend rate or 1 percentage point higher (11.95% graded down to 4.90%) than the current healthcare cost trend rates assumed to be 10.95% effective January 2024 and graded down to 3.90% for 20 years and 75 thereafter:

Service Cost $ 459,669
Interest 790,303
Changes due to plan experience (4,196,475)
Changes due to assumption changes 392,831
Benefit payments (459,831)
Net change in total OPEB liability (3,013,503)
Total OPEB liability - beginning 13,187,959
Total OPEB liability - ending (a) $ 10,174,456
Plan fiduciary net position
Contributions - employer (1) $ 1,031,831
Net investment income 300,420
Change due to investment experience 144,868
Benefit payments (1) (459,831)
Net Change in plan fiduciary net position 1,017,288
Plan fiduciary net position - beginning 4,814,509
Plan fiduciary net position - ending (b) 5,831,797
Net OPEB liability - ending (a) - (b) $ 4,342,659
(1) Amount includes implicit subsidy associated with benefits paid. 1% Decrease Current 1% Increase
Net OPEB Liability 5,775,565 $ 4,342,659 $ 3,170,583 $
206

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 46 -
Note 12: Other Post-Employment Benefits (Continued)
OPEB Plan Fiduciary Net Position
(1) Includes $382,873 of pay-as-you-go contributions made from sources outside of the trust, plus an implicit subsidy amount of $76,958.

Healthcare
Cost
1% Decrease Rate 1% Increase
Net OPEB liability 2,744,150 $ 4,342,659$ $ 5,629,421
Statement of Fiduciary Net Position - June 30, 2023
Assets
Investments
Managed account $ 5,831,797
Total Assets 5,831,797
Net position restricted for post-employment
benefits other than pensions $ 5,831,797
Statement of Changes in Fiduciary Net Position for the Fiscal Year Ended June 30, 2023 Additions
Employer Contributions (1) $ 1,031,831
Investment income: 300,420
Change due to investment experience 144,868
Total Additions 1,477,119
Deductions
Benefit payments (1) (459,831)
Total Deductions (459,831)
Net increase in net position 1,017,288
Net position restricted for post-employment
benefits other than pensions
Beginning of fiscal year 4,814,509
End of fiscal year $ 5,831,797
207

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 47 -
Note 12: Other Post-Employment Benefits (Continued)
Investments
The City’s policy regarding the allocation of the plan’s invested assets is established and may be amended by the management of the City. The primary objective is to maximize total Plan return, subject to the risk and quality constraints set forth in the investment guidelines. The investment objective the City has selected is the Balance Strategy, which seeks to provide growth of principal and income. The asset allocation ranges for this objective as of June 30, 2023, are listed below:

Market conditions may cause the account’s asset allocation to vary from the stated range from time to time.

The investment manager (assisting the City) will rebalance the portfolio no less than quarterly and/or when the actual weighting differs substantially from the strategic range, if appropriate and consistent with the objectives.

For the fiscal year ended June 30, 2023, the annual money-weighted rate of return on investments, net of investment expense, was 6.90 percent. The money-weighted rate of return expresses investment performance, net of investment expense adjusted for the changing amounts invested.

Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.

Amounts are first recognized in OPEB expense for the fiscal year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. Liability changes due to plan experience which differs from what was assumed in the prior measurement period and/or from assumption changes during the period are recognized over the OPEB plan’s Expected Average Remaining Service Life (EARSL). EARSL periods used for changes arising in this current measurement period were seven years. Changes in the Fiduciary Net Position due to investment performance different from the assumed earnings rate are always recognized over 5 years. Liability changes attributable to benefit changes occurring during the period are recognized immediately.

Target Target
Allocation Allocation
Equity - Large Cap Core 32.00% 7.70%
Equity - Mid Cap Core 6.00% 8.00%
Equity - Small Cap Core 9.00% 8.50%
Equity - Real Estate 2.00% 6.60%
Equity - International 7.00% 7.50%
Equity - Emerging Markets 4.00% 7.50%
Fixed Income - Short Term Bond 6.75% 3.30%
Fixed Income - Intermediate Term Bond 27.00% 4.00%
Fixed Income - High Yield 1.25% 5.70%
Cash 5.00% 2.60%
PARS Balanced HighMark Plus Portfolio
Expected Rate of Return
208

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 48 -
Note 12: Other Post-Employment Benefits (Continued)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2023, the City recognized OPEB income of $149,335 and reported deferred outflows of resources related to OPEB from the following sources:

Amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:

Note 13: Conduit Debt Obligations
Financial Cooperation Agreements
The City from time to time has provided financial assistance to health care providers for the acquisition of equipment and facilities deemed to be in the public interest. The agreements are secured by the property financed and are payable solely from payments received on the underlying security liens. Upon repayment of the debt, ownership of the property transfers to the private-sector entity served by the loan agreement, neither the Agency, the City of Duarte, nor any political subdivision thereof is obligated in any manner for repayment of the debt. Accordingly, such debt is not reported as liabilities in the accompanying financial statements.

Deferred Outflows Deferred Inflows
of Resources of Resources
Change of Assumptions 1,381,182 $ 371,960 $
Differences Between Expected
and Actual Experience 759,851 3,552,844
Net Differences Between Projected
and Actual Earnings on Investments 205,218 -
Total $ 2,346,251 $ 3,924,804
Deferred
Fiscal Year Outflows (Inflows)
Ended June 30: of Resources
2024 (69,822)
2025 (94,689)
2026 (215,499)
2027 (400,205)
2028 (494,980)
Thereafter (303,358)
209

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
- 49 -
Note 14: Commitments and Contingencies
Grant Audits
Under the terms of federal and state grants, periodic audits are required, and certain costs may be questioned as not being appropriate expenditures under the terms of the grants. Such audits could lead to reimbursement to the grantor agencies. City Management believes disallowance, if any, will be immaterial.

Memorandum of Understanding with Foothill Transit
On September 21, 2017, the City entered into a memorandum of understanding (MOU) with Foothill Transit (Transit) in which Transit will purchase three electric 35-foot electric buses for operation of the City’s transit service. The City reimbursed the cost of two of the buses utilizing Prop A funds. The City will reimburse Transit for the cost of the third bus through monthly payments financed over a period of ten years at an annual interest rate of three percent. On April 1, 2019, the third bus was acquired by Transit for a base cost of $731,908 with interest over the next ten years of $116,175 for a total cost of $848,083. There is a monthly payment of both principal and interest totaling $7,067.

The MOU has an initial base term of four years, with two three-year extensions. If the MOU is not extended and is terminated before the end of the ten-year financing period, the City will have the choice of either continuing the financing of the bus, paying the remaining balance on the bus; or transferring the ownership of the bus to Transit, who would then reimburse the City for the amount paid to date.

Contractual Commitments
On July 1, 2023, the City entered into a contract with the Los Angeles Sheriff’s Department to provide city law enforcement services for the 2022-2023 fiscal year for an estimated cost of $5.4 million. 210

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 28,094,578 $ 28,094,578 $ 28,094,578 $- Resources (Inflows):

Taxes 15,455,000 15,455,000 15,695,783 240,783
Licenses and permits 1,858,000 1,858,000 1,385,144 (472,856) Intergovernmental 5,415,800 5,415,800 5,894,732 478,932 Charges for services 431,900 431,900 441,546 9,646
Use of money and property 114,000 114,000 387,361 273,361 Fines and forfeitures 310,000 310,000 454,635 144,635
Miscellaneous 255,500 255,500 601,234 345,734
Lease proceeds - - 744,157 744,157
Transfers in 700,200 700,200 773,739 73,539
Amounts Available for Appropriations 52,634,978 52,634,978 54,472,909 1,837,931 Charges to Appropriations (Outflows):

Current:

General government 6,772,720 7,150,100 6,456,386 693,714 Safety 6,914,091 6,916,616 6,830,732 85,884
Development 3,196,500 3,219,600 2,695,700 523,900
Recreation and cultural 2,781,800 2,974,800 3,029,965 (55,165) Capital outlay 2,597,209 2,320,592 2,473,505 (152,913)
Debt service:

Principal retirement 235,564 235,564 235,536 28
Interest and fiscal charges 12,717 12,717 12,763 (46)
Transfers out 771,200 846,200 756,958 89,242
Total Charges to Appropriations 23,281,801 23,676,189 22,491,545 1,184,644 Budgetary Fund Balance, June 30 $ 29,353,177 $ 28,958,789 $ 31,981,364 $ 3,022,575 See Note to Required Supplementary Information
Budget Amounts
-50-
211

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
- 51 -
Cost Sharing Multiple-Employer Defined Benefit Pension Plan Last 10 Fiscal Years (*)
SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY FY 15 FY 16 FY 17 FY 18 FY 19
Measurement Measurement Measurement Measurement Measurement Date Date Date Date Date
June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 City's proportion of the
net pension liability 0.30890% 0.291010% 0.30027% 0.29560% 0.28309% City's proportionate
share of the net
pension liability $ 8,486,349 $ 10,578,290 $ 12,675,786 $ 14,098,986 $ 13,503,297 City's covered payroll 2,467,539 $ $ 3,706,684 $ 3,970,085 $ 4,047,472 $ 4,004,164 City's proportionate
share of the net
pension liability as
a percentage of it's
covered payroll 343.9% 285.4% 319.3% 348.3% 337.2%
Plan's fiduciary net
position as a
percentage of the
total pension liability 78.40% 79.82% 75.87% 73.31% 77.69% FY 20 FY 21 FY 22 FY 23
Measurement Measurement Measurement Measurement
Date Date Date Date
June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 City's proportion of the
net pension liability 0.27900% 0.27813% 0.27327% 0.24768% City's proportionate
share of the net
pension liability $ 14,091,516 $ 15,108,868 $ 9,811,894 $ 17,488,020 City's covered payroll 4,272,731 $ $ 4,338,950 $ 4,381,600 $ 3,985,824 City's proportionate
share of the net
pension liability as
a percentage of it's
covered payroll 329.8% 348.2% 223.9% 438.8%
Plan's fiduciary net
position as a
percentage of the
total pension liability 77.73% 77.71% 90.49% 78.19%
212

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
- 52 -
Cost Sharing Multiple-Employer Defined Benefit Pension Plan Last 10 Fiscal Years (*)
SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY (Continued)
Notes to the Schedule:

In Fiscal Year 2016-17, the discount rate for the PERF C was lowered from 7.65 percent to 7.15 percent.

Deferred outflows of resources for changes of assumptions represented the unamortized portion of this assumption change.

In fiscal year 2022-2023, the discount rate was lowered from 7.15 percent to 6.90 percent. *Fiscal year 2015 was the 1st year of implementation, therefore, only nine years are shown. 213

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
- 53 -
Cost Sharing Multiple-Employer Defined Benefit Pension Plan Last 10 Fiscal Years (*)

SCHEDULE OF PENSION CONTRIBUTIONS
Measurement Measurement Measurement Measurement Measurement Date Date Date Date Date
June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 Miscellaneous Miscellaneous Miscellaneous Miscellaneous Miscellaneous Actuarially determined
contribution (a) $ 262,412 $ 285,477 $ 400,604 $ 421,885 $ 449,981 Contribution in
relation to the
actuarially determined
contribution (b) (262,412) (285,477) (400,604) (421,885) (449,981) Contribution deficiency
(excess) $ - $ - $ - $ - $ -
Covered payroll (c ) 2,352,312 $ $ 2,467,539 $ 3,706,684 $ 3,970,085 $ 4,047,472 Contributions as a
percentage of covered
payroll 11.16% 11.57% 10.81% 10.63% 11.12%
Measurement Measurement Measurement Measurement
Date Date Date Date
June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 Miscellaneous Miscellaneous Miscellaneous Miscellaneous Actuarially determined
contribution (a) $ 459,105 $ 537,636 $ 525,340 $ 505,435 Contribution in
relation to the
actuarially determined
contribution (b) (459,105) (537,636) (525,340) (505,435) Contribution deficiency
(excess) $ - $ - $ - $ -
Covered payroll (c ) 4,004,164 $ $ 4,272,231 $ 4,338,950 $ 4,381,600 Contributions as a
percentage of covered
payroll 11.47% 12.58% 12.11% 11.54%
(a) Historical information is required only for measurement periods for which GASB Statement No. 68 is applicable.
(b) Some employers may choose to make additional contributions towards their unfunded liability. Contributions for such plans exceed the actuarially determined contributions. (c ) Covered payroll represented above is based on pensionable earnings provided by the employer. However, GASB 68 defines covered payroll as the total payroll of employee’s pension plan. Accordingly, if pensionable earnings are different that total earnings for covered-employees, the employer should display in the disclosure footnotes the payroll based on total earnings for the covered group and recalculate the required payroll-related ratios.
214

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
- 54 -
Cost Sharing Multiple-Employer Defined Benefit Pension Plan Last 10 Fiscal Years (*)
SCHEDULE OF PENSION CONTRIBUTIONS (Continued)
Notes to Schedule
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal year 2021-2022 were from June 30, 2021 public agency valuations.

Actuarial cost method Entry age normal cost method
Amortization method Level percent of payroll
Average remaining period 18 years as of the valuation date Asset valuation method 30-year direct rate smoothing
Actuarial assumptions
Discount rate 6.90%
Inflation 2.30%
Projected salary increases Varies by entry age and service Payroll growth 2.75%
Individual salary growth A merit scale varying in duration of employment coupled with an assumed annual inflation growth of 2.5% and an annual production growth of 0.25%
Retirement age The probabilities of retirement are based on the 2015 CalPERS experience study for the period 1997 to 2011.

