Duarte City Council
December 10, 2024

5 mandate to amend the Franchise Agreement, the City and Burrtec began discussions to amend the Agreement to include the requirements of SB 1383. The proposed amendment is included as Attachment C of this report.

In collaboration with Burrtec and R3, an independent consultant retained by the City, the City has developed an agreement amendment that defines the responsibilities that can be designated to the hauler, Burrtec. This amendment will need to be executed as proposed to facilitate compliance mandated by SB 1383. The proposed Amendment does the following:
• Definitions: Add, update, and amend definitions specific to SB 1383 regulations contained in the agreement.
• Collection Systems: Provide the City with an approved collection program for source separated recyclable materials, organic waste, food waste, and refuse using containers that comply with the requirements of SB 1383 regulations.
• Capacity Guarantee: Burrtec is required to provide written notification to the City that the organic waste processing facility has sufficient capacity. • Contamination Monitoring: Provide the City with a contamination minimization program ensuring all routes are reviewed annually in accordance with 14 CCR Section 18984.5(b) • Education & Outreach: Provide education and outreach to residential, commercial, and multi-family generators concerning proper recycling, the use of containers for organic waste, composting, preventing contamination, and proper container placement. • Waiver Programs: Evaluation of customer requests for a waiver from program participation requirements, per CalRecycle requirements for waiver eligibility, and reevaluation of eligibility every five years. • Coordination and cooperation with the City in meeting its recovered organic waste product procurement target.
• Reporting to the City and CalRecycle on compliance activities.

RATE REVIEW BACKGROUND
The original Burrtec Agreement sets forth a specific formula by which rates are to be adjusted over time. On September 6, 2024, Burrtec submitted its original request for adjustments to its residential, commercial and roll off rates to become effective January 1, 2025. The City's responsibility is to review the rates proposed by Burrtec and confirm that the calculations are correct. The contract rate review provisions are as follows:
• Rates are to be adjusted annually, effective each January 1 • Rates are adjusted up or down based on the contract formula that counts for various cost factors, including Consumer Price Index (CPI), fuel prices and tipping fees • Burrtec may request an adjustment more than 4 percent, when justified.

City staff worked with the City's SB 1383 implementation consultant R3 to review the submitted cost data and the rate increase information to confirm the calculations are consistent with the provisions in the Agreement and comparable to statewide SB 1383 rate impacts.

6 RATE REVIEW DISCUSSION
Refuse, Organics, and Recycling Rate Analysis:

Historically, components included in the rate calculation consist of disposal rates, the CPI change as measured by the percent change from July in the previous year to July of the rate review year; and the change in the average price per gallon of fuel based on the U.S. Dept. of Energy Alternative Fuel Pricing Report.

Cost Component 2024 (per ton) 2025 (per ton) Amount Increase Trash Disposal $68.75 $73.04 $4.29
Mixed Organic Waste $125.00 $132.81 $7.81
Recyclables $43.80 $17.98 $-(25.82)
Residential Rates:

Burrtec is seeking an increase in residential rates of 3.70 percent for residential services.

A refuse survey conducted in October 2024 shows that the City of Duarte’s residential refuse rates are among the lowest one-third of cities surveyed in the San Gabriel Valley, even with the proposed rate increase. The chart illustrates the most common forms of service – residential (90-60-60) and commercial 3-yard trash bin serviced once per week.
2024 Rate Survey
City Hauler Residential Total Commercial Total
La Verne Waste Mgt. $34.16 $191.64
Duarte - current Burrtec $37.14 $237.21
Arcadia Waste Mgt. $37.58 Hauler determines rates
Duarte - proposed Burrtec $38.51 $241.26
San Dimas Waste Mgt. $43.45 $220.66
Claremont City $43.75 $177.01
Azusa Athens $43.99 $252.08
Glendora Athens $44.26 $302.49
Monrovia Athens $46.18 $289.72
Diamond Bar Waste Mgt./
Valley Vista $47.41 $168.82
Sierra Madre Athens $47.60 $309.23
Covina Athens $47.83 $260.42
South Pasadena Athens $57.09 $202.45

7 Residential Refuse and Recycling Rate (90/60/60)
The chart below illustrates Duarte’s most commonly used residential service (90/60/60 cart combination) and the impact of the new increase.

Residential Refuse and Recycling Rate (90/60/60)
Residential Rate 2024 Proposed 2025 Amount Change
Base Monthly Rate $32.68 $33.89 $1.21
Franchise Fee $4.46 $4.62 $0.16
Total $37.14 $38.51 $1.37
Residential Street Sweeping: Burrtec is also requesting a 3.56 percent cost increase for street sweeping which is less than the contract CPI adjustment provision.

Residential Street Sweeping
Residential Rate 2024 Proposed 2025
Base Monthly Rate $1.98 $2.05
Franchise Fee $0.27 $0.28
Total $2.25 $2.33
Commercial Refuse, Organics, Roll-Off, Recycling & Street Sweeping Rate Analysis:

As seen in Residential disposal rates, recycling costs have resulted in steep rate increases.

California State AB 341 and AB 1826 require the compliance of businesses and multi-family residential dwellings in mandatory commercial solid waste and organics recycling.

The food equalization element to the commercial and multi-family housing properties is still implemented to allow for a lower cost impact with the rollout of the Bulky Item Pickup Program, while still in compliance with SB 1383.

Commercial Refuse, Organics, Roll-Off, & Recycling Rate Analysis Service 2024 Proposed 2025 Increase Percent Change
Trash - Commercial
one 3-yard bin, one time/week $237.21 $241.26 $4.05 1.71% Trash - Multi-Family
one 3-yard bin, one time/week $266.12 $269.55 $3.43 1.29% Green Waste
one 3-yard bin, one time/week $249.95 $260.95 $11.00 4.40% Recyclables
one 3-yard bin, one time/week $153.49 $167.66 $14.17 9.23% Food Waste
one 65-gallon, one time/week $58.81 $60.09 $1.28 2.18%

8 Commercial Street Sweeping: Burrtec is also requesting a 3.22 percent cost increase for street sweeping which is less than the contract CPI adjustment provision.

Commercial Street Sweeping
Commercial Street Sweeping 2024 Proposed 2025
Commercial Rate $3.70 $3.82
Base Monthly Rate $0.65 $0.67
Total $4.35 $4.49

RECOMMENDATION
Staff recommends that City Council approve both the Burrtec Waste Services 2023 Annual Performance Review and Amendment No. 16 to the “Municipal Solid Waste, Recyclables, and Green Waste Services Agreement Between the City of Duarte and Burrtec Waste Services,” setting the refuse collection and recycling rates shown in the attached schedule to become effective January 1, 2025 and complying with SB 1383.

FISCAL IMPACT
If approved, the proposed rate increases would be put into effect January 1, 2025, resulting in an overall increase in the City franchise fee revenue for both residential and commercial services.

ATTACHMENTS
Attachment A: Annual Performance Review
Attachment B: Burrtec Rate Sheet with Standard Rate Increase Attachment C: Amendment No. 16
Fiscal Review: Reviewed and Approved:

Kristen Petersen Brian Villalobos
Assistant City Manager/ City Manager
Director of Administrative Services

City of Duarte
Burrtec Waste Services
Proposed 2024 Rate Increases
Effective January 1, 2025
Current Proposed
1/1/24 1/1/25
Rates Rates Change
Residential Service:
90/60/60 37.14 38.51 3.70%
60/60/60 32.27 33.46 3.70%
40/60/60 29.74 30.84 3.70%
40/60/60 - Senior and/or handicapped 28.12 29.16 3.70%
Additional 90 gallon refuse container (each) 9.28 9.58 3.23% Additional 60 gallon refuse container (each) 7.09 7.32 3.24% Extra refuse container collection/service (each) 9.44 9.75 3.28% Additional recycling container - one no charge no charge Additional recycling containers - two or more (each) 1.67 1.72 2.99% Additional green waste container (each) 1.73 1.79 3.47% Wildlife deterrent barrel (+ base fee) 8.98 + base fee 9.28 + base fee Container exchange (1 free/year) (each) 25.14 25.97 3.30% Additional bulky waste pickup including CRT (2 free/yr) 31.45 32.48 3.28% Backyard collection:

Resident requested convenience (+ base fee) 27.16 + base fee 28.05 + base fee Manual collection (+ base fee) 34.85 + base fee 35.99 + base fee Senior and/or handicapped base fee only base fee only
Residential Street Sweeping Service Alternate Day/Side 2.25 + base fee 2.33 + base fee Bulky Item collection 31.45 32.48 3.28%
Return Trip Charge - Barrel Service 11.16 11.53 n/a
Commercial Service:

Wheeled toter (90/60 - once per week) 37.84 39.13 3.41% Wheeled toter (60 recycling only - once per week) 16.53 18.09 9.44% Wheeled toter (90/60 green waste only - once per week) 26.21 27.12 3.47% Extra Pickup - Barrel Trash 9.24 9.54 3.25%
Extra Pickup - Barrel Food Waste 18.26 18.86 3.29%
Return Trip Charge - Barrel Service 0.00 0.00 n/a
Residential Refuse bin collection
Times
Bin Size per Week

1.5 1 158.57 163.36 3.02%

1.5 2 269.52 277.97 3.14%
2 1 194.65 200.57 3.04%
2 2 320.52 330.78 3.20%
3 1 215.10 222.19 3.30%
3 2 351.80 364.18 3.52%
MultFamily Refuse bin collection (includes Bulky Program) Times
Bin Size per Week

1.5 1 174.65 177.24 1.48%

1.5 2 300.85 305.01 1.38%

1.5 3 441.68 447.72 1.37%

1.5 4 570.01 577.67 1.34%

1.5 5 698.28 707.55 1.33%

1.5 6 818.62 829.24 1.30%
2 1 222.96 226.21 1.46%
2 2 375.62 380.65 1.34%
2 3 523.18 529.80 1.27%
2 4 663.49 671.46 1.20%
2025 Duarte Proposed Rates_8-26-24_City File Staff Report 1

City of Duarte
Burrtec Waste Services
Proposed 2024 Rate Increases
Effective January 1, 2025
Current Proposed
1/1/24 1/1/25
Rates Rates Change
MultFamily Refuse bin collection (includes Bulky Program) 2 5 803.84 813.16 1.16%
2 6 944.16 954.86 1.13%
3 1 266.12 269.55 1.29%
3 2 451.94 457.13 1.15%
3 3 666.72 674.25 1.13%
3 4 866.92 876.49 1.10%
3 5 1,067.04 1,078.67 1.09%
3 6 1,267.28 1,280.96 1.08%
4 1 354.99 359.58 1.29%
4 2 598.00 604.81 1.14%
4 3 840.99 850.02 1.07%
4 4 1,083.92 1,095.19 1.04%
4 5 1,326.92 1,340.42 1.02%
4 6 1,569.86 1,585.58 1.00%
6 1 532.65 539.53 1.29%
6 2 858.75 868.16 1.10%
6 3 1,184.76 1,196.72 1.01%
6 4 1,510.92 1,525.39 0.96%
6 5 1,837.04 1,854.05 0.93%
6 6 2,163.13 2,182.68 0.90%
MultFamily Compactor bins
Trash
2 1 296.56 304.41 2.65%
2 2 522.84 537.04 2.72%
2 3 772.78 793.85 2.73%
2 4 1,007.88 1,035.48 2.74%
2 5 1,242.91 1,277.06 2.75%
2 6 1,478.04 1,518.74 2.75%
MultFamily Compactor bins
Recyclilng
2 1 148.24 148.45 0.14%
2 2 230.06 218.71 -4.93%
2 3 336.58 318.14 -5.48%
2 4 482.92 464.66 -3.78%
2 5 590.82 565.71 -4.25%
2 6 698.68 666.71 -4.58%
Commercial Refuse bin collection:

Times
Bin Size per Week

1.5 1 160.19 163.08 1.80%

1.5 2 271.94 276.72 1.76%

1.5 3 398.32 405.27 1.74%

1.5 4 512.20 521.08 1.73%

1.5 5 626.01 636.81 1.73%

1.5 6 731.91 744.35 1.70%
2 1 203.69 207.35 1.80%
2 2 337.08 342.92 1.73%
2 3 465.36 473.21 1.69%
2 4 586.41 596.01 1.64%
2025 Duarte Proposed Rates_8-26-24_City File Staff Report 2

City of Duarte
Burrtec Waste Services
Proposed 2024 Rate Increases
Effective January 1, 2025
Current Proposed
1/1/24 1/1/25
Rates Rates Change
Commercial Refuse bin collection:
2 5 707.48 718.85 1.61%
2 6 828.54 841.68 1.59%
3 1 237.21 241.26 1.71%
3 2 394.13 400.54 1.63%
3 3 580.00 589.36 1.61%
3 4 751.29 763.32 1.60%
3 5 922.51 937.20 1.59%
3 6 1,093.85 1,111.20 1.59%
4 1 316.45 321.85 1.71%
4 2 520.92 529.36 1.62%
4 3 725.36 736.85 1.58%
4 4 929.75 944.28 1.56%
4 5 1,134.21 1,151.80 1.55%
4 6 1,338.61 1,359.22 1.54%
6 1 474.84 482.94 1.71%
6 2 743.13 754.99 1.60%
6 3 1,011.33 1,026.95 1.54%
6 4 1,279.67 1,299.04 1.51%
6 5 1,547.98 1,571.11 1.49%
6 6 1,816.26 1,843.15 1.48%
Recycling bin collection:

Times
Bin Size per Week

1.5 1 96.92 107.56 10.98%

1.5 2 141.50 153.54 8.51%

1.5 3 205.47 222.40 8.24%

1.5 4 262.30 282.79 7.81%

1.5 5 319.11 343.19 7.55%

1.5 6 375.91 403.54 7.35%
2 1 122.32 135.29 10.60%
2 2 178.19 192.39 7.97%
2 3 258.80 278.67 7.68%
2 4 379.19 412.04 8.66%
2 5 461.17 499.94 8.41%
2 6 543.10 587.78 8.23%
3 1 153.49 167.66 9.23%
3 2 237.19 253.15 6.73%
3 3 346.04 368.26 6.42%
3 4 442.38 468.65 5.94%
3 5 538.66 568.95 5.62%
3 6 634.93 669.26 5.41%
2025 Duarte Proposed Rates_8-26-24_City File Staff Report 3

City of Duarte
Burrtec Waste Services
Proposed 2024 Rate Increases
Effective January 1, 2025
Current Proposed
1/1/24 1/1/25
Rates Rates Change
Commercial Food Waste bin collection:

Times
Bin Size per Week
2 1 203.69 207.35 1.80%
2 2 337.08 342.92 1.73%
2 3 465.36 473.21 1.69%
2 4 586.41 596.01 1.64%
2 5 707.48 718.85 1.61%
2 6 828.54 841.68 1.59%
Barrel
65g 1 58.81 60.09 2.18%
65g 2 97.21 99.48 2.34%
65g 3 141.33 144.78 2.44%
65g 4 182.59 187.12 2.48%
65g 5 223.86 229.49 2.51%
65g 6 265.19 271.91 2.53%
Green waste bin collection:

Times
Bin Size per Week

1.5 1 127.71 133.28 4.36%
2 1 175.99 183.62 4.34%
2 2 351.89 367.16 4.34%
3 1 249.95 260.95 4.40%
3 2 433.19 452.99 4.57%
3 3 638.24 667.54 4.59%
3 4 832.35 870.84 4.62%
3 5 1,026.44 1,074.08 4.64%
3 6 1,220.62 1,277.44 4.66%
Split Bin:

Times
Bin Size per Week
3 1 283.05 283.09 0.01%
3 2 437.93 435.73 -0.50%
3 3 639.15 635.52 -0.57%
3 4 817.01 811.52 -0.67%
3 5 994.79 987.48 -0.73%
3 6 1,172.74 1,163.58 -0.78%
2025 Duarte Proposed Rates_8-26-24_City File Staff Report 4

City of Duarte
Burrtec Waste Services
Proposed 2024 Rate Increases
Effective January 1, 2025
Current Proposed
1/1/24 1/1/25
Rates Rates Change
Bin push rates:

Times
Distance per Week
0'-25' 1 0.00 0.00
0'-25' 2 0.00 0.00
0'-25' 3 0.00 0.00
26'-50' 1 7.96 8.22 3.27%
26'-50' 2 15.90 16.42 3.27%
26'-50' 3 23.87 24.65 3.27%
51'-75' 1 11.92 12.31 3.27%
51'-75' 2 23.87 24.65 3.27%
51'-75' 3 35.77 36.95 3.30%
76'-100' 1 15.90 16.42 3.27%
76'-100' 2 31.81 32.86 3.30%
76'-100' 3 47.69 46.91 -1.64%
101'-125' 1 19.89 20.54 3.27%
101'-125' 2 39.78 41.09 3.29%
101'-125' 3 59.66 61.62 3.29%
126'-150' 1 23.87 24.65 3.27%
126'-150' 2 47.73 49.30 3.29%
126'-150' 3 71.57 73.92 3.28%
151'-175' 1 27.85 28.76 3.27%
151'-175' 2 55.67 57.50 3.29%
151'-175' 3 83.49 86.23 3.28%
176'-200' 1 31.81 32.86 3.30%
176'-200' 2 63.95 66.05 3.28%
176'-200' 3 95.44 98.58 3.29%
200'+ 1 (per foot) 0.17/foot 0.18/foot
200'+ 2 (per foot) 0.33/foot 0.34/foot
200'+ 3 (per foot) 0.48/foot 0.5/foot
Refuse rolloff containers:

