Agenda packet — Fontana City Council, July 25, 2023 (part 3 of 14)

RESOLUTION NO. 2023-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA,

CALIFORNIA, AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN COMMUNITY FACILITIES DISTRICT NO. 109 (NARRA HILLS) FOR FISCAL YEAR 2023-2024.

WHEREAS, the City Council of the City of Fontana, (the “City Council”) has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors relating to the levy of a special tax in a community facilities district, all as authorized pursuant to the terms and provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”). This Community Facilities District shall hereinafter be referred to as COMMUNITY FACILITIES DISTRICT NO. 109; and
WHEREAS, on June 14, 2022, Community Facilities District No. 109 (Narra Hills) Special Tax Bonds, were approved for the acquisition of the improvements in Tract 20010, 20069, and 20070; and
WHEREAS, the City Council, by Ordinance, as authorized by Section 53340 of the Government Code of the State of California, has authorized the levy of a special tax to pay for costs and expenses related to said Community Facilities District, and the City Council desires to establish the specific rate of the special tax to be collected for Fiscal Year 2023-2024.

NOW, THEREFORE, BE IT RESOLVED, determined, and ordered by the City Council of the City of Fontana, California, as follows:

SECTION 1. That the above recitals are all true and correct.

SECTION 2. The specific rate and amount of the special tax to be collected to pay for the costs and expenses for Fiscal Year 2023-2024 for the referenced District is hereby determined and established as set forth in Exhibit “B” attached hereto and incorporated herein by reference provided, however, that the City Manager is hereby authorized to reduce the specific rate and method of the special tax as shown in Exhibit “B” upon receipt of the Assessor’s roll from the County of San Bernardino if, as determined by the City Manager in his discretion, following review of the Assessor’s roll, a lower rate and amount of the special tax will be sufficient to pay for the costs and expenses for such fiscal year.

SECTION 3. The rate as set forth above does not exceed the amount previously authorized by Ordinance of the City Council, and is not in excess of that as previously approved by the qualified electors of the District.
363
Resolution No. 2023-

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SECTION 4. The proceeds of the Special Tax shall be used to pay, in whole or in part, the costs of the following, in the following order of priority:
(a) Payment of principal and interest on any outstanding authorized bonded indebtedness;
(b) Necessary replenishment of bond reserve funds or other reserve funds; (c) Payment of costs and expenses of authorized public facilities and incidental expenses pursuant to the Act; and
(d) Repayment of advances and loans, as appropriate.

The basis for the determination of the special tax needed for the 2023-2024 fiscal year is set forth in Exhibit “B”, attached hereto and incorporated herein by reference.

SECTION 5. The above authorized Special Tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall have the same lien and priority in the case of delinquency as is provided for ad valorem taxes.

SECTION 6. All monies above collected shall be paid into the Community Facilities District’s funds, including any bond and reserve funds.

SECTION 7. The City Manager is hereby directed to transmit or cause to be transmitted to the Auditor of the County of San Bernardino for entry in the next County assessment roll on which taxes will become due, opposite each lot or parcel of land affected in a space marked “Public Improvement, Special Tax” or by any other suitable designation, the installment of the Special Tax as set forth in Exhibit “B” or as adjusted pursuant to the provisions of Section 2 above.

SECTION 8. The County Auditor shall then, at the close of the tax collection period, promptly render to this Agency a detailed report showing the amount and/or amounts of such Special Tax installments, interest, penalties and percentages so collected and from what property collected, and also provide a statement of any percentages retained for the expense of making any such collection. 364
Resolution No. 2023-

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APPROVED AND ADOPTED this 25th day of July, 2023.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney
I, Germaine Key, City Clerk of the City of Fontana, do hereby certify that the foregoing resolution is the actual resolution duly and regularly adopted by the City Council at a regular meeting on the 25th day of July, 2023, by the following vote to wit:

AYES:

NOES:

ABSENT:

City Clerk of the City of Fontana
Mayor of the City of Fontana
ATTEST:

City Clerk
365
Schedule 1
Special Tax Allocation - Costs to be Allocated
Fiscal Year 2023-2024
Pay As You Go Facilities 359,561 $ Bond Service Funds Available - $ Administration Costs 5,100 Proposed Special Tax Levy 375,939 Allowance for Delinquencies (11,278)
Total Costs $ 364,661 Available Funds $ 364,661
Schedule 2
Proposed Special Tax Rates for Fiscal Year 2023-2024
(Special Tax A and Special Tax B)
Total Special
Residential Floor Area (sq ft) Special Tax A Special Tax B [1] Tax Rate 1 – Detached 4,400 or Greater 8,186.00 $ 735.61 $ 8,921.61 $ 2 – Detached 4,200 to <4,400 7,879.00 735.61 8,614.61
3 – Detached 4,000 to <4,200 7,736.00 735.61 8,471.61
4 – Detached 3,800 to <4,000 7,592.00 735.61 8,327.61
5 – Detached 3,600 to <3,800 7,238.00 735.61 7,973.61
6 – Detached 3,400 to <3,600 6,905.00 735.61 7,640.61
7 – Detached 3,200 to <3,400 6,551.00 735.61 7,286.61
8 – Detached 3,000 to <3,200 6,240.00 735.61 6,975.61
9 – Detached 2,800 to <3,000 6,103.00 735.61 6,838.61
10 – Detached 2,600 to <2,800 5,873.00 735.61 6,608.61
11 – Detached 2,400 to <2,600 5,666.00 735.61 6,401.61
12 – Detached 2,200 to <2,400 5,349.00 735.61 6,084.61
13 – Detached 2,000 to <2,200 5,118.00 735.61 5,853.61
14 – Detached Less than 2,000 4,876.00 735.61 5,611.61
15 – Attached 2,000 or Greater 4,074.00 718.00 4,792.00 16 – Attached 1,800 to <2,000 4,025.00 718.00 4,743.00
17 – Attached 1,600 to <1,800 3,762.00 718.00 4,480.00
18 – Attached 1,400 to <1,600 3,627.00 718.00 4,345.00
19 – Attached 1,200 to <1,400 3,445.00 718.00 4,163.00
20 – Attached Less than 1,200 3,320.00 718.00 4,038.00
21 – Non-Residential Property 36,640.00 4,880.00 41,520.00 Undeveloped Property - - -
Total Proposed Levy 375,939 $ 45,608 $ 421,547 $
[1] Based on weighted average for detached units permitted through May 1, 2023. Detached units in Planning Area 3 are subject to a lower Services Special Tax.

Exhibit "A"
City of Fontana
Community Facilities District No. 109
Narra Hills
366
Exhibit "A"
City of Fontana
Community Facilities District No. 109
Narra Hills
Schedule 3
Comparison of Special Tax Levy and Rates by Fiscal Years Tax Classification Percent
(Land Use) Special Tax Rate Special Tax Rate Change
1 – Detached 4,400 or Greater - $ 8,930.00 $ - $ 8,921.61 $ 0% 2 – Detached 4,200 to <4,400 - 8,623.00 25,844 8,614.61 0% 3 – Detached 4,000 to <4,200 - 8,480.00 - 8,471.61 0%
4 – Detached 3,800 to <4,000 - 8,336.00 24,983 8,327.61 0% 5 – Detached 3,600 to <3,800 - 7,982.00 31,894 7,973.61 0% 6 – Detached 3,400 to <3,600 - 7,649.00 - 7,640.61 0%
7 – Detached 3,200 to <3,400 - 7,295.00 21,860 7,286.61 0% 8 – Detached 3,000 to <3,200 - 6,984.00 90,683 6,975.61 0% 9 – Detached 2,800 to <3,000 - 6,847.00 34,193 6,838.61 0% 10 – Detached 2,600 to <2,800 - 6,617.00 52,869 6,608.61 0% 11 – Detached 2,400 to <2,600 - 6,410.00 32,008 6,401.61 0% 12 – Detached 2,200 to <2,400 - 6,093.00 48,677 6,084.61 0% 13 – Detached 2,000 to <2,200 - 5,862.00 58,536 5,853.61 0% 14 – Detached Less than 2,000 - 5,620.00 - 5,611.61 0%
15 – Attached 2,000 or Greater - 4,792.00 - 4,792.00 0% 16 – Attached 1,800 to <2,000 - 4,743.00 - 4,743.00 0%
17 – Attached 1,600 to <1,800 - 4,480.00 - 4,480.00 0%
18 – Attached 1,400 to <1,600 - 4,345.00 - 4,345.00 0%
19 – Attached 1,200 to <1,400 - 4,163.00 - 4,163.00 0%
20 – Attached Less than 1,200 - 4,038.00 - 4,038.00 0%
21 – Non-Residential Property - 41,520.00 - 41,520.00 0% Undeveloped Property 357,160 Various - -
$ 357,160 $ 421,547
FY 2022 - 2023 FY 2023 - 2024
367
B-1
EXHIBIT “B”

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES
(Summary – Full text available in the Financial Services Division) The Resolution of Annual Levy refers to this Exhibit for an explanation of the rate and method of apportionment of the special tax so as to allow each landowner or resident within the district to estimate the annual amount that would be required for payment.

A Special Tax as hereinafter defined shall be levied on all Assessor’s Parcels of Taxable Property in City of Fontana Community Facilities District No. 109 (Narra Hills) (“CFD No. 109”) and collected each fiscal year commencing in Fiscal Year 2022-2023, in an amount determined by the City Council of the City of Fontana (the “Council”) through the application of the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 109, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.

The rate and method of apportionment of the special tax for 2023-2024 shall be as follows.
368
B-2
I. SPECIAL TAXES FOR PUBLIC IMPROVEMENTS:

Assigned Actual Tax
Special Tax Tax Rate Amount
Land Use Class (square feet) Unit FY 2023-2024 FY 2023-2024 FY 2023-2024 1 – Detached 4,400 or Greater Unit $8,186.00 $8,186.00 $0 2 – Detached 4,200 to <4,400 Unit 7,879.00 7,879.00 23,637 3 – Detached 4,000 to <4,200 Unit 7,736.00 7,736.00 0
4 – Detached 3,800 to <4,000 Unit 7,592.00 7,592.00 22,776 5 – Detached 3,600 to <3,800 Unit 7,238.00 7,238.00 28,952 6 – Detached 3,400 to <3,600 Unit 6,905.00 6,905.00 0
7 – Detached 3,200 to <3,400 Unit 6,551.00 6,551.00 19,653 8 – Detached 3,000 to <3,200 Unit 6,240.00 6,240.00 81,120 9 – Detached 2,800 to <3,000 Unit 6,103.00 6,103.00 30,515 10 – Detached 2,600 to <2,800 Unit 5,873.00 5,873.00 46,984 11 – Detached 2,400 to <2,600 Unit 5,666.00 5,666.00 28,330 12 – Detached 2,200 to <2,400 Unit 5,349.00 5,349.00 42,792 13 – Detached 2,000 to <2,200 Unit 5,118.00 5,118.00 51,180 14 – Detached Less than 2,000 Unit 4,876.00 4,876.00 0
15 – Attached 2,000 or Greater Unit 4,074.00 4,074.00 0 16 – Attached 1,800 to <2,000 Unit 4,025.00 4,025.00 0
17 – Attached 1,600 to <1,800 Unit 3,762.00 3,762.00 0
18 – Attached 1,400 to <1,600 Unit 3,627.00 3,627.00 0
19 – Attached 1,200 to <1,400 Unit 3,445.00 3,445.00 0
20 – Attached Less than 1,200 Unit 3,320.00 3,320.00 0
21 – Non-Residential Property Acre 36,640.00 36,640.00 0 $375,939
Method of Apportionment of Special Tax A
Commencing with Fiscal year 2022-2023 and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requirement for Facilities and shall provide for the levy of the Facilities Special Tax each Fiscal Year as follows:

First: The Facilities Special Tax shall be levied on each Assessor’s Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Facilities Special Tax;
Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property at up to 100% of the Maximum Facilities Special Tax for Undeveloped Property;
Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Facilities Special Tax on each Assessor’s Parcel of Developed Property whose 369
B-3
Maximum Special Tax is determined through the application of the Backup Facilities Special Tax shall be increased in equal percentages from the Assigned Facilities Special Tax up to the Maximum Facilities Special Tax for each such Assessor’s Parcel;
Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to 100% of the Maximum Facilities Special Tax for Taxable Public Property and Taxable Property Owner Association Property, as needed to satisfy the Special Tax Requirement for Facilities;
Notwithstanding the above, the CFD Administrator shall, in any Fiscal Year, calculate a levy Proportionately less than 100% of the Assigned Facilities Special Tax in step one (above), when (i) the CFD Administrator is no longer required to provide for the levy of the Facilities Special Tax pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; and (ii) all authorized CFD No. 109 Bonds have already been issued or the Council has covenanted that it shall not issue any additional CFD No. 109 Bonds (except refunding bonds) to be supported by the Facilities Special Tax.

Further notwithstanding the above, under no circumstances shall the Facilities Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued (in accordance with Section 53321(d)(3) of the California Government Code), be increased as a consequence of delinquency or default by the owner of any other Assessor’s Parcel within CFD No. 109 by more than ten percent above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. To the extent that the levy of the Facilities Special Tax on Residential Property is limited by the provision in the previous sentence, the levy of the Facilities Special Tax on each Assessor’s Parcel of Non-Residential Property shall continue in equal percentages up to 100% of the applicable Maximum Facilities Special Tax.
370
B-4
II. SERVICES SPECIAL TAXES FOR MAINTENANCE OF PARK,

PARKWAYS, AND OPEN SPACE
Maximum Annual Actual
Tax Rate Tax Rate Tax Amount
Land Use Class Unit FY 2023-2024 FY 2023-2024 FY 2023-2024 1 – P.A. 1 Final Residential Subdivision Unit $1,060.80 $744.00 $14,880 2 – P.A. 2 Final Residential Subdivision Unit 1,060.80 744.00 16,368 3 – P.A. 3 Final Residential Subdivision Unit 1,025.10 718.00 14,360 4 – P.A. 4 Final Residential Subdivision Unit 1,025.10 718.00 0 5 – Non-Residential Property Acre 6,966.60 4,880.00 0
$45,608
On each July 1, commencing on July 1, 2022, the Maximum Services Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.

First: The Services Special Tax shall be levied Proportionately each Fiscal Year on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Services Special Tax as needed to satisfy the Special Tax Requirement for Services;
Second: If additional monies are needed to satisfy the Special Tax Requirement for Services after the first step has been completed, then the levy of the Services Special Tax on each Assessor’s Parcel of Developed Property shall be increased in equal percentages from the Assigned Services Special Tax up to the Maximum Services Special Tax for each such Assessor’s parcel. 371

City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-2353 Agenda Date: 7/25/2023
Agenda #: AH. Category: Consent Calendar
FROM:

Finance
SUBJECT:

Levy of a Special Tax in Community Facilities District No. 111 (Monterado) for Fiscal Year 2023-2024.

RECOMMENDATION:

Adopt Resolution No. 2023-083, Authorizing the Levy of Special Tax in Community Facilities District No. 111 (Monterado) for Fiscal Year 2023-2024.

COUNCIL GOALS:
· Practice sound fiscal management by fully funding liabilities and reserves. · Practice sound fiscal management by developing long-term funding and debt management plans.

DISCUSSION:

Community Facilities District No 111 (Monterado) was established by Resolution No. 2022-117 on September 13, 2022, to finance public facilities and to pay annual landscape and lighting costs for the district. The District will issue a maximum (not to exceed) of $7,300,000 in Special Tax Bonds to finance the acquisition of certain major capital facilities (infrastructure) to serve properties within the District.

Pursuant to Government Code Section 53340, a resolution must be adopted by the City Council annually to levy a special tax to pay for the cost of providing public facilities, services, and incidental expenses. The rate and method of apportionment of the special tax was originally set forth in Ordinance No. 1904 approved and adopted by the City Council on September 27, 2022.

The special tax levied on each assessable parcel within the District is necessary to pay for the cost of providing public facilities and authorized administrative expenses (Facilities Special Tax A); and the annual landscape and lighting maintenance costs of the District (Services Special Tax B). The proposed Fiscal Year 2023-2024 special tax rates (Special Tax A and Special Tax B) are shown in Exhibit A.

The proposed special tax rates for Fiscal Year 2023-2024 were developed according to the Rate and Method of Apportionment (Exhibit B).

The District was established after the adoption of Proposition 218 and complies with its requirements because the District and the special taxes were approved by the consent of the property owner at the time the District was formed.

City of Fontana Page 1 of 2 Printed on 7/20/2023
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File #: 21-2353 Agenda Date: 7/25/2023
Agenda #: AH. Category: Consent Calendar
The City Treasurer has reviewed and supports this action.

FISCAL IMPACT:

The proposed Fiscal Year 2023-2024 special tax rates are the same as the prior year and will generate approximately $457,695; $385,227 for public facility expenses and $72,468 for landscape and lighting maintenance costs.

MOTION:

Approve staff recommendation.

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RESOLUTION NO. 2023-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA,

CALIFORNIA, AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN COMMUNITY FACILITIES DISTRICT NO. 111 (MONTERADO) FOR
FISCAL YEAR 2023-2024.

WHEREAS, the City Council of the City of Fontana, (the “City Council”) has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors relating to the levy of a special tax in a community facilities district, all as authorized pursuant to the terms and provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”). This Community Facilities District shall hereinafter be referred to as COMMUNITY FACILITIES DISTRICT NO. 111; and
WHEREAS, on September 13, 2022, Community Facilities District No. 111 (Monterado) Special Tax Bonds, were approved for the acquisition of the improvements in Tract 20224; and
WHEREAS, the City Council, by Ordinance, as authorized by Section 53340 of the Government Code of the State of California, has authorized the levy of a special tax to pay for costs and expenses related to said Community Facilities District, and the City Council desires to establish the specific rate of the special tax to be collected for Fiscal Year 2023-2024.

NOW, THEREFORE, BE IT RESOLVED, determined, and ordered by the City Council of the City of Fontana, California, as follows:

SECTION 1. That the above recitals are all true and correct.

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The basis for the determination of the special tax needed for the 2023-2024 fiscal year is set forth in Exhibit “B”, attached hereto and incorporated herein by reference.

SECTION 6. All monies above collected shall be paid into the Community Facilities District’s funds, including any bond and reserve funds.

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APPROVED AND ADOPTED this 25th day of July, 2023.

READ AND APPROVED AS TO LEGAL FORM:

AYES:

NOES:

ABSENT:

City Clerk of the City of Fontana
Mayor of the City of Fontana
ATTEST:

City Clerk
377
Schedule 1
Special Tax Allocation - Costs to be Allocated
Fiscal Year 2023-2024
Pay As You Go Facilities $ 368,670 Bond Service Funds Available $ - Administration Costs 5,000 Proposed Special Tax Levy 385,227 Allowance for Delinquencies (11,557)
Total Costs $ 373,670 Available Funds $ 373,670
Schedule 2
Proposed Special Tax Rates for Fiscal Year 2023-2024
(Special Tax A and Special Tax B)
Total Special
Residential Floor Area (sq ft) Special Tax A Special Tax B Tax Rate 1 – 2,250 or Greater $ 3,258.00 $ 366.00 $ 3,624.00
2 – 2,050 to less than 2,250 3,218.00 366.00 3,584.00
3 – 1,850 to less than 2,050 3,031.00 366.00 3,397.00
4 – 1,650 to less than 1,850 2,940.00 366.00 3,306.00
5 – Less than 1,650 2,907.00 366.00 3,273.00
6 – Non-Residential Property 51,640.00 6,270.00 57,910.00 Undeveloped Property - 366.00 366.00
Total Proposed Levy $ 385,227 $ 72,468 $ 457,695
Schedule 3
Comparison of Special Tax Levy and Rates by Fiscal Years Tax Classification Percent
(Land Use) Special Tax Rate Special Tax Rate Change
1 – 2,250 or Greater $ - $ 3,624.00 $ - $ 3,624.00 0%
2 – 2,050 to less than 2,250 - 3,584.00 57,344 $ 3,584.00 0% 3 – 1,850 to less than 2,050 - 3,397.00 166,453 $ 3,397.00 0% 4 – 1,650 to less than 1,850 - 3,306.00 208,278 $ 3,306.00 0% 5 – Less than 1,650 - 3,273.00 - $ 3,273.00 0%
6 – Non-Residential Property - 57,910.00 - $ 57,910.00 0% Undeveloped Property - 366.00 25,620 366.00 0%
$ - $ 457,695
Exhibit "A"
City of Fontana
Community Facilities District No. 111
Monterado
FY 2022 - 2023 FY 2023 - 2024
378
B-1
EXHIBIT “B”

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 111
(MONTERADO)

A Special Tax as hereinafter defined shall be levied on all Assessor’s Parcels of Taxable Property in City of Fontana Community Facilities District No. 111 (Monterado) (“CFD No. 111”) and collected each fiscal year commencing in Fiscal Year 2023-2024, in an amount determined by the City Council of the City of Fontana (the “Council”) through the application of the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 111, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.

The rate and method of apportionment of the special tax for 2023-2024 shall be as follows.
379
B-2
I. SPECIAL TAXES FOR PUBLIC IMPROVEMENTS:

Assigned Actual Tax
Special Tax Tax Rate Amount
Land Use Class (square feet) Unit FY 2023-2024 FY 2023-2024 FY 2023-2024 1 – 2,250 or Greater Unit $3,258.00 $3,258.00 $0
2 – 2,050 to less than 2,250 Unit 3,218.00 3,218.00 51,488 3 – 1,850 to less than 2,050 Unit 3,031.00 3,031.00 148,519 4 – 1,650 to less than 1,850 Unit 2,940.00 2,940.00 185,220 5 – Less than 1,650 Unit 2,907.00 2,907.00 0
6 – Non-Residential Property Acre 51,640.00 51,640.00 0 $385,227
Method of Apportionment of Special Tax A
Commencing with Fiscal year 2022-2023 and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requirement for Facilities and shall provide for the levy of the Facilities Special Tax each Fiscal Year as follows:

First: The Facilities Special Tax shall be levied on each Assessor’s Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Facilities Special Tax;
Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property at up to 100% of the Maximum Facilities Special Tax for Undeveloped Property;
Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Facilities Special Tax on each Assessor’s Parcel of Developed Property whose Maximum Special Tax is determined through the application of the Backup Facilities Special Tax shall be increased in equal percentages from the Assigned Facilities Special Tax up to the Maximum Facilities Special Tax for each such Assessor’s Parcel;
Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to 100% of the Maximum Facilities Special Tax for Taxable Public Property and Taxable Property Owner Association Property, as needed to satisfy the Special Tax Requirement for Facilities;
380
B-3
Notwithstanding the above, the CFD Administrator shall, in any Fiscal Year, calculate a levy Proportionately less than 100% of the Assigned Facilities Special Tax in step one (above), when (i) the CFD Administrator is no longer required to provide for the levy of the Facilities Special Tax pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; and (ii) all authorized CFD No. 111 Bonds have already been issued or the Council has covenanted that it shall not issue any additional CFD No. 111 Bonds (except refunding bonds) to be supported by the Facilities Special Tax.

Further notwithstanding the above, under no circumstances shall the Facilities Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued (in accordance with Section 53321(d)(3) of the California Government Code), be increased as a consequence of delinquency or default by the owner of any other Assessor’s Parcel within CFD No. 111 by more than ten percent above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. To the extent that the levy of the Facilities Special Tax on Residential Property is limited by the provision in the previous sentence, the levy of the Facilities Special Tax on each Assessor’s Parcel of Non-Residential Property shall continue in equal percentages up to 100% of the applicable Maximum Facilities Special Tax.

II. SERVICES SPECIAL TAXES FOR MAINTENANCE OF PARK,

PARKWAYS, AND OPEN SPACE
Maximum Annual Actual
Tax Rate Tax Rate Tax Amount
Land Use Class Unit FY 2023-2024 FY 2023-2024 FY 2023-2024 1 – Final Residential Subdivision
2 – Non-Residential Property
Unit
Acre
$520.20
8,955.60
$366.00
6,270.00
$72,468
0 $72,468
On each July 1, commencing on July 1, 2023, the Maximum Services Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.

Method of Apportionment of Special Tax B
Commencing with Fiscal Year 2022-2023 and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requirement for Services and shall provide for the levy of the Services Special Tax until the total Services Special Tax levy equals the Special Tax Requirement for Services. The Services Special Tax shall be levied each Fiscal Year as follows:
381
B-4
First: The Services Special Tax shall be levied Proportionately each Fiscal Year on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Services Special Tax as needed to satisfy the Special Tax Requirement for Services;
Second: If additional monies are needed to satisfy the Special Tax Requirement for Services after the first step has been completed, then the levy of the Services Special Tax on each Assessor’s Parcel of Developed Property shall be increased in equal percentages from the Assigned Services Special Tax up to the Maximum Services Special Tax for each such Assessor’s parcel. 382
383
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-2354 Agenda Date: 7/25/2023
Agenda #: AI. Category: Consent Calendar
FROM:

Finance
SUBJECT:

Levy of a Special Tax in Community Facilities District No. 112 (The Gardens Phase One) for Fiscal Year 2023-2024.

RECOMMENDATION:

Adopt Resolution No. 2023-084, Authorizing the Levy of Special Tax in Community Facilities District No. 112 (The Gardens Phase One) for Fiscal Year 2023-2024.

COUNCIL GOALS:
· Practice sound fiscal management by fully funding liabilities and reserves. · Practice sound fiscal management by developing long-term funding and debt management plans.

DISCUSSION:

Community Facilities District No 112 (The Gardens Phase One) was established by Resolution No. 2023-028 on April 25, 2023, to finance public facilities and to pay annual landscape and lighting costs for the district. The District will issue a maximum (not to exceed) of $28,400,000 in Special Tax Bonds to finance the acquisition of certain major capital facilities (infrastructure) to serve properties within the District.

Pursuant to Government Code Section 53340, a resolution must be adopted by the City Council annually to levy a special tax to pay for the cost of providing public facilities, services, and incidental expenses. The rate and method of apportionment of the special tax was originally set forth in Ordinance No. 1913 approved and adopted by the City Council on December 20, 2022.

The proposed special tax rates for Fiscal Year 2023-2024 were developed according to the Rate and Method of Apportionment (Exhibit B).

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File #: 21-2354 Agenda Date: 7/25/2023
Agenda #: AI. Category: Consent Calendar
The City Treasurer has reviewed and supports this action.

FISCAL IMPACT:

The proposed Fiscal Year 2023-2024 special tax rates are the same as the prior year and will generate approximately $671,159; $591,845 for public facility expenses and $79,314 for landscape and lighting maintenance costs.

MOTION:

Approve staff recommendation.