Mortality The probabilities of mortality are based on CalPERS’ specific data. The rate incorporates Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study that can be found on the CalPERS website.
* Fiscal year 2015 was the 1st year of implementation, therefore, only nine years are shown. 215

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
- 55 -

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS Last Ten Fiscal Years*
(1): Amount includes implicit subsidy associated with benefits paid. *Fiscal Year 2018 was the 1st year of implementation therefore only 6 years are shown. 2018 2019 2020 2021 2022 2023
Total OPEB Liability
Service cost 258,408$ 266,160$ 327,023$ 389,582$ 447,366$ $ 459,669 Interest on the total
OPEB liability 464,777 495,518 575,620 633,116 748,420 790,303 Differences between
expected and actual
experience 983,161 65,900 - 1,285,548 35,353 -
Changes of assumptions - 2,167,125 (331,435) (419,273) 583,430 392,831 Changes due to plan
experience - - - - - (4,196,475)
Benefit payments (1) (662,583) (359,809) (365,155) (431,406) (462,219) (459,831) Net change in total OPEB
liability 1,043,763 2,634,894 206,053 1,457,567 1,352,350 (3,013,503) Total OPEB liability -
beginning 6,493,332 7,537,095 10,171,989 10,378,042 11,835,609 13,187,959 Total OPEB liability -
ending (a) $ 7,537,095 $ 10,378,042$ 11,835,609 10,171,989 $ 13,187,959 $ 10,174,456 $ Plan Fiduciary Net Position
Contribution - employer (1) 915,033$ 651,809$ 741,655$ 876,406$ 868,219$ 1,031,831$ Net Increase (decrease)
in fair value of
investments 189,196 176,444 81,965 996,936 (688,055) 300,420 Benefit payments (1) (662,583) (359,809) (365,155) (431,406) (462,219) (459,831) Change due to investment
experience - - - - - 144,868
Administrative expense (13,347) - - (24,255) (29,705) - Net Change in plan fiduciary 428,299 468,444 458,465 1,417,681 (311,760) 1,017,288 net position
Plan fiduciary net position -
beginning 2,353,380 2,781,679 3,250,123 3,708,588 5,126,269 4,814,509 Plan fiduciary net position -
ending (b) $ 2,781,679 3,250,123$ 3,708,588$ 5,126,269$ 4,814,509$ 5,831,797$ Net OPEB liability (a) - (b) $ 4,755,416 6,921,866$ 6,669,454$ 6,709,340$ 8,373,450$ 4,342,659$ Plan fiduciary net position as a
percentage of total OPEB
liability 36.91% 31.95% 35.73% 43.31% 36.51% 57.32%
Covered-employee payroll 4,211,793 $ 3,926,264$ 4,325,247$ 3,579,723$ 3,613,652$ 4,422,484$ Net OPEB liability as a
percentage of coveredemployee payroll 112.91% 176.30% 154.20% 187.43% 231.72% 98.20% Measurement Period
216

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
- 56 -

SCHEDULE OF OPEB CONTRIBUTIONS
Last Ten Fiscal Years*
*Fiscal Year 2018 was the 1st year of implementation therefore only 6 years are shown.

Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
Year Year Year Year Year Year
6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Contractually Determined
Contribution (CDC) $ 782,535 1,491,134 $ 803,739$ 876,406$ 868,219$ $ 1,031,831 Contributions in relation to
the CDC (915,033) (651,809) (741,655) (876,406) (1,031,831) (868,219) Contribution deficiency
(excess) $ 576,101 $ 130,726 62,084$ $ - -$ -$
Covered-employee payroll 4,211,793 $ 3,926,264$ 4,325,247$ 3,579,723$ 3,613,652 $ 4,422,484 $ Contributions as a percentage
of covered-employee payroll 21.73% 16.60% 17.15% 24.48% 24.03% 23.33% 217

CITY OF DUARTE

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
- 57 -
Note 1: Budgets and Budgetary Accounting
The City adopts an annual budget prepared in accordance with accounting principles generally accepted in the United States of America and on the modified accrual basis of accounting for its governmental funds. The City Manager or designee is authorized to transfer budgeted amounts between the accounts of any department. Any revisions that alter the total appropriations of any department or fund must be approved by the City Council. Prior year appropriations lapse unless they are approved for carryover into the following fiscal year. Expenditures may not legally exceed appropriations at the fund level.
218

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

COMMUNITY IMPROVEMENT CAPITAL PROJECTS FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 330,180 $ 330,180 $ 330,180 $ - Resources (Inflows):

Intergovernmental 1,951,000 1,951,000 582,046 (1,368,954) Use of money and property 700 700 13,625 12,925
Amounts Available for Appropriations 2,281,880 2,281,880 925,851 (1,356,029) Charges to Appropriations (Outflows):

Transportation 150,000 150,000 - 150,000
Capital outlay 1,801,000 1,801,000 114,000 1,687,000
Total Charges to Appropriations 1,951,000 1,951,000 114,000 1,837,000 Budgetary Fund Balance, June 30 $ 330,880 $ 330,880 $ 811,851 $ 480,971 See Note to Required Supplementary Information
Budget Amounts
-58- 219

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2023
State Lighting Community Supplemental
Gasoline and Development Law
Tax Landscaping Block Grant Enforcement
Assets:

Pooled cash and investments $ 2,226,277 $ 198,955 $ - $ 11,613 Receivables:

Taxes 47,817 16,223 - -
Grants - - 37,681 -
Total Assets $ 2,274,094 $ 215,178 $ 37,681 $ 11,613
Liabilities and Fund Balances:

Liabilities:

Accounts payable $ 108,779 $ 118,533 $ 1,539 $ 11,613
Accrued liabilities - - - -
Retention payable 15,732 - 30,094 -
Due to other funds - - 6,048 -
Total Liabilities 124,511 118,533 37,681 11,613
Fund Balances:

Restricted for:

Development projects - 96,645 - -
Recreation and culture - - - -
Transportation 2,149,583 - - -
Unassigned - - - -
Total Fund Balances (deficits) 2,149,583 96,645 - -
Total Liabilities and Fund Balances $ 2,274,094 $ 215,178 $ 37,681 $ 11,613 (Continued)
Special Revenue Funds
-59- 220

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2023
Prop
Air Quality Measure Quimby A
Management M Act Transit
Assets:

Pooled cash and investments $ 143,745 $ 1,081,960 $ 68,861 $ 1,012,308 Receivables:

Taxes - - - -
Grants 7,090 - - -
Total Assets $ 150,835 $ 1,081,960 $ 68,861 $ 1,012,308 Liabilities and Fund Balances:

Liabilities:

Accounts payable $ - $ - $ - $ 63,118
Accrued liabilities - - - 297
Retention payable - - - -
Due to other funds - - - -
Total Liabilities - - - 63,415
Fund Balances:

Restricted for:

Development projects - - - -
Recreation and culture - - 68,861 -
Transportation 150,835 1,081,960 - 948,893
Unassigned - - - -
Total Fund Balances (deficits) 150,835 1,081,960 68,861 948,893 Total Liabilities and Fund Balances $ 150,835 $ 1,081,960 $ 68,861 $ 1,012,308 (Continued)
Special Revenue Funds
-60- 221

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2023
Prop Measure
Housing C R LR
Authority Transit PEG Transit
Assets:

Pooled cash and investments $ 2,053,300 $ 313,161 $ 34,858 $ 679,832 Receivables:

Taxes - - - -
Grants - - 7,666 -
Total Assets $ 2,053,300 $ 313,161 $ 42,524 $ 679,832
Liabilities and Fund Balances:

Liabilities:

Accounts payable $ - $ 51,962 $ 1,256 $ -
Accrued liabilities - 243 - -
Retention payable - - - 27,584
Due to other funds - - - -
Total Liabilities - 52,205 1,256 27,584
Fund Balances:

Restricted for:

Development projects 2,053,300 - 41,268 -
Recreation and culture - - - -
Transportation - 260,956 - 652,248
Unassigned - - - -
Total Fund Balances (deficits) 2,053,300 260,956 41,268 652,248 Total Liabilities and Fund Balances $ 2,053,300 $ 313,161 $ 42,524 $ 679,832 (Continued)
Special Revenue Funds
-61- 222

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2023
Bicycle Low and
Park Measure SB1/ and Moderate
Dev W RMRA Pedestrian Housing
Assets:

Pooled cash and investments $ - $ 342,985 $ 865,741 $ - $ 3,218,326 Receivables:

Taxes - - - - -
Grants 14,146 - 84,772 - -
Land held for resale - - - - 881,753
Total Assets $ 14,146 $ 342,985 $ 950,513 $ - $ 4,100,079 Liabilities and Fund Balances:

Liabilities:

Accounts payable $ 10,818 $ - $ 88,196 $ - $ -
Accrued liabilities - - - - -
Retention payable - - 19,649 - -
Due to other funds 22,136 - - - -
Total Liabilities 32,954 - 107,845 - -
Fund Balances:

Restricted for:

Development projects - 342,985 - - 4,100,079
Recreation and culture - - - - -
Transportation - - 842,668 - -
Unassigned (18,808) - - - -
Total Fund Balances (deficits) (18,808) 342,985 842,668 - 4,100,079 Total Liabilities and Fund Balances $ 14,146 $ 342,985 $ 950,513 $ - $ 4,100,079 (Continued)
Special Revenue Funds
-62- 223

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2023
Capital
Project Town Total
Fund Center Infrastructure Nonmajor
Inclusionary Debt Debt Governmental
Housing Service Service Funds
Assets:

Pooled cash and investments $ 538,092 $ - $ - $ 12,790,014 Receivables:

Taxes - - - 64,040
Grants - - - 151,355
Land held for resale - - - 881,753
Total Assets $ 538,092 $ - $ - $ 13,887,162
Liabilities and Fund Balances:

Liabilities:

Accounts payable $ - $ - $ - $ 455,814
Accrued liabilities - - - 540
Retention payable - - - 93,059
Due to other funds - - - 28,184
Total Liabilities - - - 577,597
Fund Balances:

Restricted for:

Development projects 538,092 - - 7,172,369
Recreation and culture - - - 68,861
Transportation - - - 6,087,143
Unassigned - - - (18,808)
Total Fund Balances (deficits) 538,092 - - 13,309,565
Total Liabilities and Fund Balances $ 538,092 $ - $ - $ 13,887,162 Debt Service Funds
-63- 224

CITY OF DUARTE

COMBINING STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES (DEFICITS)

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
State Lighting Community Supplemental
Gasoline and Development Law
Tax Landscaping Block Grant Enforcement
Revenues:

Assessments $ - $ 1,001,446 $ - $ -
Intergovernmental 548,865 - 638,865 165,271
Charges for services - - - -
Use of money and property 40,616 - - 655
Miscellaneous - 24,700 - -
Total Revenues 589,481 1,026,146 638,865 165,926
Expenditures:

Current:

Safety - - - 165,926
Development - 1,224,998 - -
Transportation 555,642 - - -
Capital outlay - - 637,102 -
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total Expenditures 555,642 1,224,998 637,102 165,926
Excess (Deficiency) of Revenues
Over (Under) Expenditures 33,839 (198,852) 1,763 -
Other Financing Sources:
(Uses):

Transfers in - 536,121 - -
Transfers out (111,129) (343,200) - -
Total Other Financing
Sources (Uses) (111,129) 192,921 - -
Net Changes in Fund Balances (77,290) (5,931) 1,763 -
Fund Balances (Deficits),
Beginning of Fiscal Year 2,226,873 102,576 (1,763) -
Fund Balances (Deficits), End of
Fiscal Year $ 2,149,583 $ 96,645 $ - $ -
(Continued)
Special Revenue Funds
-64- 225

CITY OF DUARTE

COMBINING STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES (DEFICITS)

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Air Prop
Quality Measure Quimby A
Management M Act Transit
Revenues:

Assessments $ - $ - $ - $ -
Intergovernmental 35,119 396,784 - 563,991
Charges for services - - - -
Use of money and property 2,490 17,192 1,213 18,000
Miscellaneous - - - 19,696
Total Revenues 37,609 413,976 1,213 601,687
Expenditures:

Current:

Safety - - - -
Development - - - -
Transportation - - 467,758
Capital outlay 3,105 - - 46,646
Debt service:

Principal retirement 15,766 - - -
Interest and fiscal charges 443 - - -
Total Expenditures 19,314 - - 514,404
Excess (Deficiency) of Revenues
Over (Under) Expenditures 18,295 413,976 1,213 87,283
Other Financing Sources:
(Uses):

Transfers in - - - -
Transfers out - - - (46,800)
Total Other Financing
Sources (Uses) - - - (46,800)
Net Changes in Fund Balances 18,295 413,976 1,213 40,483 Fund Balances (Deficits),
Beginning of Fiscal Year 132,540 667,984 67,648 908,410 Fund Balances (Deficits), End of
Fiscal Year $ 150,835 $ 1,081,960 $ 68,861 $ 948,893
(Continued)
Special Revenue Funds
-65- 226

CITY OF DUARTE

COMBINING STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES (DEFICITS)

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Prop Measure
Housing C R LR
Authority Transit PEG Transit
Revenues:

Assessments $ - $ - $ - $ -
Intergovernmental - 467,814 - 350,760
Charges for services - - 31,951 -
Use of money and property 75,238 5,600 564 17,630
Miscellaneous - 16,114 - -
Total Revenues 75,238 489,528 32,515 368,390
Expenditures:

Current:

Safety - - - -
Development 22,327 - - -
Transportation - 379,556 - -
Capital outlay - 38,165 40,377 584,068
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total Expenditures 22,327 417,721 40,377 584,068
Excess (Deficiency) of Revenues
Over (Under) Expenditures 52,911 71,807 (7,862) (215,678) Other Financing Sources:
(Uses):

Transfers in - - - -
Transfers out - (38,101) - (116,814)
Total Other Financing
Sources (Uses) - (38,101) - (116,814)
Net Changes in Fund Balances 52,911 33,706 (7,862) (332,492) Fund balances (Deficits),
Beginning of Fiscal Year 2,000,389 227,250 49,130 984,740 Fund Balances (Deficits), End of
Fiscal Year $ 2,053,300 $ 260,956 $ 41,268 $ 652,248
(Continued)
Special Revenue Funds
-66- 227

CITY OF DUARTE

COMBINING STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES (DEFICITS)

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Bicycle Low and
Park Measure SB1/ and Moderate
Dev W RMRA Pedestrian Housing
Revenues:

Assessments $ - $ - $ - $ - $ -
Intergovernmental 19,294 252,208 483,777 - -
Charges for services - - - - -
Use of money and property - 3,839 17,332 - 56,742
Miscellaneous - - - - -
Total Revenues 19,294 256,047 501,109 - 56,742
Expenditures:

Current:

Safety - - - - -
Development - 89,764 - - 8,495
Transportation - - - - -
Capital outlay 38,102 14,055 417,482 - -
Debt service:

Principal retirement - - - - -
Interest and fiscal charges - - - - -
Total Expenditures 38,102 103,819 417,482 - 8,495
Excess (Deficiency) of Revenues
Over (Under) Expenditures (18,808) 152,228 83,627 - 48,247 Other Financing Sources:
(Uses):