Size Tonnage
20 5 696.34 727.65 4.50%
30 5 696.34 727.65 4.50%
40 5 696.34 727.65 4.50%
Compactor 5 775.18 808.13 4.25%
Recycling rolloff containers:

Size Tonnage
40 0 288.69 294.76 2.10%
Compactor 0 367.53 375.25 2.10%
Green waste rolloff containers:

Size Tonnage
20/40 5 1,038.49 1,090.61 5.02%
Clean Inert containers:

Size Tonnage
10/20/40 10 303.20 309.38 2.04%
Construction & Demolition containers
Size Tonnage
10/40 5 795.62 824.56 3.64%
2025 Duarte Proposed Rates_8-26-24_City File Staff Report 5

City of Duarte
Burrtec Waste Services
Proposed 2024 Rate Increases
Effective January 1, 2025
Current Proposed
1/1/24 1/1/25
Rates Rates Change
Extra Services:

Extra refuse bin collection/service 57.87 59.77 3.28%
Extra pick-up Bin Compactor (Trash) 77.21 79.75 3.29%
Lock installed 6.40 6.61 3.28%
Lock removed - damaged by customer 35.18 36.34 3.30%
Recycling contamination (1 grace per year) 57.87 59.77 3.28% Steam Clean (roll-off compactors) 127.46 131.65 3.29%
Steam Clean (bin compactors) 57.87 59.77 3.28%
Tilthopper 50.27 51.92 3.28%
Food Waste Contamination (1 grace per year) 63.50 65.59 3.29% Dry run/ relocation 89.12 92.05 3.29%
Contamination Cleaning
- Barrel 69.53 71.81 3.28%
- Bin 81.40 84.07 3.28%
Temporary Bin Services:
3 Cubic Yd (7 day use) 175.21 180.97 3.29%
Dump & Return 175.21 180.97 3.29%
Dry run/ relocation
Permanent Boxes - Weekly Rent Fee 203.76 210.45 3.28%
Temporary Boxes - Daily Rent Fee 29.11 30.07 3.30%
Certificate of Destruction 134.12 138.53 3.29%
Residential Street Sweeping Service Alternate Day/Side 2.25 + base fee 2.33 + base fee Commercial Street Sweeping Service Alternate Day/Side 4.35 + base fee 4.49 + base fee Barrel Exchange (one exchange per year N/C, does not 17.44 18.01 3.27% apply to graffiti or damaged barrels)
Barrel Replacement (resdl-customer damaged 75.10 77.57 3.29% comml-lost or stolen)
Bin Exchange (one exchange per year N/C, does not 87.18 90.04 3.28% apply to graffiti or damaged bins)
Bin Replacement + actual cost of bin (comm lost or stolen) 96.56 99.73 3.28% End Dump (rate per hour) N/A 220.29 New
2025 Duarte Proposed Rates_8-26-24_City File Staff Report 6

AMENDMENT #16 TO AGREEMENT BETWEEN
THE CITY OF DUARTE AND BURRTEC WASTE SERVICES LLC.

This Amendment No. 16 to the Agreement Between the City Of Duarte And Burrtec Waste Services LLC For Municipal Solid Waste, Recyclables, And Green Waste Collection, Transportation, Disposal, Composting, And Processing (“Amendment No. 16”) is made and entered into as of December 10, 2024 (“Effective Date”), by and between the CITY OF DUARTE, a municipal corporation (“City”), and BURRTEC WASTE SERVICES, LLC, a California limited liability company (“Contractor”). City and Contractor are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS
A. City and Contractor entered into that certain agreement titled “Agreement Between the City of Duarte and Burrtec Waste Service [sic], LLC for Municipal Solid Waste, Recyclables, and Green Waste Collection, Transportation, Disposal, Composting, and Processing” dated on or about September 18, 1996, also referred to as “Agreement Between The City of Duarte And Burrtec Waste Services[sic], LLC For Solid Waste Collection, Processing and Disposal Services, September 18, 1996 (the “Original Agreement”), as amended by that certain Amendment No. 1 thereto dated on or about March 8, 2004 (“Amendment No. 1”), by that certain Amendment No. 2 thereto dated on or about November 13, 2007 (“Amendment No. 2”), by that certain Amendment No. 3 thereto dated on or about February 24, 2009 (“Amendment No. 3”), by that certain Amendment No. 4 thereto dated on or about June 22, 2010 (“Amendment No. 4”), and by that certain Amendment No. 5 thereto dated on or about December 10, 2013 (“Amendment No. 5”) and by that certain Amendment No. 6 dated on or about December 15, 2014 (“Amendment No. 6”) by that certain Amendment No. 7 dated on or about December 23, 2015 (“Amendment No. 7”) by that certain Amendment No. 8 dated on or about December 13, 2016 (“Amendment No. 8”) and by certain Amendment No. 9 dated on or about December 12, 2017 (“Amendment No. 9”), and by certain Amendment No. 10 dated on or about December 20, 2018 (“Amendment No. 10”) and by certain Amendment No. 11 dated on or about December 4, 2019 (“Amendment No. 11”), and by certain Amendment No. 12 dated on or about December 21, 2020 (“Amendment No. 12”) and by certain Amendment No. 13 dated on or about October 26, 2021, (“Amendment No. 13”) and by certain Amendment No. 14 dated on or about December 13, 2022 (“Amendment No.14”), and by certain Amendment No. 15 dated on or about November 14, 2023 (“Amendment No.15”).

The Original Agreement as amended by Amendment Nos 1 through 15, inclusive, is hereinafter referred to collectively as the “Agreement.”
B. City and Contractor desire to enter into this Amendment No. 16 to, among other things, amend the Terms and Conditions of the Agreement.

C. The Legislature of the State of California, by enactment of the California Integrated Waste Management Act of 1989 (AB 939) (California Public Resources Code Section 40000, et seq.), has declared that it is in the public interest to authorize and require local agencies to make adequate provisions for Solid Waste handling within their jurisdictions.

D. The State of California has found and declared that the amount of Solid Waste generated in California, coupled with diminishing Disposal capacity and interest in minimizing

potential environmental impacts from landfilling and the need to conserve natural resources, have created an urgent need for State and local agencies to enact and implement an aggressive integrated waste management program. The State has, through enactment of AB 939 and subsequent related legislation including, but not limited to: the Jobs and Recycling Act of 2011 (AB 341), the Event and Venue Recycling Act of 2004 (AB 2176), SB 1016 (Chapter 343, Statutes of 2008), the Mandatory Commercial Organics Recycling Act of 2014 (AB 1826), and the Short-Lived Climate Pollutants Bill of 2016 (SB 1383), directed the responsible State agency, and all local agencies, to promote a reduction in Landfill Disposal and to maximize the use of feasible waste reduction, Reuse, Recycling, and composting options in order to reduce the amount of material that must be Disposed.

E. SB 1383 establishes regulatory requirements for jurisdictions, Generators, haulers, Solid Waste facilities, and other entities to support achievement of State-wide Organic Waste Disposal reduction targets.

F. SB 1383 Regulations require the CITY to implement Collection programs, meet Processing facility requirements, conduct contamination monitoring, provide education, maintain records, submit reports, monitor compliance, conduct enforcement, and fulfill other requirements; and, the CITY has chosen to delegate some of its responsibilities to the Contractor, acting as the CITY’s designee, and Contractor desires to take on these responsibilities.

G. Except as otherwise set forth in this Amendment No. 16, the defined terms used herein shall have the same meanings as used in the Agreement.

NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and promises hereinafter contained, and for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Parties hereto agree as follows:

1. TERM. Section 3.01 (Term) of the Agreement is hereby amended in its entirety to read as follows:

3.01 Term. The Term of this Agreement shall expire effective December 31, 2034, subject to subsection (c) below
(c) The Agreement Term may be extended one (1) additional year each year from and after December 31, 2025, so as to continually maintain a ten (10) year period as the remaining Term of the Agreement. Such extension may be granted by City with or without cause, pursuant to the Annual Performance Review procedures and schedule as laid forth in the Agreement.

2. DEFINITIONS. The following definitions are added to the Agreement, and/or amended as set forth herein, as applicable. Definitions otherwise contained in the Agreement and/or any previous amendment(s), but which are not addressed below, shall remain the same.

Black Container has the same meaning as Gray Container and shall be used for the purpose of storage and collection of Black Container Waste.

Blue Container has the same meaning as in 14 CCR Section 18982(a)(5) and shall be used for the purpose of storage and Collection of Source Separated Recyclable Materials or Source Separated Blue Container Organic Waste.

Brown Container has the same meaning as in 14 CCR Section 18982.2(a)(5.5) and shall be used for the purpose of storage and collection of source separated Food Waste pursuant to 14 CCR Section 18984.1(6)(A).

California Code of Regulations or CCR means the State of California Code of Regulations. CCR references in this Agreement are preceded with a number that refers to the relevant Title of the CCR (e.g., “14 CCR refers to Title 14 of CCR).

CalRecycle means the California Department of Resources Recycling and Recovery, which is the department designated with responsibility for developing, implementing, and enforcing SB 1383 Regulations on jurisdictions and other regulated entities.

Collect or Collection means Solid Waste, Recyclables, Food Waste and Organic Waste pickups made by CONTRACTOR as required by and in accordance with the provisions of this Agreement.

Commercial Edible Food Generators includes Tier One or Tier Two Commercial Edible Food Generators as defined in 14 CCR Section 18982(a)(73) and (a)(74). For the purposes of this definition, Food Recovery Organizations and Food Recovery Services are not Commercial Edible Food Generators.

Compostable Plastics or Compostable Plastic means plastic materials that meet the ASTM D6400 standard for compostability, or as otherwise described in 14 CCR Section 18984.1(a)(1)(A) or 18984.2(a)(1)(C).

Compost has the same meaning as in 14 CCR Section 17896.2(a)(4), as may be amended from time to time.

Diversion or Divert means activities which reduce or eliminate discarded materials from disposal, including, but not limited to, source reduction, Reuse, salvage, Recycling, and composting.

Edible Food means food intended for human consumption, or as otherwise defined in 14 CCR Section 18982(a)(18). For the purposes of this Agreement, Edible Food is not Solid Waste if it is recovered and not discarded. Nothing in this Chapter or in 14 CCR, Division 7, Chapter 12 requires or authorizes the recovery of Edible Food that does not meet the food safety requirements of the California Retail Food Code. If the definition in 14 CCR Section 18982(a)(18) for Edible Food differs from this definition, the definition in 14 CCR Section 18982(a)(18) shall apply to this Agreement.

Excluded Waste means Hazardous Substance, Hazardous Waste, Infectious Waste, Designated Waste, volatile, corrosive, Medical Waste, infectious, regulated radioactive waste, and toxic substances or material that Facility operator(s), which receive materials from the City and its generators, reasonably believe(s) would, as a result of or upon acceptance, transfer, processing, or disposal, be a violation of local, State, or Federal law, regulation, or ordinance, including: land use

restrictions or conditions, waste that cannot be disposed of in Class III Landfills or accepted at the Facility by permit conditions, waste that in the City’s, or its Designee’s reasonable opinion would present a significant risk to human health or the environment, cause a nuisance or otherwise create or expose CONTRACTOR or CITY to potential liability: but not including de minimis volumes or concentrations of waste of a type and amount normally found in Single-Family or Multi-Family Solid Waste after implementation of programs for the safe collection, processing, recycling, treatment, and disposal of batteries and paint in compliance with Sections 41500 and 41802 of the California Public Resources Code.

Facility(ies) means any plant, site, or operation used for the purpose of handling discarded materials, including, but not limited to, disposal, transfer, recycling, composting, and processing facilities or operations.

Food Recovery means actions to collect and distribute food for human consumption that otherwise would be disposed, or as otherwise defined in 14 CCR Section 18982(a)(24).

Food Recovery Organization means an entity that engages in the collection or receipt of Edible Food from Commercial Edible Food Generators and distributes that Edible Food to the public for Food Recovery either directly or through other entities, or as otherwise defined in 14 CCR Section 18982(a)(25), including, but not limited to:
(1) A food bank as defined in Section 113783 of the Health and Safety Code; (2) A nonprofit charitable organization as defined in Section 113841 of the Health and Safety Code; and,
(3) A nonprofit charitable temporary food facility as defined in Section 113842 of the Health and Safety Code.

A Food Recovery Organization is not a Commercial Edible Food Generator for the purposes of this Agreement and implementation of 14 CCR, Division 7, Chapter 12 pursuant to 14 CCR Section 18982(a)(7).

If the definition in 14 CCR Section 18982(a)(25) for Food Recovery Organization differs from this definition, the definition in 14 CCR Section 18982(a)(25) shall apply to this Agreement.

Food Recovery Service means a Person or entity that collects and transports Edible Food from a Commercial Edible Food Generator to a Food Recovery Organization or other entities for Food Recovery; or as otherwise defined in 14 CCR Section 18982(a)(26). A Food Recovery Service is not a Commercial Edible Food Generator for the purposes of this Chapter and implementation of 14 CCR, Division 7, Chapter 12 pursuant to 14 CCR Section 18982(a)(7).

Food Scraps means the unavoidable waste products from food preparation including but not limited to, carrot peelings, apple cores, meat trimmings, bones. Food Scraps excludes fats, oils, liquids, and grease when such materials are Source Separated from other Food Scraps.

Food-Soiled Paper means compostable paper material that has come in contact with food or liquid, such as, but not limited to, napkins and pizza boxes.

Food Waste means all food and Food Scraps. Food Waste excludes fats, oils, liquids, and grease when such materials are Source Separated from other Food Waste. With respect to Single Family and Multi-Family Residential Dwellings Food Waste is a subset of Source Separated Green Container Organic Waste. Edible Food separated for Food Recovery shall not be considered Food Waste
Generator means the Person or entity that is responsible for the initial creation of waste, or as otherwise defined in 14 CCR Section 18982(a)(48).

Gray Container or (Black Container) has the same meaning as in 14 CCR Section 18982(a)(28) and shall be used for the purpose of storage and Collection of Gray Container Waste. The lid or body of a container may be black and shall have the same meaning as Gray Container.

Gray Container Waste or (Black Container Waste) means Solid Waste that is collected in a Gray Container as specified in 14 CCR Sections 18984.1(a) and (b), or as otherwise defined in 14 CCR Section 17402(a)(6.5). Gray Container Waste may specifically include carpet, Non-Compostable Paper and textiles.

Green Container has the same meaning as in 14 CCR Section 18982(a)(29) and shall be used for the purpose of storage and collection of SSGCOW.

Hauler Route(s) means the designated itinerary or sequence of stops for each segment of the CITY’s collection service area, or as otherwise defined in 14 CCR Section 18982(a)(31.5).

Large Event means an event, including, but not limited to, a sporting event or a flea market, that charges an admission price, or is operated by a local agency, and serves an average of more than 2,000 individuals per day of operation of the event, at a location that includes, but is not limited to, a public, nonprofit, or privately owned park, parking lot, golf course, street system, or other open space when being used for an event. If the definition in 14 CCR Section 18982(a)(38) differs from this definition, the definition in 14 CCR Section 18982(a)(38) shall apply to this Agreement.

Large Venue means a permanent venue facility that annually seats or serves an average of more than 2,000 individuals within the grounds of the facility per day of operation of the venue facility.

For purposes of 14 CCR, Division 7, Chapter 12 and this Agreement, a venue facility includes, but is not limited to, a public, nonprofit, or privately owned or operated stadium, amphitheater, arena, hall, amusement park, conference or civic center, zoo, aquarium, airport, racetrack, horse track, performing arts center, fairground, museum, theater, or other public attraction facility. For purposes of 14 CCR, Division 7, Chapter 12 and this Agreement, a site under common ownership or control that includes more than one Large Venue that is contiguous with other Large Venues in the site, is a single Large Venue. If the definition in 14 CCR Section 18982(a)(39) differs from this definition, the definition in 14 CCR Section 18982(a)(39) shall apply to this Agreement.

Non-Compostable Paper includes, but is not limited to, paper that is coated in a plastic material that will not breakdown in the composting process, or as otherwise defined in 14 CCR Section 18982(a)(41).

Non-Organic Recyclables means non-putrescible and non-hazardous recyclable wastes including, but not limited to, bottles, cans, metals, plastics, and glass, or as otherwise defined in 14 CCR Section 18982(a)(43).

Organic Waste means Solid Wastes containing material originated from living organisms and their metabolic waste products including, but not limited to, food, green material, landscape and pruning waste, organic textiles and carpets, lumber, wood, Paper Products, Printing and Writing Paper, manure, biosolids, digestate, and sludges, or as otherwise defined in 14 CCR Section 18982(a)(46).

Biosolids and digestate are as defined in 14 CCR Section 18982(a)(4) and 14 CCR Section 18982(a)(16.5), respectively.

Paper Products include, but are not limited to, paper janitorial supplies, cartons, wrapping, packaging, file folders, hanging files, corrugated boxes, tissue, and toweling; or as otherwise defined in 14 CCR Section 18982(a)(51).