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RESOLUTION NO. 2023-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA,

CALIFORNIA, AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN COMMUNITY FACILITIES DISTRICT NO. 112 (THE GARDENS PHASE ONE) FOR FISCAL YEAR 2023-2024.

WHEREAS, the City Council of the City of Fontana, (the “City Council”) has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors relating to the levy of a special tax in a community facilities district, all as authorized pursuant to the terms and provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”). This Community Facilities District shall hereinafter be referred to as COMMUNITY FACILITIES DISTRICT NO. 112; and
WHEREAS, on April 25, 2023, Community Facilities District No. 112 (The Gardens Phase One) Special Tax Bonds, were approved for the acquisition of the improvements in Tracts 20362, 20363, and 20364; and
WHEREAS, the City Council, by Ordinance, as authorized by Section 53340 of the Government Code of the State of California, has authorized the levy of a special tax to pay for costs and expenses related to said Community Facilities District, and the City Council desires to establish the specific rate of the special tax to be collected for Fiscal Year 2023-2024.

NOW, THEREFORE, BE IT RESOLVED, determined, and ordered by the City Council of the City of Fontana, California, as follows:

SECTION 1. That the above recitals are all true and correct.

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The basis for the determination of the special tax needed for the 2023-2024 fiscal year is set forth in Exhibit “B”, attached hereto and incorporated herein by reference.

SECTION 6. All monies above collected shall be paid into the Community Facilities District’s funds, including any bond and reserve funds.

Page 3 of 3 ends

APPROVED AND ADOPTED this 25th day of July, 2023.

READ AND APPROVED AS TO LEGAL FORM:

AYES:

NOES:

ABSENT:

City Clerk of the City of Fontana
Mayor of the City of Fontana
ATTEST:

City Clerk
388
Schedule 1
Special Tax Allocation - Costs to be Allocated
Fiscal Year 2023-2024
Pay As You Go Facilities 569,090 $ Bond Service Funds Available - $ Administration Costs 5,000 Proposed Special Tax Levy 591,845 Allowance for Delinquencies (17,755)
Total Costs $ 574,090 Available Funds $ 574,090
Schedule 2
Proposed Special Tax Rates for Fiscal Year 2023-2024
(Special Tax A and Special Tax B)
Total Special
Residential Floor Area (sq ft) Special Tax A Special Tax B Tax Rate 1 – Two Story 3,400 or Greater 5,626.00 $ 576.00 $ 6,202.00 $ 2 – Two Story 3,200 to <3,400 5,417.00 576.00 5,993.00
3 – Two Story 3,000 to <3,200 5,208.00 576.00 5,784.00
4 – Two Story 2,800 to <3,000 5,007.00 576.00 5,583.00
5 – Two Story 2,600 to <2,800 4,883.00 576.00 5,459.00
6 – Two Story 2,400 to <2,600 4,381.00 576.00 4,957.00
7 – Two Story 2,200 to <2,400 4,164.00 576.00 4,740.00
8 – Two Story Less than 2,200 3,947.00 576.00 4,523.00
9 – One Story 2,000 or Greater 4,829.00 576.00 5,405.00 10 – One Story Less than 2,000 4,613.00 576.00 5,189.00 11 – 1,900 or Greater 3,845.00 550.00 4,395.00
12 – 1,700 to <1,900 3,414.00 550.00 3,964.00
13 – 1,500 to <1,700 2,953.00 550.00 3,503.00
14 – 1,300 to <1,500 2,768.00 550.00 3,318.00
15 – Less than 1,300 2,583.00 550.00 3,133.00
16 – Non-Residential Property 55,240.00 5,580.00 60,820.00 17 – Non-Residential Property 50,260.00 5,580.00 55,840.00 18 – Non-Residential Property 63,050.00 5,580.00 68,630.00 19 – Non-Residential Property 40,030.00 5,580.00 45,610.00 Undeveloped Property - - -
Total Proposed Levy 591,845 $ 79,314 $ 671,159 $
Exhibit "A"
City of Fontana
Community Facilities District No. 112
The Gardens Phase One
389
Exhibit "A"
City of Fontana
Community Facilities District No. 112
The Gardens Phase One
Schedule 3
Comparison of Special Tax Levy and Rates by Fiscal Years Tax Classification Percent
(Land Use) Special Tax Rate Special Tax Rate Change
1 – Two Story 3,400 or Greater - $ 6,202.00 $ - $ 6,202.00 $ 0% 2 – Two Story 3,200 to <3,400 - 5,993.00 83,902 5,993.00 0% 3 – Two Story 3,000 to <3,200 - 5,784.00 69,408 5,784.00 0% 4 – Two Story 2,800 to <3,000 - 5,583.00 94,911 5,583.00 0% 5 – Two Story 2,600 to <2,800 - 5,459.00 49,131 5,459.00 0% 6 – Two Story 2,400 to <2,600 - 4,957.00 69,398 4,957.00 0% 7 – Two Story 2,200 to <2,400 - 4,740.00 52,140 4,740.00 0% 8 – Two Story Less than 2,200 - 4,523.00 - 4,523.00 0%
9 – One Story 2,000 or Greater - 5,405.00 32,430 5,405.00 0% 10 – One Story Less than 2,000 - 5,189.00 31,134 5,189.00 0% 11 – 1,900 or Greater - 4,395.00 13,185 4,395.00 0%
12 – 1,700 to <1,900 - 3,964.00 63,424 3,964.00 0%
13 – 1,500 to <1,700 - 3,503.00 112,096 3,503.00 0%
14 – 1,300 to <1,500 - 3,318.00 - 3,318.00 0%
15 – Less than 1,300 - 3,133.00 - 3,133.00 0%
16 – Non-Residential Property - 60,820.00 - 60,820.00 0% 17 – Non-Residential Property - 55,840.00 - 55,840.00 0% 18 – Non-Residential Property - 68,630.00 - 68,630.00 0% 19 – Non-Residential Property - 45,610.00 - 45,610.00 0% Undeveloped Property - Various - -
$ - $ 671,159
FY 2022 - 2023 FY 2023 - 2024
390
B-1
EXHIBIT “B”

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 112
(THE GARDENS PHASE ONE)

A Special Tax as hereinafter defined shall be levied on all Assessor’s Parcels of Taxable Property in City of Fontana Community Facilities District No. 112 (The Gardens Phase One) (“CFD No. 112”) and collected each fiscal year commencing in Fiscal Year 2023-2024, in an amount determined by the City Council of the City of Fontana (the “Council”) through the application of the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 112, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.

The rate and method of apportionment of the special tax for 2023-2024 shall be as follows.
391
B-2
I. SPECIAL TAXES FOR PUBLIC IMPROVEMENTS:

Assigned Actual Tax
Special Tax Tax Rate Amount
Land Use Class (square feet) Unit FY 2023-2024 FY 2023-2024 FY 2023-2024 1 – Two Story 3,400 or Greater Unit $5,626.00 $5,626.00 $0 2 – Two Story 3,200 to <3,400 Unit 5,417.00 5,417.00 75,838 3 – Two Story 3,000 to <3,200 Unit 5,208.00 5,208.00 62,496 4 – Two Story 2,800 to <3,000 Unit 5,007.00 5,007.00 85,119 5 – Two Story 2,600 to <2,800 Unit 4,883.00 4,883.00 43,947 6 – Two Story 2,400 to <2,600 Unit 4,381.00 4,381.00 61,334 7 – Two Story 2,200 to <2,400 Unit 4,164.00 4,164.00 45,804 8 – Two Story Less than 2,200 Unit 3,947.00 3,947.00 0
9 – One Story 2,000 or Greater Unit 4,829.00 4,829.00 28,974 10 – One Story Less than 2,000 Unit 4,613.00 4,613.00 27,678 11 – 1,900 or Greater Unit 3,845.00 3,845.00 11,535
12 – 1,700 to <1,900 Unit 3,414.00 3,414.00 54,624
13 – 1,500 to <1,700 Unit 2,953.00 2,953.00 94,496
14 – 1,300 to <1,500 Unit 2,768.00 2,768.00 0
15 – Less than 1,300 Unit 2,583.00 2,583.00 0
16 – Non-Residential Property Acre 55,240.00 55,240.00 0 17 – Non-Residential Property Acre 50,260.00 50,260.00 0 18 – Non-Residential Property Acre 63,050.00 63,050.00 0 19 – Non-Residential Property Acre 40,030.00 40,030.00 0 $591,845
Method of Apportionment of Special Tax A
Commencing with Fiscal year 2023-2024 and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requirement for Facilities and shall provide for the levy of the Facilities Special Tax each Fiscal Year as follows:

First: The Facilities Special Tax shall be levied on each Assessor’s Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Facilities Special Tax;
Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property at up to 100% of the Maximum Facilities Special Tax for Undeveloped Property;
Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the levy of the Facilities Special Tax on each Assessor’s Parcel of Developed Property whose 392
B-3
Maximum Special Tax is determined through the application of the Backup Facilities Special Tax shall be increased in equal percentages from the Assigned Facilities Special Tax up to the Maximum Facilities Special Tax for each such Assessor’s Parcel;
Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to 100% of the Maximum Facilities Special Tax for Taxable Public Property and Taxable Property Owner Association Property, as needed to satisfy the Special Tax Requirement for Facilities;
Notwithstanding the above, the CFD Administrator shall, in any Fiscal Year, calculate a levy Proportionately less than 100% of the Assigned Facilities Special Tax in step one (above), when (i) the CFD Administrator is no longer required to provide for the levy of the Facilities Special Tax pursuant to steps two through four above in order to meet the Special Tax Requirement for Facilities; and (ii) all authorized CFD No. 112 Bonds have already been issued or the Council has covenanted that it shall not issue any additional CFD No. 112 Bonds (except refunding bonds) to be supported by the Facilities Special Tax.

Further notwithstanding the above, under no circumstances shall the Facilities Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued (in accordance with Section 53321(d)(3) of the California Government Code), be increased as a consequence of delinquency or default by the owner of any other Assessor’s Parcel within CFD No. 112 by more than ten percent above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. To the extent that the levy of the Facilities Special Tax on Residential Property is limited by the provision in the previous sentence, the levy of the Facilities Special Tax on each Assessor’s Parcel of Non-Residential Property shall continue in equal percentages up to 100% of the applicable Maximum Facilities Special Tax.
393
B-4
II. SERVICES SPECIAL TAXES FOR MAINTENANCE OF PARK,

PARKWAYS, AND OPEN SPACE
Maximum Annual Actual
Tax Rate Tax Rate Tax Amount
Land Use Class Unit FY 2023-2024 FY 2023-2024 FY 2023-2024 1 – P.A. 5 Final Residential Subdivision Unit $770.00 $550.00 $15,950 2 – P.A. 6 Final Residential Subdivision Unit 770.00 550.00 12,100 3 – P.A. 7 Final Residential Subdivision Unit 810.00 576.00 10,368 4 – P.A. 8, 9 & 10 Final Residential Subdivision Unit 810.00 576.00 40,896 5 – Non-Residential Property Acre 7,820.00 5,580.00 0
$79,314
On each July 1, commencing on July 1, 2024, the Maximum Services Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.

Method of Apportionment of Special Tax B
Commencing with Fiscal Year 2023-2024 and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requirement for Services and shall provide for the levy of the Services Special Tax until the total Services Special Tax levy equals the Special Tax Requirement for Services. The Services Special Tax shall be levied each Fiscal Year as follows:

CASA GRANDE AVENUE

CYPRESS AVENUE

DUNCAN CANYON ROAD

SIERRA AVENUE

FIELDCRESS DRIVE

CASSAVA DRIVE

MONTELENA ROAD

GARDENS STREET
LOT 6
TRACT NO. 20364
TRACT NO. 20363
TRACT NO. 20362
LOT 5
(THE GARDENS PHASE ONE)
PROPOSED BOUNDARIES OF CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 112 395
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-2348 Agenda Date: 7/25/2023
Agenda #: AJ. Category: Consent Calendar
FROM:

Management Services
SUBJECT:
2023-2024 Statement of Investment Policy
RECOMMENDATION:

Adopt the City of Fontana Statement of Investment Policy for Fiscal Year 2023-2024.

COUNCIL GOALS:
· To create a team by working together to provide stability and consistent policy direction.

DISCUSSION:

The City of Fontana Statement of Investment Policy (Policy) requires an annual review and adoption by the City Council. The Policy was last updated in January 2023. The Policy is being presented at this time to ensure that the requirements of the Policy are consistent throughout the fiscal year. The Policy has been certified by the Association of Public Treasurers of the United States and Canada (APT US&C).

There are some additional minor changes being proposed to the policy including the following:
· Investment Review Committee - members currently include the City Treasurer, Chief Financial Officer/Deputy City Treasurer, Budget Manager and Accounting Manager. Due to a reorganization of the Finance Department, it is proposed to eliminate the Budget Manager from the committee and add the Deputy Finance Officer and Revenue and Operations Manager.
· Authorized Investment Officers - the current policy includes the authorized investment officers of City Manager, Chief Financial Officer/Deputy City Treasurer, Budget Manager, and Accounting Manager. It is proposed to eliminate the Budget Manager from the authorized investment officers and add the Deputy Finance Officer and Revenue and Operations Manager.
· Investment Maturities - the current policy states that the “maximum maturity term of any investment shall not exceed five (5) years (measured by settlement date) unless prior express authority from Council has been granted.” It is proposed to add the language that the maturity term shall not exceed five (5) years (measured by settlement date or Weighted Average Life ).
· Additional language clarification, an needed.

The Investment Review Committee will meet quarterly to discuss the status of current investments, strategies for future investments, and other matters deemed relevant. Additionally, upon approval of City of Fontana Page 1 of 2 Printed on 7/20/2023
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File #: 21-2348 Agenda Date: 7/25/2023
Agenda #: AJ. Category: Consent Calendar
this item, the Authorized Investment Officers will be as follows:

Authorized Investment Officers:

City Manager
Chief Financial Officer/Deputy City Treasurer
Deputy Finance Officer
Revenue and Operations Manager
Accounting Manager
The update is being done to bring the Investment Policy review schedule in line with the Fiscal year rather than the calendar year.

FISCAL IMPACT:

None.

MOTION:

Approve staff recommendation.

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CITY OF FONTANA

STATEMENT OF

INVESTMENT POLICY
2023-2024
Certified by the Association of Public Treasurers of the United States and Canada (APT US&C)
Prepared by the Finance Department Lisa Conlon,
Revenue Operations Manage
Reviewed and Approved by
Janet Koehler-Brooks, City Treasurer
398

TABLE OF CONTENTS
Page
I. OVERVIEW 1
Introduction
Scope
Objectives
Significant Changes
II. INVESTMENT AUTHORITY AND RESPONSIBILITIES 3
Authorized Investment Officers
Investment Review Committee
Investment Procedures
Internal Control
Conflicts of Interest
III. ELIGIBLE FINANCIAL INSTITUTIONS 5
Selection of Eligible Financial Institutions
Safekeeping and Custody
IV. AUTHORIZED INVESTMENTS 7
Investment Types
Due Diligence Requirement
Prohibited Investments
Derivative Investments
Legislative Changes
V. INVESTMENT MATURITIES 14
VI. CASH MANAGEMENT 15
VII. EVALUATION OF INVESTMENT PERFORMANCE 16
Benchmark Comparison
VIII. INVESTMENT REPORTING 17
IX. INVESTMENT POLICY REVIEW AND ADOPTION 18
X. GLOSSARY 19
399
City of Fontana
Statement of Investment Policy
1 I. OVERVIEW

INTRODUCTION
The purpose of this document is to provide guidelines for the prudent investment of the unexpended cash in the City’s treasury and outline policies for maximizing the efficiency of the City's cash management system. The ultimate goal is to enhance the economic status of the City while protecting its pooled cash.

SCOPE
Included in the scope of the City's investment policy are the following major guidelines and practices which are to be used in achieving the City's primary investment objectives:
❖ Investment Authority and Responsibilities
❖ Eligible Financial Institutions
❖ Authorized Investments
❖ Investment Maturities
❖ Cash Management
❖ Evaluation of Investment Performance
❖ Investment Reporting
❖ Investment Policy Review and Adoption
It is intended that this policy cover all funds and investment activities under the direct authority of the City. These funds are accounted for in the City's Comprehensive Annual Financial Report (CAFR) and include the general fund, special revenue funds, debt service funds, capital project funds, enterprise funds, internal service funds and agency funds.

Funds excluded from this policy include proceeds of debt issuance, retirement/pension funds and deferred compensation funds, and pension or other post-employment benefit funds held in a trust.

OBJECTIVES
The City's cash management system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the City to invest funds to the fullest extent possible. The City attempts to obtain the highest yield obtainable as long as investments meet the criteria established for safety and liquidity. 400
City of Fontana
Statement of Investment Policy
10 Criteria for selecting investments in the order of priority are:

1. Safety. The safety and risk associated with an investment refers to the potential loss of principal, interest, or a combination of these amounts. The City shall invest in a manner that seeks to avoid capital losses resulting from institution default or the erosion of market value.

2. Liquidity. This refers to the ability to convert an investment into cash with a minimal risk of losing some portion of principal or interest. Liquidity is an important investment quality, especially when the need for unexpected funds occurs occasionally.

3. Yield. Yield is the potential dollar earnings an investment can provide and becomes a consideration only after the basic requirements of safety and liquidity have been met.

Portfolio diversification in terms of maturity, instrument types and issuer help minimize the overall risk while maximizing the market rate of return. Therefore, the portfolio should consist of a mix of various types of securities, issuers and maturities. Occasional measured losses are inevitable and must be considered within the context of the overall portfolio's investment return, provided that adequate diversification has been implemented.

The City operates its pooled cash investments under the "Prudent Person Rule" which obligates a fiduciary to ensure that:
"... investment shall be made with the exercise of that degree of judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation but for investment considering the probable safety of their capital as well as the probable income to be derived."
All participants in the investment process shall act as custodians of the public trust.

Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. The overall program shall be designed and managed with a degree of professionalism that is worthy of the public trust. 401
City of Fontana
Statement of Investment Policy
7 II. INVESTMENT AUTHORITY AND RESPONSIBILITIES

AUTHORIZED INVESTMENT OFFICERS
Cash management and investment transactions are the responsibility of the Chief Financial Officer or designee. The City Council has authorized the following officials to undertake investment transactions on behalf of the City:

City Manager
Chief Financial Officer/Deputy City Treasurer
Deputy Finance Officer
Accounting Manager
Revenue Operations Manager
Daily portfolio management responsibilities have been delegated to the Chief Financial Officer/Deputy City Treasurer.

The City may retain the services of an outside investment advisor or manager as approved by the City Council to assist with the City’s investment program who shall retail full liability for, and make all investment decisions and transactions in strict accordance with State Law, this Policy and such other written instructions as are provided.

INVESTMENT REVIEW COMMITTEE
At least quarterly, the Investment Review Committee, consisting of the City Treasurer, Chief Financial Officer/Deputy City Treasurer, Deputy Finance Officer, Accounting Manager and Revenue Operations Manager shall meet with the investment advisor or manager to discuss the status of current investments, strategies for future investments, and other matters deemed relevant, and shall report to the City Council as necessary.

INVESTMENT PROCEDURES
The Chief Financial Officer/Deputy City Treasurer has established investment procedures which:
❖ Adhere to the Statement of Investment Policy
❖ Prioritize safety and liquidity
❖ Determine risk and optimizes return
❖ Provide for a system of due diligence in making investment decisions.

In order to accomplish these goals, a “Model” investment portfolio has been designed to 402
City of Fontana
Statement of Investment Policy
8 provide the strategic framework for supervising and reporting on the investment portfolio.

The model was developed according to this policy’s maturity guidelines and is used to facilitate decisions regarding security transactions. Each security selection recommended by the investment advisor or manager shall be designed to move the actual portfolio toward the model portfolio without taking any immediate losses.

No person authorized to conduct investment transactions (including investment advisor or manager) shall engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Chief Financial Officer/Deputy City Treasurer.

All investments selected under this policy, including any investments in foreign securities or currency, must be held with a financial institution that is subject to the jurisdiction of the laws and courts of the United States.

INTERNAL CONTROL
The Finance Department is responsible for ensuring compliance with the City's investment policy as well as for establishing systems of internal control designed to monitor the activities of any appointed investment advisor or manager, so as to prevent loss due to fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by the investment advisor or manager, city officers and employees. Timely bank reconciliations are conducted to ensure proper handling of all transactions.

An independent analysis by an external auditor shall be conducted annually to review internal control and compliance with policies and procedures.

CONFLICTS OF INTEREST
The City adopts the following policy concerning conflicts of interest:

1. Officers, investment advisor(s) or manager(s), and employees involved in the investment process shall not conduct personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.

2. Officers, investment advisor(s) or manager(s), and employees involved in the investment process shall disclose to the City Clerk any material financial interests in financial institutions that conduct business with the City of Fontana, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the City's portfolio. 403
City of Fontana
Statement of Investment Policy
9 III. ELIGIBLE FINANCIAL INSTITUTIONS

SELECTION OF ELIGIBLE FINANCIAL INSTITUTIONS
In selecting financial institutions for deposit or investment of funds, the Finance Department shall consider the creditworthiness of the institution.

1. Deposits. The City will only deposit funds with an institution that has a rating of at least "A" as assigned by an established rating service based on quarterly financial information provided by the Federal Reserve Board and the Federal Home Loan Bank Board (i.e., The Financial Directory). Ratings will be monitored on a quarterly basis and any downgrade in rating below "A" will be reported to the Investment Review Committee together with a recommendation for possible action.

2. Brokers/Dealers. Investments must be purchased directly from the issuer, from an institution licensed by the state as a broker-dealer, from a member of a federally regulated securities exchange, or from a brokerage firm designated as a primary government dealer by the Federal Reserve Bank.

All financial institutions which desire to do business with the City must supply the Finance Department with the following:
❖ Completed broker/ dealer questionnaire including certification that the financial institution has reviewed and will comply with the City’s Statement of Investment Policy and applicable California Government Code sections and that it will exercise due diligence in informing the City of all foreseeable risks associated with financial transactions conducted with the firm.
❖ Certified financial statements.
❖ Resumé of the primary representative who will be dealing with the City.

The Deputy City Treasurer shall review the information submitted and designate the institution as either eligible or ineligible for City investment transactions. The City will only do business with those institutions designated as “eligible”; however, an “eligible” designation does not guarantee that the City will do business with that institution.

A current audited financial report prepared by an independent certified public accountant 404
City of Fontana
Statement of Investment Policy
10 shall be submitted to the City annually within six months after the end of the institution’s fiscal year in order for the institution to remain on the “eligible” list. Within the context of the City’s policies regarding portfolio limitations, investment transactions shall be distributed as evenly as possible between financial institutions.

If the City has an investment advisor, the investment advisor may use its own list of authorized broker/dealers to conduct transactions on behalf of the City. The advisor shall make available its list of authorized broker/dealers to City staff upon request.

SAFEKEEPING AND CUSTODY
The City shall enter into an agreement with a bank trust department to serve as the safekeeping agent for all direct investments. The safekeeping agent shall hold all investments in an account for the sole benefit of the City.

All security transactions, including collateral requirements, shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by a third-party custodian and evidenced by safekeeping receipts.
405
City of Fontana
Statement of Investment Policy
11 IV. AUTHORIZED INVESTMENTS

INVESTMENT TYPES
Investment of City funds is governed by the California Government Code Sections 16429.1 and 53601. Investments may not have a term or maturity at the time of investment of longer than that authorized by Section 53601 or five years (measured by settlement date) unless the City Council has granted express authority, no less than three (3) months prior to the investment, for a specific investment to exceed such limit.

It should be noted that while the Government Code specifies the maximum percentage of the portfolio which may be held in each type of investment at any one time, fluctuations in the portfolio balance will prevent strict adherence to such restrictions. Therefore, percentage limitations shall apply to investments at the time of purchase. The City will diversify its investments by security type and institution.

Within the context of the State limitations, the following investments are authorized:

1. State Treasurer's Local Agency Investment Fund (LAIF) Government Code Section 16429.1: Pursuant to LAIF policy, local government agencies are authorized to invest in this program administered by the California State Treasurer. Monies invested with LAIF are pooled with State monies in order to earn the maximum rate of return consistent with safe and prudent treasury management. A thorough investigation of the pool is required on a continual basis. (See Due Diligence Requirement on page 12.)

2. U.S. Treasury Obligations
Government Code Sections 53601(b): U.S. Treasury Notes or other indebtedness secured by the full faith and credit of the federal government.

3. U.S. Government Securities
Government Code Sections 53601(f): Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies of the United States government-sponsored enterprises.
406
City of Fontana
Statement of Investment Policy
12 4. California State, California State, California Local Government Agencies, and other United States State Bonds
Government Code Sections 53601(c) through (e): Twenty percent (20%) of the City’s portfolio may be invested in this category having at the time of investment a minimum “AA” or its rating equivalent or better by an NRSRO. This category includes:
❖ Registered state warrants or treasury notes or bonds of the State of California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled or operated by the state or by a department, board, agency, or authority of the state. ❖ Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California.
❖ Bonds, notes, warrants, or other evidence of indebtedness of a local agency within the State of California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency.

5. Bankers Acceptances
Government Code Section 53601(g): Forty percent (40%) of the City's portfolio may be invested in Bankers Acceptances which are defined as bills of exchange or time drafts, drawn on and accepted by a commercial bank, which are eligible for purchase by the Federal Reserve System, although no more than 30% of the portfolio may be invested in Bankers Acceptances with any one commercial bank.

Additionally, the maturity period cannot exceed 180 days.

6. Commercial Paper
Government Code Section 53601(h): Twenty-five percent (25%) of the City's portfolio may be invested in "Prime" commercial paper as rated by a nationally recognized statistical-rating organization (NRSRO). Issuing corporations must be organized and operating in the United States, have $500 million total assets, and have at least an "A" rating by an NRSRO on debt other than commercial paper.

No more than 10% of the portfolio may be invested in the commercial paper and 407
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13 medium-term notes of any single issuer. The maturity period cannot exceed 270 days.

7. Negotiable Certificates of Deposit
Government Code Section 53601(i): Thirty percent (30%) of the City's portfolio may be invested in Negotiable Certificates of Deposit issued by a nationally or state-chartered bank or a state or federal association or by a state-licensed branch of a foreign bank. These securities shall be rated in a ratings category of “A” or its equivalent or better by an NRSRO.

8. Medium-Term Notes
Government Code Section 53601(k): Defined as all corporate and depository institution debt securities with a maximum remaining maturity of five years or less (measured by settlement date), issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this subdivision must be rated in a rating category of "A" or its equivalent or better by an NRSRO. No more than 10% of the portfolio may be invested in the commercial paper and medium-term notes of any single issuer. Up to 30% of the City's portfolio may be so invested.