Transfers in - - - 53 -
Transfers out - - (83,560) - -
Total Other Financing
Sources (Uses) - - (83,560) 53 -
Net Changes in Fund Balances (18,808) 152,228 67 53 48,247 Fund balances (Deficits),
Beginning of Fiscal Year - 190,757 842,601 (53) 4,051,832 Fund Balances (Deficits), End of
Fiscal Year $ (18,808) $ 342,985 $ 842,668 $ - $ 4,100,079 (Continued)
Special Revenue Funds
-67- 228

CITY OF DUARTE

COMBINING STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES (DEFICITS)

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Capital
Project Total
Fund Town Infrastructure Nonmajor
Inclusionary Center Debt Debt Governmental
Housing Service Service Funds
Revenues:

Assessments $ - $ - $ - $ 1,001,446
Intergovernmental - - - 3,922,748
Charges for services - - - 31,951
Use of money and property 9,483 71 - 266,665
Miscellaneous - - - 60,510
Total Revenues 9,483 71 - 5,283,320
Expenditures:

Current:

Safety - - - 165,926
Development - - - 1,345,584
Transportation - - - 1,402,956
Capital outlay - - - 1,819,102
Debt service:

Principal retirement - 74,764 161,834 252,364
Interest and fiscal charges - 751 59,003 60,197
Total Expenditures - 75,515 220,837 5,046,129
Excess (Deficiency) of Revenues
Over (Under) Expenditures 9,483 (75,444) (220,837) 237,191 Other Financing Sources:
(Uses):

Transfers in - - 220,837 757,011
Transfers out - (34,188) - (773,792)
Total Other Financing
Sources (Uses) - (34,188) 220,837 (16,781)
Net Changes in Fund Balances 9,483 (109,632) - 220,410
Fund balances (Deficits),
Beginning of Fiscal Year 528,609 109,632 - 13,089,155
Fund Balances (Deficits), End of
Fiscal Year $ 538,092 $ - $ - $ 13,309,565
Debt Service Funds
-68- 229

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

STATE GASOLINE TAX
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 2,226,873 $ 2,226,873 $ 2,226,873 $ - Resources (Inflows):

Intergovernmental 625,600 625,600 548,865 (76,735)
Use of money and property 2,800 2,800 40,616 37,816
Amounts Available for Appropriations 2,855,273 2,855,273 2,816,354 (38,919) Charges to Appropriations (Outflows):

Transportation 591,000 724,000 555,642 168,358
Capital outlay 10,000 10,000 - 10,000
Transfers out 120,200 147,200 111,129 36,071
Total Charges to Appropriations 721,200 881,200 666,771 214,429 Budgetary Fund Balance, June 30 $ 2,134,073 $ 1,974,073 $ 2,149,583 $ 175,510 Budget Amounts
-69- 230

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

LIGHTING AND LANDSCAPING
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 102,576 $ 102,576 $ 102,576 $ - Resources (Inflows):

Assessments 986,500 986,500 1,001,446 14,946
Miscellaneous - 25,000 24,700 (300)
Transfers in 550,300 625,300 536,121 (89,179)
Amounts Available for Appropriations 1,639,376 1,739,376 1,664,843 (74,533) Charges to Appropriations (Outflows):

Development 1,245,100 1,345,100 1,224,998 120,102
Transfers out 343,200 343,200 343,200 -
Total Charges to Appropriations 1,588,300 1,688,300 1,568,198 120,102 Budgetary Fund Balance, June 30 $ 51,076 $ 51,076 $ 96,645 $ 45,569 Budget Amounts
-70- 231

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

COMMUNITY DEVELOPMENT BLOCK GRANT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance (Deficit), July 1 $ $ (1,763) (1,763) $ (1,763) $ - Resources (Inflows):

Intergovernmental 750,000 750,000 638,865 (111,135)
Amounts Available for Appropriations 748,237 748,237 637,102 (111,135) Charges to Appropriations (Outflows):

Capital outlay 750,000 750,000 637,102 112,898
Total Charges to Appropriations 750,000 750,000 637,102 112,898 Budgetary Fund Balance, June 30 $ (1,763) $ (1,763) $ - $ 1,763 Budget Amounts
-71- 232

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

SUPPLEMENTAL LAW ENFORCEMENT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ - $ - $ - $ -
Resources (Inflows):

Intergovernmental 160,000 160,000 165,271 5,271
Use of money and property 100 100 655 555
Amounts Available for Appropriations 160,100 160,100 165,926 5,826 Charges to Appropriations (Outflows):

Safety 160,100 160,100 165,926 (5,826)
Total Charges to Appropriations 160,100 160,100 165,926 (5,826) Budgetary Fund Balance, June 30 $- $ - $ - $ -
Budget Amounts
-72- 233

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

AIR QUALITY MANAGEMENT DISTRIBUTION
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 132,540 $ 132,540 $ 132,540 $ - Resources (Inflows):

Intergovernmental 28,000 28,000 35,119 7,119
Use of money and property 200 200 2,490 2,290
Amounts Available for Appropriations 160,740 160,740 170,149 9,409 Charges to Appropriations (Outflows):

Capital outlay 4,191 4,191 3,105 1,086
Debt service:

Principal retirement 15,766 15,766 15,766 -
Interest and fiscal charges 443 443 443 -
Total Charges to Appropriations 20,400 20,400 19,314 1,086 Budgetary Fund Balance, June 30 $ 140,340 $ 140,340 $ 150,835 $ 10,495 Budget Amounts
-73- 234

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

MEASURE M
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 667,984 $ 667,984 $ 667,984 $ - Resources (Inflows):

Intergovernmental 369,100 369,100 396,784 27,684
Use of money and property 500 500 17,192 16,692
Amounts Available for Appropriations 1,037,584 1,037,584 1,081,960 44,376 Budgetary Fund Balance, June 30 $ 1,037,584 $ 1,037,584 $ 1,081,960 $ 44,376 Budget Amounts
.
-74- 235

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

QUIMBY ACT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 67,648 $ 67,648 $ 67,648 $ - Resources (Inflows):

Use of money and property 100 100 1,213 1,113
Amounts Available for Appropriations 67,748 67,748 68,861 1,113 Budgetary Fund Balance, June 30 $ 67,748 $ 67,748 $ 68,861 $ 1,113 Budget Amounts
-75- 236

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

PROPOSITION A TRANSIT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 908,410 $ 908,410 $ 908,410 $ - Resources (Inflows):

Intergovernmental 561,500 561,500 563,991 2,491
Use of money and property 1,600 1,600 18,000 16,400
Miscellaneous - - 19,696 19,696
Amounts Available for Appropriations 1,471,510 1,471,510 1,510,097 38,587 Charges to Appropriations (Outflows):

Transportation 414,300 470,900 467,758 3,142
Capital outlay 46,700 46,700 46,646 54
Transfers out 46,800 46,800 46,800 -
Total Charges to Appropriations 507,800 564,400 561,204 3,196 Budgetary Fund Balance, June 30 $ 963,710 $ 907,110 $ 948,893 $ 41,783 Budget Amounts
-76- 237

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

HOUSING AUTHORITY
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 2,000,389 $ 2,000,389 $ 2,000,389 $ - Resources (Inflows):

Use of money and property 2,000 2,000 75,238 73,238
Amounts Available for Appropriations 2,002,389 2,002,389 2,075,627 73,238 Charges to Appropriations (Outflows):

Development 90,200 90,200 22,327 67,873
Total Charges to Appropriations 90,200 90,200 22,327 67,873 Budgetary Fund Balance, June 30 $ 1,912,189 $ 1,912,189 $ 2,053,300 $ 141,111 Budget Amounts
.
-77- 238

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

PROPOSITION C TRANSIT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 227,250 $ 227,250 $ 227,250 $ - Resources (Inflows):

Intergovernmental 434,200 434,200 467,814 33,614
Use of money and property 400 400 5,600 5,200
Miscellaneous - - 16,114 16,114
Amounts Available for Appropriations 661,850 661,850 716,778 54,928 Charges to Appropriations (Outflows):

Transportation 342,400 382,400 379,556 2,844
Capital outlay 38,200 38,200 38,165 35
Transfers out 38,100 38,100 38,101 (1)
Total Charges to Appropriations 418,700 458,700 455,822 2,878 Budgetary Fund Balance, June 30 $ 243,150 $ 203,150 $ 260,956 $ 57,806 Budget Amounts
-78- 239

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE
PEG
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 49,130 $ 49,130 $ 49,130 $ - Resources (Inflows):

Charges for services 33,000 33,000 31,951 (1,049)
Use of money and property - - 564 564
Amounts Available for Appropriations 82,130 82,130 81,645 (485) Charges to Appropriations (Outflow):

Capital outlay - 45,000 40,377 4,623
Total Charges to Appropriations - 45,000 40,377 4,623
Budgetary Fund Balance, June 30 $ 82,130 $ 37,130 $ 41,268 $ 4,138 Budget Amounts
-79- 240

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

MEASURE R LR TRANSIT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 984,740 $ 984,740 $ 984,740 $ - Resources (Inflows):

Intergovernmental 325,700 325,700 350,760 25,060
Use of money and property 1,700 1,700 17,630 15,930
Amounts Available for Appropriations 1,312,140 1,312,140 1,353,130 40,990 Charges to Appropriations (Outflows):

Capital outlay 550,000 582,000 584,068 (2,068)
Transfers out 110,000 116,000 116,814 (814)
Total Charges to Appropriations 660,000 698,000 700,882 (2,882) Budgetary Fund Balance, June 30 $ 652,140 $ 614,140 $ 652,248 $ 38,108 Budget Amounts
-80- 241

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

PARK DEVELOPMENT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ - $ - $ - $ -
Resources (Inflows):

Intergovernmental 576,000 576,000 19,294 (556,706)
Amounts Available for Appropriations 576,000 576,000 19,294 (556,706) Charges to Appropriations (Outflow):

Capital outlay 576,000 576,000 38,102 537,898
Total Charges to Appropriations 576,000 576,000 38,102 537,898 Budgetary Fund Balance (Deficit), June 30 $ - $ - $ (18,808) $ (18,808) Budget Amounts
-81-
242

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

MEASURE W
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 190,757 $ 190,757 $ 190,757 $ - Resources (Inflows):

Intergovernmental 250,000 250,000 252,208 2,208
Use of money and property - - 3,839 3,839
Amounts Available for Appropriations 440,757 440,757 446,804 6,047 Charges to Appropriations (Outflows):

Development 14,000 14,000 89,764 (75,764)
Capital outlay 400,000 400,000 14,055 385,945
Total Charges to Appropriations 414,000 414,000 103,819 310,181 Budgetary Fund Balance, June 30 $ 26,757 $ 26,757 $ 342,985 $ 316,228 Budget Amounts
-82- 243

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE
SB1/RMRA
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 842,601 $ 842,601 $ 842,601 $ - Resources (Inflows):

Intergovernmental 489,100 489,100 483,777 (5,323)
Use of money and property 600 600 17,332 16,732
Amounts Available for Appropriations 1,332,301 1,332,301 1,343,710 11,409 Charges to Appropriations (Outflows):

Capital outlay 400,000 473,644 417,482 56,162
Transfers out 80,000 80,000 83,560 (3,560)
Total Charges to Appropriations 480,000 553,644 501,042 52,602 Budgetary Fund Balance, June 30 $ 852,301 $ 778,657 $ 842,668 $ 64,011 Budget Amounts
-83- 244

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

BICYCLE AND PEDESTRIAN
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Budgetary Fund Balance (Deficit), July 1 $ (53) $ (53) $ (53) $ - Resources (Inflows):

Transfers in 20,200 20,200 53 (20,147)
Amounts Available for Appropriations 20,147 20,147 - (20,147) Charges to Appropriations (Outflow):

Capital outlay 20,200 20,200 - 20,200
Total Charges to Appropriations 20,200 20,200 - 20,200
Budgetary Fund Balance (Deficit), June 30 $ (53) $ (53) $ - $ 53 Budget Amounts
-84- 245

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

LOW AND MODERATE HOUSING
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 4,051,832 $ 4,051,832 $ 4,051,832 $- Resources (Inflows):

Use of money and property 5,700 5,700 56,742 51,042
Amounts Available for Appropriations 4,057,532 4,057,532 4,108,574 51,042 Charges to Appropriations (Outflows):

Development 8,600 8,600 8,495 105
Total Charges to Appropriations 8,600 8,600 8,495 105
Budgetary Fund Balance, June 30 $ 4,066,132 $ 4,048,932 $ 4,100,079 $ 51,147 Budget Amounts
-85-
246

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

INCLUSIONARY HOUSING
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 528,609 $ 528,609 $ 528,609 $ - Resources (Inflows):

Use of money and property 700 700 9,483 8,783
Amounts Available for Appropriations 529,309 529,309 538,092 8,783 Budgetary Fund Balance, June 30 $ 529,309 $ 529,309 $ 538,092 $ 8,783 Budget Amounts
.
-86- 247

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

TOWN CENTER
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 109,632 $ 109,632 $ 109,632 $ - Resources (Inflows):

Use of money and property - - 71 71
Amounts Available for Appropriations 109,632 109,632 109,703 71 Charges to Appropriations (Outflows):

Principal retirement 800 75,000 74,764 236
Interest and fiscal charges 2,500 2,500 751 1,749
Transfers out - - 34,188 (34,188)
Total Charges to Appropriations 3,300 77,500 109,703 (32,203) Budgetary Fund Balance, June 30 $ 106,332 $ 32,132 $ - $ (32,132) Budget Amounts
-87- 248

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

INFRASTRUCTURE
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ - $ - $ - $ -
Resources (Inflows):

Transfers in 220,900 220,900 220,837 (63)
Amounts Available for Appropriations 220,900 220,900 220,837 (63) Charges to Appropriations (Outflows):

Principal retirement 161,900 161,900 161,834 66
Interest and fiscal charges 59,000 59,000 59,003 (3)
Total Charges to Appropriations 220,900 220,900 220,837 63 Budgetary Fund Balance, June 30 $- $ - $ - $ -
Budget Amounts
-88- 249
ITEM: 10.B
Consideration of a Professional Services Agreement with Magellan Advisors, LLC for Consulting Services for the Broadband Access and Connectivity Infrastructure Assessment Recommended Action:

It is recommended that the City Council authorize the City Manager to approve a Professional Services Agreement with Magellan Advisors, LLC, in the amount not to exceed $200,000 to conduct a Broadband Access and Connectivity Infrastructure Assessment.