Printing and Writing Papers include, but are not limited to, copy, xerographic, watermark, cotton fiber, offset, forms, computer printout paper, white wove envelopes, manila envelopes, book paper, note pads, writing tablets, newsprint, and other uncoated writing papers, posters, index cards, calendars, brochures, reports, magazines, and publications; or as otherwise defined in 14 CCR Section 18982(a)(54).

Processing means the controlled separation, recovery, volume reduction, conversion, or Recycling of Solid Waste including, but not limited to, organized, manual, automated, or mechanical sorting, the use of vehicles for spreading of waste for the purpose of recovery, and/or includes the use of conveyor belts, sorting lines, or volume reduction equipment, or as otherwise defined in 14 CCR Section 17402(a)(20).

Prohibited Container Contaminants means the following: (i) discarded materials placed in the Blue Container that are not identified as acceptable Source Separated Recyclable Materials for the City’s Blue Container; (ii) discarded materials placed in the Brown Container that are not identified as acceptable Source Separated Food Waste for the City’s Brown Container; (iii) discarded materials placed in the Green Container that are not identified as acceptable Source Separated Green Container Organic Waste for the City’s Green Container; (iv) Discarded Materials placed in the Gray Container that are acceptable Source Separated Recyclable Materials, Source Separated Food Waste and/or Source Separated Green Container Organic Wastes to be placed in the City’s Green Container, Brown Container, and/or Blue Container; and (v) Excluded Waste placed in any Container.

Recycle or Recycling means the process of Collecting, sorting, cleansing, treating, and reconfiguring materials for the purpose of returning them to the economic mainstream in the form of raw material for new, Reused, or reconstituted products that meet the quality standards necessary to be used in the marketplace. Recycling includes processes deemed to constitute a reduction of landfill disposal pursuant to 14 CCR, Division 7, Chapter 12, Article 2. Recycling does not include gasification or transformation as defined in Public Resources Code Section 40201.

Reuse or any variation thereof, means the use, in the same, or similar, form as it was produced, of a material which might otherwise be discarded, or as otherwise defined in 14 CCR Section 17402.5(b)(2).

SB 1383 means Senate Bill 1383 of 2016 approved by the Governor on September 19, 2016, which added Sections 39730.5, 39730.6, 39730.7, and 39730.8 to the Health and Safety Code, and added Chapter 13.1 (commencing with Section 42652) to Part 3 of Division 30 of the Public Resources Code, establishing methane emissions reduction targets in a statewide effort to reduce emissions of short-lived climate pollutants as amended, supplemented, superseded, and replaced from time to time.

SB 1383 Regulations or “SB 1383 Regulatory” means or refers to, for the purposes of this Agreement, the Short-Lived Climate Pollutants: Organic Waste Reduction regulations developed by CalRecycle and adopted in 2020 that created 14 CCR, Division 7, Chapter 12 and amended portions of regulations of 14 CCR and 27 CCR.

SB 619 means Senate Bill 619 of 2021 approved by the Governor on October 5, 2021, which amended Section 42652.5 of the Public Resource Code, authorizing the department, notwithstanding the regulations, to establish any maximum compliance deadline in a corrective action plan that it determines to be necessary and appropriate under the circumstances for the correction of a violation of the regulations.

Service Level refers to the number and size of a Customer’s Container(s) and the frequency of Collection service, as well as ancillary services such as lock/unlock service, Container push/pull service, etc.

Source Separated means materials, including commingled Recyclable materials, that have been separated or kept separate from the Solid Waste stream, at the point of generation, for the purpose of additional sorting or processing those materials for Recycling or Reuse in order to return them to the economic mainstream in the form of raw material for new, reused, or reconstituted products which meet the quality standards necessary to be used in the marketplace, or as otherwise defined in 14 CCR Section 17402.5(b)(4). For the purposes of the Agreement, Source Separated shall include separation of materials by the Generator, property owner, property owner’s employee, property manager, or property manager’s employee into different Containers for the purpose of Collection such that Source Separated materials are separated from Gray Container Waste or other Solid Waste for the purposes of Collection and processing.

Source Separated Blue Container Organic Waste means Source Separated Organic Wastes that can be placed in a Blue Container that is limited to the collection of those Organic Wastes and NonOrganic Recyclables as defined in Section 18982(a)(43), or as otherwise defined by Section 17402(a)(18.7).

Source Separated Brown Container Food Waste means Source Separated Food Waste that can be placed in a Brown Container.

Source Separated Green Container Organic Waste means Source Separated Organic Waste that can be placed in a Green Container that is specifically intended for the separate collection of

Organic Waste by the generator, excluding Source Separated Blue Container Organic Waste, carpets, Non-Compostable Paper, and textiles.

Source Separated Recyclable Materials means Source Separated Non-Organic Recyclables and Source Separated Blue Container Organic Waste.

Tier One Commercial Edible Food Generator means a Commercial Edible Food Generator that is one of the following:
(1) Supermarket.
(2) Grocery Store with a total facility size equal to or greater than 10,000 square feet. (3) Food Service Provider.
(4) Food Distributor.
(5) Wholesale Food Vendor.

If the definition in 14 CCR Section 18982(a)(73) of Tier One Commercial Edible Food Generator differs from this definition, the definition in 14 CCR Section 18982(a)(73) shall apply to this Agreement.

Tier Two Commercial Edible Food Generator means a Commercial Edible Food Generator that is one of the following:
(1) Restaurant with 250 or more seats, or a total facility size equal to or greater than 5,000 square feet.
(2) Hotel with an on-site food facility and 200 or more rooms. (3) Health facility with an on-site food facility and 100 or more beds. (4) Large Venue.
(5) Large Event.
(6) A State agency with a cafeteria with 250 or more seats or total cafeteria facility size equal to or greater than 5,000 square feet.
(7) A local education agency with an on-site food facility.

If the definition in 14 CCR Section 18982(a)(74) of Tier Two Commercial Edible Food Generator differs from this definition, the definition in 14 CCR Section 18982(a)(74) shall apply to this Agreement.

Waste Evaluations means sampling waste from hauler routes as specified in 14 CCR Section 18984.5 C.

3. COLLECTION SYSTEM “Collection System” is added to the Agreement, and/or amended as set forth herein, as applicable:

General. CONTRACTOR shall provide an approved Collection program for the separate Collection of Source Separated Recyclable Materials, Source Separated Green Container Organic Waste, Source Separated Brown Container Food Waste, and Gray Container Waste as specified in this Agreement, using Containers that comply with the requirements of this Agreement, SB 619, and SB 1383

Regulations. CONTRACTOR shall perform site assessments as needed to determine service level needs, and modify collection routes as required.

CONTRACTOR shall not knowingly Collect Blue, Green, Brown or Gray Containers that include an excess of twenty-five percent (25%) by weight of Prohibited Container Contaminants. Prohibited Container Contaminant tolerance as a percentage may be modified upon mutual agreement between CITY and CONTRACTOR.

Source Separated Recyclable Materials Collection (Blue Container).

CONTRACTOR shall provide Blue Containers to all Customers not eligible for a waiver and not employing alternative compliance protocols and shall provide Source Separated Recyclable Materials Collection service. CONTRACTOR shall transport the Source Separated Recyclable Materials to a Facility that recovers the materials designated for Collection in the Blue Containers, in accordance with the SB 1383 Regulations.

Source Separated Green Container Organic Waste Collection (Green Container).

CONTRACTOR shall provide Green Containers to all Customers not eligible for a waiver and not employing alternative compliance protocols and shall provide Source Separated Green Container Organic Waste Collection service.

CONTRACTOR shall Transport the Source Separated Green Container Organic Waste to a Facility in accordance with SB 1383 Regulations.

Source Separated Brown Container Food Waste Collection (Brown Container).

CONTRACTOR may provide Brown Containers to all commercial Customers not eligible for a waiver and not employing alternative compliance protocols and shall provide Source Separated Food Waste Collection service to said customers.

CONTRACTOR shall transport Source Separated Food Waste to a Facility in accordance with SB 1383 Regulations.

Gray Container Waste Collection. CONTRACTOR shall provide Gray Containers to Customers for Collection of Gray Container Waste and shall provide Gray Container Waste Collection service. CONTRACTOR shall transport the Gray Container Waste to a Facility in accordance with the SB 1383 Regulations.

CONTRACTOR may allow carpets and textiles to be placed in the Gray Containers.

4. ORGANIC WASTE AND RECYCLABLE MATERIAL CAPACITY
GUARANTEE. “Organic Waste and Recyclable Material Capacity Guarantee” is added to the Agreement, and/or amended as set forth herein, as applicable:

Annually, For Facilities owned or operated by CONTRACTOR or an affiliate of CONTRACTOR, CONTRACTOR shall provide written notification to the CITY that the Facility has the capability to recover and/or process Organic Waste. CITY shall not implement or enforce an ordinance,

policy, procedure, permit condition, or initiative that prohibits the lawful processing of Organic Waste pursuant to 14 CCR Section 18990.1(b)

5. USE OF PLASTIC BAGS FOR FOOD WASTE COLLECTION IN GREEN CONTAINERS. “Use of Plastic Bags for Food Waste Collection in Green Containers” is added to the Agreement, and/or amended as set forth herein, as applicable:

CONTRACTOR may require Customers and Generators to place Food Waste in plastic bags, compostable bags, or other paper wrappings and put the bagged or wrapped Food Waste in the Green Container. CONTRACTOR shall provide written notification to the CITY that allowing the use of bags does not inhibit the ability of the CITY to comply with SB 1383 Regulations, and that the Facility can remove and/or process plastic bags when it recovers Source Separated Green Container Organic Waste. CONTRACTOR shall provide annual written notification to the CITY that the Facility has and will continue to have the capabilities to remove and process plastic bags when it recovers Source Separated Green Container Organic Waste.”

6. CONTAMINATION MONITORING. “Contamination Monitoring” is added to the Agreement, and/or amended as set forth herein, as applicable:

Contamination Monitoring
A. Actions upon Identification of Prohibited Container Contaminants.

Upon finding Prohibited Container Contaminants in a Container, CONTRACTOR shall follow the protocols set forth in this Section.
i. Record Keeping. The driver or other CONTRACTOR representative shall record each event of identification of Prohibited Container Contaminants in a written log or in the on-board computer system including date, time, Customer’s address, type of Container (Blue, Green, Brown or Gray Container); and maintain photographic evidence, when possible.
ii. Contamination Notices. Upon identification of Prohibited Container Contaminants in a Customer’s Container, CONTRACTOR shall provide the Customer a contamination notice. The contamination notification shall: (i) inform the Customer of the observed presence of Prohibited Container Contaminants; (ii) include the date and time the Prohibited Container Contaminants were observed; (iii) include information on the Customer’s requirement to properly Source Separate materials into the appropriate Containers, and the accepted and prohibited materials for Collection in the Blue Container, Brown Container, Green Container, and/or Gray Container; (iv) inform the Customer of the courtesy pick-up of the contaminated materials on this occasion with information for subsequent instances of Prohibited Container Contaminants, CONTRACTOR may assess contamination processing fees; and, (v) CONTRACTOR may include photographic evidence. CONTRACTOR shall leave the contamination notice attached to or adhered to the Customer’s contaminated Containers; at the premises’ door or gate; or, may deliver the notice by mail, e-mail, text message, or other electronic message.

iii. Notice of Assessment of Contamination Processing Fees. If the CONTRACTOR observes Prohibited Container Contaminants in a Customer’s Container on more than two occasions within a six-month time period and issued contamination notices on each of those occasions, the CONTRACTOR may impose a contamination processing fee pursuant to fees and rates approved by resolution of CITY Council on the third or subsequent instance of contamination. CONTRACTOR shall notify the CITY in its monthly report to CITY of Customers for which Contamination Processing fees were assessed. CONTRACTOR shall leave a Contamination Processing fee notice attached to or adhered to the Customer’s contaminated Container(s); at the premises door or gate; or, deliver the notice by mail, e-mail, text message, or other electronic message. The Contamination Processing fee notice shall identify the prohibited material(s), explain how to prevent future violations, and indicate that the Customer will be charged a contamination Processing fee on the next solid waste bill. The format of the contamination Processing fee notice shall be approved by the CITY. iv. Disposal of Contaminated Materials. If the CONTRACTOR observes Prohibited Container Contaminants in a Customer’s Container(s), CONTRACTOR may dispose of the Container’s contents, provided CONTRACTOR complies with the noticing requirements in subsection iii. above.

7. ROUTE REVIEWS AND WASTE EVALUATIONS. “Route Reviews and Waste Evaluations” is added to the Agreement, and/or amended as set forth herein, as applicable:

Route Reviews and Waste Evaluations:

CONTRACTOR shall meet its SB 1383 Regulations contamination monitoring requirements using Route Reviews or Waste Evaluations.
i. Route Reviews
a. If CONTRACTOR elects to perform Route Reviews, CONTRACTOR shall, conduct Hauler Route reviews for Prohibited Container Contaminants in Collection Containers in a manner that is deemed safe by the CONTRACTOR; is approved by CITY; is conducted in a manner that results in all Hauler Routes being reviewed annually, in an amount not less than the quantity specified in the calculations used to determine the Compliance Fee and is consistent and in accordance with SB 1383 Regulations and 14 CCR Section 18984.5(b). Containers may be randomly selected along the Hauler Route. This Section should not be construed to require that every container on a Hauler Route must be sampled annually. CONTRACTOR may prioritize the inspection of Customers that are more likely to be out of compliance.
b. Upon finding Prohibited Container Contaminants in the Container, CONTRACTOR shall follow the contamination monitoring noticing procedures as described herein.

ii. Waste Evaluations If CONTRACTOR elects to perform Waste Evaluations, CONTRACTOR shall conduct waste evaluations that comply with and meet the requirements of 14 CCR Section 18984.5(c). CITY maintains the right to observe, or hire a third party CONTRACTOR to observe the waste evaluations.
a. Sampling Method, Study Protocols. CONTRACTOR shall conduct waste evaluations for Prohibited Container Contaminants by sampling the contents of Containers on Hauler Routes in the following manner:
• CONTRACTOR shall conduct waste evaluations at least twice per year and in two distinct seasons of the year in a manner that complies with the requirements of 14 CCR Section 18984.5(c).
• CONTRACTOR’s waste evaluations shall include samples of Source Separated Recyclable Materials, Source Separated Green Container Organic Waste, and Gray Container Waste.
• The waste evaluations shall include samples from each Container type served by the CONTRACTOR and shall include samples taken from different areas in the CITY that are representative of the CITY’s waste stream. • The waste evaluations shall include at least the minimum number of samples required specified in SB 1383 Regulations.
• The CONTRACTOR shall transport all of the material collected for sampling to a sorting area at a permitted solid waste facility where the presence of Prohibited Container Contaminants for each Container type shall be measured to determine the ratio of Prohibited Container Contaminants present in each material stream by weight. To determine the ratio of Prohibited Container Contaminants, the CONTRACTOR shall use protocols established in accordance with the SB 1383 regulations.
b. Contamination Response. If the sampled weight of Prohibited Container Contaminants exceeds twenty-five percent (25%) of the measured sample for any material stream, the CONTRACTOR shall within fifteen (15) working days of the waste evaluation, notify all Customers on the sampled Hauler Route of their requirement to properly source separate materials into the appropriate Containers.

CONTRACTOR may provide this information by placing a written notice on the Customer’s Containers or the gate or door of the premises; and/or by mail, email, or electronic message to the Generators. The format of the warning notice shall be approved by the CITY.
c. Material Exceptions. Organic Waste that is textiles, carpet, hazardous wood waste, human waste, pet waste, or material(s) subject to a quarantine of movement issued by a County agricultural commissioner is not required to be measured as Organic Waste when calculating the amount of Organic Waste present in the Gray Container Waste.

iii. Recordkeeping Requirements.

CONTRACTOR shall maintain all applicable Container Contamination Minimization records required under SB 1383 Regulations, and report to the CITY on contamination monitoring activities, route reviews and/or waste evaluations, and actions taken.

CONTRACTOR shall provide reports to City on customers discovered to be out of compliance with the SB 1383 Regulations (based upon Contractor employee observation or complaints from the public), including a list of the customers, the type of violation (including not donating edible food, not providing Containers for customer use, and other compliance violations), actions taken to educate those customers, conditions and photographs, and contact information for those customers in order for the City to follow up on administrative review and potential issuance of Notices of Violation. Such reports and other information requested by the City shall be provided quarterly or as required by City.

8. ALTERNATIVE METHODS. “Alternative Methods” is added to the Agreement, and/or amended as set forth herein, as applicable:

Nothing in this Agreement shall prohibit the CONTRACTOR from meeting its compliance requirements by any alternative methods or procedures, provided it complies with SB 1383, its Regulations, and/or any other applicable law, as may be amended from time to time and as approved in writing by the CITY.

9. EDUCATION AND OUTREACH. “Education and Outreach” is added to the Agreement, and/or amended as set forth herein, as applicable:
i. Public Education.

CONTRACTOR shall, create applicable education materials and conduct education programs and activities as provided by and in accordance with the SB 1383 Regulations.

CONTRACTOR shall provide educational material by mail or electronically to customers providing information consistent with 14 CCR Section 18985. For illustrative purposes, such materials may include information concerning proper Recycling, the use of Containers for Organic Waste and commercial Food Waste, composting, preventing Contamination, and proper container placement. Updated educational materials shall be prepared and submitted to CITY Manager for approval. CONTRACTOR shall perform the recordkeeping requirements related to its compliance with education and outreach requirements under 14 CCR Section 18985.3. CITY shall perform the record keeping requirements related to its education and outreach efforts. CONTRACTOR shall cooperate and coordinate with the CITY on public education activities.