9. Mortgage or Asset-Backed Securities (ABS)
Government Code Section 53601(o): Up to twenty percent (20%) of the City's portfolio may be invested in mortgage pass-through securities, collateralized mortgage obligations, mortgage-backed or other pay-through bonds, equipment lease-backed certificates, consumer receivable passthrough certificates, or consumer receivable-backed bonds. Securities eligible for investment under this subdivision shall be rated in a rating category of “AA” or its equivalent or better by an NRSRO and have a maximum remaining maturity of five years or less measured on a weighted average life (WAL) basis.

10. Supranational Obligations
Government Code Section 53601(q): Defined as United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank, and eligible for purchase and sale within the United States. These 408
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Statement of Investment Policy
14 securities shall be rated in a ratings category of “AA” or its equivalent or better by an NRSRO. Purchases of supranationals shall not exceed 30 percent (30%) of the City’s portfolio nor exceed a five-year term.

11. Certificates of Deposit
Government Code Section 53635: There is no limit as to the amount of the investment portfolio that may be deposited in certificates of deposit.

California law requires that public funds be collateralized. The depository must secure its public fund accounts by maintaining with the agent of the depository government securities having a market value of at least one hundred ten percent (110%) of the value of the public fund accounts. If a depository uses mortgagebacked securities (i.e., promissory notes secured by first mortgages or first deeds of trust) as collateral for public deposits, the market value of the mortgagebacked securities must be at least one hundred fifty percent (150%) of the value of the public fund accounts.

The collateralization requirement may be waived to the extent that funds are federally insured (currently up to $250,000 per institution). For deposits equivalent to the maximum insured amount, security may also be waived for interest accrued on the deposit provided the interest is computed by the depository on the average daily balance of the deposits, paid monthly and computed on a 360-day basis.

It is the current practice of the City of Fontana to invest in the following types of securities. In order to avoid the risks associated with investing in unfamiliar instruments, any new type of security allowed by the State of California but not listed below must be approved by the Investment Review Committee prior to the investment of City funds.

The portfolio can invest in 144A-registered securities. 409
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15 Investment Type Maximum
Maturity
Maximum
% of
Portfolio
Minimum
Quality
Requirements
Government
Code Section
State Treasurer’s Local
Agency Investment
Fund (LAIF)
5 years
LAIF
maximum
per account N/A 16429.1
U.S. Government
Securities 5 years None None 53601(b)53601(f)
California State,
California Local
Government Agencies,
and other United
States State Bonds
5 years 20%
“AA” rating
category or its
equivalent or
better
53601(c)
53601(d)
53601(e)
Bankers Acceptances 180 days 40% None 53601(g)
Commercial Paper 270 days
25%
(10% with one
issuer)*
A-1 or higher 53601(h)
Negotiable Certificates
of Deposit 5 years 30% None 53601(i)
Medium-Term Notes 5 years
30% (10%
with one
issuer)*
“A” rating
category or its
equivalent or
better
53601(k)
Pass-Through
Securities 5 years 20%
“AA” rating
category or its
equivalent or
better
53601(o)
Supranational
Obligations 5 years 30%
“AA” rating
category or its
equivalent or
better
53601(q)
Certificates of Deposit 5 years None None 53635
*Commercial paper and medium-term notes are combined to determine the 10% limit per issuer.
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Statement of Investment Policy
16 DUE DILIGENCE REQUIREMENT
As stated, the Chief Financial Officer/Deputy City Treasurer, as assisted by an investment advisor or manager, shall make a thorough investigation of an investment pool or mutual fund prior to investing funds and on a continual basis. At a minimum, the following information shall be on file for each pool and/or mutual fund:

1. A description of eligible investment securities, and a written statement of investment policy and objectives.

2. A description of interest calculations, how interest is distributed, and how gains and losses are treated.

3. A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.

4. A description of who may invest in the program, how often, and the size of deposits and withdrawals.

5. A schedule for receiving statements and portfolio listings.

6. Whether reserves, retained earnings, etc. are utilized by the pool/fund.

7. A fee schedule, and when and how fees are assessed.

8. Whether the pool/fund is eligible for bond proceeds and/or will it accept such proceeds.

PROHIBITED INVESTMENTS
In compliance with Government Code Section 53631.5, the City of Fontana shall not invest in inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages. Additionally, the City shall not invest in any security that could result in zero interest accrual if held to maturity.

The City does not participate in any form of portfolio leverage, including but not limited to securities lending programs, reverse repurchase agreements and margin accounts.

DERIVATIVE INVESTMENTS
Derivatives are investments whose value is “derived” from or based upon the value of other assets or on the level of an interest rate index. The City of Fontana does not invest in derivative products.
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17 LEGISLATIVE CHANGES
Any State of California legislative action that further restricts allowable maturities, investment types or percentage allocations will be incorporated into the City of Fontana Statement of Investment Policy and supersede any and all previous applicable language.

If the City is holding an investment that is subsequently prohibited by a legislative change, the City may hold that investment, if it is deemed prudent by the Investment Review Committee, until the maturity date to avoid an unnecessary loss. 412
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18 V. INVESTMENT MATURITIES
In order to minimize the impact of market risk, while maximizing the investment rate of return, it is intended that all investments will be held to maturity. In order to implement this policy, the following guidelines will be used:

1. Liquidity. Approximately ten percent (10%) of the portfolio shall be held in shortterm investments (less than twelve months) as insufficient liquidity could cause the premature sale of a security at a price below the original investment cost.

2. Weighted Average Life. The weighted average life (WAL) of the portfolio should not exceed two and one-half years.

3. Duration. The target duration of the portfolio shall be two years.

4. Diversification of Maturities. Projected cash flow requirements are the primary factor to be used in determining investment maturity terms. After cash flow needs have been met, yield considerations will be the next factor used in determining maturity terms, with the expectation that longer maturity periods will generally yield greater returns. However, the City will diversify its investments by maturity in order to avoid over concentration (in excess of 25%) in a specific maturity sector.

5. Sale of Securities. Investments may be sold prior to maturity for cash flow or appreciation purposes. However, no investment shall be made based solely on earnings anticipated from capital gains.

6. Maximum Maturity. As previously stated, the maximum maturity term of any investment shall not exceed five (5) years (measured by settlement date or Weighted Average Life) unless recommended by an investment advisor or manager, and prior express authority from Council has been granted. 413
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19 VI. CASH MANAGEMENT
In order to obtain a reasonable return on public funds, the following cash management practices will be followed:

1. Maintain maximum investment of all City funds not required to meet immediate cash flow needs.

2. Pool cash from all City administered funds for investment purposes with interest earnings allocated monthly based on the average cash balance of each fund at month end as a percentage of the entire pooled portfolio.

3. Maximize the City's cash flow through immediate deposit of all cash receipts, use of direct deposit when available, and appropriate timing of payment to vendors.

4. Maximize cash flow information available through the use of only one operating bank account.
414
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20 VII. EVALUATION OF INVESTMENT PERFORMANCE
The investment portfolio shall be managed using a passive style; market timing shall be ignored, and the focus instead shall be on obtaining a market average rate of return during budgetary and economic cycles, taking into account the City's investment risk constraints and cash flow needs. Investments shall be managed at the portfolio level, not at the level of the individual securities.

BENCHMARK COMPARISON
The investment portfolio shall be structured to optimize the return given the risk constraints and cash flow needs.

Investment performance shall be continually monitored and evaluated by the Investment Review Committee. Investment performance statistics and activity reports shall be generated on a monthly basis for presentation to the City Council.

For reporting purposes, the portfolio’s monthly rate of return shall be compared to the BBG Barc Treasury 1-3 Yr Index.
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Statement of Investment Policy
21 VIII. INVESTMENT REPORTING
The Finance Department shall prepare and submit a monthly investment report to the City Council.

The Monthly Investment Report shall be issued and available within 30 days after the end of the monthly reporting period, or as soon as the information is available. 416
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Statement of Investment Policy
22 IX. INVESTMENT POLICY REVIEW AND ADOPTION
This Statement of Investment Policy shall be submitted annually to the City Council for review and adoption in July. The policy shall be reviewed at least annually to ensure its consistency with the overall objectives of the City and its relevance to current law and financial and economic trends. Any modifications made thereto must be approved by the City Council.
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Statement of Investment Policy
23 X. GLOSSARY
AGENCIES: Federal agency securities.

BROKER: A broker brings buyers and sellers together for a commission paid by the initiator of the transaction or by both sides.

COLLATERAL: This includes, but is not limited to securities pledged by a bank to secure deposits of public monies.

COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the city.

CERTIFICATES OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large-denomination CD's are typically negotiable.

COMMERCIAL PAPER (CP): Short-term, negotiable, unsecured promissory notes.

COUPON: The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value.

DELIVERY VERSUS PAYMENT (DVP): Delivery of securities with an exchange of money for the securities.

DERIVATIVE PRODUCTS: Financial instruments whose own value is "derived" from or based upon the value of other assets or on the level of an interest rate index. These instruments often have complex structures with option-like features.

DISCOUNT: The difference between the cost price of a security and its value at maturity when quoted at lower than face value.

DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, e.g., U.S. Treasury Bills.

DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns.

DURATION: A measure of the timing of the cash flows to be received from a given fixed income security. The duration of a security is a useful indicator of its price volatility for given changes in interest rates.
418
City of Fontana
Statement of Investment Policy
24 FEDERAL AGENCY SECURITIES (AGENCIES): Discount and coupon obligations of the federal agencies established by Congress to provide credit to specific sectors of the economy.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits currently up to $100,000 per deposit.

FEDERAL HOME LOAN BANKS (FHLB): The institutions that regulate and lend to savings and loan associations.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): A federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). FNMA securities are highly liquid and widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA): Securities are backed by FHA, VA or FMHM mortgages. Security holder is protected by full faith and credit of the U.S. Government.

LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value.

LOCAL AGENCY INVESTMENT FUND (LAIF): Investment program administered by the California State Treasurer where monies invested are pooled with State monies to earn the maximum rate of return consistent with safe and prudent treasury management.

MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold.

MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase agreements that establishes each party's rights in the transactions. A master agreement will often specify, among other things, the right of the buyer to liquidate the underlying securities in the event of default by the seller.

MATURITY: The date upon which the principal or stated value of an investment becomes due and payable.

MEDIUM-TERM NOTES: all corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. 419
City of Fontana
Statement of Investment Policy
25 MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers' acceptances, etc.) are issued and traded. For this purpose, bankers’ acceptance means one or more time draft(s) for which a bank has committed to making the payment to the holder at maturity.

MONEY MARKET MUTUAL FUND: A type of fixed income mutual fund that invests in debt securities characterized by their short maturities and minimal credit risk.

MORTGAGE PASS-THROUGH SECURITIES: A security created when one or more mortgage holders form a pool of mortgages and sells shares or participation certificates in the pool. The cash flow from the collateral pool is “passed through” to the security holder as monthly payments of principal, interest and prepayments.

MUTUAL FUNDS: Open-end professionally managed investment fund that pools money from many investors to purchase securities.

NEGOTIABLE CERTIFICATES OF DEPOSIT: CDs with a minimum face value of $100,000 that can be traded in a highly-liquid secondary market.

NRSRO: Nationally Recognized Statistical Rating Organization, a credit rating agency approved by the U.S. Securities and Exchange Commission (SEC) to provide information that financial firms must rely on for regulatory purposes. The top firms including Moody’s Investor Services, Standard and Poor’s and Fitch Group.

PORTFOLIO: Collection of securities held by an investor.

PRUDENT PERSON RULE: The standard of care to be used under this policy, whereby investments shall be made with the exercise of that degree of judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation but for investment considering the probable safety of their capital as well as the probable income to be derived."
PRIMARY DEALER: A group of government securities dealers that submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange commission (SEC) registered securities brokerdealers, banks, and a few unregulated firms.

RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond or the current income return.

REPURCHASE AGREEMENT (REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. 420
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Statement of Investment Policy
26 SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection.
421
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Statement of Investment Policy
27 SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution.

SECURITIES AND EXCHANGE COMMISSION (SEC): Agency created by Congress to protect investors in securities transactions by administering securities legislation.

SUPRANATIONAL OBLIGATIONS: United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank, and eligible for purchase and sale within the United States.

TREASURY BILLS: A non-interest bearing discount security issued by the U.S.

Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.

TREASURY BOND: Long-term U.S. Treasury securities having initial maturities of more than ten years.

TREASURY NOTES: Intermediate term coupon bearing U.S. Treasury securities having initial maturities of from one to ten years.

YIELD: The rate of annual income return on an investment expressed as a percentage. Income Yield is obtained by dividing the current dollar income by the current market price for the security. Yield to Maturity is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.
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Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-2357 Agenda Date: 7/25/2023
Agenda #: AK. Category: Consent Calendar
F ROM:

Housing
SUBJECT:

Approve lease agreement, supportive service agreement and property management agreements for Homekey and Family Homelessness Challenge Grant properties.

RECOMMENDATION:

1. Approve and authorize the City Manager to execute the lease agreements with Water of Life Community Church for Homekey and Family Homelessness Challenge Grant properties.

2. Approve and authorize the City Manager to execute the supportive services agreements with Water of Life Community Church for Homekey and Family Homelessness Challenge Grant properties.

3. Approve and authorize the City Manager to execute the property management agreements with Quality Management Group for Homekey and Family Homelessness Challenge Grant properties.

4. Approve and Authorize the City Manager and/or his designee(s) to make non-material changes to these agreements and execute any future amendments to these agreements.

COUNCIL GOALS:
· Provide a diverse range of housing types and levels of affordability while addressing homelessness in the community by construction of affordable high-quality multi-family housing.
· Provide a diverse range of housing types and levels of affordability while addressing homelessness in the community by acquisition, substantial rehabilitation, and professional management of selected multi-family properties to provide more affordable units and reduce crime and code enforcement activity.
· Provide a diverse range of housing types and levels of affordability while addressing homelessness in the community by promoting diverse range of housing projects and levels of affordability.

DISCUSSION:

Homekey Program Round 2 (Homekey) is a State of California grant funding program administered by the California Department of Housing and Community Development (HCD). Approximately $1.45 billion in grant funding has been made available statewide as part of the Round 2 Notice of Funding Available (NOFA) to continue the State’s efforts to rapidly expand housing for persons experiencing homelessness or at risk of homelessness and who are inherently impacted by or at increased risk due to the COVID-19 pandemic. The Round 2 application opened on September 30, 2021, and closed on January 31, 2022.

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File #: 21-2357 Agenda Date: 7/25/2023
Agenda #: AK. Category: Consent Calendar
The Family Homelessness Challenge grant (FHC) made available $40 million in grant funding authorized by AB 140 (Chapter 111, Statutes of 2021) to provide competitive grants and technical assistance to local jurisdictions to promote rapid innovation, accelerate nascent programs, and expand promising practices to create scalable solutions that can be shared across the state to address and ultimately end family homelessness.

On January 10, 2022, the City Council passed and adopted Resolution No. 2022-002, directing the collaboration with Water of Life Community Church (WOL) and Quality Management Group (QMG) to submit an application for the Homekey Program grant funding in the amount of $3,054,395.

Additionally, on July 26, 2022 the City Council accepted the Family Homelessness Challenge Grant award funding in the amount of $2,726,608, to support the interim housing program.

Three city-owned properties (7714 Tamarind Ave, 8996 Olive St, & 8344 Bennett Ave) will utilize Homekey and FHC grant funding. These units will provide wrap-around supportive services for those inherently impacted by COVID-19 by nature of being homeless or chronically homeless, or at risk of homelessness, who are residents of San Bernardino County and preferably the City of Fontana.

Referrals into the program will be made through the San Bernardino County Coordinated Entry System (CES). The units would be operated as a cohesive project by Quality Management Group (QMG) as the property manager and Water of Life (WOL) as the lead service provider. Each property will execute an annual lease with an option to extend, a property management agreement and a supportive services agreement complying with all applicable federal and state grant funding sources.

FISCAL IMPACT:

The fiscal impact associated with the approval of this item is $3,033,969.00 over the term of the grant periods. This amount is included in the 2023-24 budget in Project Strings 30200019-301-B, 30200021-301-B, and 30200007-698-B.

MOTION:

Approve staff recommendation
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CITY OF FONTANA

PROFESSIONAL SERVICES AGREEMENT
TRACKING NUMBER:

1. PARTIES AND DATE.

This Agreement is made and entered into this ___ day of July, 2023, by and between the City of Fontana, a municipal corporation organized under the laws of the State of California with its principal place of business at 8353 Sierra Avenue, Fontana, California 92335 (“City”) and Water of Life Community Church, a Non-Profit Organization with its principal place of business at 11418 Miller Ave, Suite K, Fontana, CA 92336 (“Consultant”). City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties.”

2. RECITALS.

2.1 City. City is a municipal corporation organized under the laws of the State of California, with power to contract for services necessary to achieve its purpose.

2.2 Consultant. Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is familiar with and experienced in providing supportive services to individuals and families who are homeless or at risk of homelessness, and the provision of such services to public clients, and further that Consultant has all appropriate licenses to provide such services in the State of California and the City.

2.3 Project. City desires to engage Consultant to render such services on the terms and conditions as set forth in this Agreement for purposes of reducing and eliminating homelessness in the City. City and Consultant agree that this Agreement is subject to requirements of funding received under state and federal law, including grant conditions referenced herein, and that City and Consultant shall reasonably cooperate to fulfill the requirements and conditions for the receipt and expenditure of such funding (“Funding Requirements”).

3. TERMS.

3.1 Scope of Services and Term.

3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional consulting services necessary for the supportive services more particularly described in the “Scope of Services” attached as Exhibit “A”, which is incorporated herein by reference (“Services”). All Services and related activities shall be in accordance with this Agreement, the exhibits attached hereto, and all applicable local, state and federal laws, rules and regulations.

3.1.2 Term. The term of this Agreement shall be for a period of one year from___, 2023 to___ , 2024 (“Term”), unless earlier terminated as provided herein. The City has the option, by giving written notice to Consultant, to extend the term for four (1) one-year periods (“Extended Term”), at which point the Agreement will expire and a new agreement will be required.

Consultant shall perform its services in a prompt and timely manner within the term of this Agreement and shall commence performance upon receipt of written notice from the City to 425
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proceed (“Notice to Proceed”). The Notice to Proceed shall set forth the date of commencement of work.

3.1.3 Reimbursement for Prior Services. Notwithstanding the Term set forth above, Consultant may submit a request for reimbursement of services rendered prior to the Term that would meet all other requirements for payment under this Agreement. If the City determines, in the exercise of its reasonable discretion, that the request would meet the requirements of this Agreement, except for being provided during the Term, and the City receives written confirmation from the funding source that the services comply with any applicable Funding Requirement for the Services, then the City may, agree to issue payment for the requested amount. City has the sole and absolute discretion to deny any request made under this paragraph.

3.2 Responsibilities of Consultant.

3.2.1 Control and Payment of Subordinates; Independent Contractor. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement.

City retains Consultant on an independent contractor basis and not as an employee. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant’s exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers’ compensation insurance.

3.2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit “B” attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant’s conformance with the Schedule, City shall respond to Consultant’s submittals in a timely manner. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.

Consultant agrees and understands that the payment for Services is subject to the deadlines for expenditure of funds, if any, referenced in the Funding Requirements.

3.2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City, and in accordance with all requirements of the Scope of Services and any applicable Funding Requirements. Consultant understands and agrees to comply with all obligations of a “subrecipient” or “subgrantee,” if applicable, under any funding source referenced in this Agreement, as well as to comply with the following:

3.2.3.1 Compliance with the Drug-Free Workplace Act of 1990 (Gov. Code § 8350 et seq.).

3.2.3.2 Publishing a statement notifying employees or agents that unlawful manufacture, distribution, dispensation, possession or use of a controlled substance is prohibited and specifying actions to be taken for violations.
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3.2.3.3 Establishing a Drug-Free Awareness Program, as required by Government Code § 8355, subdivision (a)(2) to inform employees or agents about: (a) the dangers of drug abuse in the workplace; (b) Consultant’s policy of maintaining a drug-free workplace; (c) any available counseling, rehabilitation, and employee assistance program; and (d) penalties that may be imposed upon employees or agents for drug abuse violations.

3.2.3.4 Provide each employee or agent, as required by Government Code § 8355(a)(3), a copy of Consultant’s drug-free policy statement, and require each employee or agent agree and abide to the terms of the policy as part of the employment or agent contract.

3.2.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval by City, such approval not to be unreasonably withheld, conditioned, or delayed. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property, shall be promptly removed from the Services by the Consultant at the request of the City. The key personnel for performance of this Agreement are as follows: Mark Nuaimi, Sr. Staff Director, Operations.

3.2.5 City’s Representative. The City hereby designates Valerie Gonzales, Housing Development Manager, or his or her designee, to act as its representative for the performance of this Agreement (“City’s Representative”), as may be updated from time to time. City’s Representative shall have the power to act on behalf of the City for all purposes under this Contract. Consultant shall not accept direction or orders from any person other than the City’s Representative or his or her designee.

3.2.6 Consultant’s Representative. Consultant hereby designates Giovanni Quiroz, Grant Manager of Consultant, or his or her designee, to act as its representative for the performance of this Agreement (“Consultant’s Representative”), as may be updated from time to time. Consultant’s Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant’s Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

3.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City’s staff, consultants and other staff at all reasonable times.

3.2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, including a City Business License, and that such licenses and approvals shall be maintained 427
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throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant’s failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Services, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Services by the Consultant and shall not be re-employed to perform any of the Services or any related work.

3.2.9 Laws and Regulations; Employee/Labor Certifications. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If the Consultant performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to the City, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.

3.2.9.1 Employment Eligibility; Consultant. By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time. Such requirements and restrictions include, but are not limited to, examination and retention of documentation confirming the identity and immigration status of each employee of the Consultant.

Consultant also verifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement, and shall not violate any such law at any time during the term of the Agreement. Consultant shall avoid any violation of any such law during the term of this Agreement by participating in an electronic verification of work authorization program operated by the United States Department of Homeland Security, by participating in an equivalent federal work authorization program operated by the United States Department of Homeland Security to verify information of newly hired employees, or by some other legally acceptable method. Consultant shall maintain records of each such verification, and shall make them available to the City or its representatives for inspection and copy at any time during normal business hours. The City shall not be responsible for any costs or expenses related to Consultant’s compliance with the requirements provided for in this Section 3.2.9 or any of its sub-sections.

3.2.9.2 Employment Eligibility; Subcontractors, Consultants, and Subconsultants. To the same extent and under the same conditions as Consultant, Consultant shall require all of its subcontractors, consultants, sub-subcontractors and subconsultants performing any work relating to the Services or this Agreement to make the same verifications and comply with all requirements and restrictions provided for in Section 3.2.9.1.

3.2.9.3 Employment Eligibility; Failure to Comply. Each person executing this Agreement on behalf of Consultant verifies that they are a duly authorized officer of Consultant, and understands that any of the following, if not cured within thirty (30) days of (i) written notice by the City, or (ii) discovery by Consultant, whichever is earlier, shall be grounds 428
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for the City to terminate the Agreement for cause: (1) failure of Consultant or its subcontractors, consultants, sub-subcontractors or subconsultants to meet any of the requirements provided for in Sections 3.2.9.1 or 3.2.9.2; (2) any misrepresentation or material omission concerning compliance with such requirements (including in those verifications provided to the Consultant under Section 3.2.9.2); or (3) failure to immediately remove from the Services any person found not to be in compliance with such requirements. The opportunity to cure stated herein shall be subject to the Funding Requirements and shall not prejudice City’s rights to withhold payment to comply with the Funding Requirements.

3.2.9.4 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Workers’ Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to obtain the required liability insurance in accordance with law and this Agreement before commencing the performance of the Services.

3.2.9.5 Equal Opportunity Employment. Consultant shall not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment, including any subconsultant, because of race, religious creed, color, national origin (including language use restriction), ancestry, physical disability (including HIV and AIDS), mental disability, medical condition (cancer/genetic characteristics), genetic information, marital status, sex, gender, gender identity, gender expression, age (over 40), sexual orientation, pregnancy, military and veteran status, denial of medical and family care leave or pregnancy disability leave, or any other characteristic protected by state or federal law. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, supervising, layoff or termination. Consultant and any of its subcontractors shall comply with all applicable state and federal laws against discriminatory practices and all Funding Requirements, including but not limited to the non-discrimination provisions set forth in Section 8 of the FHC Grant General Terms and Conditions.

3.2.9.6 Air Quality. To the extent applicable, Consultant must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the South Coast Air Quality Management District (SCAQMD) and/or California Air Resources Board (CARB). Although the SCAQMD and CARB limits and requirements are more broad, Consultant shall specifically be aware of their application to "portable equipment", which definition is considered by SCAQMD and CARB to include any item of equipment with a fuel-powered engine. Consultant shall indemnify City against any fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Consultant, its subconsultants, or others for whom Consultant is responsible under its indemnity obligations provided for in this Agreement.

3.2.9.7 Water Quality.
(A) Management and Compliance. To the extent applicable, Consultant’s Services must account for, and fully comply with, all local, state and federal laws, rules and regulations that may impact water quality compliance, including, without limitation, all applicable provisions of the Federal Water Pollution Control Act (33 U.S.C. §§ 1300); the California Porter-Cologne Water Quality Control Act (Cal Water Code §§ 13000-14950); laws, rules and regulations of the Environmental Protection Agency, the State Water Resources Control 429
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Board and the Santa Ana Regional Water Quality Control Board; the City’s ordinances regulating discharges of storm water; and any and all regulations, policies, or permits issued pursuant to any such authority regulating the discharge of pollutants, as that term is used in the Porter-Cologne Water Quality Control Act, to any ground or surface water in the State. (B) Liability for Non-compliance. Failure to comply with the laws, regulations and policies described in this Section is a violation of law that may subject Consultant or City to penalties, fines, or additional regulatory requirements. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from and against any and all fines, penalties, claims or other regulatory requirements imposed as a result of Consultant’s non-compliance with the laws, regulations and policies described in this Section, unless such non-compliance is the result of the sole established negligence, willful misconduct or active negligence of the City, its officials, officers, agents, employees or authorized volunteers. (C) Training. In addition to any other standard of care requirements set forth in this Agreement, Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them without impacting water quality in violation of the laws, regulations and policies described in this Section. Consultant further warrants that it, its employees and subcontractors will receive adequate training, as determined by City, regarding the requirements of the laws, regulations and policies described in this Section as they may relate to the Services provided under this Agreement. Upon request, City will provide Consultant with a list of training programs that meet the requirements of this paragraph.

3.2.10 Insurance.

3.2.10.1 Time for Compliance. Consultant shall not commence, nor shall Consultant be required to commence, the Services under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the City that the subcontractor has secured all insurance required under this section.