Attachments:
10B - PSA for Magellan Advisors.pdf
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2 assessments throughout Southern California. Moreover, Magellan is currently working with the San Gabriel Valley Council of Governments (“SGVCOG”) to conduct its own regional assessment.

The study will develop a gap analysis, identifying key issues and barriers related to ensuring that Duarte has reliable, equitable, and affordable broadband access as well as include recommendations to fill those gaps. The gap analysis will include conducting the following tasks:
• Comprehensive asset inventory of broadband assets.
• Market analysis identifying the services available to businesses and residents, as well as service pricing.
• Needs assessment including an online broadband survey of services residents and businesses currently have, an embedded speed test, and use of services. Interviews and workshops will also be hosted by Magellan with key community organizations to gain a better understanding of current and future broadband and technology needs and issues. • Identifying key local and regional public and private agencies to collaborate to increase marketability, investments and partnerships to expand broadband services to underserved businesses and residents.

In addition to developing a gap analysis, Magellan will also review City policies and recommend what policies can be made to align with current best practices to increase broadband infrastructure.

To assist in addressing identified needs from the gap analysis, Magellan will develop a conceptual network design that includes the locations and type of infrastructure needed to address those needs.

The design will leverage existing infrastructure and planned projects as well as include recommended new infrastructure such as fiber optic and wireless technologies to address community needs. Included in this design is the feasibility and cost associated with implementation. Magellan will also conduct a business model analysis to recommend Duarte’s role in developing the network as well as identify potential funding sources and opportunities to partner with neighboring and regional agencies to realize the network design.

It is anticipated that the work will be completed in approximately eight months after the kickoff meeting. The schedule assumes high engagement when surveying the community during the needs assessment portion of the study.

Per Chapter 2.36.080 of the Duarte Municipal Code (Purchase of Professional Services), purchasing professional services is exempt from the purchasing requirement set forth in Chapter

2.36.040. Rather, “The selection of a firm for professional services will be made by qualificationsbased selection.” Magellan was selected as the preferred firm to conduct the study due to its extensive experience in developing broadband strategies and assessments, prominent presence working with various agencies in Southern California (cities, counties, and council of governments), and the synergy created working with the firm currently conducting the SGVCOG study.
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3 RECOMMENDATION
It is recommended that the City Council authorize the City Manager to approve a Professional Services Agreement with Magellan Advisors, LLC, in the amount not to exceed $200,000 to conduct a Broadband Access and Connectivity Infrastructure Assessment.

FISCAL IMPACT
If approved, preparation of this study would cost $199,695. $200,000 was included in the FY 2023-24 Budget for the preparation of this study (Account No. 1010-7965). The entire expense will be covered by funds awarded from the State Department of Technology.

ATTACHMENTS
Professional Services Agreement
Magellan Advisors, LLC Proposal
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CITY OF DUARTE

AGREEMENT FOR PROFESSIONAL SERVICES
THIS AGREEMENT FOR PROFESSIONAL SERVICES (“Agreement”) is made and effective as of December 12, 2023 (“Effective Date”), by and between the City of Duarte (“City”), and Magellan Advisors, LLC wholly owned subsidiary of EN Engineering, LLC a Florida limited liability company, (“Consultant”). City and Consultant may sometimes herein be referred to individually as a “Party” and collectively as the “Parties.” In consideration of the mutual covenants and conditions set forth herein, and for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Parties agree as follows:

1. RECITALS
The City wishes to engage the services of Consultant to provide broadband needs assessment services as described further in this Agreement. Consultant wishes to provide all such services and has the necessary expertise and competency to provide such services.

2. TERM
This Agreement shall commence on the Effective Date and shall remain and continue in effect until June 30, 2024 or until the tasks listed in the Scope of Services are completed, whichever is later, unless sooner terminated pursuant to the provisions of this Agreement. The term may be extended upon execution of a written amendment between the Parties.

3. SERVICES AND PERFORMANCE
A. In compliance with all terms and conditions of this Agreement, Consultant shall provide services more particularly described in the “Scope of Services,” which is attached hereto and incorporated herein by this reference as Exhibit A. The services may be referred to herein as the “Services” or “Work.” In the event of any inconsistency between the terms of Exhibit A and this Agreement, the terms of this Agreement shall govern.

B. As a material inducement to City entering into this Agreement, Consultant represents and warrants that Consultant is a provider of first-class work and services, and Consultant is experienced in performing the type of work and services contemplated herein. The minimum standard of care for all professional services performed or furnished by Consultant under this Agreement will be the care and skill ordinarily used by members of the subject profession practicing under similar circumstances at the same time and in the same locality. Consultant represents that the Services will be performed by Consultant or under its direct supervision, and that all personnel engaged in such Work shall be fully qualified and shall be authorized and permitted under applicable Federal, State, and local law to perform such Work. Consultant shall pay all wages, salaries, and other amounts due to such personnel in connection with their performance of the Services and as required by law
C. The experience, knowledge, capability, and reputation of Consultant, its principals, and employees were a substantial inducement for City to enter into this Agreement. Therefore, without the prior written approval of City, which may be given or withheld at City’s sole and 254
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absolute discretion, Consultant shall not (i) contract with any other entity to perform in whole or in part the Services required hereunder; or (ii) transfer, assign, convey, or encumber (voluntarily or by operation of law) any or all of this Agreement.

D. Consultant shall obtain and maintain at its sole cost and expense such licenses, permits, and approvals as may be required by law for the performance of the Services required by this Agreement prior to the commencement of Services. Consultant shall have the sole obligation to pay for any fees, assessments, and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for Consultant’s performance of the Services, and shall indemnify, defend, and hold harmless City and its elected and appointed officials, boards, members, officers, agents, representatives, employees, and volunteers (“City Personnel”) against any such fees, assessments, taxes, penalties, or interest levied, assessed, or imposed against City related to the Services.

E. Consultant shall provide all Services rendered hereunder in accordance with all ordinances, resolutions, statutes, rules, and regulations of City and any Federal, State, or local governmental agency having jurisdiction in effect at the time Service is rendered. Each and every provision required by law to be included in this Agreement shall be deemed to be included, and this Agreement shall be read and enforced as though they were included.

F. Consultant shall assume all costs arising from the use of patented or copyrighted materials, including, but not limited to, equipment, devices, processes, and software programs, used or incorporated in the Services or Work performed by Consultant under this Agreement.

Pursuant to Paragraph 7, Consultant shall indemnify, defend (with legal counsel acceptable to City), and hold City and City Personnel harmless from any and all suits, actions, or proceedings of every nature for or on account of the use of any patented or copyrighted materials.

G. Consultant shall not subcontract the performance of any of the Services without the prior written approval of City.

H. The Parties have determined that prevailing wage laws do not apply to this Agreement because the Services do not include construction, alteration, demolition, installation, or repair work or are other otherwise exempt under California’s prevailing wage laws (California Labor. Code section 1720 et seq.). Notwithstanding the foregoing, it is agreed by the Parties that, in connection with performance of the Services, including, without limitation, any and all “public works” (as defined by applicable law), Consultant shall bear all risks of payment or non-payment of prevailing wages under California law and/or the implementation of California Labor Code section 1781, as the same may be amended from time to time, and/or any other similar law.

Pursuant to Paragraph 7, Consultant shall indemnify, defend (with legal counsel acceptable to City), and hold City and City Personnel harmless from and against any liability, loss, damage, cost, or expenses (including but not limited to reasonable attorneys’ fees, expert witness fees, court costs, and costs incurred related to any inquiries or proceedings) arising from or related to (i) the noncompliance by Consultant or any party performing the Services of any applicable local, State, and/or Federal law, including, without limitation, any applicable Federal and/or State labor laws (including, without limitation, the requirement to pay State prevailing wages and hire apprentices); (ii) the implementation of California Labor Code section 1781, as the same may be amended from time to time, or any other similar law; and/or (iii) failure by Consultant or any party performing 255
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the Services on Consultant’s behalf to provide any required disclosure or identification as required by California Labor Code section 1781, as the same may be amended from time to time, or any other similar law.

4. MANAGEMENT
City’s Assistant to the City Manager shall represent City in all matters pursuant to the administration of this Agreement and review the Services performed by Consultant. The City Manager shall have the authority, subject to the limitations set forth in Paragraph 5, to enlarge the Scope of Services or increase the compensation due to Consultant. Consultant’s official representative in the administration of this Agreement shall be Jory Wolf, VP of Digital Innovation, who shall have the authority to make all decisions for Consultant and bind Consultant to the terms of this Agreement.

5. COMPENSATION
A. City agrees to pay Consultant an amount not to exceed $200,000, based on the Scope of Services set forth in Exhibit A.

B. Consultant shall not be compensated for any Services rendered in connection with its performance of this Agreement that are in addition to those set forth herein, unless such additional services are authorized in advance, and in writing, by the City Manager. Consultant shall be compensated for any additional services in the amounts and in the manner as agreed to by City Manager and Consultant at the time City’s written authorization is given. Unless otherwise agreed to by the Parties in writing, all provisions in this Agreement applicable to Consultant’s performance of the Services shall also apply to any additional services.

C. Consultant shall be paid monthly and shall submit monthly invoices/reports to City, within ten (10) days following the end of each month, showing actual Services performed. Invoices shall include billings for all charges, including authorized direct costs incurred by Consultant during the month covered by the invoice. Consultant shall be paid on the next regular Council warrant after all required paperwork is submitted. If City disputes whether Consultant has earned its fee or any portion, City shall give written notice to Consultant within thirty (30) days of receipt of Consultant’s monthly invoice/report stating the basis for such dispute.

6. SUSPENSION OR TERMINATION OF AGREEMENT
A. City may at any time, for any reason, with or without cause, suspend or terminate this Agreement, or any portion hereof, by serving written notice upon Consultant. Upon receipt of said notice, Consultant shall immediately cease all Work under this Agreement, unless the notice provides otherwise. In the event this Agreement is suspended or terminated pursuant to this subparagraph (A), Consultant shall submit a final invoice/report to City pursuant to Paragraph 4, and City shall be entitled to receive a return of the fee paid to Consultant, or portion thereof, if the reason for the termination is failure by Consultant to have timely performed the Services set forth in Exhibit A. In City’s sole and absolute discretion, prior to effecting a suspension or termination pursuant to this subparagraph (A), City may first serve upon Consultant a written notice of the default specifying the default and the amount of time that Consultant shall have to cure, correct, or remedy the default. If Consultant fails to cure the default within the specified period of time, 256
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City shall have the right to immediately terminate this Agreement pursuant to this subparagraph (A). Notwithstanding any other provision of this Agreement to the contrary, City’s termination of this Agreement pursuant to this subparagraph (A) shall not preclude or prejudice any other remedy to which City may be entitled in law or in equity.

B. Consultant may terminate this Agreement only due to a material breach by City, and only upon not less than thirty (30) days’ prior written notice to City which notice shall specify the material default. Upon receipt of such notice, City may, but shall not be obligated to, effect to remedy such default, which remedy will cause the notice of termination to no longer apply, and this Agreement to continue in effect.

7. RECORDS AND OWNERSHIP OF DOCUMENTS
A. Consultant shall maintain complete and accurate records with respect to costs, expenses, receipts, and other such information required by City that relate to the performance of Services under this Agreement. Consultant shall maintain adequate records of Services provided in sufficient detail to produce an evaluation of Services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Consultant shall provide free access to the representatives of City or its designees at reasonable times to such books and records; shall give City the right to examine and audit said books and records; shall permit City to make transcripts therefrom as necessary; and shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a period of six (6) years after receipt of final payment.

B. Upon completion of, or in the event of termination or suspension of this Agreement, all original documents, computer files, surveys, notes, and other documents prepared in the course of providing the Services to be performed pursuant to this Agreement (“Work Product”) shall become the sole property of City and may be used, reused, or otherwise disposed of by City without the permission of Consultant. Consultant shall provide such items to City promptly upon completion of this Agreement. City acknowledges that such Work Product is not intended or represented to be suitable for use unless completed by Consultant, or for use or reuse by City or others on extensions of the Services or Work under this Agreement, or for any other use or purpose, without written verification or adaptation by Consultant. Any such use, reuse, or any modification of the Work Product, without written verification, completion, or adaptation by Consultant, as appropriate for the specific purpose intended, will be at City’s sole risk and without liability or legal exposure to Consultant or to its officers, directors, members, partners, agents, employees, and consultants.

C. Any information gained by Consultant in the performance of this Agreement shall be considered confidential and such information and the reports, records, documents, and other materials prepared by Consultant in the performance of Services under this Agreement shall not be released publicly or to any other client of Consultant without the prior written approval of the City Manager.
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8. INDEMNIFICATION
A. To the fullest extent permitted by law, except as set forth in subparagraph (B), Consultant shall indemnify, defend (with legal counsel acceptable to City), and hold harmless City and City Personnel from and against any and all claims, actions, suits, claims, demands, judgments, attorneys’ fees, costs, damages, losses, penalties, obligations, expenses, or liabilities (“Claims”) that may be asserted or claimed by any person or entity arising out of, or pertaining to, Consultant’s negligence, recklessness, or willful misconduct, whether or not there is concurrent active or passive negligence on the part of City and/or any City Personnel, but excluding any Claims arising from the sole negligence or willful misconduct of City or any City Personnel. Consultant shall defend any action or actions filed in connection with any such claims or liabilities, and shall pay all costs and expenses, including attorneys’ fees incurred in connection therewith. Consultant shall promptly pay any judgment rendered against City or any City Personnel for any such claims or liabilities. In the event City and/or any City Personnel is made a party to any action or proceeding filed or prosecuted for any such Claims arising out of or in connection with the Work being performed or Services being provided under this Agreement, Consultant shall pay to City any and all costs and expenses incurred by City or City Personnel in such action or proceeding, together with reasonable attorneys’ fees and expert witness fees. Consultant’s duty to defend shall consist of reimbursement of defense costs incurred by City in direct proportion to the Consultant’s proportionate percentage of fault. Consultant’s percentage of fault shall be determined, as applicable, by a court of law, jury, or arbitrator. In the event any loss, liability, or damage is incurred by way of settlement or resolution without a court, jury, or arbitrator having made a determination of Consultant’s percentage of fault, the Parties agree to mediation with a neutral third-party to determine Consultant’s proportionate percentage of fault for purposes of determining the amount of indemnity and defense cost requirement owed to City.