For the avoidance of doubt, Contractor shall annually provide the following to all its customers under the Agreement:
(i) Information on the customer’s requirements to properly separate materials in appropriate Containers.

(ii) Information on methods for: the prevention of Organic Materials generation, recycling Organic Materials on-site, sending Organic Materials to community composting, and any other local requirements regarding Organic Materials. (iii)Information regarding the methane reduction benefits of reducing the landfill disposal of Organic Materials, and the methods of Organic Materials recovery contemplated by the Agreement.
(iv)Information regarding how to recover Organic Materials. (v) Information related to the public health and safety and environmental impacts associated with the landfill disposal of Organic Materials. (vi)The above information will be provided, at a minimum, through print and/or electronic media, and may also be provided through workshops, meetings and/or on-site visits. All City approved information for distribution shall be posted on and downloadable from the Contractor’s website.
(vii) All information and materials shall be provided in English and Spanish.

Contractor shall provide educational materials to customers discovered to be out of compliance with the requirements of the SB 1383 Regulations, and shall report a list of such customers as well as actions taken to the City on a periodic basis as required by City. ii. Food Recovery Listings.

The CONTRACTOR and CITY shall coordinate, maintain and annually update a list of Food Recovery Organizations and Food Recovery Services operating within the CITY, maintain the list on the CONTRACTOR’s website, and share the list with the CITY so the CITY can post the list on the CITY’s website. The list shall include, at a minimum, the following information about each Food Recovery Organization and Food Recovery Service:
(1) Name and physical address;
(2) Contact information;
(3) Collection service area; and
(4) An indication of the types of Edible Food the Food Recovery Service or Food Recovery Organization can accept for Food Recovery.

CONTRACTOR shall post and maintain a web page or web pages that include organic waste recovery and edible food donation program information on its website.

10. BILLING AND ENROLLMENT “Billing and Enrollment” is added to the Agreement, and/or amended as set forth herein, as applicable:

Contamination Processing Fees.

Any contamination processing fees to be assessed upon a Customer account shall be included and itemized on the Customer’s invoice for the billing period in which the CONTRACTOR notified the Customer of the assessment of the contamination processing fee.

Enrollment Assistance
CITY requires that Customers subscribe to organic waste collection services.

CONTRACTOR shall assist the CITY in ensuring that the subscription of Customers to Collection services occurs in a timely and efficient manner. CONTRACTOR shall maintain records and provide reports necessary for the CITY to verify the subscription of Customers.

11. GENERATOR WAIVER PROGRAM COORDINATION. “Generator Waiver Program Coordination” is added to the Agreement, and/or amended as set forth herein, as applicable:
i. General.

In accordance with SB 1383 Regulations, CITY may grant waivers from organic waste collection services to eligible organic waste generators. ii. Requests Submitted to CONTRACTOR.

Waste generators may submit requests for waivers to the CONTRACTOR.

CONTRACTOR shall be responsible for the distribution, collection and evaluation of waiver applications as appropriate and provide CITY a recommendation to accept or reject waiver requests. CONTRACTOR shall review the generator’s waiver application and inspect the generator’s premises as needed to verify the accuracy of the application. CONTRACTOR shall provide documentation of the review in its recommendation to approve or deny the waiver request.

CITY ultimately retains the right to approve or deny any application, regardless of the CONTRACTOR’s recommendation and will process the approval or denial as required by SB 1383 requirements. CONTRACTOR shall report information regarding waivers reviewed to the CITY.
iii. CONTRACTOR Change in Customer Service Levels.

When the CITY grants a waiver to a generator, CITY shall notify the CONTRACTOR within ten (10) business days of the waiver approval with pertinent Customer information and any changes to the Subscription, Service Level or Collection service requirements for the Customer.

CONTRACTOR shall have five (5) business days to modify the Customer’s Collection Service Level and billing statement, as needed.
iv. Reverification of Waivers.

CONTRACTOR shall conduct such reverifications of waivers and review applicable records at least once every five (5) years for de minimis and physical space constraint waivers.

CONTRACTOR shall maintain a record of each waiver verification and provide a report to the

CITY documenting the waiver reverifications performed and recommendations to CITY on those waivers that CONTRACTOR concludes are no longer warranted. The CITY shall make a final determination of the waiver eligibility of those generators.

12. INSPECTION AND ENFORCEMENT. “Inspection and Enforcement” is added to the Agreement, and/or amended as set forth herein, as applicable:

Inspection and Enforcement
CONTRACTOR shall assist the CITY with applicable inspections and enforcement as specified in this Agreement. CONTRACTOR shall maintain a computer database of all oral and written SB 1383 related non-compliance incidents reported to CONTRACTOR by Customers, or discovered by CONTRACTOR. CONTRACTOR shall maintain applicable records from inspection and enforcement in accordance with SB 1383 Regulations, with the exception of Notice of Violations which shall be the responsibility of CITY. CITY shall be responsible for the issuance of any fines for CITY Municipal Code violations.

13. COMPLAINTS, REPORTS OF NON-COMPLIANCE. “Complaints, Reports of Non-Compliance” is added to the Agreement, and/or amended as set forth herein, as applicable:

Complaints, Reports of Non-Compliance
i. Investigation.

As needed, CONTRACTOR shall assist the CITY in its investigation of complaints investigations.
ii. Recordkeeping and Reporting.

CONTRACTOR agrees to maintain a log of all applicable oral and written complaints or reports of non-compliance received by the CONTRACTOR. CONTRACTOR shall be responsible for the prompt and courteous attention to the complaint and subsequent notice shall be sent to the CITY for further inspection and enforcement efforts.”

14. PROVISION FOR PROCUREMENT OF RECOVERED ORGANIC WASTE PRODUCT “Provision for Procurement of Recovered Organic Waste Products” is added to the Agreement, and/or amended as set forth herein, as applicable:

Provision for Procurement of Recovered Organic Waste Products CONTRACTOR agrees to act as a direct service provider on behalf of the CITY.

CONTRACTOR shall coordinate and cooperate with the CITY in meeting its recovered Organic Waste product procurement target, as required by SB 1383 Regulations, 14 CCR Section 18993.1.

CONTRACTOR shall procure and deliver an annual quantity of Recovered Organic Waste Products in an amount not more than the quantity specified in the rate adjustment calculations used to determine the Compliance Fee as requested by the CITY. Recovered Organic Waste Products

shall comply with 14 CCR 18993.1(f). CONTRACTOR shall comply with the recordkeeping and verification requirements of 14 CCR 18993.2.

15. CONTAINER REQUIREMENTS. “Container Requirements” is added to the Agreement, and/or amended as set forth herein, as applicable:

CONTRACTOR shall provide Collection Containers as follows: (i) Solid Waste container bodies and/or lids shall be black or gray; (ii) Recyclable Materials container bodies and/or lids shall be blue; (iii) Organic Waste Container bodies and/or lids shall be green; and (iv) commercial Food Waste Container bodies and/or lids shall be brown.

No later than January 1, 2036, CONTRACTOR shall provide all Customers with Collection Containers that comply with the Container color requirements specified in this Agreement or as otherwise specified in the SB 1383 Regulations. Notwithstanding this Section, the CONTRACTOR is not required to replace functional Containers, including Containers purchased prior to January 1, 2022, that do not comply with the color requirements of this Agreement prior to the end of the useful life of those Containers, or prior to January 1, 2035, whichever comes first.

16. LABELING REQUIREMENTS “Labeling Requirements” is added to the Agreement, and/or amended as set forth herein, as applicable:

Labeling Requirements
CONTRACTOR shall place a label on the body or lid of each Container that has been provided to a Customer that includes language or graphic images, or both, that indicate the primary materials accepted and the primary materials prohibited in that Container in accordance with the SB 1383 Regulations. Labels shall clearly indicate items that are Prohibited Container Contaminants for each Container.

17. ORGANICS RECORDKEEPING AND REPORTING. “Organics Recordkeeping and Reporting” is added to the Agreement, and/or amended as set forth herein, as applicable:

Organics Recordkeeping and Reporting
CONTRACTOR shall prepare and maintain the records identified in 14 CCR Section 18995.2(f) arising from the work performed by CONTRACTOR and assist CITY in reporting such information in form and format satisfactory to the CITY.

CONTRACTOR shall allow CITY access to records via remote access to CONTRACTOR’s third-party reporting software for the purposes of auditing and inspecting SB 1383-related records and reports. Additional information that may be required from time to time for the purposes of complying with the SB 1383 Regulations shall also be furnished by the CONTRACTOR within a reasonable amount of time and upon request.

Reports to CITY on customers discovered to be out of compliance with the SB 1383 Regulations, including a list of the customers, the type of violation (including not providing Containers for customer use, and other compliance violations), actions taken to educate those customers, and contact information for those customers. Such reports shall be provided quarterly or as required by CITY.

CONTRACTOR shall report on all activities as mutually agreed upon with the CITY at least one month in advance of the CITY’s reports to CalRecycle on August 1.

CONTRACTOR shall provide a full customer list including service level, date of service, and customer contact information upon CITY request.

18. IDENTIFICATION OF FACILITIES Identification of Facilities is added to the Agreement, and/or amended as set forth herein, as applicable:

CONTRACTOR shall identify the Recyclable Materials and Organic Waste Processing Facilities to which they will transport organic waste as required by the SB 1383 Regulations.

19. OTHER TERMS AND CONDITIONS UNCHANGED.

Except as expressly amended by the Amendment, all other terms and conditions of the Agreement shall remain unchanged. In the event of any conflict between the terms and conditions of this Amendment and the terms and conditions of the Agreement and/or any previous amendment thereto, the terms and conditions of this Amendment shall prevail and control.

20. COUNTERPARTS.

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. All counterparts shall be construed together and shall constitute one agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by and through their respective authorized officers, as of the date first above written.

CITY OF DUARTE BURRTEC WASTE SERVICES, LLC.

By: By:

Mayor
Its:

Attest:

By:

City Clerk
Approved as to Form:

By:

City Attorney

AGENDA REPORT
MEETING DATE: December 10, 2024
TO: Mayor and Members of the City Council
FROM: Kristen Petersen, Assistant City Manager/Admin. Serv. Director BY: Angela Chiaromonte, Financial Services Manager
SUBJECT: Audited Financial Statements for Fiscal Year 2023/24 RECOMMENDATION: It is recommended that the City Council receive and file the Audited Financial Statements for Fiscal Year 2023/24
FISCAL IMPACT: None

BACKGROUND
After the end of each fiscal year, an independent accounting firm is used to conduct a financial audit of the City of Duarte and the Housing Authority. Moss Levy and Hartzheim conducted our independent audit for fiscal year 2023/24.

DISCUSSION/ANALYSIS
Copies of the City financial statements for the fiscal year ended June 30, 2024, are attached. The auditor found them to be prepared in accordance with generally accepted accounting principles and to fairly present the financial position of the City. We did not have any deficiencies in 2023/24.

The original 2023/24 General Fund budget was adopted in June 2023 with a projected deficit of $1,507,400. At the mid-year review in February 2024, we projected that fiscal year 2023/24 would end with a deficit of $469,600. Since that time, property taxes, building permit revenue, interest earnings, fines and forfeitures related to cost recoveries of three large code enforcement cases came in higher than expected and several capital projects were delayed. With these changes, the City’s General Fund actually ended the fiscal year with a surplus of $3.8 million, which translates into $26.3 million in unrestricted cash, $4.7 million for special projects assigned by the City Council, $2 million restricted specifically for improvements in the Town Center Specific Plan area, $240,000 for public art, $226,000 for pension costs, $94,000 for storm drain improvements, and $36,000 for vehicle replacement.

The U.S. economy today faces a delicate balance between inflationary pressures and slowing growth. While inflation has cooled somewhat from its peak, it remains above target levels, prompting the Federal Reserve to maintain higher interest rates. This has led to higher borrowing Agenda Item: 10.D.

2 costs, affecting both consumers and businesses. Job growth continues, but the labor market shows signs of stability, with some sectors experiencing layoffs. Trade and investment are also affected by global issues. However, sectors like technology and clean energy show resilience, and there are signs of strength in consumer spending, contributing to hopes for a gradual economic recovery.

Please note that staff will be bringing the 2024/25 midyear budget before City Council in February 2025. We will discuss and analyze the fund balance more at that time, because the 2023/24 estimated fund balance was used when the City Council adopted the budget in June and now the actual ending fund balance will serve as a part of the 2024/25 mid-year analysis.

RECOMMENDATION
It is recommended that the City Council receive and file the Audited Financial Statements for Fiscal Year 2023/24.

FISCAL IMPACT
None.

ATTACHMENTS
Audited Financial Statements for Fiscal Year 2023/24
Fiscal Review: Reviewed and Approved:

Kristen Petersen Brian Villalobos
Assistant City Manager/ City Manager
Director of Administrative Services

CITY OF DUARTE, CALIFORNIA

FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Prepared by:

Finance Department

CITY OF DUARTE
For the Fiscal Year Ended June 30, 2024
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 .............................................................................. 49 Budgetary Comparison Schedule – SB1/RMRA 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 ....................................................................................................... 57 Note to Required Supplementary Information ......................................................................................... 58 Other Supplemental Information:

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

CITY OF DUARTE
For the Fiscal Year Ended June 30, 2024
Table of Contents
Page(s)
Nonmajor Budgetary Comparison Schedules – Special Revenue Funds (Continued):

Park Development .............................................................................................................................. 81 Measure W .......................................................................................................................................... 82 Bicycle and Pedestrian………………. ............................................................................................... 83 Low and Moderate Housing………………. ...................................................................................... 84 Nonmajor Budgetary Comparison Schedules – Capital Projects Funds Inclusionary Housing .......................................................................................................................... 85 Community Improvement ................................................................................................................... 86 Nonmajor Budgetary Comparison Schedule – Debt Service Funds Infrastructure....................................................................................................................................... 87

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
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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, 2024, 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 respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2024, 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 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.

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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 budget comparison schedule for the SB1/RMRA 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 51 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.

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Supplementary 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 accompanying combining and individual nonmajor governmental fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual non-major governmental 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, 2024, 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, 2024

4 City of Duarte
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
This discussion and analysis are 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, 2024. 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 $91,115,923 (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 Statement No. 34.  During the fiscal year, City program revenues exceeded expenses and the City’s net position reflects an increase of $5,513,095.
 The City’s governmental funds had ending fund balances of $50,565,222 which is an increase of $4,462,442 over the prior fiscal year fund balance of $46,102,780.  This fiscal year, the City’s General Fund experienced a net change in Fund Balance of $4,418,247.

This was primarily due to the increase in revenues such as property taxes, building permit revenue, interest earnings, fines and forfeitures related to cost recoveries of three large code enforcement cases. There were also reduced expenditures due to delayed projects.  The City’s debt increased by $321,740 during the fiscal year to $4,572,344 due largely to the new public safety office lease that was added to Long Term Liabilities reporting. See Note #8 for further details.
 At June 30, 2024, the City reported a net pension liability of $18,471,427 and related deferred outflows of $6,626,196 and deferred inflows of $631,280. See Note #11 for further details.  At June 30, 2024, the City reported an OPEB liability of $3,848,028 and related deferred outflows of $1,501,684 and deferred inflows of $3,326,722. 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.

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 are governmental 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. Two 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.

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 48 of the report.

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, 2024, is as follows:

Net Position
Governmental Activities
2023 2024
Current and other assets $ 49,183,626 $ 55,350,541
Capital assets 60,331,043 63,227,736
Total assets $109,514,669 $118,578,277
Deferred Outflows of Resources $ 9,395,352 $ 8,127,880
Current and other liabilities $ 2,762,263 $ 4,431,864
Long-term debt outstanding 26,081,283 26,891,799
Total liabilities $ 28,843,546 $ 31,323,663

Deferred Inflows of Resources $ 4,463,647 $ 4,266,571
Net assets (liabilities):

Net Investment in capital assets $ 57,168,359 $ 59,670,311 Restricted 16,683,037 16,863,221
Unrestricted 11,751,432 14,582,391
Total net position $ 85,602,828 $ 91,115,923
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 2024, assets exceeded liabilities by $91,115,923.

The City’s primary assets were cash - $46,499,458, land held for resale - $3,620,451 and capital assets - $63,227,736. 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 - $18,471,427, its net OPEB liability - $3,848,028 and its long-term bonded indebtedness - $4,572,344.

7 A summary of the changes in the City’s net position for the fiscal year ended June 30, 2024, is as follows:

Changes in Net Position

Governmental Activities
2023 2024
Revenues :

Program revenues :

Charges for services $3,314,721 $4,174,366
Operating grants 5,956,844 2,772,223
Capital grants 1,671,746 2,513,353
General revenues:

Taxes 15,695,783 16,304,534
Use of money and property 667,653 2,302,351
Intergovernmental 2,782,305 2,997,160
Miscellaneous 661,744 374,373
Total revenues 30,750,796 31,438,360
Expenses:

General government 5,763,754 6,952,817
Safety 6,232,272 7,560,586
Development 3,082,968 4,658,200
Recreation and culture 2,159,749 4,118,923
Transportation 2,684,548 2,554,442
Interest expense 69,369 80,297
Total expenses 19,992,660 25,925,265
Change in net position 10,758,136 5,513,095
Net position - beginning of fiscal year 74,844,692 85,602,828

Net position - end of fiscal year $85,602,828 $91,115,923 At fiscal year-end, the City’s net position had increased by $5,513,095.