3.2.10.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultant, its agents, representatives, employees or subcontractors.

Consultant shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage:
(A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability:

Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance. The policy shall not contain any exclusion contrary to the Agreement, including but not limited to endorsements or provisions 430
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limiting coverage for (1) contractual liability (including but not limited to ISO CG 24 26 or 21 29); or (2) cross liability for claims or suits by one insured against another. (B) Minimum Limits of Insurance. Consultant shall maintain limits no less than: (1) General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used including, but not limited to, form CG 2503, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation limits as required by the Labor Code of the State of California. Employer’s Liability limits of $1,000,000 per accident for bodily injury or disease. Defense costs shall be paid in addition to the limits.
(C) Notices; Cancellation or Reduction of Coverage. At least fifteen (15) days prior to the expiration of any such policy, evidence showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or materially reduced, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, the City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by the City will be promptly reimbursed by Consultant or the City may withhold amounts sufficient to pay premium from Consultant payments. In the alternative, the City may suspend or terminate this Agreement.

3.2.10.3 Insurance Endorsements. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by the City to add the following provisions to the insurance policies:
(A) General Liability. The general liability policy shall include or be endorsed (amended) to state that: (1) using ISO CG forms 20 10 and 20 37, or endorsements providing the exact same coverage, the City of Fontana, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or ongoing and complete operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work; and (2) using ISO form 20 01, or endorsements providing the exact same coverage, the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any excess insurance shall contain a provision that such coverage shall also apply on a primary and noncontributory basis for the benefit of the City, before the City’s own primary insurance or self-insurance shall be called upon to protect it as a named insured. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way. Notwithstanding the minimum limits set forth in Section 3.2.10.2(B), any available insurance proceeds in excess of the specified minimum limits of coverage shall be available to the parties required to be named as additional insureds pursuant to this Section 3.2.10.3(A).
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(B) Automobile Liability. The automobile liability policy shall include or be endorsed (amended) to state that: (1) the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way.

Notwithstanding the minimum limits set forth in Section 3.2.10.2(B), any available insurance proceeds in excess of the specified minimum limits of coverage shall be available to the parties required to be named as additional insureds pursuant to this Section 3.2.10.3(B). (C) Workers’ Compensation and Employers Liability Coverage.

The insurer shall agree to waive all rights of subrogation against the City, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the Consultant.
(D) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, employees, agents and volunteers and other additionally insureds

3.2.10.4 Separation of Insureds; No Special Limitations; Waiver of Subrogation. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, agents and volunteers.

All policies shall waive any right of subrogation of the insurer against the City, its officials, officers, employees, agents, and volunteers, or any other additional insureds, or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, its officials, officers, employees, agents, and volunteers, or any other additional insureds, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

3.2.10.5 Deductibles and Self-Insurance Retentions. Any deductibles or selfinsured retentions must be declared to and approved by the City. Consultant shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, agents and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.

3.2.10.6 Subconsultant Insurance Requirements. Consultant shall not allow any subconsultants to commence work on any subcontract relating to the work under the Agreement until they have provided evidence satisfactory to the City that they have secured all insurance required under this Section. If requested by Consultant, the City may approve different 432
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scopes or minimum limits of insurance for particular subconsultants. The Consultant and the City shall be named as additional insureds on all subconsultants’ policies of Commercial General Liability using ISO form 20 38, or coverage at least as broad.

3.2.10.7 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating no less than A:VIII, licensed to do business in California, and satisfactory to the City.

3.2.10.8 Verification of Coverage. Consultant shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements must be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time.

3.2.10.9 Reporting of Claims. Consultant shall report to the City, in addition to Consultant’s insurer, any and all insurance claims submitted by Consultant in connection with the Services under this Agreement

3.2.11 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions shall also include all equipment and training as reasonably necessary for the implementation of any operations and policies procedures in effect at any site where Services are provided.

3.2.12 Non-Discrimination. During the performance of this Agreement, Consultant, its employees and agents, shall not deny the Services to any person on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, nor shall they discriminate unlawfully against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. Consultant shall insure that the evaluation and treatment of employees and applicants for employment are free of such discrimination. Contractor and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code §12900 et seq.), the regulations promulgated thereunder (Cal. Code Regs., tit. 2, §11000 et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code §§11135- 11139.5), and the regulations or standards adopted by the awarding state agency to implement such article. Consultant shall permit access by representatives of the Department of Fair Employment and Housing and the awarding state agency upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours’ notice, to such of its books, records, accounts, and all other sources of information and its facilities as said Department or Agency shall require to ascertain compliance with this clause. Consultant shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. (See Cal. Code Regs., tit. 2, §11105.) Consultant shall include 433
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the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under the Agreement.

3.3 Fees and Payments.

3.3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit ”C” attached hereto and incorporated herein by reference. The total compensation for the initial one-year term shall initially equal an amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000.00), without written approval of City’s Representative (the “Compensation”). Extra Work may be authorized, as described below; and if authorized, said Extra Work will be compensated at the rates and manner set forth in this Agreement.

3.3.2 Ongoing Review of the Budget. It is understood and agreed that the Parties will meet regularly, and no less than once per quarter, to evaluate the Budget, the performance of the Project, and whether the Budget should be adjusted or modified to meet the Funding Requirements or further intent of the Parties and the intended purpose of this Agreement.

Notwithstanding the foregoing, Consultant understands and agrees that the Budget and the amount specified in Section 3.3.1 cannot be modified without a written amendment to this Agreement that is approved by the City Council, or its designee by appropriate delegated authority.

3.3.3 Payment of Compensation. Consultant shall submit to City a monthly itemized statement which indicates work completed and hours of Services rendered by Consultant (each a “Statement”). The Statement shall describe the amount of Services and supplies provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the Statement. The Statement must provide any and all information City may reasonably require to comply with any Funding Requirements referenced in in the Scope of Services or elsewhere in this Agreement, and upon request the City shall meet communicate with Consultant the information necessary to obtain payment. City shall, within thirty (30) days of receiving such Statement, review the Statement and pay all approved charges thereon (the “Payment Period”). City shall not unreasonably withhold, condition, or delay the approval of any payment of any such Statement. To the extent the City rejects or disputes a Statement (a “Statement Dispute”), the City shall deliver written notice to Consultant, and said notice shall describe, in reasonable detail, (i) the reason for the Statement Dispute, (ii) action that Consultant may take in order to remedy the Statement Dispute, and (iii) as applicable, if there is a dispute as to the amount billed or charged in any Statement the amount so disputed (“Payment Dispute Notice”). Upon receipt of the Payment Dispute Notice, Consultant shall have the right, exercisable in Consultant’s sole and absolute discretion, to take such steps to remedy the dispute; provided however, that such action by Consultant, if any, shall be without waiver of any of Consultant’s rights under this Agreement, at law, or in equity.

3.3.4 Reimbursement Subject to Funding Requirements. Any Statement must adequately document that the Services comply with the applicable Funding Requirements, as may be reasonably required by the City, and as set forth in Exhibit A.

3.3.5 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City.

3.3.6 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, “Extra Work” means any work which is 434
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determined by City to be necessary for the proper completion of the Services, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement.

Consultant shall not perform, nor be compensated for, Extra Work without written authorization from City’s Representative.

3.3.7 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Sections 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., (“Prevailing Wage Laws”), which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects. City has not made any representations or warranties to Consultant regarding the applicability of Prevailing Wages. If the Services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is One Thousand Dollars ($1,000) or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant’s principal place of business and at the project site. Consultant shall defend, indemnify and hold the City, its elected officials, officers, employees, volunteers and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.

3.3.8 Program Funding Source Compliance. Consultant agrees and understands that any payments under this Agreement may be subject to a determination that the services comply with grant funding conditions or requirements and that the City may withhold or retain payment for services that fail to comply with any grant conditions or requirements; provided however, that the City shall not unreasonably withhold or retain payment, and if the City desires to withhold or retain payment, it shall comply with the Statement Dispute procedures set forth in Section 3.3.3 including, without limitation, the delivery of a Payment Dispute Notice.

3.4 Accounting Records.

3.4.1 Maintenance and Inspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City, or an official or agent of the State of California, or other appropriate agency, during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement as required by any funding source. Consultant must retain records related to services provided under this Agreement for a period of ten (10) years, or longer period as required by law or any Funding Requirements. On or before that date, the City may require Consultant continue to retain records or provide all records related to the services provided under this Agreement.

3.4.2 Funding Requirement Records. Consultant agrees and understands that Consultant must comply with all provisions of the Funding Requirements related to the maintenance and inspection of records, and that Consultant will cooperate with the City at all times by providing documents, reports, records, or other data to City for the purpose of complying with the Funding Requirements.
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3.5 General Provisions.

3.5.1 Termination of Agreement.

3.5.1.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement as follows: (i) at any time and without cause with at least ninety (90) days written notice to Consultant, or (ii) if terminating ‘for cause’ then upon at least thirty (30) days written notice to Consultant. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause or in connection with the termination of the Lease (defined below).

3.5.1.2 Termination of Lease. City and Consultant are parties to that certain Lease Agreement dated July __, 2023 (the “Lease”) pursuant to which Consultant leases certain premises located at 7714 Tamarind Avenue, Fontana, CA 92336 (the “Tamarind Premises”) in connection with providing the Services described in this Agreement. City and Consultant acknowledge and agree that Consultant intends to provide a significant amount of the Services at the Tamarind Premises, and that the termination of the Lease could materially impair Consultant’s ability to render the Services. Upon the termination of the Lease, Consultant shall have thirty (30) days to deliver written notice to City electing to either (i) terminate this Agreement, or (ii) continue to perform this Agreement, with a proportionate reduction of the Services to be rendered and the Compensation.

3.5.1.3 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such documents and other information within fifteen (15) days of the request.

3.5.1.4 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

3.5.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective Parties at the following address, or at such other address as the respective parties may provide in writing for this purpose, or at the emails set forth below (as may be changed by written notice to the other party from time to time):

City
City of Fontana
8353 Sierra Avenue, Fontana,
California 92335
Attn: Valerie Gonzales
Email:

Consultant
Water of Life Community Church
14418 Miller Ave, Suite K
Fontana, CA 92336
Attn: Mark Nuaimi
Email: [email protected]
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address, or, if sent by email, one business day after dispatch. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.5.3 Ownership of Materials and Confidentiality.
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3.5.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement (“Documents & Data”). All Documents & Data shall be and remain the property of City, and shall not be used in whole or in substantial part by Consultant on other projects without the City's express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Consultant shall retain copies of all Documents & Data on file for a minimum of fifteen (15) years following completion of the Services, and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the Documents & Data following this retention period, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents.

3.5.3.2 Subcontractors. Consultant shall require all subcontractors to agree in writing that City is granted a non exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or its subcontractors, or those provided to Consultant by the City.

3.5.3.3 Right to Use. City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Agreement or another project, provided that any such use not within the purposes intended by this Agreement or unrelated this Agreement without employing the services of Consultant shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project unrelated to this Agreement, it shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless Consultant and its officers, directors, agents and employees from claims arising out of the negligent use or re-use of the Documents & Data on such other project. Consultant shall be responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Consultant shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Consultant, a party for whom the Consultant is legally responsible or liable, or anyone approved by the Consultant.

3.5.3.4 Indemnification. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person 437
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or entity in consequence of the use in the course of this Agreement by City of the Documents & Data, including any method, process, product, or concept specified or depicted.

3.5.3.5 Confidentiality. All “Confidential Information,” ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by, received by, or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services.

Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City’s name or insignia, photographs of the Services, or any publicity pertaining to the Services in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.
“Confidential Information” shall include, but not be limited to, all information or material that Consultant learns of or obtains while providing services to the City, its officials, employees or other agents, including any other consultant working on behalf of the City, under this Agreement that is or was confidential or privileged by virtue of it having been discussed or presented in a duly-noticed closed session meeting of the City Council, or otherwise privileged and/or confidential under applicable law, including but not limited to personnel information, confidential medical or health information, information pertaining to on-going or potential litigation, information learned in the context of the attorney-client relationship with the City Attorney or special counsel to the City. Confidential Information as defined includes, but is not limited to, all data, materials, products, technology, computer programs, specifications, manuals, business plans, software, marketing plans, financial information, internal processes and procedures, and other information disclosed or submitted, orally, in writing, or by any other media, to Consultant by City. Nothing herein shall require City to disclose any of its information to Consultant.

Consultant shall use and disclose Confidential Information only for the benefit of City and as is, or may be, necessary to perform his job responsibilities under this Agreement and in accordance with applicable law. Following the termination of this Agreement, Consultant shall not use or disclose any Confidential Information, except with the express written consent of City.

Consultant’s obligations under this Section shall survive the termination and/or expiration of this Agreement.

3.5.4 Indemnification.

3.5.4.1 Scope of Indemnity. To the fullest extent permitted by law, Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents (“City Indemnified Parties”) free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to (i) any negligence or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s Services or (ii) any material breach, default, violation or nonperformance of this Agreement. Such obligation shall not include consequential or special damages incurred by the City; provided, however, nothing in this section shall limit City’s recovery of any claim or liability for repayment of moneys that were used to pay for services of Consultant for non-compliance 438
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with the Funding Requirements. Notwithstanding the foregoing, to the extent Consultant's Services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant.

3.5.4.2 Additional Indemnity Obligations. To the extent Consultant is obligated to defend, indemnify, and hold the City Indemnified Parties free and harmless pursuant to Section

3.5.4.1, Consultant shall: (a) defend, with legal counsel chosen by City, at Consultant’s own cost, expense and risk, any and all claims, actions or other proceedings of every kind covered by Section 3.5.4.1 that may be brought or instituted against the City Indemnified Parties, (b) shall pay and satisfy any judgment, award or decree that may be rendered against the City Indemnified Parties as party of any such claim, suit, action or other proceeding, (c) reimburse said City Indemnified Parties for the cost of any settlement paid by said City Indemnified Parties as part of any such claim, suit, action or other proceeding. Such reimbursement shall include payment for the City’s attorneys’ fees and costs, including expert witness fees. Consultant shall reimburse the City Indemnified Parties, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant’s obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by the City Indemnified Parties.

Consultant’s Initials: ______________

3.5.5 Governing Law; Government Code Claim Compliance. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Bernardino County. In addition to any and all contract requirements pertaining to notices of and requests for compensation or payment for extra work, disputed work, claims and/or changed conditions, Consultant must comply with the claim procedures set forth in Government Code sections 900 et seq. prior to filing any lawsuit against the City. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to extra work, disputed work, claims, and/or changed conditions have been followed by Consultant. If no such Government Code claim is submitted, or if any prerequisite contractual requirements are not otherwise satisfied as specified herein, Consultant shall be barred from bringing and maintaining a valid lawsuit against the City.

3.5.6 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

3.5.7 Attorney’s Fees. If either Party commences an action against the other Party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney’s fees and all other costs of such action.

3.5.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Bernardino County.
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3.5.9 Time of Essence. Time is of the essence for each and every provision of this Agreement.

3.5.10 City’s Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Agreement or Services provided hereunder.

3.5.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties.

3.5.12 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.

3.5.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subcontractors of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

3.5.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

3.5.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

3.5.16 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

3.5.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.5.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or 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 rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.
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3.5.19 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

3.5.20 Counterparts. This Agreement may be executed in counterparts, including both counterparts that are executed on paper and counterparts that are in the form of electronic records and are executed electronically. An electronic signature means any electronic sound, symbol or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including email transmitted electronic signatures. All executed counterparts shall constitute one agreement, and each counterpart shall be deemed an original.

The parties hereby acknowledge and agree that electronic records and electronic signatures may be used in connection with the execution of this Agreement and electronic signatures or signatures transmitted by electronic mail in so-called pdf format shall be legal and binding and shall have the same full force and effect as if a paper original of this agreement had been delivered and signed by using a handwritten signature. City and Consultant (a) agree that an electronic signature, whether digital or encrypted, of a party to this Agreement is intended to authenticate this writing and have the same force and effect as a manual signature, (b) intend to be bound by the signatures (whether original, faxed or electronic) on any document sent or delivered by electronic mail or other electronic means, (c) are aware that the other party will rely on such signatures, and (d) hereby waive any defenses to the enforcement of the terms of this Agreement based on the foregoing forms of signatures. If this Agreement has been executed by electronic signature, all parties executing this document are expressly consenting under the Electronic Signatures in Global and National Commerce Act (“E-Sign”), and Uniform Electronic Transactions Act (“UETA”), that a signature transmitted by email or other electronic means shall constitute an Electronic Signature to an Electronic Record under both E-Sign and UETA with respect to this specific transaction.

3.6 Subcontracting. Prior Approval Required. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.

3.7 Entire Agreement. This Agreement, with its exhibits, represents the entire understanding of City and Consultant as to those matters contained herein, and supersedes and cancels any prior or contemporaneous oral or written understanding, promises or representations with respect to those matters covered hereunder. Each Party acknowledges that no representations, inducements, promises or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void. This Agreement may not be modified or altered except in writing signed by both Parties hereto. This is an integrated Agreement. Notwithstanding the foregoing, nothing in this Agreement shall supersede or cancel the separate agreement between City and Consultant regarding the Emergency Solutions Grant Program Services or Lease entered by the Parties on or about ______, 2023. [SIGNATURES ON NEXT PAGE]
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SIGNATURE PAGE
TO

CITY OF FONTANA

PROFESSIONAL SERVICES AGREEMENT
TRACK NO. _________________

CITY OF FONTANA
By:

Matthew C. Ballantyne
City Manager
Water of Life Community Church
By:
________________
Title:

Attest:

By:

City Clerk
Attest:1
By:

Approved as to form:

Best Best & Krieger LLP
City Attorney
By: _____________________________
Phillip Burum
Deputy City Manager
By: ______________________________
Valerie Gonzales
Housing Development Manager

IN COMPLIANCE WITH CONTRACT INSURANCE REQUIREMENTS
By: ______________________________
Rakesha L. Thomas
Director of Human Resources

IN COMPLIANCE WITH PURCHASING AND CONTRACT ADMINISTRATION

POLICIES/PROCEDURES
Jessica Brown, Chief Financial Officer Purchasing Office

1 Attestation of Consultant’s signature must be obtained when required by the by-laws, articles of incorporation or other laws, rules or regulations applicable to Consultant’s business entity. 442
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EXHIBIT “A”

SCHEDULE OF SERVICES
EXHIBIT “A”

SCOPE OF SERVICES
Water of Life Community Church, a Non-Profit Organization with its principal place of business at 11418 Miller Ave, Suite K, Fontana, CA 92336 (“Consultant”) shall provide services under this Agreement, as set forth herein:

1. It is a material term of this Agreement that Consultant comply with tall funding requirements (“Funding Requirements”) that are a condition of funding awarded to the City of Fontana (“City”) as set forth below:

1.1 The City has been awarded funds as part of the Family Homelessness Challenge Grant (“FHC Program”), which is funded through the Business, Consumer Services and Housing Agency of the State of California. Consultant agrees to comply all requirements of the FHC Program, including but not limited to the following:
(a) All requirements under Chapter 8 (commencing with Section 50255) of Part 1 of Division 31 of the Health and Safety Code of California, and any regulations, guidance, or amendments thereto;
(b) All requirements set forth in (1) the Family Homelessness Challenge Grant and Technical Assistance Program Standard Agreement, inclusive of all exhibits therein, and (2) the Program Work Plan, each of which is attached hereto as Attachments 1 and 2, respectively, and incorporated herein by reference; and, (c) Any other requirements for compliance with the FHC Program that may be determined by the State of California or the City.

2. Eligible Clients. The eligible clients for the services described herein are individuals and families who are homeless or at risk of homelessness persons who are “homeless” as defined in Section 578.3 of Title 24 of the Code of Federal Regulations, inclusive of individuals and families who are homeless or at risk of homelessness (“Client” or “Clients”).

3. Compliance with Work Plan. Consultant’s Services will be consistent with the activities set forth in the Work Plan, including: Street Outreach, Interim Shelter, Rapid Rehousing, Delivery of Permanent Housing, Service Coordination, Systems Support, Operating Subsidies, and Administrative Costs.

4. Program Properties. Consultant’s Services will support services for Eligible Clients in connection with housing opportunities at the following property: 7714 Tamarind Avenue, Fontana California (“Bridge of Hope”).

5. Service Deliverables. Consultant shall provide the following Services:

5.1 Consultant will provide case management from initial intake, assessment, and eligibility determinations for Clients.

5.2 Consultant’s case managers shall coordinate wraparound supportive services needed for Client success and access to sustainable housing, and provide assessment and 443
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EXHIBIT “A”

SCHEDULE OF SERVICES
coordination of medical services, skills training, vocational training, child care, animal care, transportation services, legal needs, and such other needs in furtherance of the applicable Funding Requirements and approved by the City.

5.3 All Clients shall be eligible for Consultant’s “Residential Leadership Academy” or similar program to be provided by Consultant upon consultation and approval of the City.

5.4 Consultant shall provide housing navigation services, including but not limited to:
(a) Maintaining a housing inventory (locally and regionally); (b) Understanding habitability requirements and fair market requirements; (c) Assisting clients with housing navigation and search.

5.5 Consultant shall provide street outreach services for daily engagement with homeless persons to assess vulnerability, assist with becoming document ready to obtain essential services, develop an Individual Housing Action Plan and guide clients toward the goal of becoming stable.

5.6 Consultant shall coordinate services for Clients in need of interim shelter, including transportation, bedding, food, animal care, and required documentation.

5.7 Consultant shall have services designed for families with a dependent minor.

5.8 Consultant shall coordinate vocational, legal, child care, animal care services for Clients in permanent supportive housing, including transportation, RLA classes, and required documentation.

6. Interim Housing Policies and Procedure

6.1 The Program Properties shall be operated as interim housing based on “Housing First” principles. “Housing First” means the evidence-based model that uses housing as a tool, rather than a reward, for recover and that centers on providing or connecting homeless people to permanent housing as quickly as possible.

6.2 Each Program Property shall be staffed at all hours, 24/7/365, by an agent or employee of Consultant who is designated as a Client Care Technician.

6.3 Consultant shall be responsible for operating the Program Properties and providing services in accordance with the core components of Housing First, pursuant to Welfare and Institutions Code § 8255, subdivision (b), including the following:
(a) Screening and selection practices that promote accepting applicants regardless of sobriety or use of substances, completion of treatment or participation in services. (b) Applicants are not rejected on the basis of poor credit or financial history, poor or lack of rental history, criminal convictions unrelated to occupancy, or behaviors that indicate a lack of “housing readiness.”
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(c) Acceptance of referrals from shelters, street outreach, drop-in centers, and other parts of crisis response systems frequented by vulnerable people experiencing homelessness.
(d) Supportive services that emphasize engagement and problem solving over therapeutic goals and service plans that are highly occupant-driven without predetermined goals.
(e) Participation in services or program compliance is not a condition of permanent housing.
(f) Written agreements that set out rights and responsibilities of occupancy, as required by California law.
(g) The use of alcohol or drugs in and of itself, without other lease violations, is not a reason for termination of occupancy.
(h) Prioritize occupant selection based on criteria other than “first-come-firstserve,” including duration or chronicity of homelessness, vulnerability to early mortality, or high utilization of crisis services, such as triage tools.
(i) Case managers and service coordinators who are trained in and actively employ evidence-based practices for client engagement, including but not limited to, motivational interviewing and client-centered counseling. (j) Services are informed by a harm-reduction philosophy that recognizes drug and alcohol use and addition as a part of tenants’ lives, where residents are engaged in nonjudgmental communication regarding drug and alcohol use, and where residents are offered education regarding how to avoid risky behaviors and engage in safer practices, as well as connected to evidence-based if the resident so chooses. (k) Accommodate disabilities, reduce harm, and promote health and community and independence among tenants.

6.4 Consultant must establish community guidelines for each Program Property that shall be subject to review and approval by the City. Tenant must allow residents the opportunity to have meaningful and purposeful opportunities to inform and shape the policies reflected in the community guidelines.

6.5 Consultant must cooperate with City to ensure compliance with any regulations or program administration as reasonably determined by City.

6.6 Consultant shall develop Community Guidelines and an Occupancy Termination Policy for each Project Property, which shall be subject to review and approval by City in its sole and absolute discretion. The Community Guidelines and Occupancy Termination Policy shall be in writing and shall set forth in plain language the rules and terms for a resident’s occupancy of the property, grounds for termination of occupancy, and the required notice procedures prior to the termination of a resident’s occupancy.
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EXHIBIT “A”

SCHEDULE OF SERVICES

6.7 The Community Guidelines, Occupancy Termination Policy, and any other documentation reasonably required by City, shall be provided to residents at the commencement of occupancy.

6.8 In the event of termination of a resident’s occupancy, Consultant shall provide the resident with: (A) a written copy of its grievance process, which sets forth in plain language how a resident may file an appeal challenging the termination of their residency, and (B) a written exit plan that includes, among other information, referrals to any available local shelter, and the Consultant shall make a good faith, reasonable effort to facilitate an intake for the resident in an available bed or unit when possible.

7. Consultant shall coordinate with any and all employees, agents or other consultants of the City for purposes of carrying out the Services thereunder.

8. Consultant shall cooperate with the City to comply with all obligations for inputting and maintaining data into the Homeless Management Information System, in accordance with California Health and Safety Code § 50259, including but not limited to: health information, in a manner consistent with state and federal law.

9. All referrals to assisted units shall be made through the local Coordinated Entry System or other comparable prioritization system based on greatest need, and in accordance with protocols that are developed and implemented in accordance with the local Continuum of Care and Program Requirements.

10. Consultant shall maintain and provide to City all data and outcomes that may inform an assessment of the Services and compliance with the Funding Requirements, including but not limited to client service data, housing status of persons served and documentation supporting the use of funds, and detail about the Services provided.

Consultant’s Initials: ___________
Exhibit A: Attachment 1

FHC STANDARD AGREEMENT
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EXHIBIT “A”

SCHEDULE OF SERVICES
Exhibit A: Attachment 2

WORK PLAN
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EXHIBIT “B”

SCHEDULE OF SERVICES
EXHIBIT “B”

SCHEDULE OF SERVICES
Consultant shall commence providing the Services on the Effective Date, in accordance with written notice from the City, the Schedule of Services set forth below, and the Budget attached as Exhibit C.

Consultant agrees and understands that the FHC Grant requires fifty percent (50%) of the City’s award to be spent by June 30, 2024 and one hundred percent (100%) to be spent by June 30, 2026. Failure to meet the Schedule of Services set forth above will result in damage to the City.