B. The provisions of this subparagraph (B) apply only if Consultant is a “design professional” within the meaning of California Civil Code section 2782.8(c). If Consultant is a “design professional,” within the meaning of Section 2782.8(c), then notwithstanding subparagraph (A), to the fullest extent permitted by law (including, without limitation, California Civil Code sections 2782 and 2782.6), Consultant shall defend (with legal counsel acceptable to City), indemnify, and hold harmless City and City Personnel from and against any Claim that arises out of, pertains to, or relates to, directly or indirectly, in whole or in part, the negligence, recklessness, or willful misconduct of Consultant, any sub-consultant, subcontractor, or any other person directly or indirectly employed by them, or any person that any of them control, arising out of Consultant’s performance of any task or Service for or on behalf of City under this Agreement.

Such obligations to defend, hold harmless, and indemnify City or any City Personnel, shall not apply to the extent that such Claims are caused, in part, by the sole negligence or willful misconduct of City or City Personnel. Consultant’s cost to defend City and/or City Personnel against any such Claim shall not exceed Consultant’s proportionate percentage of fault with respect to that Claim; however, pursuant to California Civil Code section 2782.8(a), in the event that one or more of the defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Consultant shall meet and confer with City (and, if applicable, other parties) regarding any unpaid defense costs. To the extent Consultant has a duty to indemnify City or any City Personnel under this subparagraph (B), Consultant shall be responsible for all incidental and consequential damages resulting directly or indirectly, in whole or in part, from Consultant’s negligence, recklessness, or willful misconduct. 258
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C. Consultant hereby authorizes City to deduct from any amount payable to Consultant (whether arising out of this Agreement or otherwise) any amounts the payment of which may be in dispute hereunder or which are necessary to compensate City for any losses, costs, liabilities, or damages suffered by City, and all amounts for which City may be liable to third parties, by reason of Consultant’s negligent acts, errors, omissions, or willful misconduct, in performing or failing to perform Consultant’s obligations under this Agreement. City in its sole and absolute discretion, may withhold any payment due to Consultant, without liability for interest, an amount sufficient to cover such claim. The failure of City to exercise such right to deduct or withhold shall not act as a waiver of Consultant’s obligation to pay City any sums Consultant owes City.

9. INSURANCE
Without limiting Consultant’s indemnification obligations of City as set forth in this Agreement, and prior to the commencement of Work, Consultant shall obtain, provide, and maintain, at its own expense, during the entire term of this Agreement including any extension thereof, policies of insurance of the type and amounts described in Exhibit B and in a form satisfactory to City.

A. No Work or Services under this Agreement shall commence until Consultant has provided City with Certificates of Insurance evidencing the required insurance coverages and said Certificates of Insurance are reasonably approved by City. Certificates are to reflect that the insurer will provide thirty (30) days’ written notice to City of any cancellation of coverage. In the event any of said policies of insurance are reduced in limits or cancelled for any reason, Consultant shall, prior to the cancellation date, submit new evidence of insurance.

B. The provisions of any workers’ compensation or similar law will not limit the obligations of Consultant under this Agreement. Consultant expressly agrees not to use any statutory immunity defenses under such laws with respect to City, its employees, officials, and agents.

C. Consultant agrees to provide immediate notice to City of any claim or loss against Consultant arising out of the Work performed under this Agreement. City assumes no obligation or liability by such notice, but has the right to monitor the handling of any such claim or claims if they are likely to involve City.

D. The City’s Director of Administrative Services shall have the authority to adjust or amend the insurance requirements in Exhibit B of this Agreement so long as such amendment or adjustment is agreed to in writing by the Parties.

10. INDEPENDENT CONTRACTOR
A. Consultant is and shall at all times remain as to City a wholly independent contractor. The personnel performing the Services under this Agreement on behalf of Consultant shall at all times be under Consultant’s exclusive direction and control. Neither City nor any of its officers, officials, employees, or agents shall have control over the conduct of Consultant or any of Consultant’s officers, employees, or agents. Consultant shall not at any time or in any manner represent that it or any of its officers, employees, or agents is in any manner officers, officials, 259
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employees, or agents of City. Consultant shall not incur or have the power to incur any debt, obligation, or liability whatever against City, or bind City in any manner.

B. No City-provided 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 this Agreement, City shall not pay salaries, wages, or other compensation to Consultant for performing Services hereunder for City. City shall not be liable for compensation or indemnification to Consultant for injury or sickness arising out of performing Services hereunder.

11. NO UNDUE INFLUENCE
Consultant declares and warrants that no undue influence or pressure was or is used against or in concert with any officer or employee of City in connection with the award, terms, or implementation of this Agreement, including any method of coercion, confidential financial arrangement, or financial inducement. No officer or employee of City shall receive compensation, directly or indirectly, from Consultant, or from any officer, employee, or agent of Consultant, in connection with the award of this Agreement or any Work to be conducted as a result of this Agreement. Consultant further warrants that it has not employed or retained any company or person other than a bona fide employee working for Consultant, to solicit or secure this Agreement and that it has not paid or agreed to pay any company or person any fee, commission, percentage, brokerage fee, gift, or any other consideration contingent upon, or resulting from, the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to annul this Agreement without liability or, in its discretion, to deduct from this Agreement price or consideration, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift, or contingent fee.

12. NO BENEFIT TO ARISE TO LOCAL EMPLOYEES
No member, officer, or employee of City, or their designees or agents, and no public official who exercises authority over or has responsibilities with respect to this Agreement during his/her tenure or for one (1) year thereafter, shall have any interest, direct or indirect, in any agreement or sub-agreement, or the proceeds thereof, for Work to be performed in connection with the Services performed under this Agreement.

13. COVENANT AGAINST DISCRIMINATION
Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that in the performance of this Agreement there shall be no discrimination against or segregation of, any person or group of persons on account of any impermissible classification including, but not limited to, race, color, creed, religion, sex, gender, gender identity, gender expression, physical or mental disability, age, military status, marital or familial status, sexual orientation, national origin, or ancestry.

14. NONLIABILITY OF CITY OFFICERS AND EMPLOYEES
No City Personnel shall be personally liable to Consultant, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Consultant or to its successor, or for breach of any obligation of the terms of this Agreement. 260
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15. NOTICES
Any notices which either Party may desire to give or may be required to give to the other Party under this Agreement must be in writing and may be given either by (a) personal service; (b) delivery by a reputable document delivery service, such as but not limited to, Federal Express, which provides a receipt showing date and time of delivery; (c) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the Party as set forth below or at any other address as that Party may later designate by notice; or (d) e-mailing the notice to the e-mail addresses as set forth below:

If to City: City of Duarte
Attn: Andres Rangel
1600 Huntington Drive
Duarte, California 91010
If to Consultant: Magellan Advisors, LLC wholly owned subsidiary of EN Engineering
Attn: Jory Wolf
999 18th Street, Suite 3000
Denver, CA 80202

16. GOVERNING LAW; ATTORNEYS’ FEES; LITIGATION MATTERS
The internal laws of the State of California, without regard to principles of conflicts of laws, shall govern the interpretation of this Agreement. In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. Notwithstanding anything in this Agreement to the contrary, in no event shall Consultant be entitled to economic or consequential damages or to punitive damages. In the event of any litigation arising from or related to this Agreement, the prevailing Party shall be entitled to recover from the non-prevailing Party all reasonable costs incurred, including staff time, court costs, attorneys’ fees, expert witness fees, and other related expenses. The Superior Court of the County of Los Angeles shall have exclusive jurisdiction over any litigation between the Parties concerning this Agreement. Service of process on City shall be made in the manner required by law for service on a public entity. Service of process on Consultant shall be made in any manner permitted by law and shall be effective whether served inside or outside of California.

17. RIGHTS AND REMEDIES ARE CUMULATIVE; WAIVER
A. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.
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B. No delay or omission in the exercise of any right or remedy by a non-defaulting Party on any default shall impair such right or remedy or be construed as a waiver. No waiver by either Party of any of the provisions of this Agreement shall be effective unless explicitly set forth in writing and signed by the Party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Agreement shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.

18. SEVERABILITY
If any portion of this Agreement is found by a court of competent jurisdiction to be invalid, void, illegal, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way affect, impair, or invalidate any other term, covenant, or condition, or provision contained in this Agreement. Upon a determination that any term or provision is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this Agreement to give effect to the original intent of the Parties as closely as possible in order that the transactions contemplated hereby be performed as originally contemplated to the greatest extent possible.

19. INTERPRETATION; ENTIRE AGREEMENT
The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. This Agreement contains the entire understanding between the Parties relating to the obligations of the Parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, relating to the obligations of the Parties described in this Agreement, are merged into this Agreement and shall be of no further force or effect.

20. CONFLICTS OF INTEREST
Consultant represents, warrants, and covenants that he, she, or it presently has no interest, direct or indirect, which would interfere with or impair in any manner or degree the performance of Consultant’s obligations and responsibilities under this Agreement. Consultant further agrees that while this Agreement is in effect, Consultant shall not acquire or otherwise obtain any interest, direct or indirect, that would interfere with or impair in any manner or degree the performance of Consultant’s obligations and responsibilities under this Agreement. Consultant acknowledges that pursuant to the provisions of the Political Reform Act (California Government Code section 87100 et seq.), City may determine Consultant to be a “consultant” as that term is defined by the Political Reform Act. In the event City makes such a determination, Consultant agrees to complete and file a “Statement of Economic Interest” with the City Clerk to disclose such financial interests as required by City. In such event, Consultant further agrees to require any other person doing Work under this Agreement to complete and file a “Statement of Economic Interest” to disclose such other person’s financial interests as required by City. 262
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21. NO THIRD-PARTY BENEFICIARIES
This Agreement benefits solely the Parties to this Agreement and their respective permitted successors and assigns and nothing in this Agreement, express or implied, confers on any other person any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.

22. PARAGRAPH HEADINGS AND SUBHEADINGS
The paragraph headings and subheadings contained in this Agreement are included for convenience only and shall not limit or otherwise affect the terms of this Agreement.

23. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one and the same instrument.

24. EXECUTION OF CONTRACT
The persons executing this Agreement on behalf of each of the Parties represent and warrant that (i) such Party is duly organized and existing; (ii) they are duly authorized to execute and deliver this Agreement on behalf of said Party; (iii) by so executing this Agreement, such Party is formally bound to the provisions of this Agreement; and (iv) that entering into this Agreement does not violate any provision of any other Agreement to which said Party is bound.

25. CITY MANAGER AUTHORITY
City’s City Manager shall have the authority to make non-material changes, non-material amendments, or clerical edits to this Agreement on behalf of the City.

26. LIMITATION OF LIABILITY
WITH THE EXCEPTION OF CONSULTANT’S OBLIGATION TO INDEMNIFY CITY FOR THIRD PARTY CLAIMS PURSUANT TO ARTICLE 8 OF THIS AGREEMENT, NEITHER

CITY NOR CONSULTANT SHALL BE LIABLE TO THE OTHER FOR ANY PUNITIVE,

EXEMPLARY, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES,

WHETHER FORESEEN OR KNOWN IN ADVANCE BY EITHER PARTY, WHETHER

BASED IN CONTRACT, WARRANTY, TORT OR OTHER LEGAL THEORY, INCLUDING

BUT NOT LIMITED TO LOSS OF PROFIT, REVENUE, FINANCING, FUNDING,

BONDING, USE, PRODUCTIVITY OR EFFICIENCY, BUSINESS, EQUIPMENT, UTILITY

OR FACILITY INTERRUPTION, INEFFICIENCY OR SHUTDOWN, AND DAMAGE TO BUSINESS REPUTATION. WITH THE EXCEPTION OF CONSULTANT’S OBLIGATION TO INDEMNIFY CITY FOR THIRD PARTY CLAIMS PURSUANT TO ARTICLE 8 OF THIS

AGREEMENT, THE TOTAL AND AGGREGATE LIABILITY OF CONSULTANT FOR ANY

AND ALL CLAIMS, LOSSES, LIABILITIES, DAMAGES, JUDGMENTS AND AWARDS

ARISING OUT OF OR RELATED TO THE SERVICES, ORDERS OR THIS AGREEMENT

SHALL BE LIMITED TO THE GREATER OF THE APPLICABLE INSURANCE LIMITS 263
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REQUIRED TO BE MAINTAINED BY CONSULTANT UNDER THIS PROFESSIONAL SERVICES AGREEMENT OR $2,000,000.
[Signatures on following page.]
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IN WITNESS WHEREOF, the City Council of the City of Duarte caused the Agreement to be subscribed by its Mayor or City Manager and said Consultant has executed or caused this Agreement to be executed by its duly authorized officer(s).

CITY OF DUARTE
_________________________________
Brian Villalobos
City Manager
Date: _____________________________

CONSULTANT
_________________________________
_________________________________
By: ______________________________
Its: ______________________________
Date: _____________________________
ATTEST
_________________________________
City Clerk
Date: _____________________________

APPROVED AS TO FORM

RUTAN & TUCKER, LLP
_________________________________
City Attorney, City of Duarte
Date: _____________________________
SVP/Chief Management Officer
Dec. 5, 2023
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EXHIBIT A
Scope of Services
Infrastructure Broadband Assessment Proposal
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EXHIBIT B
Insurance Requirements
A. Insurance Required
(1) Commercial General Liability insurance in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage.
(2) Automobile Insurance covering bodily injury and property damage for all activities of Consultant arising out of or in connections with Work to be performed under this Agreement, including coverage for any owned, hired, non-owned, or rented vehicles in an amount not less than $1,000,000 combined single limit for each accident. (3) Workers’ Compensation Insurance providing statutory benefits as required by California law.
(4) Employer’s Liability Insurance with limits in an amount not less than $1,000,000.
(5) Professional Liability or Errors and Omissions Insurance designed to protect against acts, errors, or omissions of Consultant and “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy limit shall be no less than $1,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the Effective Date of this Agreement, and Consultant agrees to maintain continuous coverage through a period no less than three (3) years after completion of the Services required by this Agreement. (6) Cyber Technology Errors and Omissions Insurance with coverage of at least $1,000,000 per occurrence, $2,000,000 general aggregate. (7) Cyber Security and Privacy Liability Insurance with coverage of at least $1,000,000 per occurrence, $2,000,000 general aggregate.