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, 2024, the City’s governmental funds had a total ending fund balance of $50,565,222. This amount represents an increase of $4,462,442, or 9.7% as compared to the prior fiscal year fund balance of $46,102,780.

Really all of this increase took place in the General Fund and as discussed earlier, the increase in the General Fund was due to several factors, including property tax revenue increases, higher than expected building permit revenues, increased interest revenue resulting from increased rates and balances and delayed project expenses. Special Revenue Funds represent about $13 million of the City’s governmental funds and the changes were so minor that overall the special revenue fund balances only increased by approximately $39,000.

8 Capital Asset and Debt Administration
Capital Assets
At fiscal year-end, the City had $63.2 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 $2,896,693 as compared to the prior fiscal year. Additional information can be found in Note #6.

Debt Administration
At the end of the fiscal year, the City had both bonded and other long-term debt totaling $4,572,344. A summary of the City’s debt activity for the fiscal year ended is as follows:

Outstanding Debt at Fiscal Year-end

Increase
2023 2024 (Decrease)
US Bancorp Infrastructure Lease $2,276,306 $2,110,556 $ (165,750)) Apple Lease 0 21,605 21,605
CA Energy Comm Loan 48,344 29,439 (18,905)
Leases 321,677 837,038 515,361
Subscriptions 516,357 417,404 (98,953)
Accrued vacation & sick leave 1,087,920 1,156,302 68,382 Total debt $ 4,250,604 $4,572,344 $ 321,740
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 2023/24 with $33.6 million, which included $4.7 million in funds for special one-time projects, $2 million in funds that are specifically restricted for improvements in the Town Center Specific Plan area, $240,000 for public art, and $356,000 in restricted funds for storm drain, pension, and vehicle replacement expenses.

This is a $4 million increase in General Fund cash balance. As discussed earlier, while revenues did come in higher than projected in some areas, a good portion of the positive change in fund balance is the result of one-time projects being delayed, thus reducing expenditures. However, we know that delayed projects will only cost more in the future, and ongoing expenses continue to increase. The City is constantly working towards balancing operating expenditures with revenues and this fiscal 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.

CITY OF DUARTE

STATEMENT OF NET POSITION
JUNE 30, 2024
Governmental
Activities
Assets:

Cash and investments $ 46,499,458
Receivables:

Accounts 195,367
Taxes 3,828,377
Notes and loans, net -
Accrued interest 460,882
Grants 193,904
Leases 317,999
Prepaid costs 7,932
Land held for resale 3,620,451
Restricted assets:

Cash and investments with fiscal agent 226,171
Capital assets not being depreciated 25,010,792
Capital assets, net of accumulated depreciation/amortization 38,216,944 Total Assets 118,578,277
Deferred Outflows of Resources:

Deferred OPEB related items 1,501,684
Deferred pension related items 6,626,196
Total Deferred Outflows of Resources 8,127,880
Liabilities:

Accounts payable 3,176,847
Accrued liabilities 130,121
Accrued interest 39,111
Unearned revenue 305,186
Retentions payable 141,383
Deposits payable 639,216
Noncurrent liabilities:

Due within one year 565,695
Due in more than one year 4,006,649
Net OPEB liability 3,848,028
Net pension liability 18,471,427
Total Liabilities 31,323,663
Deferred Inflows of Resources:

Deferred OPEB related items 3,326,722
Deferred pension related items 631,280
Leases receivable 308,569
Total Deferred Inflows of Resources 4,266,571
Net Position:

Net investment in capital assets 59,670,311
Restricted for:

Development projects 9,927,529
Storm drains 93,704
Transportation 6,304,734
Pensions 226,171
Recreation and cultural 311,083
Unrestricted 14,582,391
Total Net Position $ 91,115,923
See Accompanying Notes to Financial Statements.
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CITY OF DUARTE

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
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 $ 6,952,817 $ 371,005 $ 328,034 $ - $ (6,253,778) Safety 7,560,586 299,330 380,290 - (6,880,966)
Development 4,658,200 3,132,538 255,563 1,208,426 (61,673) Recreation and cultural 4,118,923 371,493 - 95,403 (3,652,027) Transportation 2,554,442 - 1,808,336 1,209,524 463,418
Interest on long-term debt 80,297 - - - (80,297)
Total Governmental Activities 25,925,265 4,174,366 2,772,223 2,513,353 (16,465,323) Total Primary Government $ 25,925,265 $ 4,174,366 $ 2,772,223 $ 2,513,353 (16,465,323) General revenues:

Taxes:

Property taxes, levied for general purposes 3,514,843
Transient occupancy tax 735,467
Sales taxes 10,152,501
Franchise taxes 1,519,403
Business license taxes 382,320
Motor vehicle in lieu - unrestricted 2,997,160
Use of money and property 2,302,351
Other 374,373
Total general revenue 21,978,418
Change in net position 5,513,095
Net position, beginning of fiscal year 85,602,828
Net position, end of fiscal year $ 91,115,923
Program Revenues
See Accompanying Notes to Financial Statements.
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CITY OF DUARTE

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2024
SB1/RMRA Other Total
Special Governmental Governmental
General Revenue Funds Funds
Assets:

Pooled cash and investments $ 32,315,504 $ 1,214,678 $ 12,969,276 $ 46,499,458 Receivables:

Accounts 195,367 - - 195,367
Taxes 2,459,585 102,523 1,266,269 3,828,377
Notes and loans, Net - - - -
Accrued interest 460,882 - - 460,882
Grants 56,022 - 137,882 193,904
Leases 317,999 - - 317,999
Prepaid costs 7,932 - - 7,932
Due from other funds 613,562 - - 613,562
Land held for resale 2,738,698 - 881,753 3,620,451
Restricted assets:

Cash and investments - fiscal agents 226,171 - - 226,171 Total assets $ 39,391,722 1,317,201 $ 15,255,180 $ 55,964,103 Liabilities:

Accounts payable $ 1,793,982 $ 443,773 $ 939,092 $ 3,176,847 Accrued liabilities 127,897 - 2,224 130,121
Unearned revenue 96,493 - 208,693 305,186
Retention payable - 25,265 116,118 141,383
Deposits payable 609,216 - 30,000 639,216
Due to other funds - - 613,562 613,562
Total liabilities 2,627,588 469,038 1,909,689 5,006,315 Deferred inflows of resources:

Unavailable revenues 55,954 - 28,043 83,997
Lease 308,569 - - 308,569
Total deferred inflows of resources 364,523 - 28,043 392,566 Fund balances:

Nonspendable:

Prepaid costs 7,932 - - 7,932
Land held for resale 2,738,698 - - 2,738,698
Leases receivable 9,430 - - 9,430
Restricted for:

Development projects 2,050,236 7,877,293 - 9,927,529
Recreation and culture - - 71,383 71,383
Transportation 848,163 - 5,448,902 6,297,065
Storm drains 93,704 - - 93,704
Pensions 226,171 - - 226,171
Public art 239,700 - - 239,700
Committed to:

Vehicle replacement 35,808 - - 35,808
Assigned
Special projects 4,675,630 - - 4,675,630
Unassigned 26,322,302 - (80,130) 26,242,172
Total fund balances 36,399,611 848,163 13,317,448 50,565,222 Total liabilities, deferred inflows of
resources, and fund balances $ 39,391,722 $ 1,317,201 $ 15,255,180 $ 55,964,103 See Accompanying Notes to Financial Statements.
-11-

CITY OF DUARTE

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2024
Fund balances of governmental funds $ 50,565,222
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. 63,227,736 Long-term debt and compensated absences have not been included in the governmental fund activity:

U.S. Bancorp lease $ (2,110,556)
CA Energy Commission loan (29,439)
Apple lease (21,605)
Lease Liabilities (837,038)
Subscription Liabilities (417,404)
Compensated absences (4,572,344) (1,156,302)
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 1,501,684
Deferred inflows of resources (3,326,722)
Net OPEB liability (5,673,066) (3,848,028)
Accrued interest payable for the current portion of interest due on long-term debt has not been reported in the governmental funds. (39,111)
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. 83,997
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 (18,471,427)
Deferred inflows related to pensions (631,280)
Deferred outflows related to pensions 6,626,196 (12,476,511) Net position of governmental activities $ 91,115,923
See Accompanying Notes to Financial Statements.
-12-

CITY OF DUARTE

STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
SB1/RMRA Other Total
Special Governmental Governmental
General Revenue Funds Funds
Revenues:

Taxes $ 16,304,535 $ $ - $ 16,304,535 -
Assessments - 1,016,214 - 1,016,214
Licenses and permits 2,102,569 - - 2,102,569
Intergovernmental 3,410,236 588,275 4,256,868 8,255,379 Charges for services 460,389 - 27,920 488,309
Use of money and property 1,768,283 40,382 493,686 2,302,351 Fines and forfeitures 567,274 - - 567,274
Miscellaneous 351,530 - 22,843 374,373
Total revenues 24,964,816 628,657 5,817,531 31,411,004
Expenditures:

Current:

General government 6,311,334 - - 6,311,334
Safety 7,072,767 - 187,960 7,260,727
Development 2,722,613 1,521,154 - 4,243,767
Recreation and cultural 3,325,266 - - 3,325,266
Transportation - 1,127,249 - 1,127,249
Capital outlay 1,383,386 519,302 2,948,007 4,850,695
Debt service:

Principal retirement 289,922 - 186,477 476,399
Interest and fiscal charges 25,854 - 57,019 82,873
Total expenditures 21,131,142 519,302 6,027,866 27,678,310 Excess (deficiency) of revenues
over (under) expenditures 3,833,674 109,355 (210,335) 3,732,694 Other financing sources (uses):

Lease and subscription proceeds 669,388 - 60,360 729,748 Transfers in 811,631 - 896,446 1,708,077
Transfers out (896,446) (103,860) (707,771) (1,708,077) Total other financing
sources (uses) 584,573 (103,860) 249,035 729,748
Net change in fund balances 4,418,247 5,495 38,700 4,462,442 Fund balances, beginning of
fiscal year 31,981,364 842,668 13,278,748 46,102,780
Fund balances, end of fiscal year $ 36,399,611 $ 848,163 $ 13,317,448 $ 50,565,222 See Accompanying Notes to Financial Statements.
-13-

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, 2024
Net change in fund balances - total governmental funds $ 4,462,442 Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays, lease acquisitions, and subscription acquisitions 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 $ 4,850,695
Construction in progress disposed during the fiscal year (86,622) Amounts not recorded as capital outlays that were capitalized 133,853 Depreciation and amortization (2,001,233) 2,896,693
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 476,399
Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 2,576
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. (68,391) 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. (729,748) 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. 248,146 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. 27,356
Pension obligation benefits reported in the governmental funds includes cash payments made in to the trust fund and payments on behalf of retirees. In the statement of activities, pension expenses includes the change in the net pension liability, and the related change in pension amounts for deferred outflows of resources and deferred inflows of resources. (1,802,378) Change in net position of governmental activities $ 5,513,095 See Accompanying Notes to Financial Statements.
-14-

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 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.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 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 blended component units. Separate statements for each fund 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.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 17 -
Note 1: Summary of Significant Accounting Policies (Continued) SB1/RMRA Special Revenue Fund – This fund accounts for the City’s share of tax revenues collected by the State of California on the sale of fuel for motor vehicles pursuant to the road repair and accountability act of 2017. The use of these funds is restricted for basic road maintenance, rehabilitation, and critical safety projects on the local streets and roads system.

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.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 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.

Leases 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.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 19 -
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

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 20 -
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.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 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.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 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, 2024:

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

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

Air Quality Management Distribution Special Revenue Fund $ 52,585 Nonmajor Fund - Park Development Special Revenue Fund $ 80,130

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 23 -
Note 1: Summary of Significant Accounting Policies (Continued) Future Accounting Pronouncements
GASB Statements listed below will be implemented in future financial statements.

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

The provisions of Statement Number 102 “Certain risk Disclosures” are effective for fiscal years beginning after December 15, 2024.

The provisions of Statement Number 103 “Financial Reporting Model Improvements” are effective for fiscal years beginning after June 15, 2025.

The provisions of Statement Number 104 “Disclosure of Certain Capital Assets” are effective for fiscal years beginning after June 15, 2025.

Note 2: Cash and Investments
Cash and Investments
Cash and investments as of June 30, 2024, are classified in the accompanying financial statements as follows:

Deposits
At June 30, 2024, the carrying amount of the City’s deposits was $5,801,157 and the bank balance was $6,037,536. The 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 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 Statement of Net Position:

Cash on hand $ 3,025
Demand deposits 5,801,157
Investments 40,695,276
Restricted:

Cash and investments with fiscal agents 226,171
Total cash and investments Governmental Activities $ 46,725,629

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 24 -
Note 2: Cash and Investments (Continued)
Deposits (Continued)
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. There are no investments held by a bond trustee as of June 30, 2024. 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 $ 226,171

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 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 $40,695,276 does not have a rating provided by a nationally recognized statistical rating organization. The City’s restricted cash of $226,171 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 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, 2024, $6,037,536 of the City’s deposits with financial institutions in excess of federal depository insurance limits was held in collateralized accounts.

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”.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 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, 2024, was $40,695,276 which reflected an unrealized loss of $150,473 for the current fiscal year.

The total amount invested by all public agencies in LAIF as of June 30, 2024, was $21.9 billion. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2024, has a balance of $178 billion (56.92% was invested in government securities). The average maturity of PMIA investments was 217 days as of June 30, 2024.

Note 3: Interfund Receivables, Payables, and Transfers
The composition of interfund balances as of June 30, 2024, 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.

These will be eliminated as additional funds are received or the general fund transfers funds to cover the shortfalls.

Due From Due To
Other Funds Other Funds
Major Funds:

General $ 613,562 -
Nonmajor Special Revenue Funds:

Community Development Block Grant - 7,066
Park Development Grant - 79,494
Nonmajor Capital Project Fund:

Community Improvement - 527,002
Total $ 613,562 $ 613,562

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 27 -
Note 3: Interfund Receivables, Payables, and Transfers (Continued) Transfers In/Transfers Out:

Transfers Out in the amount of $896,446 were made out of the General Fund into the Lighting and Landscaping Fund ($672,427) for capital and administrative costs, into the Air Quality Management Fund ($3,182) to pay for leased car maintenance costs, and the Infrastructure Debt Service fund ($220,837) for debt payment costs.

Transfers In in the amount of $811,631 were made to reimburse the General Fund for expenditures paid on behalf of the State Gasoline Tax Fund ($89,961), Lighting and Landscape Fund ($343,200), Measure M Fund ($94,024), Proposition A Transit Fund ($60,000), the Proposition C Transit Fund ($45,000), Measure R LR Transit Fund ($75,586), and the SB1/RMRA Fund ($103,860).

Note 4: Notes Receivable
Notes and loans receivable as of June 30, 2024, 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 loans outstanding at June 30, 2024.

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 56 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, 2024, 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, 2024.

General SB1/RMRA Nonmajor
Transfers In Fund Fund Funds Total
General Fund $ - $ 103,860 $ 707,771 $ 811,631
Nonmajor Funds 896,446 - - 896,446
Total $ 896,446 $ 103,860 $ 707,771 $ 1,708,077
(Transfers Out)

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 28 -
Note 5: Leases Receivable
The City has 6 cell tower lease agreements in place as of June 30, 2024. 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. During the fiscal year ended June 30, 2024, the City entered into an amendment for this lease which grants additional option years. Under the new agreement and if all options are exercised then the lease will end in September 2053.

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 $1,794 from July 2023 through September 2023, $2,030 for the month of October 23, and $2,200 from November 2023 through June 2024. The current 5-year term will expire in September 2028.

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 $3,849 from July 2023 through October 2023, $3,962 for the month of November 23, and $4,003 from December 2023 through June 2024. The lease will expire in 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. The third option was exercised in February 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 $1,200 a month, increasing 4% each March under the terms of the lease. Payments received during the fiscal year were $2,641 from July 2023 through February 2024 and $2,746 from March 2024 through June 2024. The current 5-year term will expire in February 2029.

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 $1,803 from July 2023 through October 2023 and $1,821 from November 2023 through June 2024. The current 5-year term will expire in November 2024.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 29 -
Note 5: Leases Receivable (Continued)
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 $1,661 from July 2023 through November 2023 and $1,711 from December 2023 through June 2024. 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 additional optional 5-year terms. If the third option is exercised, the lease would end in March 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 $1,711 from July 2023 through February 2024, $1,714 for March 2024, and $1,762 from April 2024 through June 2024. The current 5-year term will expire in February 2025.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 30 -
Note 6: Capital Assets
A summary of changes in capital asset activity for the fiscal year ended June 30, 2024, is as follows:

Depreciation and amortization expense was charged to functions of the primary government as follows:

Governmental activities:

Capital assets, not being depreciated:

Land $ 21,737,333 $ $ - - $ - $ 21,737,333
Construction in progress 1,700,132 3,934,198 86,622 2,274,249 3,273,459 Total capital assets, not being depreciated 23,437,465 3,934,198 86,622 2,274,249 25,010,792 Capital assets, being depreciated:

Structures and improvements 11,416,635 - 688,899 - 12,105,534 Machinery and equipment 3,167,391 371,652 469,906 90,950 3,160,087 Infrastructure 64,417,535 32,856 14,865,003 1,494,400 51,079,788 .