Consultant’s Initials: ___________
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EXHIBIT “C”
BUDGET
EXHIBIT “C”
BUDGET
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LEASE AGREEMENT

BETWEEN THE CITY OF FONTANA

AND WATER OF LIFE COMMUNITY CHURCH
THIS LEASE AGREEMENT (hereinafter “Lease”) is entered into by and between the CITY OF FONTANA, a California municipal corporation (hereinafter “Landlord”), and WATER OF LIFE COMMUNITY CHURCH, a California non-profit corporation (hereinafter “Tenant”).

Tenant and Landlord are sometimes individually referred to as “Party” and collectively as “Parties.”

1. RECITALS

1.1 WHEREAS, Landlord is the fee simple owner of that certain real property located at 7714 Tamarind Ave., City of Fontana, County of San Bernardino, State of California (Assessor Parcel No. 019-224-213-0000), more particularly described in attached Exhibit “A” (the “Property”); and

1.2 WHEREAS, Tenant will lease the Property from Landlord for the purpose of, inter alia, providing a shelter and related services to homeless persons pursuant to a separate Professional Services Agreement, dated June ___, 2023 (hereafter “Supportive Services Agreement”); and

1.3 WHEREAS, Landlord and Tenant desire to enter into this Lease for a term of one (1) year with two options to extend for (1) year each, upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

2. TERMS

2.1 Parties.

2.1.1 Tenant is a California non-profit corporation. Tenant will operate the Property in accordance with this Lease.

2.1.2 Landlord is a municipal corporation and, by this Lease, seeks to make the Property available to Tenant for purposes of providing shelter to persons experiencing homelessness. At times, this Lease may refer to the Landlord as acting in a regulatory capacity, and refer to the City in its capacity as regulator or administrator of public programs. This Lease shall not be construed as a regulatory approval or a waiver of the City’s right to act in a regulatory capacity.

2.2 Right of Possession. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, the Property on the terms and conditions hereinafter set forth in this Lease. 450
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2.2.1 Components of the Property. Upon the delivery of all of the herein described components, the Property shall comprise of three separate living areas, as described in the Site Plan attached hereto as Exhibit B, and described as follows:
(a) A single-family home with common areas (“Main Residence”); (b) An attached garage that is being converted into a residential unit (“Attached Residence”); and
(c) A standalone dwelling unit that is being constructed in the backyard (“Detached Residence”).

2.2.2 2.3 Term. The term of this Lease shall begin on [August 1, 2023] (“Effective Date”) and shall end one (1) year after the Effective Date (“Term”) unless terminated earlier as provided in Section 4 herein. Tenant shall have the right to extend the Term of this Lease for two (2) additional terms (each a 'Renewal Term') of one (1) year each. The terms and conditions for each Renewal Term shall be the same terms and conditions as set forth in this Lease. Tenant shall automatically be deemed to have exercised Tenant’s option to renew this Lease for a Renewal Term unless (1) Tenant notifies Landlord in writing of Tenant’s intention not to extend this Lease at least thirty (30) days prior to the expiration of the first Term or any Renewal Term, or (2) Tenant is in material default of this Lease and Tenant has failed to cure said default within the applicable cure period

2.3.1 Mobilization Period. Tenant shall have a mobilization period of [thirty (30) days] from the Effective Date. During the Mobilization Period, Tenant: (i) shall not be obligated to provide the Services at the Property, and all provisions of this Lease that concern the provision of the Services by Tenant, including, without limitation, Section 2.7, shall not apply, and (ii) shall not be required to accept any Residents or evaluate any Eligible Resident. For the avoidance of doubt, Landlord shall not be permitted to terminate this Lease during the Mobilization Period because of any failure by Tenant to provide the Services at the Property. Subject to the foregoing, Tenant shall otherwise comply with all applicable provisions of this Lease during the Mobilization Period, and shall provide reasonable efforts to secure the Property during the Mobilization Period and be responsible for maintenance, repair, and damage to the Property as set forth in this Lease.

2.4 Rent. Tenant shall pay to Landlord, as rent for leasing the Property, one ($1.00) dollar per year. Rent also includes all other monetary and non-monetary obligations of Tenant to Landlord under this Lease.

2.5 Use.

2.5.1 The Property shall be used by Tenant in accordance with the zoning ordinances and regulations of the City of Fontana to provide emergency shelter and interim housing to Eligible Residents, defined below, and related services, including but not limited to, job counseling, housing counseling and job search services, as further set forth in the Supportive Services Agreement. Tenant shall not use or permit the Property to be used for any other purposes, 451
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without the prior written consent of Landlord, which consent may be withheld or conditioned on Landlord's sole and absolute discretion.

2.5.2 Tenant agrees and acknowledges that the provision of interim housing to Eligible Residents shall be made in accordance with all applicable requirements imposed by state and federal law, and all requirements of this Lease, including but not limited to the Operations Policies and Procedures Manual (“Management Plan”) required hereunder.

2.5.3 Landlord and Tenant have separately entered into the Supportive Services Agreement, which contains requirements imposed as a result of funding sources for the required services thereunder (defined therein and hereafter referred to as “Funding Requirements”).

Tenant agrees and acknowledges to use the Property in accordance with the Funding Requirements.

2.5.4 Tenant will cooperate and coordinate with Quality Management Group, Inc. (“Property Manager”), which Landlord has hired under a separate Professional Services Agreement for property management services, including but not limited to, occupant screening and selection, enforcing occupancy requirements, certifications, and coordinating repairs and maintenance.

2.6 Provision of Interim Housing.

2.6.1 The Property shall be made available to Eligible Residents, defined below, on a temporary basis, without a requirement to sign a lease, and each occupant shall be entitled to the benefits of the Supportive Services, in accordance with the Funding Requirements and the Policies and Procedures (“Interim Housing”).

2.6.2 Conformity to the Management Plan. All occupancy shall be in accordance with the Management Plan, [substantially in the form] attached hereto as Exhibit C and incorporated herein by reference. The Management Plan shall be subject to ongoing review and modification by the City, as reasonably necessary to comply with any local, state, or federal laws, or any conditions of funding for services related to the Property, including the Funding Requirements.

2.6.3 Eligible Residents. For purposes of this Lease, the term "Eligible Resident shall mean any individual who meets the definition of “homeless” as defined in Section 578.3 of Title 24 of the Code of Federal Regulations, including but not limited to:
(a) any individual who lacks a fixed, regular, and adequate nighttime residence; and
(b) any individual who has a primary nighttime residence that is — (i) a supervised publicly or privately operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing for the mentally ill); or
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(ii) an institution that provides a temporary residence for individuals intended to be institutionalized; or
(iii) a public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings. (c) any individuals approved for residency at the Property in the Management Plan, as approved by the City.

An Eligible Resident selected for occupancy at the Property is hereafter referred to as a “Resident.”

2.7 Shelter Services. Tenant shall provide services in accordance with the Supportive Services Agreement (“Services”) to individuals and families in accordance with the Supportive Services Agreement and this Lease. If Tenant is unable to provide any or all of the Services within thirty (30) days after the Mobilization Period, then Tenant shall explain to Landlord, to Landlord's reasonable satisfaction, the reasons for such inability. The parties intend and agree that the provision of the Services, as set forth in this Lease and the Supportive Services Agreement shall be an obligation of Tenant under this Lease for which the default, notice and termination provisions found in Section 4 shall apply. Tenant shall be solely responsible for ensuring that local, regional, statewide and federal homeless service directories reflect shelter occupancy and service eligibility requirements as set forth in this Lease, including, without limitation, all of the requirements of Section 2.5.

2.8 Acceptance of Residence. Tenant shall accept Residents in accordance with this Lease and the Management Plan. Tenant acknowledges that the Property must be made available to Eligible Residents, regardless of certain factors that include, but are not limited to, an Eligible Residents’ sobriety, participation in services or treatment, history of incarceration, credit history, or history of eviction in accordance with practices permitted pursuant to Housing First practices set forth in Welfare & Institutions Code §8255, including local Coordinated Entry System prioritization protocols, or other federal or state funding sources, including the Funding Requirements.

2.9 Obligation to Refrain from Discrimination. Subject to applicable law, and to the extent allowed by the Management Plan, Tenant may restrict dwelling spaces within the Property, or, at Tenant’s election, all dwelling spaces within the Property, on the basis of sex, pursuant to the Emergency Housing and Assistance Program laws and regulations. (Health & Saf. Code, §§ 50800 et seq.; Cal. Code Regs., tit. 25, §§ 7950 et seq.) (the “Occupancy Restriction”). Except for the Occupancy Restriction, Tenant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property (or any part thereof) that there shall be no discrimination against or segregation of any person, or group of persons on account of sex, handicap status, marital status, race, color, religion, creed, national origin or ancestry in the lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Tenant, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, or sublessees of the Property. Tenant shall provide each occupant with a written notice stating as follows:
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“There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property nor shall the resident himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location or number of or use or occupancy by any resident of the property."

2.10 Waste and Nuisance. Tenant shall not commit any waste on or about the Property, nor commit or maintain any public or private nuisance on or about the Property. Tenant shall use its best efforts to prevent any third party from committing any waste on or about the Property, or from committing any public or private nuisance on or about the Property.

2.11 Compliance with Laws, Rules, Regulations. Tenant shall at all times comply with the requirements of local, state and federal laws, rules, orders and regulations now in force or which may hereinafter be in force (“Regulations”). In order to comply with the Regulations, Tenant shall obtain, at its sole cost and expense, all licenses, permits and approvals that the Regulations require for the use or operation of the Property, including but not limited to, any conditional or special use permit required by the City of Fontana Municipal Code. The Tenant shall maintain all licenses, permits and approvals throughout the Term or Renewal Term of this Lease.

2.12 Repairs and Maintenance.

2.12.1 Tenant shall keep the Property in good, clean condition and repair as set forth herein and in a clean and sanitary manner and shall surrender the same at termination hereof in as good condition as received, normal wear and tear excepted. Tenant, to the extent caused by the negligence or willful misconduct of Tenant, inclusive of its agents, employees, or volunteers, shall be responsible, at its sole cost, expense and liability, for maintaining and making repairs, restorations and replacements (as necessary) to the interior of the Property, all tenant improvements and fixtures, roof, foundations, floor and exterior walls of the Property, including, without limitation, the plumbing and heating, electrical, ventilation and air-conditioning systems.

Nothing in this Lease shall prevent Tenant from seeking assistance from Landlord in making or paying for any repairs, maintenance, restorations or replacements required to be completed by Tenant pursuant to this Section. The parties acknowledge and agree that Landlord's decision to assist Tenant in making or paying for any such repairs, maintenance, restorations or replacements shall be made in Landlord's sole and absolute discretion. After ten (10) days written notice, or as reasonably necessary in the event of an emergency, Landlord shall have the right to promptly cause repairs or maintenance required by damage to the Property that is Tenant’s responsibility under this section, and Tenant shall reimburse Landlord within thirty (30) days of invoice for the cost of all such repairs or maintenance.

2.12.2 Tenant agrees to exercise reasonable care to the following (a) To keep the premises clean and sanitary and to dispose of all rubbish, garbage and other waste, in a clean and sanitary manner; 454
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(b) To properly use and operate all electrical, gas, and plumbing fixtures and keep clean and sanitary;
(c) To promptly advise Landlord or Property Manager of any items requiring repair, including any locks, light switches, smoke detectors, appliances, and heating and air conditioning (if provided), or any condition that might need repair, including any leaks, drips, or water fixtures that do not shut off properly (e.g. a toilet or faucet); (d) To keep doors and windows and access to them unobstructed and to not block them with personal items or otherwise to maintain clear pathways into and through each room in the Property;
(e) To maintain the Property in a manner that allows necessary access through each room and to all doors and windows, does not inhibit necessary airflow, does not act as a potential haven for pests and mold growth, does not create a fire hazard, and allows rooms to be used for their intended purposes;
(f) To leave the Property in the same condition as it was received, subject to normal wear and tear, and
(g) To return the Property, upon vacating, to the same level of cleanliness it was in at the inception of the tenancy.

2.12.3 Landlord has entered or will enter into a separate Professional Services Agreement for property management services with Property Manager. All repairs and maintenance required by the Tenant’s Repair Obligations shall be arranged through the Property Manager. Prior to requesting repair or maintenance through the Property Manager for any cost in excess of two hundred and fifty dollars ($250), Tenant shall provide Landlord written notice. If Landlord provides written approval of the request for repair or maintenance, then Landlord will pay the cost of service directly to the Property Manager. If Landlord disputes the request for repair or maintenance as being the result of Tenant’s negligence or willful misconduct as set forth in Section 2.12.1 above, then Tenant shall pay the cost within thirty (30) days of written demand from the Landlord, unless the Landlord agrees, in its sole and absolute discretion, to pay for the costs; provided however, that such payment by Tenant shall not serve as an admission or waiver by Tenant.

2.12.4 Graffiti. In addition to any other maintenance obligation herein, Tenant shall promptly remove of any graffiti on the Property within twenty-four (24) hours of its occurrence. Tenant shall remove any graffiti by either painting over the vandalized area with a paint that has been color-matched to the surface on which the paint is applied, or by use of solvents, detergents or water as appropriate. If such graffiti is not removed, Landlord will provide a twentyfour (24) hour notice before it enters the Property to remove the graffiti. Tenant shall reimburse any sum expended by Landlord to remove the graffiti.

2.13 Destruction of Premises.

2.13.1 Termination of Lease. If, during the term of this Lease and any renewal term, the Property and other improvements on the Property are totally or partially destroyed and 455
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as a result the Property is totally or partially inaccessible or unusable, then either Tenant or Landlord can elect to terminate this Lease by giving at least fifteen (15) days written notice.

2.13.2 Procedures for Repair and Restoration. In the event of any damage or destruction, Tenant shall promptly give Landlord written notice of such damage or destruction and the date on which such damage or destruction occurred. Tenant shall promptly make proof of loss and shall proceed promptly to collect, or cause to be collected, all valid claims which Tenant may have against insurers or others based upon any such damage or destruction. All insurance proceeds shall first be paid to Landlord for the cost of restoration or replacement of the Property in accordance with the designation of Landlord as a loss payee under this Lease.

2.13.3 RESERVED.

2.14 Condition of Property. Tenant acknowledges that it has examined the Property and shall take possession of same in an AS-IS condition. Tenant acknowledges and agrees that Landlord has made absolutely no representations or warranties regarding whether the Property is suitable to provide shelter and related services to homeless persons.

2.15 Alterations and Additions. Tenant, at its sole cost and expense, may make any alterations, improvements or additions in, about or of the Property, but only with the prior written consent of Landlord and only upon terms and conditions mutually agreed upon in writing between Landlord and Tenant.

2.16 Entry and Inspection. Tenant shall permit Landlord or Landlord's agents to enter the Property at all times upon reasonable prior oral or written notice for the purpose of inspecting the Property and for otherwise determining Tenant's compliance with this Lease.

2.17 Assignment and Subletting. Tenant shall not assign or sublease its leasehold interest in the Property without the prior written approval of Landlord.

2.18 Assumption of Risk, Waiver, and Landlord’s Non-liability. To the maximum extent allowed by law, except for Landlord's willful or negligent acts, Tenant assumes any and all risk of loss, damage or injury of any kind to any person or property which is on or about the Property. Tenant's assumption of risk shall include, without limitation, loss or damage caused by defects in any structure or improvement on the Property, accident, fire or other casualty on the Property. To the maximum extent allowed by law, except for Landlord's willful or negligent acts, or as expressly provided in this Lease, Tenant hereby waives all claims and demands against Landlord and Landlord's officials, officers, employees, volunteers and agents for injury to persons, damage to property or any other interest of Tenant sustained by Tenant or any person claiming to be Tenant resulting from any occurrence on or about the Property.

Tenant has been advised by its legal counsel concerning the content and effect of California Civil Code Section 1542, which provides:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, 456
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would have materially affected his or her settlement with the debtor or released party.

Tenant hereby waives the benefits of Civil Code Section 1542 and all other state or federal statutes or judicial decisions of similar effect. The provisions of this Section shall survive the termination of this Lease.
______ Tenant's Initials

2.19 Indemnification.

2.19.1 Tenant Indemnification. Subject to the limitations set forth in Section 2.12, Tenant agrees to defend (in accordance with Section 2.20), indemnify and hold harmless Landlord, the City, its respective officials, officers, employees, volunteers and agents (collectively, "Indemnified Parties") from and against any and all claims, losses, actions, damages, liabilities, and expenses (including attorneys' fees) that (i) arise from or are in connection with any negligent or willful act or omission of Tenant or Tenant's officials, officers, employees, volunteers, agents, guests, licensees, invitees, or subtenants (if applicable); or (ii) result from any breach, default, violation or nonperformance of this Lease by Tenant or the Supportive Services Agreement; or (iii) arise from injury or death to persons or damage to property sustained on or about the Property.

Tenant must pay, satisfy and discharge any and all money judgments that may be recovered against any Indemnified Party in connection with the foregoing. Tenant's obligation hereunder shall survive termination of this Lease, and shall not be restricted to insurance proceeds, if any, received by any Indemnified Party. Tenant's obligation to defend, indemnify and hold harmless the Indemnified Parties pursuant to the foregoing paragraph shall not apply to any discretionary approvals made by the City. Tenant shall not be obligated to defend, indemnify or hold harmless any Indemnified Party to the extent any claim, loss, action, damage, liability, or expense (including attorneys' fees) is ultimately determined to be the result of the negligent or willful misconduct of that particular Indemnified Party or any of its officials, officers, employees, volunteers or agents.

2.19.2 RESERVED.

2.20 Duty to Defend. Upon written request from an Indemnified Party, Tenant or Landlord, as applicable, shall defend (with counsel acceptable to that Indemnified Party, in the Indemnified Party's reasonable discretion) any claim, lawsuit, administrative action or other proceeding brought against the Indemnified Party by any public body, individual, partnership, corporation, or other legal entity, relating to any matter covered by this Lease for which Tenant has an obligation to defend, Tenant shall pay all reasonable costs incident to such defense, including, but not limited to, attorneys' fees, investigators' fees, litigation expenses, settlement payments, and amounts paid in satisfaction of judgments. The obligations of Tenant pursuant to this Section shall survive the termination or expiration of this Lease.

2.21 Taxes; Revenue and Taxation Code § 107.6. A possessory property interest may be created by this Lease which may be subject to property taxation, and Tenant may be subject to the payment of property taxes levied on such interest by the appropriate taxing authority. Tenant is required to pay any such tax directly to the appropriate taxing authority. In addition, if personal property taxes are assessed, Tenant shall pay any portion of such taxes directly attributable to the 457
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Property. Except as provided above, Landlord shall pay any real property taxes, assessments and deferred taxes on the Property.

2.22 Financial Statements. Tenant shall deliver to Landlord, or cause to be delivered to Landlord, in form and detail satisfactory to Landlord, all documents, records or other information required under the Supportive Services Agreement and the Funding Requirements related to the use of the Property authorized hereunder. In addition, as soon as it becomes available, but in no event later than thirty (30) days prior to the beginning of each calendar year, a true, correct and complete copy of the Tenant’s proposed annual operating budget at the Property for the next succeeding calendar year. The annual operating budget shall include Tenant’s revenues and expenses relating to the Property for the next succeeding calendar year.

3. INSURANCE

3.1 Time for Compliance. This Lease shall not commence until Tenant has provided evidence satisfactory to the Landlord that it has secured all insurance required under this Section.

3.2 Insurance Requirements. Tenant shall, at its expense, procure and maintain for the duration of this Lease insurance against claims for injuries to persons or damages to property which may arise from or in connection with the possession, use, occupancy, management, operation, repair, maintenance or control of the Property by the Tenant and/or its officers, officials, agents, representatives, volunteers or employees.

3.2.1 Minimum Scope of and Limits of Coverage. Coverage shall be at least as broad as the latest version of the following: (A) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (B) Automobile Liability:

Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (C) Workers' Compensation and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. Tenant shall maintain limits no less than: (A) General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Lease/location or the general aggregate limit shall be twice the required occurrence limit; (B) Automobile Liability: $2,000,000 per accident for bodily injury and property damage; and (C) Workers' Compensation and Employer's Liability: Workers' compensation limits as required by the Labor Code of the State of California. Employers Liability limits of $1,000,000 per accident for bodily injury or disease.

3.2.2 Fire and Extended Coverage. Tenant shall also procure and maintain, at its own expense, for the duration of this Lease fire and extended coverage insurance for Tenant's fixtures, goods, wares, or personal property on or in the Property.

3.2.3 Insurance Endorsements. The insurance policies shall contain the following provisions, or Tenant or the primary insured shall provide endorsements on forms supplied or approved by the Landlord to add the following provisions to the insurance policies:
(a) General Liability. The General Liability policy shall be endorsed to state that: (A) the Landlord, its directors, officials, officers, employees, volunteers and agents shall 458
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be covered as additional insureds with respect to the possession, use, occupancy, management, operation, repair, maintenance or control of the Property by the Tenant and its officers, officials, agents, representatives, volunteers, employees, and Residents; and (B) the insurance coverage shall be primary insurance with respect to the Landlord, its officials, officers, employees, volunteers and agents, or if excess, shall stand in an unbroken chain of coverage excess of the Tenant's scheduled underlying coverage. Any insurance or self-insurance maintained by the Landlord, its directors, officials, officers, employees, volunteers and agents shall be excess of the Tenant's insurance and shall not be called upon to contribute with it. Landlord shall be named as a loss payee for damage to improvements on the Property on a form reasonably acceptable to Landlord. (b) Automobile Liability. The automobile liability policy shall be endorsed to state that: (A) the Landlord, its directors, officials, officers, employees, volunteers and agents shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Tenant or for which the Tenant is responsible; and (B) the insurance coverage shall be primary insurance with respect to the Landlord, its directors, officials, officers, employees, volunteers and agents, or if excess, shall stand in an unbroken chain of coverage excess of the Tenant's scheduled underlying coverage. Any insurance or self-insurance maintained by the Landlord, its directors, officials, officers, employees, agents and volunteers shall be excess of the Tenants insurance and shall not be called upon to contribute with it.
(c) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the Landlord, the City and their directors, officials, officers, employees, volunteers and agents for losses paid under the terms of the insurance policy which arise from work performed by the Tenant. (d) All Coverages. Each insurance policy required by this Lease shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the Landlord; and (B) any failure to comply with reporting or other provisions of the policies, including, breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, employees, agents and volunteers and other additional insured.

3.2.4 Separation of Insureds; No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the Landlord, the City and their directors, officials, officers, employees, volunteers and agents. All policies shall waive any right of subrogation of the insurer against the Landlord, the City, its officials, officers, employees, agents, and volunteers, or any other additional insureds, or shall specifically allow Tenant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Tenant hereby waives its own right of recovery against Landlord, its officials, officers, employees, agents, and volunteers, or any other additional insureds, and shall require similar written express waivers and insurance clauses.

3.2.5 Deductibles and Self-Insurance Retentions. Landlord may require that any deductibles or self-insured retentions must be declared to and approved by the Landlord. Tenant shall ensure that, at the option of the Landlord, either: (A) the primary insurer shall reduce or 459
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eliminate such deductibles or self-insured retentions as respects the Landlord, its directors, officials, officers, employees and agents; or (B) the primary insured shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.

3.2.6 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed and admitted to do business in California, and satisfactory to the Landlord or as approved by the Landlord’s risk manager.

3.2.7 Verification of Coverage. Tenant shall furnish Landlord with original certificates of insurance and endorsements affecting coverage required by this Lease on forms satisfactory to the Landlord. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the Landlord if requested. All certificates and endorsements must be received and approved by the Landlord. The Landlord reserves the right to require complete, certified copies of all required insurance policies, at any time.

4. TERMINATION.

4.1 Landlord. Without limiting its ability to seek other remedies (either at law or in equity) that may be available to it pursuant to statute or judicial decision, Landlord may terminate this Lease and all of its obligations hereunder, at its option, upon the occurrence of any of the following:

4.1.1 Tenant's breach of any of its non-monetary obligations under this Lease and failure to cure such breach within thirty (30) days after receipt of written notice from Landlord or, if such cure cannot be completed within thirty (30) days, Tenant's failure to commence such cure within 30 days after its receipt of written notice and thereafter diligently prosecute such cure to completion, provided that the period to cure shall not exceed ninety (90) days from written notice; or

4.1.2 Tenant's breach of any of its monetary obligations under this Lease and failure to cure such breach within ten (10) days after receipt of written notice from Landlord.

4.1.3 Tenant’s breach of the Supportive Services Agreement and failure to cure within any applicable cure period therein.

4.1.4 Landlord serving written notice, not less than ninety (90) days, of its intent to terminate the Lease without cause.

If this Lease is terminated pursuant to this Section 4, Tenant hereby expressly, knowingly and voluntarily waives any and all rights, benefits and/or assistance it may be entitled to receive from Landlord due to such termination, including, without limitation, loss of goodwill, inverse condemnation, or relocation assistance as provided for in California Government Code Sections 7260, et seq. and 42 U.S.C. Sections 4601, et seq.

Tenant has been advised by its legal counsel concerning the content and effect of California Civil Code Section 1542, which provides:
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A general release does not extend to claims which the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her would have materially affected his or her settlement with the debtor or released party.

Tenant hereby waives the benefits of Civil Code Section 1542 and all other state or federal statutes or judicial decisions of similar effect.
______ Tenant's Initials

4.2 Tenant. Tenant may terminate this Lease upon (i) Landlord's breach of any of its obligations under this Lease and Landlord's failure to cure such breach within thirty (30) days after receipt of written notice from the Tenant or, if such cure cannot be completed within thirty (30) days, Landlord's failure to commence such cure within thirty (30) days after its receipt of written notice and thereafter diligently prosecute such cure to completion, (ii) the termination of the Supportive Services Agreement for any reason, whereupon Tenant shall be entitled to terminate this Agreement at any time upon thirty (30) days written notice to Landlord, or (iii) in the event the cost of Tenant’s maintenance and repair obligation would exceed, in the aggregate $20,000.00 between January 1 and December 31 of any year during this Agreement, and the maintenance or repair is not required due to the negligence or willful misconduct of Tenant, or its employees, agents, or volunteers.

5. ENFORCEMENT OF LEASE

5.1 Governing Law and Venue. This Lease shall be governed by the laws of the State of California without regard to conflicts of laws principles. This Lease shall be deemed to have been made in the County of San Bernardino, California, regardless of the order of the signatures of the parties affixed hereto. Any litigation or other legal proceedings that arise under or in connection with this Lease shall be conducted in a federal or state court located within or for the County of San Bernardino, California. Tenant consents to the personal jurisdiction and venue in federal or state court located within or for the County of San Bernardino, California and hereby waives any defenses or objections thereto including defenses based on the doctrine of forum non conveniens.