B. All insurance policies required hereunder, except the workers’ compensation insurance, shall comply with the following requirements:
(1) All insurance shall be written by insurers that are admitted and licensed to do business in the State of California and with A.M. Best’s rating of A- or better and a minimum financial size VII in accordance with the latest edition of Best’s Key Rating Guide. (2) The policies shall be endorsed to include City and its officers, officials, employees, agents, and volunteers as additional insureds. (3) All of Consultant’s insurance: (i) shall contain no special limitations on the scope of protection afforded to the additional insureds; (ii) shall be primary insurance and any 267
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insurance or self-insurance maintained by the additional insureds or any of them shall be in excess of Consultant’s insurance and shall not contribute with it; (iii) shall be “occurrence” rather than “claims made” insurance; (iv) shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability; (v) shall prohibit Consultant from waiving the right of subrogation prior to a loss except for professional liability; and (vi) shall not contain any provision or definition that would serve to eliminate so-called “third party action over” claims, including any exclusion for bodily injury to an employee of the insured. (4) City reserves the right at any time during the term of this Agreement to change the amounts and types of insurance required by giving Consultant ninety (90) days’ advance written notice of such change.

C. Consultant shall renew the required coverage annually as long as City or its employees or agents face an exposure from Consultant’s operations pursuant to this Agreement.

Termination of this obligation shall survive the termination or expiration of this Agreement and shall not be effective until City executes a written statement to that effect. 268

RFP for Broadband Access and
Connectivity Infrastructure Assessment

CITY OF DUARTE, CA
Prepared for:

Andres Rangel
Assistant to the City Manager
[email protected]
Prepared by:

Jory Wolf
999 18th Street, Suite 3000
Denver, CO 80202
[email protected]
818-312-7768
Magellan Advisors, LLC

PROPOSAL
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2 Cover Letter
November 30, 2023
Andres Rangel
City of Duarte
Dear Andres,
Magellan is pleased to submit this proposal for the City of Duarte’s request for a Broadband Access and Connectivity Infrastructure Assessment. Our team of advisors has worked with agencies throughout California and around the US to help them develop and execute broadband strategies for their communities. Magellan has worked with several communities like Duarte to create actionable strategies that leverage existing infrastructure, develop strategic partnerships, create successful broadband policies and identify smart investments to enhance services and operations of government, businesses, education and healthcare institutions, including:
 County of Napa: Broadband Strategic Planning
 County of Sonoma: Broadband Feasibility
 County of Ventura: Broadband Master Planning
 City of Fremont: Broadband Master Planning
 City of South San Francisco: Broadband & Wireless Master Planning  City of Concord: Broadband Master Planning
 City of San Leandro: Broadband Master Planning
We strongly believe our experience makes us well suited to work extensively with your staff and departments as well as stakeholders in your communities to understand how the City can best use its unique capabilities and strengths to enhance the availability of broadband throughout the community. In this effort we will be focusing primarily on assessing, identifying and prioritizing un/underserved areas. We complement these efforts through conceptual designs, and cost estimates that detail the targeted areas and costs associated with providing service to those who are un/underserved.

Jory Wolf will be the main point of contact for this project. You can reach him directly at 818.312.7768 or [email protected]. Magellan will not be using any subcontractors for this project.

Sincerely,
Jory Wolf, VP of Digital Innovation, Magellan Advisors, LLC 270
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3 Statement of Qualifications

COMPANY PROFI LE
Magellan provides fiber engineering, consulting and network implementation to municipalities and utilities whose goal is to improve broadband in their communities. Over 400 municipalities, utilities and cooperatives have used Magellan to develop their fiber and broadband networks. Our mission is to connect every community, one at a time, to the digital economy so that no one is left behind. Our work ensures that communities can access every opportunity the internet has to offer so they can thrive in the connected world.

Our turnkey broadband solutions allow our clients to maintain a single partner that fulfils every aspect of planning and deploying broadband networks, with seasoned experts guiding their deployments every step of the way. Our success is based on our clients’ success and our fiber to the home solutions enable our clients to serve their citizens most pressing broadband needs in the digital age.
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5 RESUMES AND QUALIFI CATI ONS OF PERSONNEL
JORY WOLF, VP of Digital Innovation
Project Executive
Jory joined Magellan after 22 years as CIO of the City of Santa Monica, CA where he launched Santa Monica City Wi-Fi, which provides free internet services to the public through a network of 32 hot zones and wireless coverage in most major commercial and transit corridors throughout the city. He created Santa Monica City Net, a 100-gigabit broadband initiative to support an environment for local businesses to compete in the global economy with cutting edge network solutions. Jory has over 35 years of experience in Information Technology, including broadband, FTTH and Smart City initiatives. Jory and his teams have received over 50 awards for information technology projects during his career and in 2012 he received the CIO Lifetime Achievement Award from the Los Angeles Business Journal. Since joining Magellan Broadband in July 2016, Jory has led teams that have worked on 60+ government projects in broadband master planning, feasibility studies, wireless strategic planning, 5G small cell policies, dig once policies and smart city.

GREG LAUDEMAN
Director of Broadband and Smart City Consulting
Dr. Greg Laudeman is a leader in innovative, talent and technology-based economic development strategy, research, and implementation. Since 2015 he has managed broadband projects for Magellan with a keen eye for the economic opportunities that state of the art broadband availability brings to communities. With over 30 years of experience working in technology and tech startups, Greg brings a diverse background to community broadband to support economic development. Greg’s diverse experience as an analyst, communicator, facilitator, and organizer has always focused on how technology can make communities and organizations more competitive, innovative, and productive. For over a decade Greg led community technology outreach efforts for the Georgia Tech Enterprise Innovation Institute. Greg has a doctorate in Learning and Leadership from the University of Tennessee at Chattanooga, has master’s degrees in public policy from Georgia Tech and Telecommunications from Michigan State, and a bachelor’s degree in mass communication from UTC. 273
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6 GREG WHELAN
Senior Broadband Consultant
Greg is a subject matter expert in broadband, fiber, digital infrastructure, mobile, 5G, cloud/edge, tele-communications, and IoT. He was a pioneer in broadband and created the project the led to the first broadband modem chipset in the industry. He was a co-founder and vice president of the original Broadband Forum and participated in early international broadband standards organizations. He was part of the team that architecture one of the first Open Access Broadband networks in the USA and a was early in connecting private funding and open fiber networks in the USA. Prior to joining Magellan Broadband, he was an independent broadband industry analyst and advisor. Before that he led broadband marketing and products at Cisco Systems, Cascade Communications, Analog Devices and a number of start-ups in greater Boston.

AL KAMUDA
Design Team
Al Kamuda is a seasoned telecommunications and GIS professional with over 20 years’ experience in telecommunications engineering, mapping, design and outside plant construction.

Prior to joining Magellan, Al was the Senior Design Manager for the Central Florida region at Spectrum (Charter Communications), where he led the planning, project management and implementation of outside plant design for various company growth projects including residential, commercial, cellular backhaul and metro WIFI. His extensive experience with the telecommunications industry, CAD platforms and geospatial expertise along with his strategic forward thinking provides an extremely diverse skill set that allows him the valuable insight needed to understand the client’s objectives in all aspects of telecommunications construction and design processes.

ALEXANDER “SASHA” BURROWS
Project Management Analyst
Sasha joined Magellan after 3 years as a broadband advocate for the Broadband Consortium of the Pacific Coast in Southern California. Here he aided the Consortium in communicating the imperative of broadband infrastructure to local governments, communities, and businesses within the tri-county region of Ventura, Santa Barbara, and San Luis Obispo. Sasha’s broadband expertise ranges from communications to project management and development, to industry education, and advocacy. He is a forward thinker, passionate about smart city development, and realizes the imperative for broadband infrastructure as a foundation for smart solutions, improved communications, and efficiency. Sasha views broadband infrastructure as the 4th utility, deserved by all communities.
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7 RESUMES
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9 Greg Whelan

S E N I O R B R O A D B A N D C O N S U L T A N T

E D U C A T I O N
BS-Electrical Engineering
Cornell University
Ithaca, NY

E X P E R I E N C E
Greywale Advisors
Principal Advisor
MBA – Innovation Management
Northeastern University
Boston, MA
Boston, MA

P R O F I L E
Greg is a subject matter expert in broadband, fiber,
digital infrastructure, mobile, 5G, cloud/edge,telecommunications, and IoT. He was a pioneer in broadband and created the projectthe led to the first
broadband modem chipset in the industry. He was a
co-founder and vice president of the original
Broadband Forum and participated in early
international broadband standards organizations. He
was part of the team that architecture one of the first Open Access Broadband networks in the
USA and was early in connecting private funding and
open fiber networks in the USA. Prior to joining
Magellan Advisors, he was an independent
broadband industry analyst and advisor. Before that
he led broadband marketing and products at Cisco
Systems, Cascade Communications, Analog Devices
and a number of start-ups in greater Boston.
• A global thought leader, industry analyst and advisor in broadband, residential fiber, cable, open access broadband, smart homes, IoT, 5G/wireless, Cloud/Edge, and local digital infrastructure. • Provide keen and actionable CxO-level insights and plans to a wide range SK I LLS Cisco Systems
Sr. Marketing Manage – Broadband Service
Providers
San Jose, CA
• Subject matter expert in the global telecommunication service provider market. Provided a range of strategic marketing expertise. • Led Cisco’s global Service Provider (SP) marketing for video, voice, mobile, cloud & connected home.
• Created and drove the solution marketing campaign which became Cisco’s primary messaging platform for all Cisco SP and created a technical and marketing umbrella to drive CxO level conversations and align and drive technical roadmaps.
• Developed and launched a long-term SP end-to-end visionary broadband architecture and tactical evolutionary roadmap addressing requirements from executives, global SPs, subject matter experts, senior network architects, BU’s and global field teams.

I N D U S T R Y A C T I V I T I E S
-ISE Expo: Innovation Meets the Last Mile: An
Introduction to Local Digital Infrastructure
-Linux Foundation’s Open Networking
Summit (ONS) on “Open Source
-Co-founder of the Broadband Forum,
initial Vice President. (Boston)

• Local Digital Infrastructure
• Technical, Business, and
Financial architectures
• End to end Broadband
Network Architectures,
Business Models, and
Financial Structures
• Ecosystem-wide Strategic
Messaging
• A global thought leader, industry analyst and advisor in broadband, residential fiber, cable, open access broadband, smart homes, IoT, 5G/wireless, Cloud/Edge, and local digital infrastructure. • Provide keen and actionable CxO-level insights and plans to a wide range ecosystem participant including technology vendors, private equity and venture capital investors, investment bankers, infrastructure investors, network service providers, fiber owners, electric utilities, entrepreneurs, and municipal leaders.
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12 Past Experience / Current Projects

FIBER ENGINEERING DESIGN
For municipalities, we connect your facilities, schools, hospitals and corridors with high-capacity fiber backbones to ensure connectivity for community needs, broadband and smart city applications. Our design work encompasses aerial and underground engineering to build the most advanced fiber networks to meet the needs of communities for years to come.

Aerial Fiber Engineering
• Strand and lash, ADSS engineering for
overhead placement on utility poles
• Pole survey using GPS with sub-meter
accuracy
• Make-ready engineering
• Pole loading analysis
• Pole attachment applications
• Pole permitting
• Low-level engineering, construction
prints, bills of materials
Underground Fiber Engineering
• Underground fiber placement in rights of
way, specific to each community’s
construction standards
• Directional boring, trenching, saw-cut and
other construction methods
• Constructability surveys and fielding
• Low-level engineering, construction prints,
bills of materials and cost estimates
• Right of way and third-party permitting
• Field changes, markups and final as-builts
Sample Projects
• City of Chesapeake, VA – 170-mile fiber design to connect all City facilities, business districts and redevelopment areas.
• City of Glendale, CA - Fiber backbone routes to reach all electric substations, creating a new ring of connectivity to improve reliability in the electric plant. The design was dimensioned to support high-capacity broadband services as part of Glendale’s strategic plan to deploy the network.
• City of Portsmouth, VA – 65-mile fiber backbone design to connect all City facilities, enable Wi-Fi at key locations and support expansion of local broadband services. • City of Boulder, CO – 65-mile fiber backbone design to support City facilities, public housing, economic development and lay a foundation for fiber to the home broadband. • City of Hillsboro, OR – 400-mile fiber backbone and broadband design to connect 34 schools, utilities, city facilities and provide fiber to the home to 66,000 homes. • City of Palo Alto, CA - Assessment for the backbone network, leading to the development of a resilient fiber ring that will support the City's internal functions for years to come. 280
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13 FIBER CONSTRUCTION PACKAGES
Magellan provides city and county organizations with detailed construction package development for their fiber and wireless broadband projects. We work with you to craft construction bids using your construction standards to ensure contractors follow your policies and minimize community impacts. Our construction plans are designed to seek the best and lowest competitive bids from leading contractors.

Construction Bills of Materials
• Detailed BOMs for aerial, underground,
facility and equipment installations
• Design specifications for fiber, conduit,
structures, splice enclosures, splitter
cabinets, equipment shelters, points of
presence and data center construction
• Unit-based BOMs for labor, materials,
facilities, equipment, hourly labor and
specialized services
Construction Procurements
• Review and integration of the latest
broadband standards into your
existing construction code
• RFP/IFB development, scopes of work
and bid forms
• Construction contract review and
recommendations
• RFP/IFB oversight, pre-bid meetings,
Q&A, addenda, short-listing and
selection of contractors
Sample Projects
• City of Portsmouth, VA – Construction bid packages, procurement, evaluation and selection for 65-miles of fiber construction.
• City of Boulder, CO – Construction bid development, release and selection for an $11 million fiber backbone construction project.
• City of Dayton, TX – Invitation to bid advertisement, review and selection of contractors for a $13 million fiber to the home broadband network. • City of Ann Arbor, MI – Invitation to bid for a $5 million fiber backbone expansion to support the City’s local economic development and business retention programs. • City of Glendale, CA – Construction bid packages to support fiber backbone routes 281
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14 FIBER CONSTRUCTION MANAGEMENT
As a turnkey construction management provider, we are in the field daily, overseeing construction, coordinating field changes, inspecting workmanship and ensuring adherence to local, state and federal standards. We have managed fiber and wireless construction in 25 different markets across the US for cities, counties and utilities. Our construction managers are on the ground in your community every day for the entire construction lifecycle. We coordinate all construction activities between contractors, public works, permitting, utilities and public relations to ensure timely completion.