Total capital assets, being depreciated 79,001,561 404,508 15,334,909 2,274,249 66,345,409 Less accumulated depreciation:

Structures and improvements 4,439,722 201,759 - 4,641,481 - Machinery and equipment 1,441,649 180,553 385,949 1,236,253 - Infrastructure 37,143,095 1,323,591 14,865,003 23,601,683 - Total accumulated depreciation 43,024,466 1,705,903 15,250,952 29,479,417 - Total capital assets, being depreciated, net 35,977,095 (1,301,395) 83,957 2,274,249 36,865,992 Lease Assets
Machinery and equipment 104,368 - 24,199 - 80,169
Vehicles 442,646 240,027 28,784 - 653,889
Building - 489,652 - - 489,652
Total lease assets, being amortized 547,014 729,679 52,983 1,223,710 - Less accumulated amortization:

Machinery and equipment 56,813 27,736 24,199 - 60,350
Vehicles 139,411 129,199 4,318 - 264,292
Building - - - - -
Total accumulated amortization 196,224 156,935 28,517 - 324,642 Total lease assets, being amortized, net 350,790 572,744 24,466 - 899,068 Subscription-Based Information Technology
Arrangements
Subscription-Based Information Technology
Arrangements 630,513 24,586 - - 655,099
Less accumulated amortization: 64,820 138,395 - - 203,215 Total Subscription-Based Information
Technology Arrangements being
amortized, net 565,693 (113,809) - - 451,884
Governmental activities capital assets, net $ 60,331,043 $ 3,091,738 $ 195,045 $ 4,548,498 $ 63,227,736 Balance Balance
July 1, 2023 Increases Decreases Transfers June 30, 2024 Governmental activities:

General government $ 322,790
Safety 16,283
Development 26,585
Recreation and culture 325,666
Transportation 1,309,909
Total $ 2,001,233

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 31 -
Note 6: Capital Assets (Continued)
Right to Use Leased Assets
The City has recorded 22 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, 2024, was $83,997. The balance of lease receivables reported as deferred inflows of resources at June 30, 2024, was $308,569. 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.

Note 8: Long-Term Liabilities
The following is a summary of changes in long-term liabilities for the fiscal year ended June 30, 2024:

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

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 Balance Balance
Governmental Activities
U.S. Bancorp Infrastructure
Lease $ 2,276,306 $- $ 165,750 $ 2,110,556 $ 169,762
Apple Lease 45,092 - 23,487 21,605 21,605
CA Energy Commission Loan 48,344 - 18,905 29,439 19,480 Total direct placement and
direct borrowings 45,092 2,324,650 208,142 210,847 2,161,600 Enterprise Leases 273,893 170,427 117,106 327,214 115,576 Canon Lease 38,143 - 18,190 19,953 18,409
Public Safety Office Lease 489,652 - 489,652 - 40,395
Edison Parking Lot Lease 6,831 - 6,831 - -
Mail Meter Lease 2,810 - 2,591 219 219
Subscriptions 516,357 24,586 123,539 417,404 133,997
Compensated Absences 545,621 1,087,920 477,239 46,252 1,156,302 Total Long term debt $ 4,250,604 $ 1,275,378 $ 953,638 $ 4,572,344 $ 565,695 Due Within
July 1, 2023 Additions Deletions June 30, 2024 One Year

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 32 -
Note 8: Long-Term Liabilities (Continued)
$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, 2024, is $2,110,556.

Apple Lease
The City entered into a purchase agreement in March 2024 to acquire 25 apple computers for $45,092. The interest rate on the loan is 8.36%. The City will pay two payments of $23,487 with the first payment being due upon delivery of the equipment and the second payment being due in March 2025. The liability as of June 30, 2024 is $21,605.

CA Energy 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, 2024, is $29,439. 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
2025 $ 169,762 $ 51,075
2026 173,870 46,967
2027 178,078 42,759
2028 182,387 38,450
2029 186,801 34,036
2030 - 2034 1,004,039 100,146
2035 215,619 5,218
Totals $ 2,110,556 $ 318,651
U.S. Bankcorp Infrastructure Lease
Fiscal year ending
June 30, Principal Interest
2025 $ 21,605 $ 1,882
Totals $ 21,605 $ 1,882
Apple Lease

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 33 -
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. During the fiscal year 2023-2024 the City entered into 7 such lease agreements and ended one lease agreement entered into in prior fiscal years. 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 4.77%. 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
2025 $ 19,480 $ 739
2026 9,959 150
Totals $ 29,439 $ 889
CA Energy Commission Loan
Fiscal year ending
June 30, Principal Interest
2025 $ 115,576 $ 8,917
2026 86,880 6,364
2027 61,680 3,911
2028 53,220 1,688
2029 9,858 862
Totals $ 327,214 $ 21,742
Enterprise Leases

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 34 -
Note 8: Long-Term Liabilities (Continued)
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 City paid $6,831 in principal during the fiscal year. While the lease was renewed in May 2024 the lease can be canceled by either party and no longer meets the accounting requirements to be reported as long term debt.

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:

Public Safety Office Lease
The City entered into a lease agreement in April of 2024 for the use of office space for the Public Safety department from July 1, 2024 through June 30, 2034. The monthly base rent from July 1, 2024 through June 30, 2029 shall be $10,076. The City received a base rent credit of $5,000 for the twelve months from July 2024 through June 2025. The lease auto renews on July 1, 2029 with a rent increase of 12% with rental payments remaining flat for the remaining five years. Either party shall have the right to terminate the lease at any time by providing twelve months prior written notice, provided, however, that said twelve month notice may not be given any earlier than June 30, 2028 with the effective date of said early termination to be no earlier than June 30, 2029. The debt matures as follows:

Fiscal year ending
June 30, Principal Interest
2025 $ 18,409 $ 138
2026 1,544 2
Totals $ 19,953 $ 140
Canon Lease
Fiscal year ending
June 30, Principal Interest
2025 $ 219 $ 1
Totals $ 219 $ 1
Mail Meter Lease

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 35 -
Note 8: Long-Term Liabilities (Continued)
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.

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:

Fiscal year ending
June 30, Principal Interest
2025 $ 40,395 $ 19,605
2026 105,418 16,694
2027 109,888 12,224
2028 114,547 7,565
2029 119,404 2,708
Totals $ 489,652 $ 58,796
Public Safety Office
Fiscal year ending
June 30, Principal Interest
2025 $ 133,997 $ 13,209
2026 132,893 8,112
2027 150,514 3,150
Totals $ 417,404 $ 24,471
Subscriptions

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 36 -
Note 8: Long-Term Liabilities (Continued)
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, 2024, had an outstanding accrued balance of unpaid vacation, sick leave, and associated employee related costs of $1,156,302 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 126 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 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. 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.

Note 9: Liability, Worker’s Compensation, and Purchased Insurance 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)

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 37 -
Note 9: Liability, Worker’s Compensation, and Purchased Insurance (Continued) 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 2023-24 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.

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 $28,097,355. 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 $6,542,316. 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 2023-24.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 38 -
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, 2024, was $3,659,937. These amounts are not recorded in the books of the City and as such not included in these financial statements.

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 (measurement date), are summarized as follows:

Tier 1* Tier 2 PEPRA
Hire date/CalPers Prior to On or After On or 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% 6.93% 8.25%
Required employer
contribution rates 14.92% 10.87% 8.00%
* Plan closed to new entrants

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 39 -
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 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, 2024, the contributions recognized as part of pension expense for the Plan were as follow:

Miscellaneous
Contributions – employer $ 1,702,553
Pension Liabilities, Pension Expense, and Deferred Outflows, and Deferred Inflows of Resources Related to Pensions
As of June 30, 2024, 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 $ 18,471,427
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, 2023, 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, 2022 rolled forward to June 30, 2023 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, 2022, and 2023 was as follows:

Miscellaneous
Proportion – June 30, 2022 0.151401%
Proportion – June 30, 2023 0.148063%
Change - Decrease 0.003338%
For the fiscal year ended June 30, 2024, the City recognized pension income of $1,802,378. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 40 -
Note 11: Retirement Plan (Continued)
$1,723,060 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, 2025.

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 June 30, 2022 actuarial valuation to June 30, 2023. The June 30, 2023, 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 $ 1,723,060 $- Difference between expected and actual experience 797,242 - Change in assumptions 1,115,203 -
Difference in actual to proportionate share
contribution - 358,924
Adjustments due to differences in proportion - 272,356
Net difference between projected and actual earnings
on pension plan investments 2,990,691 -
Total $ 6,626,196 $ 631,280
Deferred
Fiscal year ending Outflows (Inflows)
June 30, of Resources
2025 $ 1,326,838
2026 619,666
2027 2,239,537
2028 85,815
Totals $ 4,271,856

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 41 -
Note 11: Retirement Plan (Continued)
Valuation date June 30, 2022
Measurement date June 30, 2023
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 (ACFR) for the fiscal year ended June 30, 2023.

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 $ 26,539,058
Current Discount Rate 6.90%
Net Pension Liability $ 18,471,427

1.0% Increase 7.90%
Net Pension Liability $ 11,831,074

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 42 -
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, 2024, 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 0.32% 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 obligations.

As of the June 30, 2024 actuarial valuation, the Plan provided 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.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 43 -
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 2023- 2024 the City paid $363,998 in post-employment healthcare costs directly to PERS and an additional contribution of $249,000 into the Trust during FY 2023- 2024 for a total contribution amount of $612,998.

Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2024, 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 6.00%
Medicare 10.95%
Actuarial Methods and Assumptions
Demographic actuarial assumptions used in the valuation are based on the CalPERS’ 2021 Experience Study of the California Public Employees Retirement System using data from 1997 to 2019, except for a different basis used to project future mortality improvements. The mortality improvement scale was the MacLeod Watts Scale 2022, 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 6.58%, reflecting updated long-term rates of returned provided by PARS in June 2023. The return rate was determined using a building-block method and best-estimate 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%.

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 44 -
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 $ 333,762
Interest 617,179
Benefit payments (443,810)
Net change in total OPEB liability 507,131
Total OPEB liability - beginning 10,174,456
Total OPEB liability - ending (a) $ 10,681,587
Plan fiduciary net position
Contributions - employer (1) $ 692,810
Net investment income 357,378
Change due to investment experience 395,384
Benefit payments (1) (443,810)
Net Change in plan fiduciary net position 1,001,762
Plan fiduciary net position - beginning 5,831,797
Plan fiduciary net position - ending (b) $ 6,833,559
Net OPEB liability - ending (a) - (b) $ 3,848,028
(1) Amount includes implicit subsidy associated with benefits paid. 1% Decrease Current 1% Increase
Net OPEB Liability 5,346,060 $ 3,848,028 $ 2,620,407 $

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 45 -
Note 12: Other Post-Employment Benefits (Continued)
OPEB Plan Fiduciary Net Position
(1) Includes $364,998 of pay-as-you-go contributions made from sources outside of the trust, plus an implicit subsidy amount of $78,812.

Healthcare
Cost
1% Decrease Rate 1% Increase
Net OPEB liability 2,498,352 $ 3,848,028 $ 5,527,540$
Statement of Fiduciary Net Position - June 30, 2024
Assets
Investments
Managed account $ 6,833,559
Total Assets 6,833,559
Net position restricted for post-employment
benefits other than pensions $ 6,833,559
Statement of Changes in Fiduciary Net Position for the Fiscal Year Ended June 30, 2024 Additions
Employer Contributions (1) $ 692,810
Investment income: 357,378
Change due to investment experience 395,384
Total Additions 1,445,572
Deductions
Benefit payments (1) (443,810)
Total Deductions (443,810)
Net increase in net position 1,001,762
Net position restricted for post-employment
benefits other than pensions
Beginning of fiscal year 5,831,797
End of fiscal year $ 6,833,559

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 46 -
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, 2024, 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, 2024, 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 6.52 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

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 47 -
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, 2024, the City recognized OPEB income of $149,335 and reported deferred outflows and inflows 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 930,533 $ 262,299 $
Differences Between Expected
and Actual Experience 571,151 2,909,213
Net Differences Between Projected
and Actual Earnings on Investments - 155,210
Total 1,501,684 $ 3,326,722 $
Deferred
Fiscal Year Outflows (Inflows)
Ended June 30: of Resources
2025 (173,766)
2026 (294,576)
2027 (479,282)
2028 (574,056)
2029 (303,358)

CITY OF DUARTE

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
- 48 -
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 $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
The City has an ongoing contract for $2.5 million for an ATP Cycle 4 Project with $964,000 unexpended of as of June 30, 2024. On July 1, 2024, the City entered into a contract with the Los Angeles Sheriff’s Department to provide city law enforcement services for the 2023-2024 fiscal year for an estimated cost of $5.67 million.

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 31,981,364 $ 31,981,364 $ 31,981,364 $- Resources (Inflows):

Taxes 15,505,000 15,825,000 16,304,535 479,535
Licenses and permits 1,388,000 1,538,000 2,102,569 564,569 Intergovernmental 3,041,000 3,431,000 3,410,236 (20,764) Charges for services 404,300 404,300 460,389 56,089
Use of money and property 210,500 810,500 1,768,283 957,783 Fines and forfeitures 330,000 430,000 567,274 137,274
Miscellaneous 107,500 107,500 351,530 244,030
Issuance of debt lease and subscriptions - - 669,388 669,388 Transfers in 835,200 875,200 811,631 (63,569)
Amounts Available for Appropriations 53,802,864 55,402,864 58,427,199 3,024,335 Charges to Appropriations (Outflows):

Current:

General government 7,100,193 6,750,193 6,311,334 438,859 Safety 7,322,955 7,264,955 7,072,767 192,188
Development 3,783,455 3,623,455 2,722,613 900,842
Recreation and cultural 3,043,700 3,639,700 3,325,266 314,434 Capital outlay 921,240 1,535,995 1,383,386 152,609
Debt service:

Principal retirement 290,017 290,017 289,922 95
Interest and fiscal charges 25,940 25,940 25,854 86
Transfers out 841,400 942,000 896,446 45,554
Total Charges to Appropriations 23,328,900 24,072,255 22,027,588 2,044,667 Budgetary Fund Balance, June 30 $ 30,473,964 $ 31,330,609 $ 36,399,611 $ 5,069,002 See Note to Required Supplementary Information
Budget Amounts
-49-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE
SB1/RMRA SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 842,668 $ 842,668 $ 842,668 $ - Resources (Inflows):

Intergovernmental 535,800 535,800 588,275 52,475
Use of money and property 12,200 12,200 40,382 28,182
Amounts Available for Appropriations 1,390,668 1,390,668 1,471,325 80,657 Charges to Appropriations (Outflows):

Capital outlay 535,000 535,000 519,302 15,698
Transfers out 107,000 107,000 103,860 3,140
Total Charges to Appropriations 642,000 642,000 623,162 18,838 Budgetary Fund Balance, June 30 $ 748,668 $ 748,668 $ 848,163 $ 99,495 See Note to Required Supplementary Information
Budget Amounts
-50-

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
- 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 FY 24
Measurement Measurement Measurement Measurement Measurement Date Date Date Date Date
June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 City's proportion of the
net pension liability 0.27900% 0.27813% 0.27327% 0.15140% 0.14806% City's proportionate
share of the net
pension liability $ 14,091,516 $ 15,108,868 $ 9,811,894 $ 17,488,020 $ 18,471,427 City's covered payroll 4,338,950 $ $ 4,272,231 $ 4,338,950 $ 4,381,600 $ 4,162,481 City's proportionate
share of the net
pension liability as
a percentage of it's
covered payroll 324.8% 353.7% 226.1% 399.1% 443.8%
Plan's fiduciary net
position as a
percentage of the
total pension liability 77.73% 77.71% 90.49% 78.19% 77.97%

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
- 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.

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
- 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 Measurement Date Date Date Date Date
June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 Miscellaneous Miscellaneous Miscellaneous Miscellaneous Miscellaneous Actuarially determined
contribution (a) 459,105 $ 537,636 $ 525,340 $ 505,435 $ 506,617 $ Contribution in
relation to the
actuarially determined
contribution (b) (459,105) (537,636) (525,340) (505,435) (506,617) Contribution deficiency
(excess) - $ - $ - $ - $ - $
Covered payroll (c ) 4,004,164 $ 4,272,231 $ 4,338,950 $ 4,381,600 $ 3,985,824 $ Contributions as a
percentage of covered
payroll 11.47% 12.58% 12.11% 11.54% 12.71%
(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 Statement No. 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.

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
- 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 2023-2024 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 2.50%
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.