5.2 Waiver. No delay or omission in the exercise of any right or remedy of a nondefaulting party on any default shall impair such right or remedy or be construed as a waiver.

Landlord's consent or approval of any act by Tenant requiring Landlord’s consent or approval shall not be deemed to waive or render unnecessary Landlord's consent to or approval of any subsequent act of Tenant. Any waiver by any party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Lease.

5.3 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Lease, the rights and remedies of the parties are cumulative and the exercise by any party of one or more of such rights or remedies shall not preclude the exercise by that party, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 461
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5.4 Legal Action. In addition to any other rights or remedies, any party may take legal action, at law or at equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Lease, to obtain injunctive relief, or to obtain any other remedy consistent with the purposes of this Lease.

5.5 Attorneys' Fees. If any party commences an action against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs of suit from the losing party.

6. MISCELLANEOUS PROVISIONS

6.1 Construction; References; Captions. Since the parties or their agents have participated fully in the preparation of this Lease, the language of this Lease shall be construed simply, according to its fair meaning, and not strictly for or against any party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days.

All references to Tenant include all personnel, employees, agents, and subcontractors of Tenant, except as otherwise specified in this Lease. All references to Landlord include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Lease. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Lease.

6.2 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the parties.

6.3 Notice. Any notice, demand, request, consent, approval, communication either party desires or is required to give the other party or any other person shall be in writing and either served personally or sent by prepaid, first-class mail to the address set forth below, or provided by email with written confirmation of receipt from the receiving party. Alternatively, the Parties may give notice under this Lease by email to the email addresses provided above, but not such email shall be deemed effective until the receiving party confirms receipt. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated forty-eight (48) hours from the time of mailing if mailed as provided in this section.

To Landlord: To Tenant:

CITY OF FONTANA WATER OF LIFE COMMUNITY
CHURCH
Attention: City Manager Attention: Mark Nuaimi
8353 Sierra Avenue 14418 Miller Ave. Ste. K
Fontana, CA 92335 Fontana CA 92336
Email: Email: [email protected]
Copy to: Copy to:

BEST BEST & KRIEGER LLP THE OPUS LAW FIRM
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Attention: Fontana City
Attorney
2855 E. Guasti Rd.

Attention: Joshua M. Jacobs
514 Via De La Valle, Suite 203
Solana Beach, CA 92075
Ontario, CA 91761 Email: [email protected]

6.4 Integrated Agreement. This Lease contains all of the agreements of the parties and all previous understanding, negotiations and agreements are integrated into and superseded by this Lease, except that the Supportive Services Agreement and agreement relating to the Emergency Solutions Grant shall be an independent and separate obligation that is not affected by this Lease.

6.5 Amendment. This Lease may be amended at any time by the mutual consent of the parties by an instrument in writing signed by both parties.

6.6 Counterparts. This Lease may be signed in counterparts, each of which shall constitute an original.

6.7 Exhibits. All exhibits attached hereto are hereby incorporated by reference as if fully set out in the body of this Agreement.

6.8 Severability. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Lease shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Lease which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder.

6.9 Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Lease on behalf of said parties and that by so executing this Lease the parties hereto are formally bound to the provisions of this Lease.

6.10 Independent Representation by Counsel. The parties represent and declare that in executing this Lease they rely solely upon their own judgment, belief and knowledge, and the advice and recommendations of their own independently-selected counsel, concerning the nature, extent and duration of their rights and claims hereunder, and that, except as provided herein, they have not been influenced to any extent whatsoever in executing this Lease, by any representations, statements or omissions pertaining to any of the matters herein contained by any party or by any persons representing any party.

6.11 Binding Effect. This Lease shall bind and inure to the benefit of the parties, their respective heirs, successors and assigns.

6.12 Quiet Enjoyment. Tenant shall have the right to lawfully, peaceably and quietly hold, occupy and enjoy the Premises during the Lease Term without hindrance, ejection or molestation, so long as Tenant observes the covenants, agreements and stipulations required of Tenant under this Lease.
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6.13 Memorandum of Lease. The Landlord may record in the San Bernardino County Recorder’s Office this Lease or a memorandum of this Lease in a form approved by the City Manager and the City Attorney, which memorandum shall be lawfully executed by Tenant upon request by City.
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SIGNATURE PAGE TO LEASE AGREEMENT

BETWEEN THE CITY OF FONTANA

AND WATER OF LIFE COMMUNITY CHURCH
TENANT

WATER FOR LIFE COMMUNITY
CHURCH, a California non-profit
corporation

LANDLORD
CITY OF FONTANA, a California
municipal corporation
By: __________________________________
Its:
___________________________________
By:
__________________________________
Matthew C. Ballantyne , City Manager
Dated:
________________________________
Dated:
________________________________
By:
___________________________________
Its:
___________________________________
Dated:
________________________________
ATTEST:

By:
__________________________________
City Clerk
ATTEST AS TO LEGAL FORM:

BEST BEST & KRIEGER LLP
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By:
__________________________________
City Attorney
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Exhibit “A”
Legal Description

TO BE INSERTED
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Exhibit “B”
Site Plan

TO BE INSERTED
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Exhibit C
Operations and Management Plan

TO BE INSERTED
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16498.00100\41468153.1

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT

STATE OF STATE )
) ss.

COUNTY OF SAN BERNARDINO )
On , before me, ,
Date Name And Title Of Officer (e.g. “Jane Doe, Notary Public”) personally appeared ,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Place Notary Seal Above Signature of Notary Public

OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form.

CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT ¨ Individual
¨ Corporate Officer
Title(s) Title or Type of Document
¨ Partner(s) ¨ Limited
¨ General
¨ Attorney-In-Fact Number Of Pages
¨ Trustee(s)
¨ Guardian/Conservator
¨ Other:

Signer is representing:

Name Of Person(s) Or Entity(ies)
Date Of Document
Signer(s) Other Than Named Above
470
16498.00100\41468153.1

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT

STATE OF STATE )
) ss.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Place Notary Seal Above Signature of Notary Public

OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form.

Signer is representing:

Name Of Person(s) Or Entity(ies)
Date Of Document
Signer(s) Other Than Named Above
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CITY OF FONTANA

PROFESSIONAL SERVICES AGREEMENT
TRACKING NUMBER:

1. PARTIES AND DATE.

This Agreement is made and entered into this ___ day of June, 2023, by and between the City of Fontana, a municipal corporation organized under the laws of the State of California with its principal place of business at 8353 Sierra Avenue, Fontana, California 92335 (“City”) and Quality Management Group, Inc., a Corporation with its principal place of business at 3105 E Guasti Road, Suite 100, Ontario, CA 91761 (“Consultant”). City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties.”

2. RECITALS.

2.1 City. City is a municipal corporation organized under the laws of the State of California, with power to contract for services necessary to achieve its purpose.

2.2 Consultant. Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is familiar with and experienced in providing property management services for properties that serve individuals and families who are homeless or at risk of homelessness, and the provision of such services to public clients, and further that Consultant has all appropriate licenses to provide such services in the State of California and the City.

3. TERMS.

3.1 Scope of Services and Term.

3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional consulting services necessary for the property management services more particularly described in the “Scope of Services” attached as Exhibit “A”, and the conditions stated therein and incorporated herein by reference (“Services”). All Services and related activities shall be in accordance with this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations.

3.1.2 Term. The term of this Agreement shall be for a period of one year from __________ 2023 to ____________, 2024 (“Term”), unless earlier terminated as provided herein.

The City has the option, by giving written notice to Consultant, to extend the term for four (1) oneyear periods (“Extended Term”), at which point the Agreement will expire and a new agreement 472
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will be required. Consultant shall perform its services in a prompt and timely manner within the term of this Agreement and shall commence performance upon receipt of written notice from the City to proceed (“Notice to Proceed”). The Notice to Proceed shall set forth the date of commencement of work.

3.2 Responsibilities of Consultant.

Consultant agrees and understands that the payment for Services is subject to the deadlines for expenditure of funds, if any, referenced in the Funding Requirements.

3.2.5 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City, and in accordance with all requirements of the Scope of Services and any applicable Funding Requirements. Consultant understands and agrees to comply with all obligations of a “subrecipient” or “subgrantee,” if applicable, under any funding source referenced in this Agreement.

3.2.6 Compliance with the Drug-Free Workplace Act of 1990 (Gov. Code § 8350 et seq.) and the Drug–Free Workplace Act of 1988 (41 U.S.C. 701 et seq., as amended, 31 C.F.R. part 20).

3.2.6.1 Publishing a statement notifying employees or agents that unlawful manufacture, distribution, dispensation, possession or use of a controlled substance is prohibited and specifying actions to be taken for violations.

3.2.6.2 Establishing a Drug-Free Awareness Program, as required by Government Code § 8355, subdivision (a)(2), 41 U.S.C. 701 et seq., and 31 C.F.R. part 20 to inform employees or agents about: (a) the dangers of drug abuse in the workplace; (b) Consultant’s policy of maintaining a drug-free workplace; (c) any available counseling, rehabilitation, and employee assistance program; and (d) penalties that may be imposed upon employees or agents for drug abuse violations.
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3.2.6.3 Provide each employee or agent, as required by Government Code § 8355(a)(3), a copy of Consultant’s drug-free policy statement, and require each employee or agent agree and abide to the terms of the policy as part of the employment or agent contract.

3.2.7 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property, shall be promptly removed from the Services by the Consultant at the request of the City. The key personnel for performance of this Agreement are as follows: Tim Johnson.

3.2.8 City’s Representative. The City hereby designates Valerie Gonzales, Housing Development Manager, or his or her designee, to act as its representative for the performance of this Agreement (“City’s Representative”). City’s Representative shall have the power to act on behalf of the City for all purposes under this Contract. Consultant shall not accept direction or orders from any person other than the City’s Representative or his or her designee.

3.2.9 Consultant’s Representative. Consultant hereby designates Tim Johnson, or his or her designee, to act as its representative for the performance of this Agreement (“Consultant’s Representative”). Consultant’s Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant’s Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

3.2.10 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City’s staff, consultants and other staff at all reasonable times.

3.2.11 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, including a City Business License, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant’s failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Services, a threat to the safety of persons or 474
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property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Services by the Consultant and shall not be re-employed to perform any of the Services or any related work.

3.2.12 Period of Performance. Consultant shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”).

Consultant shall also perform the Services in strict accordance with any completion schedule or milestones described in any Scope of Services or Schedule of Performance attached hereto, or which may be separately agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Performance Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the City will suffer damage.

3.2.13 Laws and Regulations; Employee/Labor Certifications. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If the Consultant performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to the City, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.

3.2.13.1 Employment Eligibility; Consultant. By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time. Such requirements and restrictions include, but are not limited to, examination and retention of documentation confirming the identity and immigration status of each employee of the Consultant.

3.2.13.2 Employment Eligibility; Subcontractors, Consultants, and Subconsultants. To the same extent and under the same conditions as Consultant, Consultant shall require all of its subcontractors, consultants, sub-subcontractors and subconsultants performing any work relating to the Services or this Agreement to make the same verifications and comply with all requirements and restrictions provided for in Section 3.2.10.1. 475
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3.2.13.3 Employment Eligibility; Failure to Comply. Each person executing this Agreement on behalf of Consultant verifies that they are a duly authorized officer of Consultant, and understands that any of the following shall be grounds for the City to terminate the Agreement for cause: (1) failure of Consultant or its subcontractors, consultants, subsubcontractors or subconsultants to meet any of the requirements provided for in Sections

3.2.10.1 or 3.2.10.2; (2) any misrepresentation or material omission concerning compliance with such requirements (including in those verifications provided to the Consultant under Section

3.2.10.2); or (3) failure to immediately remove from the Services any person found not to be in compliance with such requirements.

3.2.13.4 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Workers’ Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to obtain the required liability insurance in accordance with law and this Agreement before commencing the performance of the Services.

3.2.13.5 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status.

Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City’s Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.

3.2.13.6 Air Quality. To the extent applicable, Consultant must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the South Coast Air Quality Management District (SCAQMD) and/or California Air Resources Board (CARB). Although the SCAQMD and CARB limits and requirements are more broad, Consultant shall specifically be aware of their application to "portable equipment", which definition is considered by SCAQMD and CARB to include any item of equipment with a fuel-powered engine. Consultant shall indemnify City against any fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Consultant, its subconsultants, or others for whom Consultant is responsible under its indemnity obligations provided for in this Agreement.

3.2.13.7 Water Quality.
(A) Management and Compliance. To the extent applicable, Consultant’s Services must account for, and fully comply with, all local, state and federal laws, rules and regulations that may impact water quality compliance, including, without limitation, all applicable provisions of the Federal Water Pollution Control Act (33 U.S.C. §§ 1300); the California Porter-Cologne Water Quality Control Act (Cal Water Code §§ 13000-14950); laws, rules and regulations of the Environmental Protection Agency, the State Water Resources Control Board and the Santa Ana Regional Water Quality Control Board; the City’s ordinances regulating discharges of storm water; and any and all regulations, policies, or permits issued pursuant to any 476
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such authority regulating the discharge of pollutants, as that term is used in the Porter-Cologne Water Quality Control Act, to any ground or surface water in the State. (B) Liability for Non-compliance. Failure to comply with the laws, regulations and policies described in this Section is a violation of law that may subject Consultant or City to penalties, fines, or additional regulatory requirements. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from and against any and all fines, penalties, claims or other regulatory requirements imposed as a result of Consultant’s non-compliance with the laws, regulations and policies described in this Section, unless such non-compliance is the result of the sole established negligence, willful misconduct or active negligence of the City, its officials, officers, agents, employees or authorized volunteers. (C) Training. In addition to any other standard of care requirements set forth in this Agreement, Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them without impacting water quality in violation of the laws, regulations and policies described in this Section. Consultant further warrants that it, its employees and subcontractors will receive adequate training, as determined by City, regarding the requirements of the laws, regulations and policies described in this Section as they may relate to the Services provided under this Agreement. Upon request, City will provide Consultant with a list of training programs that meet the requirements of this paragraph.

3.2.14 Insurance.

3.2.14.1 Time for Compliance. Consultant shall not commence the Services under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the City that the subcontractor has secured all insurance required under this section.

3.2.14.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultant, its agents, representatives, employees or subcontractors.

Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance. The policy shall not contain any exclusion contrary to the Agreement, including but not limited to endorsements or provisions limiting coverage for (1) contractual liability (including but not limited to ISO CG 24 26 or 21 29); or (2) cross liability for claims or suits by one insured against another. (B) Minimum Limits of Insurance. Consultant shall maintain limits no less than: (1) General Liability: $1,000,000 per occurrence for bodily injury, personal injury and 477
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property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used including, but not limited to, form CG 2503, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation limits as required by the Labor Code of the State of California. Employer’s Liability limits of $1,000,000 per accident for bodily injury or disease. Defense costs shall be paid in addition to the limits.
(C) Notices; Cancellation or Reduction of Coverage. At least fifteen (15) days prior to the expiration of any such policy, evidence showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or materially reduced, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, the City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by the City will be promptly reimbursed by Consultant or the City may withhold amounts sufficient to pay premium from Consultant payments. In the alternative, the City may suspend or terminate this Agreement.

3.2.14.3 Insurance Endorsements. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by the City to add the following provisions to the insurance policies:
(A) General Liability. The general liability policy shall include or be endorsed (amended) to state that: (1) using ISO CG forms 20 10 and 20 37, or endorsements providing the exact same coverage, the City of Fontana, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or ongoing and complete operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work; and (2) using ISO form 20 01, or endorsements providing the exact same coverage, the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any excess insurance shall contain a provision that such coverage shall also apply on a primary and noncontributory basis for the benefit of the City, before the City’s own primary insurance or self-insurance shall be called upon to protect it as a named insured. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way. Notwithstanding the minimum limits set forth in Section 3.2.11.2(B), any available insurance proceeds in excess of the specified minimum limits of coverage shall be available to the parties required to be named as additional insureds pursuant to this Section 3.2.11.3(A).
(B) Automobile Liability. The automobile liability policy shall include or be endorsed (amended) to state that: (1) the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, 478
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employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way.

Notwithstanding the minimum limits set forth in Section 3.2.11.2(B), any available insurance proceeds in excess of the specified minimum limits of coverage shall be available to the parties required to be named as additional insureds pursuant to this Section 3.2.11.3(B). (C) Workers’ Compensation and Employers Liability Coverage.

3.2.14.4 Separation of Insureds; No Special Limitations; Waiver of Subrogation. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, agents and volunteers.

3.2.14.5 Deductibles and Self-Insurance Retentions. Any deductibles or selfinsured retentions must be declared to and approved by the City. Consultant shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, agents and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.

3.2.14.6 Subconsultant Insurance Requirements. Consultant shall not allow any subconsultants to commence work on any subcontract relating to the work under the Agreement until they have provided evidence satisfactory to the City that they have secured all insurance required under this Section. If requested by Consultant, the City may approve different scopes or minimum limits of insurance for particular subconsultants. The Consultant and the City shall be named as additional insureds on all subconsultants’ policies of Commercial General Liability using ISO form 20 38, or coverage at least as broad. 479
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3.2.14.7 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating no less than A:VIII, licensed to do business in California, and satisfactory to the City.

3.2.14.8 Verification of Coverage. Consultant shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements must be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time.

3.2.14.9 Reporting of Claims. Consultant shall report to the City, in addition to Consultant’s insurer, any and all insurance claims submitted by Consultant in connection with the Services under this Agreement.,

3.2.15 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and lifesaving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures.

3.2.16 NON-DISCRIMINATION. During the performance of this Agreement, Consultant, its employees and agents, shall not deny the contract’s benefits to any person on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, nor shall they discriminate unlawfully against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. Consultant shall insure that the evaluation and treatment of employees and applicants for employment are free of such discrimination. Contractor and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code §12900 et seq.), the regulations promulgated thereunder (Cal. Code Regs., tit. 2, §11000 et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code §§11135-11139.5), and the regulations or standards adopted by the awarding state agency to implement such article. Consultant shall permit access by representatives of the Department of Fair Employment and Housing and the awarding state agency upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours’ notice, to such of its books, records, accounts, and all other sources of information and its facilities as said Department or Agency shall require to ascertain compliance with this clause. Consultant shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. (See Cal. Code 480
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Regs., tit. 2, §11105.) Consultant shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under the Agreement.

3.3 Fees and Payments.

3.3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit ”C” attached hereto and incorporated herein by reference. The total compensation for the initial one-year term shall not exceed _________________________________________ without written approval of City’s Representative. Extra Work may be authorized, as described below; and if authorized, said Extra Work will be compensated at the rates and manner set forth in this Agreement.

3.3.2 Payment of Compensation. Consultant shall submit to City a monthly itemized statement which indicates work completed and hours of Services rendered by Consultant. The statement shall describe the amount of Services and supplies provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement. The statement must provide any and all information City may reasonably require to comply with any Funding Requirements referenced in in the Scope of Services or elsewhere in this Agreement. City shall, within forty-five (45) days of receiving such statement, review the statement and pay all approved charges thereon.

3.3.3 Reimbursement Subject to Funding Requirements. Any monthly itemized statement must adequately document that the Services comply with the applicable Funding Requirements, as may be reasonably required by the City, and as set forth in Exhibit A.

3.3.4 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City.

3.3.5 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, “Extra Work” means any work which is determined by City to be necessary for the proper completion of the Services, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement.

Consultant shall not perform, nor be compensated for, Extra Work without written authorization from City’s Representative.

3.3.6 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Sections 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., (“Prevailing Wage Laws”), which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects. City has not made any representations or warranties to Consultant regarding the applicability of Prevailing Wages. If the Services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is One Thousand Dollars ($1,000) or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant’s principal place of business and at the project site. Consultant shall defend, indemnify and hold the City, its elected officials, officers, employees, volunteers and agents free and 481
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harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.

3.3.7 Service Rates. In the event that this Agreement is renewed pursuant to Section

3.1.2, if the Parties do not both agree to another Service Rate, the Service Rates shall be automatically adjusted each year at the time of renewal in accordance with the Consumer Price Index, All Urban Consumers, Los Angeles-Riverside-Orange Counties (“CPIU”)

3.4 Accounting Records.

3.5 General Provisions.

3.5.1 Termination of Agreement.

3.5.1.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause.

3.5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such documents and other information within fifteen (15) days of the request.

3.5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 482
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City
City of Fontana
8353 Sierra Avenue, Fontana,
California 92335
Attn: Valerie Gonzales
Consultant
Quality Management Group
3105 E. Guasti Road, Suite 100
California, CA 91761
Attn: Tim Johnson____________
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.5.3 Ownership of Materials and Confidentiality.

3.5.3.3 Right to Use. City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Agreement or 483
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another project, provided that any such use not within the purposes intended by this Agreement or unrelated this Agreement without employing the services of Consultant shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project unrelated to this Agreement, it shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless Consultant and its officers, directors, agents and employees from claims arising out of the negligent use or re-use of the Documents & Data on such other project. Consultant shall be responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Consultant shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Consultant, a party for whom the Consultant is legally responsible or liable, or anyone approved by the Consultant.

3.5.3.4 Indemnification. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use in the course of this Agreement by City of the Documents & Data, including any method, process, product, or concept specified or depicted.

Consultant shall use and disclose Confidential Information only for the benefit of City and as is, or may be, necessary to perform his job responsibilities under this Agreement and in accordance with applicable law. Following the termination of this Agreement, Consultant shall 484
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not use or disclose any Confidential Information, except with the express written consent of City.

Consultant’s obligations under this Section shall survive the termination and/or expiration of this Agreement.

3.5.4 Indemnification.

3.5.4.1 Scope of Indemnity. To the fullest extent permitted by law, Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any alleged acts, errors or omissions of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s Services or this Agreement, including without limitation the payment of all consequential damages, expert witness fees and attorneys fees and other related costs and expenses. Notwithstanding the foregoing, to the extent Consultant's Services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant.

3.5.4.2 Additional Indemnity Obligations. Consultant shall defend, with legal counsel chosen by City, at Consultant’s own cost, expense and risk, any and all claims, actions or other proceedings of every kind covered by Section 3.5.4.1 that may be brought or instituted against City or its directors, officials, officers, employees, volunteers and agents. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against City or its directors, officials, officers, employees, volunteers and agents as party of any such claim, suit, action or other proceeding. Consultant shall also reimburse City for the cost of any settlement paid by City or its directors, officials, officers, employees, agents, or volunteers as part of any such claim, suit, action or other proceeding. Such reimbursement shall include payment for City’s attorneys’ fees and costs, including expert witness fees. Consultant shall reimburse City and its directors, officials, officers, employees, agents, and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided.

Consultant’s obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials officers, employees, agents, or volunteers.

3.5.4.3 Consultant’s Initials: ______________

3.5.5 Governing Law; Government Code Claim Compliance. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Bernardino County. In addition to any and all contract requirements pertaining to notices of and requests for compensation or payment for extra work, disputed work, claims and/or changed conditions, Consultant must comply with the claim procedures set forth in Government Code sections 900 et seq. prior to filing any lawsuit against the City. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to extra work, disputed work, claims, and/or changed conditions have been followed by Consultant. If no such Government Code claim is 485
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submitted, or if any prerequisite contractual requirements are not otherwise satisfied as specified herein, Consultant shall be barred from bringing and maintaining a valid lawsuit against the City.

3.5.6 Compliance with Government Orders. Consultant will take such actions as may be necessary to comply promptly with any and all governmental orders or other requirements affecting the Project, whether imposed by Federal, state, county or municipal authority, including any Funding Requirements. Nevertheless, Consultant shall take no such action so long as City is contesting, or has affirmed its intention to contest, any such order or requirement. Consultant will notify City in writing of all notices of such orders or other requirements, within seventy-two (72) hours from the time of their receipt.

3.5.7 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

3.5.8 Attorney’s Fees. If either Party commences an action against the other Party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney’s fees and all other costs of such action.

3.5.9 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Bernardino County.

3.5.10 Time of Essence. Time is of the essence for each and every provision of this Agreement.

3.5.11 City’s Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Agreement or Services provided hereunder.

3.5.12 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties.

3.5.13 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.

3.5.14 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subcontractors of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

3.5.15 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. 486
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3.5.16 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

3.5.17 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

3.5.18 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.5.19 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or 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 rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

3.5.20 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

3.5.21 Counterparts. This Agreement may be executed in counterparts, including both counterparts that are executed on paper and counterparts that are in the form of electronic records and are executed electronically. An electronic signature means any electronic sound, symbol or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including email transmitted electronic signatures. All executed counterparts shall constitute one agreement, and each counterpart shall be deemed an original.

3.8 When funding for the Services is provided, in whole or in part, by an agency of the federal government, Consultant shall also fully and adequately comply with the provisions included in Exhibit “D” (Funding Requirements) attached hereto and incorporated herein by reference (“Funding Requirements”). With respect to any conflict between such Funding Requirements and the terms of this Agreement and/or the provisions of state law, the more stringent requirement shall control.
[SIGNATURES ON NEXT PAGE]
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SIGNATURE PAGE
TO

CITY OF FONTANA

PROFESSIONAL SERVICES AGREEMENT
TRACK NO. _________________

CITY OF FONTANA
By:

Matthew C. Ballantyne
City Manager
Quality Management Group, Inc., a
California corporation
By:

Name: Tim Johnson
____________________________
Its: President
Attest:

By:

City Clerk
Attest:1
By:

Approved as to form:

Best Best & Krieger LLP
City Attorney
By: _____________________________
Phillip Burum
Deputy City Manager
By: ______________________________
Valerie Gonzales
Housing Development Manager

IN COMPLIANCE WITH CONTRACT INSURANCE REQUIREMENTS
By: ______________________________
Rakesha L. Thomas
Director of Human Resources

IN COMPLIANCE WITH PURCHASING AND CONTRACT ADMINISTRATION

POLICIES/PROCEDURES
Jessica Brown, Chief Financial Officer Purchasing Office 490
EXHIBIT “A”

SCHEDULE OF SERVICES
EXHIBIT “A”

SCOPE OF SERVICES
Quality Management Group, Inc., a Corporation with its principal place of business at 3105 E Guasti Road, Suite 100, Ontario, CA 91761 (“Consultant”) shall provide services under this Agreement, as set forth herein:

1. It is a material term of this Agreement that all services provided by Consultant comply with the requirement of the funding requirements (“Funding Requirements”) that are a condition of funding awarded to the City of Fontana (“City”) as set forth below:

1.1 The City of Fontana has been awarded funds as part of the Family Homelessness Challenge Grant (“FHC Program”), which is funded through the Business, Consumer Services and Housing Agency of the State of California. All services provided under the FHC Program shall comply with the following:
(a) All requirements pursuant to Chapter 8 (commencing with Section 50255) of Part 1 of Division 31 of the Health and Safety Code of California, and any regulations, guidance, or amendments thereto; and,
(b) All requirements as set forth in (1) the Family Homelessness Challenge Grant and Technical Assistance Program Standard Agreement, inclusive of all exhibits therein, and (2) the Program Work Plan, each of which is attached hereto as Attachments 1 and 2, respectively, and incorporated herein by reference.