Construction Management
• Overall program management and
reporting to your departments
• Interface with permitting, public
works, utilities, community
engagement and the contractors
• Construction production tracking,
accounting, invoice review and
approvals and close outs
• Field changes and constructability
analysis
Construction Inspections
• Daily onsite inspection of underground and
aerial construction projects
• Site visits and coordination for fiber
installation
• Fiber splicing, termination, testing and
inspections
• Experienced inspections for federal
broadband grant and loan compliance
• Punch-list and close outs
Sample Projects
• City of Boulder, CO – Turnkey construction management and inspections for 65 miles of fiber backbone throughout the City.
• City of Dayton, TX – Turnkey construction management and inspections for a Citywide fiber to the home network covering 5,000 homes. • City of Portsmouth, VA – Construction oversight and inspections for the City’s 65- mile fiber backbone connecting City sites, schools and utility locations throughout the City.
• City of Glendale, CA – Construction bid packages to support fiber backbone routes
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16 References
FIBER & WIRELESS NETWORK DESIGN: NAVAJO NATION
“This is an incredible opportunity for the Navajo Nation. For the first time, all three branches of the Navajo government have collaborated to develop a comprehensive plan that makes affordable, high speed connectivity a reality for all Navajo communities and anchor institutions.” -Norbert Nez, IT Manager, Division of Community Development

CHALLENGE:

Navajo leaders understand the financial and social consequences of having little to no broadband service across the reservation. The quality of life for Navajo families, K-12 students and elders deteriorated significantly due to Covid-19. To address this ongoing economic burden, the current Navajo leadership supported the creation of a Navajo interagency task force that focused on identifying existing broadband assets and developed strategies for increasing infrastructure deployment. The Nation engaged Magellan in early 2020 to develop a broadband plan that would provide coverage across 26,000 square miles in four states: Arizona, New Mexico, Utah, and Colorado. Magellan also conducted a Nation-wide infrastructure inventory and issued a guidance framework to help improve coverage using fixed and mobile platforms including the utilization of different licensed and unlicensed spectrum assets including 2.5Ghz, 3.5Ghz,

5.9Ghz and 700Mhz.

MAGELLAN’S SOLUTION
Navajo leadership turned to Magellan to develop a cost-effective fiber and wireless solution. Magellan’s team developed a preliminary design and cost analysis of a proposed Navajo Network that provides fiber as middle-mile backbone throughout the Nation and a wireless solution to deliver last-mile service.

Magellan maintains a dedicated team of broadband engineers and planners that developed a network design that included a wireless overlay for all 26,000 square miles of the reservation. By utilizing a hybrid fiber and wireless model, the design included coverage to 100% of homes and anchor institutions.

OUR CLIENT’S SUCCESS
The Navajo Nation President Nez presented testimony that was drafted by Magellan to the U.S. House Energy and Commerce Committee articulating the need for additional funds to support investment in broadband infrastructure. Magellan continues to support the Nation on all aspects of its broadband funding, engineering and network design needs as well as its policy goals to increase the adoption and expansion of distance learning, telehealth, public safety, digital literacy, and other critical use cases.

CONTACT
Pearl Lee
Program Manager
P: 928.871.7613
E: [email protected]
Start and End Date:
2019 - present
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17 FIBER DESIGN & CONSTRUCTION REFERENCE: CITY OF RANCHO

CUCAMONGA, CA

CONTACT
Fred Lyn
Utility Division Manager
P: 909.477.2740 ext. 4035
E: [email protected]
“Today this infrastructure plays a crucial role in Rancho Cucamonga, not only in economic development, but will be pivotal in the long-term sustainability and future planning of the City. Rancho Fiber has arrived.” -Fred Lyn, Utilities Division Manager

CHALLENGE
City leadership recognizes that fiber-optic infrastructure is an important part of the Rancho Cucamonga community. They understand that in today’s world, connectivity affects every aspect of the community - whether in municipal operations, public safety, education, healthcare, quality of life, entertainment and commerce. To realize leadership’s vision, the City needed a partner that could develop and manage the expansion of fiber-based broadband across the City in a measured approach that achieved the City’s financial constraints while expanding access in year-by-year deployments across the City.

MAGELLAN’S SOLUTION
In 2016, Magellan worked with the City to develop a fiber master plan and engineering assessment that laid out a multi-year plan for new aerial and underground fiber deployment throughout the City, totaling $12 million over 6 years. Since adopting the master plan in 2017, Magellan has designed and built the first three phases of the fiber to the premises network. In this work, we have provided full engineering, fielding, utility assessments, pole and make ready planning, construction prints and bid packages. We also manage construction as an owner’s representative for the City in the fiber build, ensuring that the construction contractor meets our engineering specifications developed for the City, with tight quality control and within the budget.

OUR CLIENT’S SUCCESS
Today, the City has connected neighborhoods and business corridors, enabling gigabit broadband services to residents and businesses across the City. Residential customers receive gigabit service for $69.99 per month, giving them nearly 5 times the bandwidth for a lower cost than is available in the market today. Businesses have competitively priced internet on City fiber that has replaced slow and unreliable DSL, and cable internet services.
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18 Broadband Feasibilit y St udy – Cit y of Wat erloo, Iow a

CONTACT
Andy Van Fleet
Waterloo Communications
Board Chairman
P: 319-291-4323
E: [email protected]

CHALLENGE
The City of Waterloo, Iowa selected Magellan Advisors in 2019 as its partner in the development of a Broadband Study and Action Plan that will identify needs and opportunities for future broadband expansion and growth. Magellan assisted the City of Waterloo in preparing for the internet of things by integrating fiber-to-the-home broadband and smart city technologies into the City’s Broadband Study and Action Plan, a long-term plan, which will ensure that Waterloo is prepared to take advantage of all future wired and wireless applications which may benefit the community.

MAGELLAN’S SOLUTION
Magellan Advisors engaged the City of Waterloo leadership and studied the state of broadband throughout the community, while gathering and presenting information to assist City leadership in making informed decisions as it relates to deploying broadband citywide. The Magellan team developed supporting financial models and presented multiple options to the City for its consideration. Our team developed an implementation strategy and action plan for Waterloo, allowing the City to immediately begin making improvements to the community’s broadband services. This plan will enable the City of Waterloo to also support retaining and attracting new businesses, improving residential and business broadband services all while making Waterloo a high-tech competitive community. The project’s final report will serve as an implementation roadmap to ensure the broadband needs of Waterloo are served today, and well into the future.

OUR CLIENT’S SUCCESS
In April 2021 the City of Waterloo extended Magellan’s contract to begin Design, Engineering and Permitting activities for a 120-mile fiber-optic backbone identified in the Action Plan. This backbone will connect hundreds of City and Utility sites and will provide the necessary capacity to support a Fiber-tothe-Home deployment. Magellan Advisors engaged the City of Waterloo in 2020 to study the state of broadband throughout the community to gather and present information to assist City leadership in making informed decisions as it relates to deploying broadband citywide. The Magellan team developed supporting financial models presented multiple options to the City. Our team developed an implementation strategy and action plan for Waterloo, allowing the City to immediately begin making improvements to the community’s broadband services. This plan will enable the City of Waterloo to also support retaining and attracting new businesses, improving residential and business broadband services all while making Waterloo a high-tech competitive community. The project’s final report has been delivered and the City is moving forward with funding. 286
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19 FIBER MASTER PLAN, FUNDING & REFERENCE: SOUTH BAY CITIES

COUNCIL OF GOVERNMENTS, CA

CONTACT
Jacki Bacharach
Executive Director
P: 310.293.2612
E: [email protected]
2355 Crenshaw Blvd, Suite 125
Torrance, CA 90501
“Magellan has continuously devoted its time, energy and most importantly, its expertise and ingenuity to keep our fiber project moving forward – no matter how many obstacles we and our cities have put in the way.”
– Jacki Bacharach, Executive Director - SBCCOG

CHALLENGE
Magellan Advisors was initially retained by the South Bay Cities Council of Governments (SBCCOG) to complete a Fiber Master Plan for 15 cities in the South Bay Region of Los Angeles, CA. The Fiber Master Plan Study was funded by the South Bay Workforce Investment Board through a workforce development grant. The study assessed the current state of workforce development and job retention in the region through focus group discussions with cities, businesses and anchor institutions.

MAGELLAN’S SOLUTION
Following the Master Plan, Magellan developed and issued a Request for Proposals (RFP) for a construction and services contract to connect all cities and provide gigabit broadband at discounted prices. Magellan also assisted with securing funding from LA Metro including $4 million in grants and continues to assist with project management as construction is underway. The South Bay Fiber Network (SBFN) lays the foundation for a regional network to provide competitive broadband support economic development, enhance workforce development and encourage job retention.

OUR CLIENT’S SUCCESS
Jacki Bacharach, Executive Director of SBCCOG, was eager to point out the benefits the network will bring to the region and its communities. Some of these benefits include reducing telecommunications spending, providing a platform for smart transportation and delivering access to world class broadband for 15 cities connected to the network. She noted that the technical expertise, design and construction management services provided by Magellan Advisors were imperative to the success of the network.
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20 COUNTYWIDE BROADBAND INFASTRUCTURE PLANNING: VENTURA

COUNTY, CA

CONTACT
Terry Theobald
Chief Information Officer
P: (805) 654-3540
E: [email protected]

CHALLENGE
Ventura County, located north of Los Angeles, has seen disparities in access to high-speed internet across its communities. While some larger cities within the County have taken on their own broadband planning and attracted investment, other smaller communities struggle with lack of robust broadband infrastructure, resulting in high prices, little competition, and low adoption rates. Additionally, the County itself sought to reduce its telecommunications expenses as well as those of its cities.

MAGELLAN’S SOLUTION
Ventura County partnered Magellan Advisors in the development of a plan for a Countywide Fiber Network that would connect County and municipal facilities, as well as benefit unserved and underserved communities. Magellan’s team brought together a diverse group of more than 150 stakeholders from across the County and region to understand their need for broadband, review their existing assets and how they could be leveraged, identify public and private sector joint build opportunities, and create a design for a fiber network built and owned by the County to support digital equity, economic development, and government innovation. The Countywide Fiber Network included incorporating existing publicly-owned assets and rights of way as well as capitalizing on planned infrastructure projects such as water and sewer improvements for cost savings.

OUR CLIENT’S SUCCESS
Ventura County has garnered the support of municipal agencies, utilities, transportation partners, and others across the region to move forward with funding, engineering and building the Countywide Fiber Network. Using the design that Magellan Advisors created, Ventura County is in the process of developing competitive grant applications to fund the build and anticipates breaking ground along the first segment on Highway 126 to prioritize some of the most underserved areas in the County.
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21 Technical Proposal / SOW Response
TASK 1: ASSET I NVENTORY
We will conduct a comprehensive asset inventory of the City’s current broadband assets in the public right-of-way including conduit, fiber, antennas, poles, towers, abandoned facilities, active facilities, and other infrastructure to determine their usefulness for expanding broadband within the region. This effort will provide a realistic assessment of assets available for expanding broadband connectivity.

We believe that the following components should be analyzed:
 Underground conduit, innerduct, empty and available conduit  Fiber cables, strand counts, splice points, terminations and utilized strands  Vault and handhole locations
 Available and reserved capacity throughout the network  Construction and placement method policies
 Current as-builts and documentation
 Terminating locations and public facilities
 GIS maps including publicly-owned property, right of way, easements  Location of capital improvement projects and economic development zones  Current and planned locations of public safety cameras and traffic signal interconnect Magellan will request GIS files, capital projects, planning and development data from the City to develop a broadband asset map. Using this data, we propose to first build a geo-correct layer of conduit and fiber, identifying placed conduit, type, size, status (occupied/vacant) and related information. A second layer will incorporate poles, traffic signal cabinets and other assets to be used for expanding broadband.

A third layer will include General, Economic Development, Transportation and Capital Projects Plans to identify strategic and cost-effective methods of deploying and expanding broadband in a planned, organized and phased approach. We will work closely with the City to assess planned projects that may create opportunities to install additional conduit and fiber through long-term capital projects schedules, public rights-of-way encroachments and development agreements, and build a map that identifies the projects where broadband infrastructure could be installed over a 10-year period. We will conduct interviews with key staff from City agencies and departments including the General Services Facilities Division to collect information about these assets and plans, providing additional details about how they can be leveraged in the network’s design.
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22 TASK 2: MARKET ANALYSIS
Our team will conduct a market analysis to gain an understanding of what service offerings are currently available to businesses and residents in Duarte. Magellan’s market analysis will identify the services that are available, providers, service level, pricing, and access. We will document all privately-owned networks and research incumbent providers that currently serve the market as well as potential new entrants. This information will come from a variety of sources, including our comprehensive broadband database, third-party research, and information obtained from the providers themselves.

We will then analyze the current market and delineate served, underserved and unserved areas that have a need for broadband but currently lack the necessary infrastructure. We will also work with the local providers to understand and document their current needs, as they too are stakeholders in the region.

TASK 3. NEED S ASSESSMEN T
Magellan will conduct an online broadband survey, providing important information to inventory current services, test speeds across the City, and identify opportunities to build additional infrastructure to serve underserved communities and improve services and rates. The survey instrument will include an embedded speed test since actual performance is often lower than what is documented by the FCC and other sources. It will also include questions about use and access to inform us about digital literacy issues within the community.

Magellan will build the survey based on our experience of what questions work best to build an understanding of current and future broadband needs and will also guide the City in effectively marketing the survey to receive a strong response rate, including the use of social media, partnering with local business groups, and posting the survey on the City’s website.

Magellan proposes to also hold interviews and workshops with key community organizations to gain a better understanding of current and future broadband and technology needs and issues.

We find the most effective format for these interviews to be in group settings where participants are encouraged to share open, honest feedback with our team. During these meetings, we will uncover key information about the needs of the community including what locations are underserved or unserved and digital equity issues including access, affordability, availability of devices, and digital literacy.

Magellan will identify key local and regional public and private agencies to collaborate with to increase marketability, investments and partnerships to expand broadband services to un/underserved businesses and residents. These will include neighboring cities such as Monrovia, the San Gabriel Valley Council of Governments, County of Los Angeles, utilities, transportation agencies and service providers.
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23 TASK 4. G AP ANALYSI S
Based on the information uncovered in Tasks 1-3, Magellan will develop a gap analysis identifying key issues and barriers related to ensuring that Duarte’s community has access to 100 mbps symmetrical broadband. Our analysis will include gaps in:
• Broadband infrastructure including fiber-optic and wireless assets • Broadband availability, affordability, and speeds
• Digital equity
• Digital literacy programs
The analysis will include recommendations for filling each of these gaps, including the deployment of new infrastructure, working with providers to improve availability and quality of services, ensuring that all locations of the community have equal access , assisting in developing partnerships with CBOs and recommending educational programs to increase digital literacy.