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
- 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 7 years are shown. 2018 2019 2020 2021
Total OPEB Liability
Service cost $ 258,408 $ 266,160 $ 327,023 $ 389,582
Interest on the total OPEB
liability 464,777 495,518 575,620 633,116
Differences between expected
and actual experience 983,161 65,900 1,285,548 -
Changes of assumptions 2,167,125 - (331,435) (419,273)
Changes due to plan experience - - - -
Benefit payments (1) (662,583) (359,809) (365,155) (431,406) Net change in total OPEB
liability 1,043,763 2,634,894 206,053 1,457,567
Total OPEB liability -
beginning 6,493,332 7,537,095 10,171,989 10,378,042
Total OPEB liability - ending (a) $ 7,537,095 $ 10,171,989 $ 10,378,042 $ 11,835,609 Plan Fiduciary Net Position
Contribution - employer (1) $ 915,033 $ 651,809 $ 741,655 $ 876,406 Net Increase (decrease) in fair
value of investments 189,196 176,444 81,965 996,936
Benefit payments (1) (662,583) (359,809) (365,155) (431,406) Change due to investment
experience - - - -
Administrative expense (13,347) - (24,255) -
Net Change in plan fiduciary 428,299 468,444 458,465 1,417,681 net position
Plan fiduciary net position -
beginning 2,353,380 2,781,679 3,250,123 3,708,588
Plan fiduciary net position -
ending (b) $ 2,781,679 $ 3,250,123 $ 3,708,588 $ 5,126,269 Net OPEB liability (a) - (b) $ 4,755,416 $ 6,921,866 $ 6,669,454 $ 6,709,340 Plan fiduciary net position as a
percentage of total OPEB
liability 36.91% 31.95% 35.73% 43.31%
Covered-employee payroll $ 4,211,793 $ 3,926,264 $ 4,325,247 $ 3,579,723 Net OPEB liability as a
percentage of coveredemployee payroll 112.91% 176.30% 154.20% 187.43% Measurement Period

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
- 56 -

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS Last Ten Fiscal Years* (Continued)
(1): Amount includes implicit subsidy associated with benefits paid. *Fiscal Year 2018 was the 1st year of implementation therefore only 7 years are shown. 2022 2023 2024
Total OPEB Liability
Service cost $ 447,366 $ 459,669 $ 333,762
Interest on the total OPEB
liability 748,420 790,303 617,179
Differences between expected
and actual experience 35,353 - -
Changes of assumptions 583,430 392,831 -
Changes due to plan experience (4,196,475) - -
Benefit payments (1) (462,219) (459,831) (443,810)
Net change in total OPEB
liability 1,352,350 (3,013,503) 507,131
Total OPEB liability -
beginning 11,835,609 13,187,959 10,174,456
Total OPEB liability - ending (a) $ 13,187,959 $ 10,174,456 $ 10,681,587 Plan Fiduciary Net Position
Contribution - employer (1) $ 868,219 $ 1,031,831 $ 692,810 Net Increase (decrease) in fair
value of investments (688,055) 300,420 357,378
Benefit payments (1) (462,219) (459,831) (443,810)
Change due to investment
experience - 144,868 395,384
Administrative expense (29,705) - -
Net Change in plan fiduciary (311,760) 1,017,288 1,001,762 net position
Plan fiduciary net position -
beginning 5,126,269 4,814,509 5,831,797
Plan fiduciary net position -
ending (b) $ 4,814,509 $ 5,831,797 $ 6,833,559
Net OPEB liability (a) - (b) $ 8,373,450 $ 4,342,659 $ 3,848,028 Plan fiduciary net position as a
percentage of total OPEB
liability 36.51% 57.32% 63.98%
Covered-employee payroll $ 3,613,652 $ 4,422,484 $ 4,246,072 Net OPEB liability as a
percentage of coveredemployee payroll 231.72% 98.20% 90.63% Measurement Period

CITY OF DUARTE

REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
- 57 -

SCHEDULE OF OPEB CONTRIBUTIONS
Last Ten Fiscal Years*
*Fiscal Year 2018 was the 1st year of implementation therefore only 7 years are shown.

Fiscal Fiscal Fiscal Fiscal
Year Year Year Year
6/30/2018 6/30/2019 6/30/2020 6/30/2021
Contractually Determined
Contribution (CDC) 1,491,134 $ 782,535 $ 803,739 $ 765,007 $ Contributions in relation to
the CDC (915,033) (651,809) (741,655) (876,406)
Contribution deficiency
(excess) 576,101 $ 130,726 $ 62,084 $ (111,399) $
Covered-employee payroll 4,211,793 $ 3,926,264 $ 4,325,247 $ 3,579,723$ Contributions as a percentage
of covered-employee payroll 21.73% 16.60% 17.15% 24.48% Fiscal Fiscal Fiscal
Year Year Year
6/30/2022 6/30/2023 6/30/2024
Contractually Determined
Contribution (CDC) $ 867,895 $ 1,022,910 $ 709,176
Contributions in relation to
the CDC (868,219) (1,031,831) (692,810)
Contribution deficiency
(excess) $ (324) $ (8,921) $ 16,366
Covered-employee payroll $ 3,613,652 $ 4,422,484 $ 4,246,072 Contributions as a percentage
of covered-employee payroll 24.03% 23.33% 16.32%

CITY OF DUARTE

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
- 58 -
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.

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2024
State Lighting Community Supplemental
Gasoline and Development Law
Tax Landscaping Block Grant Enforcement
Assets:

Pooled cash and investments $ 2,304,701 $ 218,318 $ $ 20,888 - Receivables:

Taxes 53,444 11,499 - -
Grants - - 7,534 -
Land held for resale - - - -
Total Assets $ 2,358,145 $ 229,817 $ 7,534 $ 20,888
Liabilities and Fund Balances:

Liabilities:

Accounts payable $ 42,776 $ 123,996 $ $ 20,888 468
Accrued liabilities - - - -
Unearned revenues - - - -
Retention payable - - - -
Deposits payable - - - -
Due to other funds - - 7,066 -
Total Liabilities 42,776 123,996 7,534 20,888
Deferred Inflows of Resources:

Unavailable revenues - - - -
Total Deferred Inflows of Resources - - - -
Fund Balances:

Restricted for:

Development projects 105,821 - - -
Recreation and culture - - - -
Transportation 2,315,369 - - -
Unassigned - - - -
Total Fund Balances (deficits) 2,315,369 105,821 - -
Total Liabilities and Fund Balances $ 2,358,145 $ 229,817 $ 7,534 $ 20,888 (Continued)
Special Revenue Funds
-59-

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2024
Prop
Air Quality Measure Quimby A
Management M Act Transit
Assets:

Pooled cash and investments $ 149,748 $ 1,356,668 $ 71,383 $ 1,126,102 Receivables:

Taxes - - - -
Grants 7,669 31,320 - -
Land held for resale - - - -
Total Assets $ 157,417 $ 1,387,988 $ 71,383 $ 1,126,102 Liabilities and Fund Balances:

Liabilities:

Accounts payable $ $ 407,176 710 $ $ 44,472 -
Accrued liabilities - - - 1,223
Unearned revenues - - - -
Retention payable - 19,960 - -
Deposits payable - - - -
Due to other funds - - - -
Total Liabilities 710 427,136 - 45,695
Deferred Inflows of Resources:

Unavailable revenues 7,669 - - -
Total Deferred Inflows of Resources 7,669 - - -
Fund Balances:

Restricted for:

Development projects - - - -
Recreation and culture - - 71,383 -
Transportation 149,038 960,852 1,080,407 -
Unassigned - - - -
Total Fund Balances (deficits) 149,038 960,852 71,383 1,080,407 Total Liabilities and Fund Balances $ 157,417 $ 1,387,988 $ 71,383 $ 1,126,102 (Continued)
Special Revenue Funds
-60-

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2024
Prop Measure
Housing C R LR
Authority Transit PEG Transit
Assets:

Pooled cash and investments $ 2,107,766 $ 365,021 $ 61,062 $ 815,221 Receivables:

Taxes - - - -
Grants - 36,726 6,634 27,625
Land held for resale - - - -
Total Assets $ 2,107,766 $ 401,747 $ 67,696 $ 842,846
Liabilities and Fund Balances:

Liabilities:

Accounts payable $ $ 35,356 459 $ 1,440 $ 251,750
Accrued liabilities - 1,001 - -
Unearned revenues - - - -
Retention payable - - - 13,250
Deposits payable - - - -
Due to other funds - - - -
Total Liabilities 459 36,357 1,440 265,000
Deferred Inflows of Resources:

Unavailable revenues - - - -
Total Deferred Inflows of Resources - - - -
Fund Balances:

Restricted for:

Development projects 2,107,307 - 66,256 -
Recreation and culture - - - -
Transportation 365,390 - 577,846 -
Unassigned - - - -
Total Fund Balances (deficits) 2,107,307 365,390 66,256 577,846 Total Liabilities and Fund Balances $ 2,107,766 $ 401,747 $ 67,696 $ 842,846 (Continued)
Special Revenue Funds
-61-

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2024
Bicycle Low and
Park Measure and Moderate
Development W Pedestrian Housing
Assets:

Pooled cash and investments $ - $ $ 456,438 $ 3,358,159 - Receivables:

Taxes - - - -
Grants 20,374 - - -
Land held for resale - - 881,753 -
Total Assets $ 20,374 $ 456,438 $ - $ 4,239,912
Liabilities and Fund Balances:

Liabilities:

Accounts payable $ $ 8,965 636 $ $ - -
Accrued liabilities - - - -
Unearned revenues - - - -
Retention payable - - - -
Deposits payable - - - 30,000
Due to other funds 79,494 - - -
Total Liabilities 80,130 8,965 - 30,000
Deferred Inflows of Resources:

Unavailable revenues 20,374 - - -
Total Deferred Inflows of
Resources 20,374 - - -
Fund Balances:

Restricted for:

Development projects 447,473 - 4,209,912 -
Recreation and culture - - - -
Transportation - - - -
Unassigned (80,130) - - -
Total Fund Balances (deficits) (80,130) 447,473 4,209,912 - Total Liabilities and Fund
Balances $ 20,374 $ 456,438 $ - $ 4,239,912
(Continued)
Special Revenue Funds
-62-

CITY OF DUARTE

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2024
Infrastructure Total
Debt Nonmajor
Inclusionary Community Service Governmental
Housing Improvement Fund Funds
Assets:

Pooled cash and investments $ 557,801 $ $ - $ 12,969,276 - Receivables:

Taxes 1,201,326 - 1,266,269 -
Grants - - - 137,882
Land held for resale - - - 881,753
Total Assets $ 557,801 $ 1,201,326 $ - $ 15,255,180
Liabilities and Fund Balances:

Liabilities:

Accounts payable $ $ - $ - $ 939,092 -
Accrued liabilities - - - 2,224
Unearned revenues - 208,693 - 208,693
Retention payable - 82,908 - 116,118
Deposits payable - - - 30,000
Due to other funds - 527,002 - 613,562
Total Liabilities - 818,603 1,909,689 -
Deferred Inflows of Resources:

Unavailable revenues - - - 28,043
Total Deferred Inflows of Resources - - - 28,043
Fund Balances:

Restricted for:

Development projects 557,801 382,723 7,877,293 -
Recreation and culture - - - 71,383
Transportation - - 5,448,902 -
Unassigned - - - (80,130)
Total Fund Balances (deficits) 557,801 382,723 13,317,448 - Total Liabilities and Fund
Balances $ 557,801 $ 1,201,326 $ - $ 15,255,180
Capital Project Funds
-63-

CITY OF DUARTE

COMBINING STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES (DEFICITS)

NONMAJOR GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
State Lighting Community Supplemental
Gasoline and Development Law
Tax Landscaping Block Grant Enforcement
Revenues:

Assessments $ $ 1,016,214 - $ $ - -
Intergovernmental 621,249 - 111,773 186,159
Charges for services - - - -
Use of money and property 84,302 - - 1,801
Miscellaneous - - - -
Total Revenues 705,551 1,016,214 111,773 187,960
Expenditures:

Current:

Safety - - - 187,960
Development - 1,336,265 7,897 -
Transportation 445,789 - - -
Capital outlay 4,015 - 103,876 -
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total Expenditures 449,804 1,336,265 111,773 187,960
Excess (Deficiency) of Revenues
Over (Under) Expenditures 255,747 (320,051) - -
Other Financing Sources
(Uses):

Lease and subscription
proceeds - - - -
Transfers in - 672,427 - -
Transfers out (89,961) (343,200) - -
Total Other Financing
Sources (Uses) (89,961) 329,227 - -
Net Changes in Fund Balances 165,786 9,176 - -
Fund balances (Deficits), Beginning
of Fiscal Year 2,149,583 96,645 - -
Fund Balances (Deficits), End of
Fiscal Year $ 2,315,369 $ 105,821 $ - $ -
(Continued)
Special Revenue Funds
-64-

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, 2024
Air Prop
Quality Measure Quimby A
Management M Act Transit
Revenues:

Assessments $ $ - $ - $ - -
Intergovernmental 22,994 395,860 - 563,685
Charges for services - - - -
Use of money and property 27,952 47,175 2,522 39,630
Miscellaneous - - - 12,564
Total Revenues 50,946 443,035 2,522 615,879
Expenditures:

Current:

Safety - - - -
Development - - - -
Transportation - - - 377,720
Capital outlay 93,626 470,119 - 46,645
Debt service:

Principal retirement 20,727 - - -
Interest and fiscal charges 1,932 - - -
Total Expenditures 116,285 470,119 - 424,365
Excess (Deficiency) of Revenues
Over (Under) Expenditures (65,339) (27,084) 2,522 191,514 Other Financing Sources
(Uses):

Lease and subscription
proceeds 60,360 - - -
Transfers in 3,182 - - -
Transfers out - (94,024) - (60,000)
Total Other Financing
Sources (Uses) 63,542 (94,024) - (60,000)
Net Changes in Fund Balances (1,797) (121,108) 2,522 131,514 Fund balances (Deficits), Beginning
of Fiscal Year 150,835 1,081,960 68,861 948,893
Fund Balances (Deficits), End of
Fiscal Year $ 149,038 $ 960,852 $ 71,383 $ 1,080,407
(Continued)
Special Revenue Funds
-65-

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, 2024
Prop Measure
Housing C R LR
Authority Transit PEG Transit
Revenues:

Assessments $ $ - $ - $ - -
Intergovernmental - 467,564 - 350,563
Charges for services - - 27,920 -
Use of money and property 74,603 13,495 1,856 28,550
Miscellaneous - 10,279 - -
Total Revenues 74,603 491,338 29,776 379,113
Expenditures:

Current:

Safety - - - -
Development 20,596 - - -
Transportation - 303,740 - -
Capital outlay - 38,164 4,788 377,929
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total Expenditures 20,596 341,904 4,788 377,929
Excess (Deficiency) of Revenues
Over (Under) Expenditures 54,007 149,434 24,988 1,184
Other Financing Sources
(Uses):

Lease and subscription
proceeds - - - -
Transfers in - - - -
Transfers out - (45,000) - (75,586)
Total Other Financing
Sources (Uses) - (45,000) - (75,586)
Net Changes in Fund Balances 54,007 104,434 24,988 (74,402) Fund balances (Deficits), Beginning
of Fiscal Year 2,053,300 260,956 41,268 652,248
Fund Balances (Deficits), End of
Fiscal Year $ 2,107,307 $ 365,390 $ 66,256 $ 577,846
(Continued)
Special Revenue Funds
-66-

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, 2024
Bicycle Low and
Park Measure and Moderate
Development W Pedestrian Housing
Revenues:

Assessments $ $ - $ - $ - -
Intergovernmental 29,944 253,566 45,085 -
Charges for services - - - -
Use of money and property - 13,546 117,953 -
Miscellaneous - - - -
Total Revenues 29,944 267,112 45,085 117,953
Expenditures:

Current:

Safety - - - -
Development 148,276 - - 8,120
Transportation - - - -
Capital outlay 91,266 14,348 45,085 -
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total Expenditures 91,266 162,624 45,085 8,120
Excess (Deficiency) of Revenues
Over (Under) Expenditures (61,322) 104,488 109,833 -
Other Financing Sources
(Uses):

Lease and subscription
proceeds - - - -
Transfers in - - - -
Transfers out - - - -
Total Other Financing
Sources (Uses) - - - -
Net Changes in Fund Balances (61,322) 104,488 109,833 - Fund balances (Deficits), Beginning
of Fiscal Year (18,808) 342,985 - 4,100,079
Fund Balances (Deficits), End of
Fiscal Year $ (80,130) $ 447,473 $ - $ 4,209,912
(Continued)
Special Revenue Funds
-67-

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, 2024
Infrastructure Total
Debt Nonmajor
Inclusionary Community Service Governmental
Housing Improvement Fund Funds
Revenues:

Assessments $ $ - $ - $ 1,016,214 -
Intergovernmental 1,208,426 - 4,256,868 -
Charges for services - - - 27,920
Use of money and property 19,709 20,592 - 493,686
Miscellaneous - - - 22,843
Total Revenues 19,709 1,229,018 5,817,531 -
Expenditures:

Current:

Safety - - - 187,960
Development - - 1,521,154 -
Transportation - - 1,127,249 -
Capital outlay 1,658,146 - 2,948,007 -
Debt service:

Principal retirement - 165,750 - 186,477
Interest and fiscal charges - - 55,087 57,019
Total Expenditures 1,658,146 - 220,837 6,027,866
Excess (Deficiency) of Revenues
Over (Under) Expenditures 19,709 (429,128) (220,837) (210,335) Other Financing Sources
(Uses):