1.2 The City of Fontana has also been awarded funds as part of the Homekey Program (“Homekey Program”), which is funded through the Department of Housing and Community Development of the State of California. All services provided under the Homekey Program shall comply with the following:
(a) All requirements pursuant to Health and Safety Code §§ 50675.1.3 and 50675.1.4;
(b) All requirements of Standard Agreement (STD) 213, which is attached hereto as Attachment 3 and incorporated herein by reference.

1.3 Any other requirements for compliance with the FHC Program and the Homekey Program that may be determined by the State of California or the City, including but not limited to those requirements set forth in Exhibit “D”.

3. Compliance with Work Plan and implementing policies and procedures.

3.1 Consultant’s Services will comply with and be consistent with the activities set forth in the Work Plan, including: Street Outreach, Interim Shelter, Rapid Rehousing, Delivery of 491
EXHIBIT “A”

SCHEDULE OF SERVICES
Permanent Housing, Service Coordination, Systems Support, Operating Subsidies, and Administrative Costs.

3.2 Consultant’s Services will comply with any and all policies and procedures adopted by City with regard to any property where services are provided under this Agreement, including but not limited to policies and procedures for implementing programs referenced under the Work Plan.

4. Program Properties. Consultant’s Services will support services for Eligible Clients in connection with housing opportunities at the following properties:

4.1 7714 Tamarind Avenue, Fontana California (“Bridge of Hope”)

4.2 8996 Olive Street, Fontana, California

4.3 8344 Bennett Avenue, Fontana, California.

5. Service Deliverables. Consultant shall provide the following Services:

5.1 Execute, enforce and administer the terms of all rental agreements, or other agreements in accordance with the Funding Requirements, between City and Clients in accordance with local, state, and federal laws, and shall provide copies of each rental agreement to the City.
(a) Collect all rents, fees, and late charges due to City, and disburse security and other deposits payable to Clients.
(b) Promptly advertise and lease all unit vacancies.
(c) Qualify and screen Clients for qualifying income and rental fee limits based on guidelines as identified by the City in accordance with the Funding Requirements. (d) Create and implement an affirmative marketing plan and tenant selection procedure in compliance with the Fair Housing Act which ensures that prospective Clients are not discriminated against due to race, national origin, religion, familial status, etc. (e) Represent the City’s interests in all matters under any lease or other agreement with Clients.
(f) Take digital photographs of the exterior of each property and submit them to the City on a quarterly basis.
(g) Provide ground maintenance for any vacant parcels and/or coordinate the boarding up of vacant units on vacant parcels on an “as-needed” basis. (h) Perform and document annual inspections of both interior and exterior of all units in accordance with both the City’s Housing Quality Standards and the California Building Code, as required by the Funding Requirements. (i) Complete annual Leasehold Interest Reports and submit them to reporting agencies.
492
EXHIBIT “A”

SCHEDULE OF SERVICES
(j) Consultant shall establish and administrate the following separate banking accounts (except as noted below) for City property finances as may be required by the City and/or Funding Requirements (“Operating Account”). These accounts shall be maintained in accordance with applicable law, shall be fully insured by the Federal Deposit Insurance Corporation and shall be in the City's name. These funds shall not be commingled with Consultant's funds or City's other funds. All revenue collected pursuant to this Agreement (other than security deposits) shall be credited to the General Operating Account, which need not be interest bearing.
(k) Obtain and provide monthly reconciliations and bank statements for the Operating account, Security deposit account, if any, and any other account held for the City as of the end of the prior month.
(l) Prepare and provide City with a monthly management report by the fifteenth (15
th) of each month (or such other date as agreed upon in writing by City and Consultant) which shall include the following:
(m) Summary of rents collected, Client delinquencies, unit vacancies, and status of waiting list, if applicable as of the last day of the prior month. (n) Summaries of expenditures and revenue based under the Funding Requirements for the previous month, with a schedule of accounts receivable and payable, and balance sheet.
(o) Logs documenting monthly maintenance, preventative maintenance, and Client requested maintenance of units.
(p) Logs of onsite property visits by property management representatives. (q) Accounting of monies collected from washer, dryer, and/or vending machines on the properties.
(r) Summary and status of any Client evictions, in addition to all pending and current legal matters.
(s) Manage and resolve disputes among Clients, in addition to documenting and keeping a record of communications with Clients on issues, complaints, and resolutions to same.
(t) Manage properties in compliance with the requirements of the Crime Free Rental Housing Program.
(u) Serving of Notices of Termination and terminations of tenancies as necessary, recovery of possession of premises, and recovery of delinquent rent and/or other sums due.
(v) Commence legal action on behalf of City and/or settle, compromise, or provide releases on behalf of City following consultation and approval; make court appearances on behalf of City when necessary.
493
EXHIBIT “A”

SCHEDULE OF SERVICES
(w) Systematically and promptly receive and investigate all service requests from Clients, or any other agent acting on behalf of the City, take action thereon as may be justified, and keep records of the same. Consultant shall provide emergency maintenance service on a 24 hour-a-day basis and report all maintenance emergencies to the City by the next business day.
(x) Regularly monitor and perform repairs and/or maintenance of properties as needed. This shall include, but not be limited to, cleaning, painting, decorating, plumbing, carpentry, grounds care, and such other maintenance and repair work as may be necessary, subject to any limitations imposed by the City (including financial limitations) in addition to those contained herein. Subject to the City’s approval, Consultant shall enter into necessary agreements with subcontractors for maintenance, repairs, janitorial, pest control, and landscaping services. Incident hereto, the following provisions shall apply:
(i) Special attention will be given to preventative maintenance and, to the greatest extent feasible, the services of regular maintenance employees will be used. A preventive maintenance schedule shall be developed by Consultant for approval by the City. This schedule shall be updated annually.
(ii) Subject to the City's prior approval, Consultant shall only contract with qualified independent contractors for the maintenance and repair of air-conditioning systems and elevators, and for extraordinary repairs beyond the capability of regular maintenance employees, in accordance with all requirements of the Agreement. Consultant shall only contract with independent contractors that have an active registration through the State of California Department of Industrial Relations.
(iii) Consultant is authorized to purchase all materials, equipment, tools, appliances, supplies and services necessary for the proper maintenance and repair of the Project, provided any such purchase does not exceed $250 per incident. Any other purchase requires the prior written consent of City. (iv) Notwithstanding any of the foregoing provisions, the prior approval of the City will be required for any expenditure which exceeds $1,000 (one thousand dollars), in any one instance for labor, materials, or otherwise in connection with the maintenance and repair of the Project, except for recurring expenses within the limits of the operating budget or emergency repairs involving manifest danger to persons or property, or required to avoid suspension of any necessary service to the Project. In the latter event, Consultant will inform the City of the facts as promptly as possible. Additionally, any repairs that exceed the expenditure limit above will require a minimum of three (3) valid bids for the City’s review prior to work commencing.
(y) Manage and/or oversee any modifications or improvements made to properties, and ensure that independent contractors conducting modifications or improvements possess the required licensing and insurance coverage.
494
EXHIBIT “A”

SCHEDULE OF SERVICES
(z) Ensure that properties adhere to and remain in compliance with Fontana Municipal Code and/or other applicable state codes and guidelines. (aa) Strictly enforce all state and local laws pertaining to loitering and criminal activity around properties.
(bb) Annually recertify Client’s income based on the City’s qualification standards to ensure continued eligibility and satisfy income recertification reporting requirements.
(cc) Provide assistance to City for scheduling capital improvements and rehabilitation of properties as necessary.

6. Utilities and Service Contracts. In accordance with the operating budget for the Project, Consultant will make arrangements for water, electricity, gas, fuel oil, sewage and trash disposal, vermin extermination, decorating, laundry facilities, computer software and services and/or licensing, internet access, fax and telephone services. Consultant will negotiate concession agreements, maintenance and service contracts, and will execute the same, identified thereon on behalf of the City, subject to City’s prior approval of all terms and conditions, including, but not limited to length of term and fees for such services. All said contracts shall be in the name of the Project or City and shall be the obligation of the City and not Consultant. All contracted equipment and services will survive the term of this Agreement and will remain an obligation of the Project/City and are not transferable to Consultant.

7. Bids and Purchase Discounts, Rebates, or Commissions. City and Consultant agree to obtain contract materials, supplies and services at the lowest possible cost and on the terms most advantageous to the Project and to secure and credit to the Project all discounts, rebates or commissions obtainable with respect to purchases, service contracts and other transactions on behalf of the Project. All bids, purchases, shall be subject to procurement, prevailing wage, and funding requirements.

8. Consultant shall solicit written cost estimates (i.e. bids) from at least three qualified contractors or suppliers for any work item which City estimates will cost $1,000 (one thousand dollars) or more and for any contract or ongoing supply or service arrangement which is estimated to exceed $5,000 (five thousand hundred dollars) per year. Consultant agrees to accept the bid which represents the lowest responsible price taking into account the bidder's reputation for quality of workmanship or materials and timely performance, and the timeframe within which the services or goods are needed. At start-up, Consultant will bid out the various major contracts, i.e., the exterminator service, landscape, property insurance, annual audit and major vendors. All initial bids will be reviewed by City prior to execution of the contracts. All renewals of contracts will be first reviewed by City. No contract shall exceed one (1) year in length, without prior approval from City, and contracts over one (1) year shall be terminable without penalty on thirty (30) days’ notice. For any contract or ongoing supply or service arrangement obtainable from more than one source and estimated to cost less than $1,000 (one thousand dollars), Consultant shall solicit verbal or written cost estimates, as necessary, to assure that the Project is obtaining services, supplies and purchases at the lowest possible estimate obtained. Copies of all required bids and documentation of all other written or verbal cost comparisons made by Consultant shall be made part of the Project's records and shall be retained as required by Section 3.4.1 of this Agreement. This documentation shall be subject to 495
EXHIBIT “A”

SCHEDULE OF SERVICES
inspection by the City or their designee and Consultant agrees to submit such documentation upon request.

9. Audit. For any audit made in connection with this Agreement, City must execute an engagement letter and provide a copy to Consultant before Consultant will release documents and information to the auditor. All financial work completed by Consultant will be maintained in detailed, well-organized folders for review and audit purposes. At the end of each fiscal year, Consultant will provide the City, or an auditor, a year-end trial balance together with a complete report for the last month of the year and a year-to-date general ledger. Consultant will include in the report copies of insurance and property tax bills. Consultant will not provide schedules, lists, account analysis, mortgage or bank confirmations. Consultant will coordinate with auditors an acceptable time and office space for auditor’s fieldwork at Consultant’s office. Consultant will make staff available to answer questions. Consultant shall submit Federal and State Income Tax Returns received from the auditor and signed by City, and make all payments as directed by the auditor. Consultant will release books and records to site or storage upon receipt of a complete and final audit or review and adjusting journal entries, if any. To the extent that additional work is requested by the City or auditor that exceeds the scope of work detailed above, Consultant may charge an additional fee of $125.00 per hour for such work, subject to City approval.

10. Consultant shall coordinate with any and all employees, agents or other consultants of the City for purposes of carrying out the Program.

11. Consultant shall cooperate with the City to comply with all obligations for inputting and maintaining data into the Homeless Management Information System.

12. All referrals to assisted units shall be made through the local Coordinated Entry System or other comparable prioritization system based on greatest need, and in accordance with protocols that are developed and implemented in accordance with the local Continuum of Care and Program Requirements.

Consultant’s Initials: ___________
496
EXHIBIT “A”

SCHEDULE OF SERVICES
Exhibit A: Attachment 1

FHC STANDARD AGREEMENT
497
EXHIBIT “A”

SCHEDULE OF SERVICES
Exhibit A: Attachment 2

WORK PLAN
498
EXHIBIT “A”

SCOPE OF SERVICES
499
EXHIBIT “A”

SCOPE OF SERVICES
Exhibit A: Attachment 3
HOMEKEY STANDARD AGREEMENT 213
500
EXHIBIT “B”

SCHEDULE OF SERVICES
EXHIBIT “B”

Services in connection with specific properties will commence as follows:

For 7714 Tamarind Avenue, Fontana California (“Bridge of Hope”), upon the Effective Date of this Agreement.

For 8996 Olive Street, Fontana, California and 8344 Bennett Avenue, Fontana, California, when City provides Consultant with written notice that those properties are available for Eligible Clients.

Consultant’s Initials: ___________
501
EXHIBIT “B”

SCHEDULE OF SERVICES
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[OR INSERT SCHEDULE]
502
C EXHIBIT “C”
BUDGET
EXHIBIT “C”
BUDGET
- ATTACHED BEHIND THIS PAGE –
[OR INSERT RATES & AUTHORIZED REIMBURSABLE EXPENSES]
503
D EXHIBIT “D”

FUNDING REQUIREMENTS
EXHIBIT “D”

FUNDING REQUIREMENTS
- ATTACHED BEHIND THIS PAGE –
504
D EXHIBIT “D”

FUNDING REQUIREMENTS
Funding Requirements for Homekey 2 Program funded by ARPA CSLFRF Funds from the Coronavirus State Fiscal Recovery Fund and/or the Coronavirus Local Fiscal Recovery Fund, together known as the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) program and from the Homekey 2 program, will be used to fund all or a portion of the Agreement between Consultant and the City of Fontana to which this Exhibit is attached, including this Exhibit and all other incorporated documents (“Agreement”). As applicable, Consultant shall comply with all federal and state requirements (“Program Requirements”) including, but not limited to, the following, all of which are expressly incorporated herein by reference:
 Sections 602 and 603 of the Social Security Act as added by Section 9901 of the American Rescue Plan Act of 2021 (“ARPA”);
 CSLFRF Final Rule, codified at 31 CFR Part 35;
 CSLFRF Guidance on Recipient Compliance and Reporting Requirement, the most current version;
 2 C.F.R. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, other than such provisions as the U.S. Department of the Treasury may determine are inapplicable to the CSLFRF program and subject to such exceptions as may be otherwise provided by the U.S.

Department of the Treasury;
 Treasury Coronavirus State Fiscal Recovery Fund Award Terms and Conditions;
 The Multifamily Housing Program (Cal. Health & Safety Code §§ 50675 – 50675.15); and
 The Multifamily Housing Program Guidelines (Subchapter 4 of Chapter 7 of Title 25 of the California Code of Regulations (§§ 7300-73.47) Subcontracts, if any, shall contain a provision making them subject to all of the provisions contained in this Agreement. With respect to any conflict between the Funding Requirements and the Agreement and/or the provisions of state law and, except as otherwise required under federal law or regulation, the Funding Requirements shall control.

Consultant shall also comply with the following provisions:

1. REQUIRED CONTRACT PROVISIONS IN ACCORDANCE WITH APPENDIX II TO PART 200 – CONTRACT PROVISIONS FOR NON-FEDERAL ENTITY CONTRACTS UNDER FEDERAL AWARDS (2 C.F.R. § 200.327)
505
D EXHIBIT “D”

FUNDING REQUIREMENTS
(a) Appendix II to Part 200 (A); Appendix II to Part 200 (B): Remedies for Breach; Termination for Cause/Convenience. The Agreement includes remedies for breach and termination for cause and convenience.
(b) Appendix II to Part 200 (C) – Equal Employment Opportunity: Except as otherwise provided under 41 C.F.R. Part 60, if this Agreement meets the definition of a “federally assisted construction contract” in 41 C.F.R. § 60-1.3, then Consultant shall comply with the following equal opportunity clause, in accordance with Executive Order 11246 of September 24, 1965 entitled “Equal Employment Opportunity,” as amended by Executive Order 11375 of October 13, 1967 and implementation regulations at 41 C.F.R.

Chapter 60:
(i) The Consultant will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. The Consultant will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin. Such action shall include, but not be limited to the following: Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Consultant agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.
(ii) The Consultant will, in all solicitations or advertisements for employees placed by or on behalf of the Consultant, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.
(iii) The Consultant will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the Consultant's legal duty to furnish information.
(iv) The Consultant will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representatives of the Consultant’s commitments under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.
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D EXHIBIT “D”

FUNDING REQUIREMENTS
(v) The Consultant will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.
(vi) The Consultant will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders. (vii) In the event of the Consultant’s noncompliance with the nondiscrimination clauses of this Agreement or with any of the said rules, regulations, or orders, this Agreement may be canceled, terminated, or suspended in whole or in part and the Consultant may be declared ineligible for further Government contracts or federally assisted construction contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.
(viii) (viii) The Consultant will include the portion of the sentence immediately preceding paragraph (i) and the provisions of paragraphs (i) through (vii) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The Consultant will take such action with respect to any subcontract or purchase order as the administering agency may direct as a means of enforcing such provisions, including sanctions for noncompliance:

Provided, however, that in the event a Consultant becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the administering agency, the Consultant may request the United States to enter into such litigation to protect the interests of the United States.

The Consultant further agrees that it will be bound by the above equal opportunity clause with respect to its own employment practices when it participates in federally assisted construction work. The Consultant agrees that it will assist and cooperate actively with the administering agency and the Secretary of Labor in obtaining the compliance of contractors and subcontractors with the equal opportunity clause and the rules, regulations, and relevant orders of the Secretary of Labor, that it will furnish the administering agency and the Secretary of Labor such information as they may require for the supervision of such compliance, and that it will otherwise assist the administering agency in the discharge of the agency's primary responsibility for securing compliance.

The Consultant further agrees that it will refrain from entering into any contract or contract modification subject to Executive Order 11246 of September 24, 1965, with a contractor debarred from, or who has not demonstrated eligibility for, Government contracts and 507
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federally assisted construction contracts pursuant to the Executive Order and will carry out such sanctions and penalties for violation of the equal opportunity clause as may be imposed upon contractors and subcontractors by the administering agency or the Secretary of Labor pursuant to Part II, Subpart D of the Executive Order. In addition, the Consultant agrees that if it fails or refuses to comply with these undertakings, the administering agency may take any or all of the following actions: Cancel, terminate, or suspend in whole or in part this grant (contract, loan, insurance, guarantee); refrain from extending any further assistance to the applicant under the program with respect to which the failure or refund occurred until satisfactory assurance of future compliance has been received from such applicant; and refer the case to the Department of Justice for appropriate legal proceedings.
(c) Appendix II to Part 200 (D) – Davis-Bacon Act: Not applicable to this Agreement since it is funded by the CSLFRF.
(d) Appendix II to Part 200 (D) – Copeland “Anti-Kickback” Act: If the Services involve constructing, carrying out, completing, or repairing public buildings, or public works, Consultant must comply with the provisions of the Copeland “Anti-Kickback” Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, “Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States”). The Act provides that each vendor, contractor, subcontractor, or subrecipient shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. Contractor shall include this provision in all contracts between itself and any subcontractors in connection with the services performed under this Contract (e) Appendix II to Part 200 (E) – Contract Work Hours and Safety Standards Act:
(i) If this Agreement is in excess of $100,000 and involves the employment of mechanics or laborers, Consultant shall comply with 40 U.S.C. 3702 and 3704, as supplemented by Department of Labor regulations (29 C.F.R. Part 5). Under 40 U.S.C. 3702, each contractor must be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C. 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous.

These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.
(ii) Overtime Requirements. No contractor or subcontractor contracting for any part of the Contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in 508
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which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek.
(iii) Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in paragraph (ii) of this section the Consultant and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such Consultant and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (ii) of this section, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (ii) of this section. (iv) Withholding for unpaid wages and liquidated damages. The City shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the Consultant or subcontractor under any such contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such Consultant or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (iii) of this section. (v) Subcontracts. The Consultant or subcontractor shall insert in any subcontracts the clauses set forth in paragraph (ii) through (v) of this Section and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The Consultant shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (ii) through (v) of this Section.
(f) Appendix II to Part 200 (F) – Rights to Inventions Made Under a Contract or Agreement:
(i) If the Federal award meets the definition of “funding agreement” under 37 C.F.R. § 401.2(a) and the non-Federal entity wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that “funding agreement,” the non-Federal entity must comply with the requirements of 37 C.F.R. Part 401 (Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements), and any implementing regulations issued by the Federal awarding agency. 509
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(ii) The regulation at 37 C.F.R. § 401.2(a) currently defines “funding agreement” as any contract, grant, or cooperative agreement entered into between any Federal agency, other than the Tennessee Valley Authority, and any contractor for the performance of experimental, developmental, or research work funded in whole or in part by the Federal government. This term also includes any assignment, substitution of parties, or subcontract of any type entered into for the performance of experimental, developmental, or research work under a funding agreement as defined in the first sentence of this paragraph.
(g) Appendix II to Part 200 (G) – Clean Air Act and Federal Water Pollution Control Act: If this Agreement is in excess of $150,000, Consultant shall comply with all applicable standards, orders, or requirements issued pursuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251-1387).
(i) Pursuant to the Clean Air Act, (1) Consultant agrees to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq., (2) Consultant agrees to report each violation to the City and understands and agrees that the City will, in turn, report each violation as required to assure notification to the Federal awarding agency and the appropriate Environmental Protection Agency Regional Office, and (3) Consultant agrees to include these requirements in each subcontract exceeding $150,000. (ii) Pursuant to the Federal Water Pollution Control Act, (1) Consultant agrees to comply with all applicable standards, orders or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq., (2) Consultant agrees to report each violation to the City and understands and agrees that the City will, in turn, report each violation as required to assure notification to the Federal awarding agency and the appropriate Environmental Protection Agency Regional Office, and (3) Consultant agrees to include these requirements in each subcontract exceeding $150,000.
(h) Appendix II to Part 200 (H) – Debarment and Suspension: A contract award (see 2 C.F.R. § 180.220) must not be made to parties listed on the government wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 C.F.R. part 1986 Comp., p. 189) and 12689 (3 C.F.R. part 1989 Comp., p. 235), “Debarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549.
(i) This Agreement is a covered transaction for purposes of 2 C.F.R. pt. 180 and 2 C.F.R. pt. 3000. As such Consultant is required to verify that none of the Consultant, its principals (defined at 2 C.F.R. § 180.995), or its affiliates (defined at 2 C.F.R. § 180.905) are excluded (defined at 2 C.F.R. § 180.940) or disqualified (defined at 2 C.F.R. § 180.935).
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(ii) Consultant must comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C and must include a requirement to comply with these regulations in any lower tier covered transaction it enters into. (iii) This certification is a material representation of fact relied upon by City. If it is later determined that Consultant did not comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C, in addition to remedies available to the City, the Federal Government may pursue available remedies, including but not limited to suspension and/or debarment.
(iv) Consultant warrants that it is not debarred, suspended, or otherwise excluded from or ineligible for participation in any federal programs. Consultant also agrees to verify that all subcontractors performing work under this Agreement are not debarred, disqualified, or otherwise prohibited from participation in accordance with the requirements above. Consultant further agrees to notify the City in writing immediately if Consultant or its subcontractors are not in compliance during the term of this Agreement. (i) Appendix II to Part 200 (I) – Byrd Anti-Lobbying Act: If this Agreement is in excess of $100,000, Consultant shall have submitted and filed the required certification pursuant to the Byrd Anti-Lobbying Amendment (31 U.S.C. § 1353). If at any time during the Contract term funding exceeds $100,000.00, Consultant shall file with the City the Federal Standard Form LLL titled “Disclosure Form to Report Lobbying.” Consultants that apply or bid for an award exceeding $100,000 must file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the recipient who in turn will forward the certification(s) to the awarding agency.
(j) Appendix II to Part 200 (J) – §200.323 Procurement of Recovered Materials:
(i) Consultant shall comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 C.F.R. part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement.
(ii) In the performance of this Agreement, the Consultant shall make maximum use of products containing recovered materials that are EPA-designated items 511
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unless the product cannot be acquired: Competitively within a timeframe providing for compliance with the contract performance schedule; Meeting contract performance requirements; or At a reasonable price.
(iii) Information about this requirement, along with the list of EPAdesignate items, is available at EPA’s Comprehensive Procurement Guidelines web site, https://www.epa.gov/smm/comprehensive-procurement-guideline-cpg-program. (iv) The Consultant also agrees to comply with all other applicable requirements of Section 6002 of the Solid Waste Disposal Act.” (k) Appendix II to Part 200 (K) – §200.216 Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment:
(i) Consultant shall not contract (or extend or renew a contract) to procure or obtain equipment, services, or systems that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system funded under this Agreement. As described in Public Law 115–232, section 889, covered telecommunications equipment is telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities).
(1) For the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications
Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities). (2) Telecommunications or video surveillance services provided by such entities or using such equipment.
(3) Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country. (ii) See Public Law 115-232, section 889 for additional information. (l) Appendix II to Part 200 (L) – §200.322 Domestic Preferences for Procurement:
(i) Consultant shall, to the greatest extent practicable, purchase, acquire, or use goods, products, or materials produced in the United States (including but 512
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not limited to iron, aluminum, steel, cement, and other manufactured products). The requirements of this section must be included in all subcontracts (ii) For purposes of this section:
(1) “Produced in the United States” means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States. (2) “Manufactured products” means items and construction materials composed in whole or in part of nonferrous metals such as aluminum; plastics and polymer-based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber.

2. COMPLIANCE WITH U.S. DEPARTMENT OF THE TREASURY

CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUND AWARD TERMS

AND CONDITIONS
(a) Maintenance of and Access to Records. Consultant shall maintain records and financial documents sufficient to evidence compliance with section 603(c) of ARPA, Treasury’s regulations implementing that section, and guidance issued by Treasury regarding the foregoing. Consultant agrees to provide the CITY, Treasury Office of Inspector General and the Government Accountability Office, or any of their authorized representatives access to any books, documents, papers, and records (electronic an otherwise) of the Consultant which are directly pertinent to this Agreement for the purposes of conducting audits or other investigations. Records shall be maintained by Consultant for a period of five (5) years after completion of the project. (b) Compliance with Federal Regulations. Consultant agrees to comply with the requirements of section 603 of ARPA, regulations adopted by Treasury pursuant to section 603(f) of ARPA, and guidance issued by Treasury regarding the foregoing.

Consultant also agrees to comply with all other applicable federal statutes, regulations, and executive orders, including, without limitation, the following:
(i) Universal Identifier and System for Award Management (SAM), 2 C.F.R. Part 25, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 25 is hereby incorporated by reference.
(ii) Reporting Subaward and Executive Compensation Information, 2 C.F.R. Part 170, pursuant to which the award term set forth in Appendix A to 2 C.F.R.