Magellan will present findings from the first three tasks and in the gap analysis truly reflect the current state of broadband connectivity in Duarte. We will address who/what areas need broadband access and why so that Council will have a complete needs assessment in an effective and digestible manner.

TASK 5. ASSESSMENT OF CI TY POL I CI ES
Magellan’s policy experts will conduct a comprehensive review of Duarte’s existing policies and practices as they relate to broadband permitting, encroachments and dig once in the public right-of-way. We will summarize existing documents including the City’s General Permit Conditions and Trench Repair Specifications Policy, identify gaps, and make recommendations for new policies and best practices that have been successful in other cities. Building on our vast knowledge of state and federal rulemaking and best practice, we will review and asses the following documents with the goal of increasing broadband quality and access in Duarte:
• General plan, master plans, and other land use policies • Broadband-specific plans, policies and ordinances, including dig once/open trench/shadow conduit/excavation policies, aesthetics policy, GIS logging and digital plan submission. • Government operations, including but not limited to online access to online permitting Magellan will provide a summary and evaluation of current policies and identification of policy areas that may require additional development especially regarding dig once best practice. We will provide sample documents of best practices from other cities regarding permitting, encroachments and dig once in the public right-of-way. Our recommendations will help the City generate business processes and workflows that will improve internal and external partnerships for streamlining the ongoing expansion of broadband deployment.
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24 TASK 6. BUSINESS MOD EL EVALUATI ON
Based on the information gathered about your community during preceding tasks, our team will identify the most appropriate business model option for broadband expansion which may include opportunities for joint build, partnership options, regional collaborations, considerations about the competitive environment, and funding.

Magellan will assist the City with investigating the business model options including public -private agreements with incumbent and new entrant broadband providers. Some of the key questions that we will address in this section include:
 What opportunities exist for the City to leverage its existing infrastructure to provide additional broadband service options to unserved and underserved locations?  How might joint investment in broadband infrastructure be accomplished between the City and other public or private sector organizations?
 What legal and operational structures should be considered by the City and other organizations in use of the proposed infrastructure?
 How will the City balance private sector goals of revenue growth and profitability with public goals of providing affordable and available broadband services across the region?  How will future system expansion be handled between the City and private sector providers and what contributions will the parties make to this infrastructure?  What regional opportunities exist for collaboration?
Magellan will provide a recommendation for the most appropriate business model structure for Duarte.

TASK 7. CONCEPTUAL D ESI G N
Based on the gap analysis, Magellan will develop a conceptual network design that includes the locations and type of infrastructure needed to address the needs of Duarte’s community. The design leverage existing infrastructure and planned projects and will include recommended new infrastructure such as fiber-optic and wireless facilities to address the near- and long-term needs of residents, businesses, and community anchor institutions in Duarte. We will include GIS mapping of the proposed conceptual network design, which will be detailed enough to allow us to provide high-level cost estimates for implementing the broadband network. Our team will also help the City evaluate the feasibility and costs associated with different types of infrastructure to ensure that the final design meets the needs of the communities it will serve.

TASK 8: TECHNI CAL SOLUTI ONS & FINANCI AL ANALYSI S
We will work with the City to determine the pros/cons of various technologies as well as operation and management structures. Magellan’s team will recommend the most feasible technical solution and business model for the City of Duarte based on capital costs, operating 292
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25 expenses and capacity, alternative financing methods, as well as risk, timing, and service quality considerations.

Magellan proposes using our Broadband Financial Sustainability Model to evaluate the business and financial sustainability of the program. Using our financial tools, we suggest using the following process to conduct the business model analysis and make recommendations. We would propose using a 10-year period to analyze the project including:
 Develop the cost model for the network, including one-time and ongoing capital expenditures to build the network based on the most suitable technology solutions.  Develop the cost model for capital investment and operations, including equipment, O&M, network operations, field services, staffing, billing, and customer service, as applicable to the proposed operational model.
 Conduct financial analysis on the project to determine overall financial sustainability.

TASK 9. I D ENTI FY FUNDI NG SOURCES
Magellan’s team will screen and identify feasible grant and loan programs for the City. Our analysis will look at the federal NTIA Programs including BEAD and EDA, as well as State Programs including FFA, CASF, Capital Projects and RAISE. We will identify the program size, details, qualifications, requirements and other key information for the City to determine the opportunity to fund some of its service area with federal or state funds.  Based on the financial analysis, we will be able to provide the following information to the City to determine the best funding sources to be used for the various phases of the project. Some of the areas we will analyze include:
• State and federal grant programs
• Joint build and joint contribution projects
• Organizational structures available, for profit, non-profit, economic development corporations, joint powers authorities and joint ventures • Public/private contribution models
• Total amount of funding needed for the project
• Capital versus operational funding needed for the project • Funding term, identifying short-term and long-term portions of funding • Optimizing public and private funding sources
TASK 10. STRATEG I C BROAD BAND PLAN
Magellan will deliver a final comprehensive Strategic Broadband Plan to the City which will detail all tasks, goals, and recommended next steps for broadband enhancement. Magellan will take into account all feedback provided by City staff and key stakeholders. All previous deliverables will be compiled into this final Strategic Broadband Plan including technical memorandums and 293
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26 all recommendations from previous workshops. Magellan will present its findings to City leadership.

PROJECT MANAG EMENT
Magellan will coordinate with appropriate City staff for all of the project meetings. We will complete at a minimum the following meetings:
• One kick-off meeting with Project Team
• Weekly or Bi-weekly meetings and written status reports to City’s Representative • Meetings with local groups, stakeholders, and individuals • Presentations to various community, business and government groups on the findings and recommendations, including to the Duarte City Council.

TI MELI NE
Based on projects of a similar nature, we estimate that the City of Duarte’s Broadband Strategic Plan process would take approximately eight (8) months to complete.  Ongoing Task
 Final Deliverable
Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8 Asset Inventory ◆ 
Market Analysis ◆ ◆ 
Needs Assessment ◆ ◆ 
Gap Analysis ◆ 
Assessment of City Policies ◆ ◆ 
Business Model Evaluation ◆ 
Conceptual Network Design ◆ ◆ 
Technical Solutions & Financial Analysis ◆ 
Identify Funding Sources ◆ 
Strategic Broadband Plan ◆ 
Project Management & Meetings ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆
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27 COST PROPOSAL
The total cost to the City of Duarte for the Broadband Strategic Plan is $194,695. It includes all work to be completed by Magellan as stated in this proposal. Magellan will bill the City in eight (8) equal monthly payments of $24,336.88. Magellan will bill on the first day of the month for the current month’s services.

Travel and incidental expenses may result from 1 onsite workshop and will be billed as incurred. All other work for this project will be performed remotely. Invoices are payable on net 30 terms from the date of invoice.

Description Cost
Asset Inventory $17,700
Market Analysis $11,800
Needs Assessment $23,600
Gap Analysis $17,700
Assessment of City Policies $10,000
Business Model Evaluation $11,800
Conceptual Network Design $23,600
Technical Solutions & Financial Analysis $17,700
Identify Funding Sources $11,800
Strategic Broadband Plan $23,600
Project Management & Meetings $25,395
Total for Services $194,695
Travel and Expenses $5,000
Total Not to Exceed $199,695
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ITEM: 10.C
Consideration of Proposal to Add Three Maintenance Technicians Positions and Remove Two Senior Maintenance Technician Positions
Recommended Action:

It is recommended that the City Council amend the 2023-24 General Fund Budget to include three maintenance technician positions and remove two senior maintenance technician positions and a related budget amendment for $25,000 in account 1410-7002.

Attachments:
10C - Maintenance Technician Positions.pdf
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ITEM: 10.D
Consideration of Professional Services Agreement with Aquatic Design Group, Inc. for Design Services for the Fitness Center Pool Deck Renovation; Budget Amendment Recommended Action:

It is recommended that the City Council 1) authorize the City Manager to execute this Professional Services Agreement with Aquatic Design Group, Inc. in the amount of $458,140 for design services for the Duarte Fitness Center Pool Deck Renovation, 2) Approve a budget amendment of $458,140 to the General Fund (100-1605-7965) and 3) direct staff to use Special Project General Funds or Undesignated General Funds.

Attachments:
10D - PSA with Aquatic Design Group, Inc.pdf
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ITEM: 10.E
Annual Appointment of City Councilmembers to Intergovernmental Organizations Recommended Action:

It is recommended that the City Council 1) appoint a Councilmember to the San Gabriel Valley Mosquito & Vector Control District Board of Trustees to serve a two or four year term and 2) make appointments to other intergovernmental organizations for the upcoming year.

Attachments:
10E - Appointments to Intergovernmental Organizations.pdf 321
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Meetings date and time may vary City Manager Representative Collaborates with the Area D coordinator and other cities to prepare for disaster management (trainings / protocols) Full Council Alternate 3rd Wednesday - 6:00 p.m. Toney Lewis Delegate
Provides opporunities for contracted cities to network, educate, and access partnerships, while promoting collaborative governance Full Council Alternate 3-4 times a year, at the call of the Chairman Margaret Finlay Delegate Consists of the mayor of each city within LA County and appoints representatives to such boards, commissions, and agencies such as LAFCO, LA County Metropolitain transporation Authority, ect. Full Council Alternate Last Monday of the month - 7:00 p.m. Tera Martin Del Campo Delegate Provides community services, activites, resources, and aid to members of the community through the coordination of non-profit organization Toney Lewis Alternate Meetings date and time may vary - dependent on outside
factors, events, etc. Vinh Truong Delegate
Provides community services, resources and aid to individuals and families in Duarte through the alliance and generosity of local businesses and community members Toney Lewis Alternate
1st Monday - 6:00 p.m. Margaret Finlay Delegate
Non-profit fundraising corporation organized by community members to enrich schools and community facilities; provides financial support to enhance the quality of education received by DUSD students Jody Schulz Alternate Quarterly - date and time may vary Vinh Truong Delegate Provides workforce development, training, and education to potential employees and gives businesses access to a qualified, employable workforce Samuel Kang Alternate
Tuesday, May 23, 2023 – Annual Governing Board Meeting
2023 Foothill Transit Chats Update Meetings - Tentative Schedule:

Thursday, March 23, 2023
Thursday, April 20, 2023
Tuesday, June 20, 2023
Thursday, September 14, 2023
Tuesday, October 17, 2023
Thursday, December 7, 2023 Cesar Garcia Delegate
Elects representative to execute board and discusses Foothill Transit developments pertaining to the City and neighboring areas Toney Lewis Alternate 2nd Thursday - 11:30 a.m. Jody Schulz Delegate
Provides discussion and input regarding planning, funding, design, and contruction of the Foothill Gold Line Tera Martin Del Campo Alternate Annual Meeting - July Magaret Finlay Delegate
Duarte City Council - Intergovernmental Organizations

DUARTE COMMUNITY SERVICE COUNCIL

DUARTE EDUCATION FOUNDATION

FOOTHILL EMPLOYMENT AND TRAINING CONSORTIUM
FOOTHILL TRANSIT - $150/mtg
FOOTHILL GOLD LINE JPA (PHASE II) - $100/mtg

JOINT POWERS INSURANCE AUTHORITY

CALIFORNIA CONTRACT CITIES
AREA "D" EMERGENCY SERVICES

CITY SELECTION COMMIITTEE (COUNTY)

DUARTE COMMUNITY COORDINATING COUNCIL
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Serves on the Authority's Board of Directors to ensure that agency members are represented in its governance; business and affairs of the JPIA are considered City Manager/ Full Council Alternate 1st Thursday - 7:00 p.m. Toney Lewis Delegate
Conducts affairs of the League, monitors and strengthens the organization's programs and resources, implements committes and offers to take on special assignments, and supports the League's vision, mission, and core beliefs Full Council Alternate
3rd Thursday - 4:00p.m. Jody Schulz Delegate
Discuss significant regional issues, implement policy direction adopted in the SGCOV Strategic Plan, and appoint committees to study specific policies and programs, all to better the communities that comprise the San Gabriel Valley Tera Martin Del Campo Alternate
3rd Wednesday - 1:00 p.m. Vinh Truong Delegate
Studies environmental, energy and natural resources issues of regional significance and provides policy direction to the SGVCOG Governing Board
1st Wednesday - 8:00 a.m. Jody Schulz Delegate
Studies programs and matters pertaining to regional homelessness issues and provides policy direction to the SGVCOG Governing Board 2nd Thursday - 4:00 p.m. Samuel Kang Delegate
Studies programs and matters pertaining to the regional issues of mobility, air quality, and transportation control measures and provides policy direction to the SGVCOG Governing Board
Meetings date and time may vary - dependent on outside
factors, major events, etc. Vinh Truong Delegate
Discusses economic partnerships across sectors of education, entertainment, healthcare, transportation among 31 cities that comprise the San Gabriel Valley Cesar Garcia Alternate
2nd Friday - 7:00 a.m. Margaret Finlay Delegate
Engages in meetings concerning mosquito borne diseases within the San Gabriel Valley and reviews the operations of the District 4th Wednesday - 1:30 p.m. Jody Schulz Delegate
Engages in discussions pertaining to the construction, operation, and maintenance of collecting and treating wastewater, solid waste management, and converting waste into resources Margaret Finlay Alternate Regional Council Meetings - 1st Thursday - 12:00 p.m.

Annual General Assembly Meeting - April / May Margaret Finlay Delegate Conducts affairs of the SCAG and implements policy direction provided at the annual General Assembly meeting, acts upon policy recommendation from SCAG policy committees and external agencies, appoints committees to study specific problems/programs, and directions the actions of the agency thoughtout the year

LEAGUE OF CALIFORNIA CITIES
SGV COUNCIL OF GOVERNMENTS - $50/mo

SGV COG - ENERGY, ENVIRONMENT, NATURAL RESOURCES COMMITTEE

SGV COG - HOMELESSNESS COMMITTEE

SGV ECONOMIC PARTNERSHIP
SGV VECTOR CONTROL DISTRICT - $100/mo
SANITATION DISTRICTS #15 AND #22 - $250/mo

SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENT

SGV COG - TRANSPORTATION COMMITTEE
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