Lease and subscription
proceeds - - - 60,360
Transfers in - 220,837 - 896,446
Transfers out - - (707,771) -
Total Other Financing
Sources (Uses) - 220,837 - 249,035
Net Changes in Fund Balances 19,709 (429,128) - 38,700
Fund balances (Deficits), Beginning
of Fiscal Year 538,092 811,851 - 13,278,748
Fund Balances (Deficits), End of
Fiscal Year $ 557,801 $ 382,723 $ - $ 13,317,448
Capital Project Funds
-68-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

STATE GASOLINE TAX
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 2,149,583 $ 2,149,583 $ 2,149,583 $ - Resources (Inflows):

Intergovernmental 618,200 618,200 621,249 3,049
Use of money and property 51,700 51,700 84,302 32,602
Amounts Available for Appropriations 2,819,483 2,819,483 2,855,134 35,651 Charges to Appropriations (Outflows):

Transportation 795,000 955,000 445,789 509,211
Capital outlay 10,000 10,000 4,015 5,985
Transfers out 164,000 189,000 89,961 99,039
Total Charges to Appropriations 969,000 1,154,000 539,765 614,235 Budgetary Fund Balance, June 30 $ 1,850,483 $ 1,665,483 $ 2,315,369 $ 649,886 Budget Amounts
-69-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

LIGHTING AND LANDSCAPING
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ $ 96,645 96,645 $ 96,645 $ - Resources (Inflows):

Assessments 1,007,300 1,007,300 1,016,214 8,914
Transfers in 620,500 717,900 672,427 (45,473)
Amounts Available for Appropriations 1,724,445 1,821,845 1,785,286 (36,559) Charges to Appropriations (Outflows):

Development 1,334,200 1,490,600 1,336,265 154,335
Transfers out 343,200 343,200 343,200 -
Total Charges to Appropriations 1,677,400 1,833,800 1,679,465 154,335 Budgetary Fund Balance, June 30 $ 47,045 $ (11,955) $ 105,821 $ 117,776 Budget Amounts
-70-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

COMMUNITY DEVELOPMENT BLOCK GRANT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance (Deficit), July 1 $ $ - - $ - $ - Resources (Inflows):

Intergovernmental 148,000 148,000 111,773 (36,227)
Amounts Available for Appropriations 148,000 148,000 111,773 (36,227) Charges to Appropriations (Outflows):

Development 10,000 15,000 7,897 7,103
Capital outlay 18,000 113,000 103,876 9,124
Total Charges to Appropriations 28,000 128,000 111,773 16,227 Budgetary Fund Balance, June 30 $ 120,000 $ 20,000 $ $ (20,000) - Budget Amounts
-71-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

SUPPLEMENTAL LAW ENFORCEMENT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ $ - $ - $ - -
Resources (Inflows):

Intergovernmental 161,600 186,000 186,159 159
Use of money and property 1,400 2,300 1,801 (499)
Amounts Available for Appropriations 163,000 188,300 187,960 (340) Charges to Appropriations (Outflows):

Safety 163,000 188,300 187,960 340
Total Charges to Appropriations 163,000 188,300 187,960 340 Budgetary Fund Balance, June 30 $- $ $ - $ - -
Budget Amounts
-72-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

AIR QUALITY MANAGEMENT DISTRIBUTION
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 150,835 $ 150,835 $ 150,835 $ - Resources (Inflows):

Intergovernmental 27,000 27,000 22,994 (4,006)
Use of money and property 3,400 3,400 27,952 24,552
Transfers in - - 3,182 3,182
Issuance of debt leases and subscriptions - - 60,360 60,360 Amounts Available for Appropriations 181,235 181,235 265,323 84,088 Charges to Appropriations (Outflows):

Capital outlay 1,341 41,041 93,626 (52,585)
Debt service:

Principal retirement 20,727 20,727 20,727 -
Interest and fiscal charges 1,932 1,932 1,932 -
Total Charges to Appropriations 24,000 63,700 116,285 (52,585) Budgetary Fund Balance, June 30 $ 157,235 $ 117,535 $ 149,038 $ 31,503 Budget Amounts
-73-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

MEASURE M
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,081,960 $ 1,081,960 $ 1,081,960 $ - Resources (Inflows):

Intergovernmental 433,100 433,100 395,860 (37,240)
Use of money and property 10,000 10,000 47,175 37,175
Amounts Available for Appropriations 1,525,060 1,525,060 1,524,995 (65) Charges to Appropriations (Outflows):

Capital outlay 240,000 539,199 470,119 69,080
Transfers out 48,000 108,000 94,024 13,976
Total Charges to Appropriations 288,000 647,199 564,143 83,056 Budgetary Fund Balance, June 30 $ 1,237,060 $ 877,861 $ 960,852 $ 82,991 Budget Amounts
.
-74-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

QUIMBY ACT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 68,861 $ 68,861 $ 68,861 $ - Resources (Inflows):

Use of money and property 1,600 1,600 2,522 922
Amounts Available for Appropriations 70,461 70,461 71,383 922 Budgetary Fund Balance, June 30 $ 70,461 $ 70,461 $ 71,383 $ 922 Budget Amounts
-75-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

PROPOSITION A TRANSIT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 948,893 $ 948,893 $ 948,893 $ - Resources (Inflows):

Intergovernmental 614,300 614,300 563,685 (50,615)
Use of money and property 28,000 28,000 39,630 11,630
Miscellaneous 21,000 21,000 12,564 (8,436)
Amounts Available for Appropriations 1,612,193 1,612,193 1,564,772 (47,421) Charges to Appropriations (Outflows):

Transportation 470,000 470,000 377,720 92,280
Capital outlay 47,000 47,000 46,645 355
Transfers out 50,000 50,000 60,000 (10,000)
Total Charges to Appropriations 567,000 567,000 484,365 82,635 Budgetary Fund Balance, June 30 $ 1,045,193 $ 1,045,193 $ 1,080,407 $ 35,214 Budget Amounts
-76-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

HOUSING AUTHORITY
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 2,053,300 $ 2,053,300 $ 2,053,300 $ - Resources (Inflows):

Use of money and property 40,200 40,200 74,603 34,403
Amounts Available for Appropriations 2,093,500 2,093,500 2,127,903 34,403 Charges to Appropriations (Outflows):

Development 133,900 133,900 20,596 113,304
Total Charges to Appropriations 133,900 133,900 20,596 113,304 Budgetary Fund Balance, June 30 $ 1,959,600 $ 1,959,600 $ 2,107,307 $ 147,707 Budget Amounts
.
-77-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

PROPOSITION C TRANSIT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 260,956 $ 260,956 $ 260,956 $ - Resources (Inflows):

Intergovernmental 509,600 509,600 467,564 (42,036)
Use of money and property 7,500 7,500 13,495 5,995
Miscellaneous 17,000 17,000 10,279 (6,721)
Amounts Available for Appropriations 795,056 795,056 752,294 (42,762) Charges to Appropriations (Outflows):

Transportation 376,600 380,600 303,740 76,860
Capital outlay 38,200 38,200 38,164 36
Transfers out 40,000 40,000 45,000 (5,000)
Total Charges to Appropriations 454,800 458,800 386,904 71,896 Budgetary Fund Balance, June 30 $ 340,256 $ 336,256 $ 365,390 $ 29,134 Budget Amounts
-78-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE
PEG
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 41,268 $ 41,268 $ 41,268 $ - Resources (Inflows):

Charges for services 33,000 33,000 27,920 (5,080)
Use of money and property 500 500 1,856 1,356
Amounts Available for Appropriations 74,768 74,768 71,044 (3,724) Charges to Appropriations (Outflow):

Capital outlay - 10,000 4,788 5,212
Total Charges to Appropriations - 10,000 4,788 5,212
Budgetary Fund Balance, June 30 $ 74,768 $ 64,768 $ 66,256 $ 1,488 Budget Amounts
-79-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

MEASURE R LR TRANSIT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 652,248 $ 652,248 $ 652,248 $ - Resources (Inflows):

Intergovernmental 382,200 382,200 350,563 (31,637)
Use of money and property 30,300 30,300 28,550 (1,750)
Amounts Available for Appropriations 1,064,748 1,064,748 1,031,361 (33,387) Charges to Appropriations (Outflows):

Capital outlay 415,000 415,000 377,929 37,071
Transfers out 83,000 83,000 75,586 7,414
Total Charges to Appropriations 498,000 498,000 453,515 44,485 Budgetary Fund Balance, June 30 $ 566,748 $ 566,748 $ 577,846 $ 11,098 Budget Amounts
-80-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

PARK DEVELOPMENT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance (deficit), July 1 $ (18,808) $ (18,808) $ (18,808) $ - Resources (Inflows):

Intergovernmental 564,000 564,000 29,944 (534,056)
Amounts Available for Appropriations 545,192 545,192 11,136 (534,056) Charges to Appropriations (Outflow):

Capital outlay 564,000 564,000 91,266 472,734
Total Charges to Appropriations 564,000 564,000 91,266 472,734 Budgetary Fund Balance (Deficit), June 30 $ (18,808) $ (18,808) $ (80,130) $ (61,322) Budget Amounts
-81-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

MEASURE W
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 342,985 $ 342,985 $ 342,985 $ - Resources (Inflows):

Intergovernmental 250,000 250,000 253,566 3,566
Use of money and property 600 600 13,546 12,946
Amounts Available for Appropriations 593,585 593,585 610,097 16,512 Charges to Appropriations (Outflows):

Development 230,000 230,000 148,276 81,724
Capital outlay - - 14,348 (14,348)
Total Charges to Appropriations 230,000 230,000 162,624 67,376 Budgetary Fund Balance, June 30 $ 363,585 $ 363,585 $ 447,473 $ 83,888 Budget Amounts
-82-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

BICYCLE AND PEDESTRIAN
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Budgetary Fund Balance, July 1 $ - $ - $ - $ -
Resources (Inflows):

Intergovernmental 40,000 40,000 45,085 5,085
Amounts Available for Appropriations 40,000 40,000 45,085 5,085 Charges to Appropriations (Outflow):

Capital outlay 40,000 45,100 45,085 15
Total Charges to Appropriations 40,000 45,100 45,085 15 Budgetary Fund Balance (Deficit), June 30 $- $ (5,100) $ - $ 5,100 Budget Amounts
-83-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

LOW AND MODERATE HOUSING
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 4,100,079 $ 4,100,079 $ 4,100,079 $- Resources (Inflows):

Use of money and property 98,900 98,900 117,953 19,053
Amounts Available for Appropriations 4,198,979 4,198,979 4,218,032 19,053 Charges to Appropriations (Outflows):

Development 8,600 8,600 8,120 480
Total Charges to Appropriations 8,600 8,600 8,120 480
Budgetary Fund Balance, June 30 $ 4,190,379 $ 4,190,379 $ 4,209,912 $ 19,533 Budget Amounts
-84-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

INCLUSIONARY HOUSING CAPITAL PROJECTS FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 538,092 $ 538,092 $ 538,092 $ - Resources (Inflows):

Use of money and property 13,300 13,300 19,709 6,409
Amounts Available for Appropriations 551,392 551,392 557,801 6,409 Budgetary Fund Balance, June 30 $ 551,392 $ 551,392 $ 557,801 $ 6,409 Budget Amounts
.
-85-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

COMMUNITY IMPROVEMENT CAPITAL PROJECTS FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 811,851 $ 811,851 $ 811,851 $ - Resources (Inflows):

Intergovernmental 4,967,000 4,967,000 1,208,426 (3,758,574) Use of money and property 20,600 20,600 20,592 (8)
Amounts Available for Appropriations 5,799,451 5,799,451 2,040,869 (3,758,582) Charges to Appropriations (Outflows):

Capital outlay 4,988,000 4,988,000 1,658,146 3,329,854
Total Charges to Appropriations 4,988,000 4,988,000 1,658,146 3,329,854 Budgetary Fund Balance, June 30 $ 811,451 $ 811,451 $ 382,723 $ (428,728) Budget Amounts
-86-

CITY OF DUARTE

BUDGETARY COMPARISON SCHEDULE

INFRASTRUCTURE DEBT SERVICE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
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 165,800 165,800 165,750 50
Interest and fiscal charges 55,100 55,100 55,087 13
Total Charges to Appropriations 220,900 220,900 220,837 63 Budgetary Fund Balance, June 30 $- $ $ - $ - -
Budget Amounts
-87-

AGENDA REPORT
MEETING DATE: December 10, 2024
TO: Mayor and Members of the City Council
FROM: Craig Hensley, Community Development Director
BY: Scott Nash, Associate Planner
SUBJECT: Approval of a Professional Services Agreement with De Novo Planning Group for Preparation of an Initial Study and Mitigated Negative Declaration for a Residential Project located at 1404-1414 Royal Oaks Drive
RECOMMENDATION: That the City Council authorize the City Manager to sign a Professional Services Agreement with De Novo Planning Group for the preparation of environmental documentation for the subject property
FISCAL IMPACT: No fiscal impact. All costs associated with the contract with De Novo Planning Group will be funded by the property owner. City Staff time to manage the contract and process the entitlement applications will be covered by application fees

BACKGROUND
Shuorung Properties LLC is currently the owner of two large single-family properties located a 1404 and 1414 Royal Oaks Drive, and has submitted an application for the demolition of two existing single-family residences and the development of 11 townhomes. The required process to consider this request includes a: General Plan Amendment, a Zone Change, and a California Environemental Quality Act (CEQA) initial study assumed to be a Mitigated Negative Declaration or Negative Declaration. For projects requiring detailed environmental review, the City typically hires a consultant to complete the CEQA initial study and the resulting CEQA document. The applicant is responsible for all costs associated with the project including City overhead.

Approval of the De Novo Planning Group services agreement for the preparation of CEQA documentation is not an acknowledgement that the City Council will approve the proposed project or that the City might not seek changes to the plan. Instead, this approval allows the completion of the CEQA documentation needed in order to consider the proposed entitlements.

Agenda Item: 10.E.

2 DISCUSSION/ANALYSIS
The applicant, Shuorung Properties LLC , and City Staff discussed the best options for selection of the environmental consultant. De Novo Planning Group was selected based on the firm's proven success in preparing defensible environmental documents, the estimated speed and efficiency in completing the required CEQA documents, and a positive reputation with other cities and colleagues. This reputation paired with a fair price and quick turnaround, make De Novo Planning Group a strong choice for this project.

The environmental review by De Novo Planning Group will include the preparation of technical studies and an Initial Study in order to determine the appropriate environmental clearance document, assumed to be a Mitigated Negative Declaration. The total maximum contract cost is $67,725. The applicant/owner will be responsible for the cost of the De Novo Planning Group contract and for the application fees that are intended to cover City Staff costs. Prior to the De Novo Planning Group beginning work on the project, the applicant will be required to submit a deposit for the full cost of the professional services agreement.

When the environmental is completed and properly noticed, the project will be scheduled for public hearing before the Planning Commission and City Council to take action on the:
environmental; Zone Change; General Plan Amendment; Tentative Tract Map; and Site Plan and Design Review.

RECOMMENDATION
That the City Council authorize the City Manager to sign a Professional Services Agreement with De Novo Planning Group for the preparation of environmental documentation for the subject property.

FISCAL IMPACT
No fiscal impact. All costs associated with the contract with De Novo Planning Group will be funded by the property owner. City Staff time to manage the contract and process the entitlement applications will be covered by application fees.

ATTACHMENTS
Professional Services Agreement with De Novo Planning Group with proposal attached Fiscal Review: Reviewed and Approved:

Kristen Petersen Brian Villalobos
Assistant City Manager/ City Manager
Director of Administrative Services

2671/012225-0101
18679307.4 a06/13/23

CITY OF DUARTE

AGREEMENT FOR PROFESSIONAL SERVICES
THIS AGREEMENT FOR PROFESSIONAL SERVICES (“Agreement”) is made and effective as of December 11, 2024 (“Effective Date”), by and between the City of Duarte (“City”), and De Novo Planning Group, (“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 contract planning and environmental services to assist in the preparation of documentation pursuant to the California Environmental Quality Act (CEQA) for the 1404 Royal Oaks Project, 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 December 31, 2025, 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 to prepare an Initial Study/Mitigated Negative Declaration for the 1404 Royal Oaks Project as 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

2671/012225-0101
18679307.4 a06/13/23 -2-
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 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 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

2671/012225-0101
18679307.4 a06/13/23 -3-
(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 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 Community Development Director 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 Starla Barker, 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 $67,725, based on the Scope of Services set forth in Exhibit A. With written approval from the City, a contingency may be added to the maximum contract amount if there are unforeseen issues that require additional work.

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

2671/012225-0101
18679307.4 a06/13/23 -4-
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, 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.

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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 canceled 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, employees, or agents of City. Consultant shall not incur or have the power to incur any debt, obligation, or liability whatsoever 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.

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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.

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

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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
Craig Hensley, Community Development Director
1600 Huntington Drive
Duarte, California 91010
If to Consultant: De Novo Planning Group
Attn: Starla Barker, Principal Planner
180 E. Main Street, Suite 108
Tustin, CA 92780

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.

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.

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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.

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.

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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. [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
De Novo Planning Group
By: ______________________________
Its: ______________________________
Date: _____________________________
ATTEST
_________________________________
City Clerk
Date: _____________________________

APPROVED AS TO FORM

RUTAN & TUCKER, LLP
_________________________________
City Attorney, City of Duarte
Date: _____________________________

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EXHIBIT A
Scope of Services

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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 connection 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.

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 name 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 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;