Part 170 is hereby incorporated by reference.
(iii) OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 C.F.R. Part 180, subpart B) that the award is subject to 2 C.F.R. Part 180 and Treasury’s implementing regulation at 31 C.F.R. Part 19. 513
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(iv) Recipient Integrity and Performance Matters, pursuant to which the award term set forth in 2 C.F.R. Part 200, Appendix XII to Part 200 is hereby incorporated by reference.
(v) Governmentwide Requirements for Drug-Free Workplace, 31 C.F.R. Part 20.
(vi) New Restrictions on Lobbying, 31 C.F.R. Part 21.
(vii) Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. §§ 4601-4655) and implementing regulations. (c) Compliance with Federal Statutes and Regulations Prohibiting Discrimination. Consultant agrees to comply with statutes and regulations prohibiting discrimination applicable to the CSLFRF program including, without limitation, the following:
(i) Title VI of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.) and Treasury’s implementing regulations at 31 C.F.R. Part 22, which prohibit discrimination on the basis of race, color, or national origin under programs or activities receiving federal financial assistance.
(ii) The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§ 3601 et seq.), which prohibits discrimination in housing on the basis of race, color, religion, national origin, sex, familial status, or disability. (iii) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794), which prohibits discrimination on the basis of disability under any program or activity receiving federal financial assistance.
(iv) The Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101 et seq.), and Treasury’s implementing regulations at 31 C.F.R. Part 23, which prohibit discrimination on the basis of age in programs or activities receiving federal financial assistance.
(v) Title II of the Americans with Disabilities Act of 1990, as amended (42 U.S.C. §§ 12101 et seq.), which prohibits discrimination on the basis of disability under programs, activities, and services provided or made available by state and local governments or instrumentalities or agencies thereto.
(d) False Statements. Consultant understands that making false statements or claims in connection with the CSLFRF program is a violation of federal law and may result in criminal, civil, or administrative sanctions, including fines, imprisonment, civil damages and penalties, debarment from participating in federal awards or contracts, and/or any other remedy available by law.
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(e) Hatch Act. If Consultant is a public agency, Consultant agrees to comply, as applicable, with the requirements of the Hatch Act (5 U.S.C. section 1501-1508 and 7324-7328), which limit certain political activities of State or local government employees whose principal employment is in connection with an activity financed in whole or in part by this federal assistance.
(f) Protections for Whistleblowers.
(i) In accordance with 41 U.S.C. § 4712, Consultant may not discharge, demote, or otherwise discriminate against an employee in reprisal for disclosing to any of the list of persons or entities provided below, information that the employee reasonably believes is evidence of gross mismanagement of a federal contract or grant, a gross waste of federal funds, an abuse of authority relating to a federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a federal contract (including the competition for or negotiation of a contract) or grant.
(ii) The list of persons and entities referenced in the paragraph above includes the following:
(1) A member of Congress or a representative of a committee of Congress;
(2) An Inspector General;
(3) The Government Accountability Office;
(4) A Treasury employee responsible for contract or grant oversight or management;
(5) An authorized official of the Department of Justice or other law enforcement agency;
(6) A court or grand jury; or
(7) A management official or other employee of Consultant, or a subcontractor who has the responsibility to investigate, discover, or address misconduct. (g) Increasing Seat Belt Use in the United States. Pursuant to Executive Order 13043, 62 FR 19217 (Apr. 18, 1997), Consultant is encouraged to adopt and enforce onthe-job seat belt policies and programs for their employees when operating companyowned, rented or personally owned vehicles, and encourage its subcontractors to do the same
(h) Reducing Text Messaging While Driving. Pursuant to Executive Order 13513, 74 FR 51225 (Oct. 6, 2009), Consultant should encourage its employees and subcontractors to adopt and enforce policies that ban text messaging while driving, and 515
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Consultant should establish workplace safety policies to decrease accidents caused by distracted drivers.
(i) Assurances of Compliance with Civil Rights Requirements. The Civil Rights Restoration Act of 1987 provides that the provisions of this assurance apply to the Contract, including, but not limited to, the following:
(i) Consultant ensures its current and future compliance with Title VI of the Civil Rights Act of 1964, as amended, which prohibits exclusion from participation, denial of the benefits of, or subjection to discrimination under programs and activities receiving federal funds, of any person in the United States on the ground of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury Title VI regulations at 31 CFR Part 22 and other pertinent executive orders such as Executive Order 13166; directives; circulars; policies; memoranda and/or guidance documents.
(ii) Consultant acknowledges that Executive Order 13166, “Improving Access to Services for Persons with Limited English Proficiency (LEP),” seeks to improve access to federally assisted programs and activities for individuals who, because of national origin, are limited in their English proficiency. Consultant understands that the denial of access to persons to its programs, services and activities because of their limited proficiency in English is a form of national origin discrimination prohibited under Title VI of the Civil Rights Act of 1964. Accordingly, Consultant shall initiate reasonable steps, or comply with Treasury’s directives, to ensure meaningful access to its programs, services and activities to LEP persons. Consultant understands and agrees that meaningful access may entail providing language assistance services, including oral interpretation and written translation where necessary to ensure effective communication in the Project. (iii) Consultant agrees to consider the need for language services for LEP persons during development of applicable budgets and when conducting programs, services and activities. As a resource, the Department of the Treasury has published its LEP guidance at 70 FR 6067. For more information on LEP, please visit http://www.lep.gov.
(iv) Consultant acknowledges and agrees that compliance with this assurance constitutes a condition of continued receipt of federal financial assistance and is binding upon Consultant and Consultant’s successors, transferees and assignees for the period in which such assistance is provided.
(v) Consultant agrees to incorporate the following language in every contract or agreement subject to Title VI and its regulations between the Consultant and the Consultant’s subcontractors, successors, transferees and assignees:

The subcontractor, successor, transferee and assignee shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national 516
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origin (42 U.S.C. § 2000d et seq.), as implemented by Department of the Treasury Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this contract (or agreement). Title VI also extends protection to persons with “Limited English proficiency” in any program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by Department of the Treasury Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this contract (or agreement). (vi) Consultant understands and agrees that if any real property or structure is provided or improved with the aid of federal financial assistance by the Department of the Treasury, this assurance obligates the Consultant, or in the case of a subsequent transfer, the transferee, for the period during which the real property or structure is used for a purpose for which the federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. If any personal property is provided, this assurance obligates the Consultant for the period during which it retains ownership or possession of the property.
(vii) Consultant shall cooperate in any enforcement or compliance review activities by the Department of the Treasury of the aforementioned obligations.

Enforcement may include investigation, arbitration, mediation, litigation, and monitoring of any settlement agreements that may result from these actions. Consultant shall comply with information requests, on-site compliance reviews, and reporting requirements.
(viii) Consultant shall maintain a complaint log and inform the Department of the Treasury of any accusations of discrimination on the grounds of race, color, or national origin, and limited English proficiency covered by Title VI of the Civil Rights Act of 1964 and implementing regulations and provide, upon request, a list of all such reviews or proceedings based on the complaint, pending or completed, including outcome.

Consultant must also inform the Department of the Treasury if Consultant has received no complaints under Title VI.
(iii) Consultant must provide documentation of an administrative agency’s or court’s findings of non-compliance of Title VI and efforts to address the noncompliance, including any voluntary compliance or other agreements between the Consultant and the administrative agency that made the finding. If the Consultant settles a case or matter alleging such discrimination, Consultant must provide documentation of the settlement. If Consultant has not been the subject of any court or administrative agency finding of discrimination, please so state.
(iv) If Consultant makes sub-awards to other agencies or other entities, Consultant is responsible for assuring that sub-recipients also comply with Title VI and all of the applicable authorities covered in this assurance.

3. CONTRACTING WITH SMALL AND MINORITY FIRMS, WOMEN’S BUSINESS ENTERPRISE AND LABOR SURPLUS AREA FIRMS (2 C.F.R. § 200.321) 517
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(a) Consultant shall be subject to 2 C.F.R. § 200.321 and will take affirmative steps to assure that minority firms, women’s business enterprises, and labor surplus area firms are used when possible and will not be discriminated against on the grounds of race, color, religious creed, sex, or national origin in consideration for an award. (b) Affirmative steps shall include:
(i) Placing qualified small and minority businesses and women's business enterprises on solicitation lists;
(ii) Assuring that small and minority businesses, and women's business enterprises are solicited whenever they are potential sources; (iii) Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority business, and women's business enterprises;
(iv) Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority business, and women's business enterprises; and
(v) Using the services/assistance of the Small Business Administration (SBA), and the Minority Business Development Agency (MBDA) of the Department of Commerce.

Consultant shall submit evidence of compliance with the foregoing affirmative steps when requested by the City.

4. FUNDING SOURCE REQUIRED PROVISIONS (CSLFRF)
(a) Compliance with Subpart D of 2 C.F.R. part 200. Materials, supplies and services procured to provide Services under this Agreement shall be procured, used, managed, and disposed in accordance with the requirements in Subpart D of 2 C.F.R. part 200.
(b) Conflicts of Interest Prohibited (2 C.F.R. § 200.112). Pursuant to 2 C.F.R. § 200.112, Consultant must comply with the requirements, prohibitions, and limitations of Government Code § 1090, the Political Reform Act of 1974 (Government Code § 81000 et seq.), the City’s conflict of interest regulations, and state and federal common law regulating conflicts of interest.
(c) Mandatory Disclosure (2 C.F.R. § 200.113, 41 U.S.C. § 2313). Consultant must disclose, in a timely manner, in writing to the City all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting this Agreement.

Failure to make required disclosures constitutes a breach of this Agreement. 518
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(d) Internal Controls (2 C.F.R. § 200.303). Consultant shall take reasonable measures to safeguard protected personally identifiable information and other information considered to be sensitive consistent with applicable Federal, State, and local laws regarding privacy and responsibility over confidentiality. (e) Accessibility and Nondiscrimination. Consultant shall adhere to the accessibility and nondiscrimination requirements set forth in state and federal law, including but not limited to the following:
(i) The Unruh Civil Rights Act (Cal. Civ. Code § 51);
(ii) California Building Code Chapter 11A and 11B;
(iii) Uniform Federal Accessibility Standards;
(iv) 24 C.F.R. Part 8, or HUD's modified version of the 2010 ADA Standards for Accessible Design (Alternative 2010 ADAS), HUD-2014-0042-0001, 79 F.R. 29671 (5/27/14) (commonly referred to as "the Alternative Standards" or "HUD Deeming Memo"); and
(v) 24 CFR part 8.26
(f) Maintenance of and Access to Records. In addition to the requirements in paragraph 2(a), above:
(i) If any litigation, claim, negotiation, audit, monitoring, inspection or other action commences during this required retention period, all records must be retained until a full and final resolution of the action (ii) Consultant must provide the City, State of California, Treasury Office of Inspector General and the Government Accountability Office, or their authorized representatives, shall have the right of access to records (electronic and otherwise) in order to conduct audits or other investigations.
(g) Termination and Cancellation (CSLFRF T&C 3)
Notwithstanding Section 3.5.1 of this Agreement,
(i) The City may terminate this Agreement for cause at any time by giving at least ten (10) calendar days’ advanced written notice to Consultant. “Cause” consist of Consultant’s breach of, or failure to satisfy, any of the terms or conditions of this Agreement. Cause includes but is not limited to the following:
(1) Consultant’s failure to satisfy or timely cure a breach or failure to satisfy any condition set forth in the Agreement. Failure to satisfy any of the Performance Milestones will constitute a breach of this Agreement.
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(2) Consultant furnished any untrue or misleading material fact or representation in connection with this Agreement;
(3) Consultant conceals any material fact from the City related to this Agreement;
(4) The City determines the objectives and requirements of this Agreement cannot be met in accordance with applicable timeframes.

The City may give written notice to the Consultant to cure the breach, violation, or default.

If the breach, violation, or default is not cured to the City’s satisfaction within a reasonable time, as determined by the City in its sole and absolute discretion, then the City may declare a default under this Agreement and seek any and all remedies that are available under this Agreement, at law, or in equity.
(ii) The City may cancel this Agreement, in whole or in part, if (i) sufficient funds are not made available by the United States Government or the State of California; (ii) Congress or the Legislature enacts any restrictions, limitations, or conditions that impact this Agreement or the funding of this Agreement; (iii) Consultant fails to satisfy any of the Performance Milestones; or (iv) cancellation is otherwise permitted under state contracting law.
(iii) To cancel this Agreement pursuant to this paragraph, the City will endeavor to give fifteen (15) calendar days’ advance written notice to the Consultant.

Consultant shall, within ten (10) calendar days’ after the City’s written notice, submit a final invoice to the City for services rendered up to, but not exceeding, the date of the written notice.
(h) Remedies for Breach of this Agreement. In addition to any remedies for breach, violation, or default of any terms of this Agreement, the City may elect to pursue any remedy available at law or in equity, including but not limited to the following:
(i) Repay to the City any amount which the State of California or the federal government determines to have been misused or are subject to repayment pursuant to section 603(e) of the Social Security Act;
(ii) Modify any plans, budget, compensation terms, schedules, manner of providing Services, or take other actions directed or recommended by the State of California or federal government.

5. REQUIREMENTS FOR CONSTRUCTION CONTRACTOR, PROPERTY

MANAGER, AND SUPPORTIVE SERVICES PROVIDER
(a) Property Manager. The requirements of this subsection 5(a) apply to Consultant if the Services include activities involving tenant selection, property management, rent collection, eviction, tenant income certification, and similar activities. 520
D EXHIBIT “D”

FUNDING REQUIREMENTS
(i) Consultant’s key personnel identified in the Agreement must have three or more years of experience providing the Services. (ii) Consultant shall provide the Services in accordance with the Program Requirements, including but not limited to a property management plan that satisfies the Multifamily Housing Program and 25 C.F.R. § 7324. (iii) Consultant shall provide the Services in accordance with the core components of Housing First, Cal. Welfare and Institutions Code § 8255. (iv) In addition to the requirements in the Agreement, Consultant shall take referrals through the local Coordinated Entry System or comparable prioritization system based on greatest need and in collaboration with the local Continuum of Care.

Consultant shall support Continuum of Care participation in the statewide Homeless Data Integration System and, consistent with state and federal law, shall disclose relevant data to the local Homeless Management Information System and comparable data collection systems.
(v) Consultant shall provide Services in accordance with the tenant selection, income certification, rent standards, design features, and other Program Requirements, including but not limited to Article 2 of Subchapter 4 of Chapter 7 of Division 1 of Title 25 of the California Code of Regulations. (vi) The affirmative marketing plan and tenant selection procedure required by Section 5 of this Agreement must ensure positive outreach and informational efforts to those who are least likely to know about and apply for the benefits of the Services. The affirmative marketing plan and tenant selection procedures must ensure prospective Clients are not discriminated against on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, age, medical condition, genetic information, citizenship, primary language, immigration status (except where explicitly prohibited by federal law), arbitrary characteristics, and all other classes of individuals protected from discrimination under federal or state housing laws, as well as individuals perceived to be a member of any of the preceding classes, and any individual or person associated with any of the preceding classes. (vii) In addition to any other reporting requirements provided in this Agreement, Consultant shall provide information to City sufficient to conduct an independent audit in accordance with 25 C.C.R. § 7325 and to submit the annual Homekey Program and Expenditure Report, including but not limited to the following data:
(1) The number and demographics of individuals housed, or likely to be housed, using the funds.
(2) The racial and ethnic composition of the tenants assisted. 521
D EXHIBIT “D”

FUNDING REQUIREMENTS
(3) The number of units, and the location of those units, for which operating subsidies have been, or are planned to be, capitalized under this Agreement.
(4) Any lessons learned from the provision of the Services. (viii) Materials, supplies and services procured to provide Services under this Agreement shall be procured, used, and disposed in accordance with the requirements in Subpart D of 2 C.F.R. part 200.
(ix) Operating budget. Within ninety (90) days prior to the end of each City fiscal year, Consultant shall submit a proposed operating budget which sets forth an estimate of operating income, operating expenses, any proposed rent increases, and an allocation of income and uses of income among units and spaces subject to and those not subject to the Program Requirements, if any.
(b) Supportive Services Provider. The requirements of this subsection 5(b) apply to Consultant if the Services include activities involving case management, behavioral health services, physical health services, assistance obtaining benefits and essential documentation, education employment services, and similar supportive services.
(i) Consultant’s key personnel identified in the Agreement must have three or more years of experience providing the Services. (ii) Consultant shall take referrals through the local Coordinated Entry System or comparable prioritization system based on greatest need and in collaboration with the local Continuum of Care. Consultant shall support Continuum of Care participation in the statewide Homeless Data Integration System and, consistent with state and federal law, shall disclose relevant data to the local Homeless Management Information System and comparable data collection systems. (iii) Consultant shall create if needed, and provide Services in accordance with, a supportive services plan that describes the on-site staffing plan proposed to deliver these Services, the approach to securing and/or connecting residents to off-site services including primary care and other needed physical health and behavioral health services as well as other tenancy supports. (iv) Consultant shall support Continuum of Care participation in the statewide Homeless Data Integration System and, consistent with state and federal law, shall disclose relevant data to the local Homeless Management Information System and comparable data collection systems.
(v) In addition to any other reporting requirements provided in this Agreement, Consultant shall provide information to City sufficient to conduct an independent audit in accordance with 25 C.C.R. § 7325 and to submit the annual Homekey Program and Expenditure Report, including but not limited to details of 522
D EXHIBIT “D”

FUNDING REQUIREMENTS
supportive services offered to Clients and lessons learned from the provision of the Services.
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City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-2356 Agenda Date: 7/25/2023
Agenda #: AL. Category: Public Hearing
FROM:

Finance
SUBJECT:

Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2022 and Single Audit Report Fiscal Year Ended June 30, 2022
RECOMMENDATION:

1. Receive and File the City of Fontana’s Annual Comprehensive Financial Report (ACFR) for Fiscal Year ended June 30, 2022.

2. Receive and File the City of Fontana’s Single Audit Report (SAR) for Fiscal Year ended June 30, 2022.Recomm
COUNCIL GOALS:
· Practice sound fiscal management by producing timely and accurate financial information.

DISCUSSION:

Annual Comprehensive Financial Report (ACFR)
The City of Fontana is required by Fontana Municipal Code Section 10-8 to have the City’s annual financial records audited by an independent audit firm. Section 10-8 states, “The books, accounts, and funds of the City Finance Department, City Treasurer and all special agencies shall be audited by a registered and licensed public accountant at least once a year…” Accordingly, this year’s audit for the City was completed by the accounting firm Davis Farr LLP.

The primary objectives of a financial audit are: (1) to express an opinion on the fairness of the financial statements in conformity with generally accepted accounting principles; and (2) to determine whether the City has complied with applicable legal requirements in obtaining and expending public funds.

The audit for Fiscal Year 2021-22 was performed in accordance with generally accepted auditing standards. These standards are required to obtain reasonable assurances that the general-purpose financial statements are free from material misstatements.

Davis Farr LLP has issued an unmodified ("clean") opinion, the highest opinion given for financial statements, to the City for the fiscal year ended June 30, 2022. This opinion states that the generalpurpose financial statements present fairly, in all material respects, the financial position of the City of Fontana, as of June 30, 2022, and the results of the City’s operations are in conformity with generally City of Fontana Page 1 of 2 Printed on 7/20/2023
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File #: 21-2356 Agenda Date: 7/25/2023
Agenda #: AL. Category: Public Hearing
Fontana, as of June 30, 2022, and the results of the City’s operations are in conformity with generally accepted accounting principles.

Single Audit Report (SAR)
2 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that all nonFederal agencies expending Federal awards of $750,000 or more during the Fiscal Year must have a single or program specific audit conducted in that year. Accordingly, the City’s Fiscal Year 2021-2022 audit was completed by the accounting firm Davis Farr LLP with the compliance requirements described in the OMB Compliance Supplement.

It was Davis Farr LLP’s opinion that the schedule of expenditure of federal awards was fairly stated in all material aspects in relation to the financial statements and an unmodified opinion was issued.

The SAR, includes a report on Internal Controls in accordance with General Auditing Standard, a report/notes on compliance for each Major Federal Program, and a schedule of findings and questions costs.

Copies of the ACFR and SAR have been made available to the public at the City Clerk’s Office and on the City’s web site.

The City Treasurer has reviewed and supports this action.

FISCAL IMPACT:

None.

MOTION:

Approve staff recommendation.

City of Fontana Page 2 of 2 Printed on 7/20/2023
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CITY OF FONTANA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED
JUNE 30, 2022
526

CITY OF FONTANA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Year Ended June 30, 2022

TABLE OF CONTENTS

INTRODUCTORY SECTION
Page
Number

i
x
xi
1 Letter of Transmittal
List of Principal Officials
Organizational Chart

FINANCIAL SECTION
Independent Auditors’ Report
Management’s Discussion and Analysis
Basic Financial Statements
Government-Wide Financial Statements
Exhibit A - Statement of Net Position
Exhibit B - Statement of Activities
21 22
6 527

CITY OF FONTANA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Year Ended June 30, 2022

TABLE OF CONTENTS
FINANCIAL SECTION (continued)
Basic Financial Statements (continued)
Fund Financial Statements
Page
Number
Exhibit C - Balance Sheet – Governmental Funds
Exhibit D - Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
Exhibit E - Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds
Exhibit F - Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Exhibit G - Statements of Revenues, Expenditures, and Changes in Fund Balances -- Budget and Actual
General Fund
Fire Protection District - Special Revenue Fund
Housing Authority Low/Mod Housing - Special Revenue Fund Economic Stimulus - Special Revenue Fund
Exhibit H - Statement of Net Position – Proprietary Funds 23 24
25 26
27 28
29 30
31 528

CITY OF FONTANA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Year Ended June 30, 2022

TABLE OF CONTENTS
FINANCIAL SECTION (continued)
Basic Financial Statements (continued)
Page
Number

Exhibit I - Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds 32
Exhibit J - Statement of Cash Flows - Proprietary Funds 33 Exhibit K - Statement of Fiduciary Net Position 34
Exhibit L - Statement of Changes in Fiduciary Net Position 35 Notes to the Financial Statements
Note 1: Organization and Summary of Significant Accounting Policies 36 Note 2: Stewardship, Compliance and Accountability 47
Note 3: Cash and Investments 49
Note 4: Leases 53
Note 5: Receivables 54
Note 6: Capital Assets 55
Note 7: Interfund Receivables, Payables and Transfers 57 Note 8: Long-Term Debt 60
Note 9: Risk Management 64
Note 10: Litigation 64
529

CITY OF FONTANA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Year Ended June 30, 2022
FINANCIAL SECTION (continued)
Basic Financial Statements (continued)

TABLE OF CONTENTS
Page
Number
Notes to the Financial Statements (continued)
Note 11: Jointly Governed Organization 65
Note 12: Other Post-Employment Benefits 65
Note 13: Pensions 68
Note 14: Public Agency Retirement Services 78
Note 15: Classification of Fund Balances 78
Note 16: Fontana Fire Protection District 80
Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency 83 Note 18: Tax Abatement 88
Note 19: Prior Period Adjustments 88
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios during the 89 Measurement Period - Safety Plan
Schedule of Changes in Net Pension Liability and Related Ratios during the 90 Measurement Period - Miscellaneous Plan
Schedule of Plan Contributions – Safety Plan 91
Schedule of Plan Contributions – Miscellaneous Plan 92
Schedule of Changes in Total OPEB Liability and Related Ratios 93 530

CITY OF FONTANA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Year Ended June 30, 2022

TABLE OF CONTENTS
Page
Number
FINANCIAL SECTION (continued)
Basic Financial Statements (continued)
Supplementary Information
Combining and Individual Fund Statements and Schedules
Schedule 1 - Combining Balance Sheet – Non-Major Governmental Funds 98 Schedule 2 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-Major Governmental Funds 103
Schedule 3 - Budgetary Comparison Schedules - Governmental Funds 108 Schedule 4 - Combining State of Net Position – All Fiduciary Funds 134 Schedule 5 - Combining Statement of Changes in Assets and Liabilities – All Fiduciary Funds 135

STATISTICAL SECTION
Net Position by Component – Last Ten Fiscal Years 138
Changes in Net Position– Last Ten Fiscal Years 139
Fund Balances – Governmental Funds – Last Ten Fiscal Years 141 531

CITY OF FONTANA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Year Ended June 30, 2022

TABLE OF CONTENTS
Page
Number

STATISTICAL SECTION (continued)
Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 142 Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 144 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 145 Principal Property Taxpayers – Current Year and Nine Years Ago 146 Property Tax Levies and Collections – Last Ten Fiscal Years 147 Ratio of Outstanding Debt by Type – Last Ten Fiscal Years 148 Ratio of General Bonded Debt Outstanding – Last Ten Fiscal Years 149 Direct and Overlapping Bonded Debt 150
Legal Debt Margin Information – Last Ten Fiscal Years 151 Demographic and Economic Statistics – Last Ten Fiscal Years 152 Principal Employers – Current Year and Nine Years Ago 153 Full-time City Government Employees by Function – Last Ten Fiscal Years 154 532

CITY OF FONTANA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Year Ended June 30, 2022

TABLE OF CONTENTS
STATISTICAL SECTION (continued)
Page
Number

Operating Indicators by Function/Program – Last Ten Fiscal Years 155 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years 156 Miscellaneous Statistical Information 157
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July 13, 2023
The Honorable Mayor and City Council
State law requires that all general-purpose local governments publish a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the annual comprehensive annual financial report of the City of Fontana for the fiscal year ended June 30, 2022.

This report consists of management’s representations concerning the finances of the City of Fontana. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Fontana has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse, and to compile sufficient reliable information for the preparation of the City of Fontana’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Fontana’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The City of Fontana’s financial statements have been audited by Davis Farr LLP, a firm of licensed certified public accountants.

The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Fontana for the fiscal year ended June 30, 2022, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and City of Fontana

C A L I F O R N I A
i
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significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Fontana’s financial statements for the fiscal year ended June 30, 2022, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report.

The independent audit of the financial statements of the City of Fontana was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City of Fontana’s separately issued Single Audit Report.

GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Fontana’s MD&A can be found immediately following the report of the independent auditors.

Profile of the Government
The City of Fontana is located about 50 miles east of Los Angeles. The City spans approximately 52.4 square miles and has an estimated population of 212,809. The City was first developed as an organized rural community through the vision of Mr. A. B.

Miller. Although self-sufficient, the farming community was abruptly reshaped to accommodate the industrial revolution in 1942 with the transformation of Mr. Miller’s farm into a steel mill by Henry J. Kaiser. The area became Southern California’s leading producer of steel and steel-related products. The steel industry dominated the City’s economy until 1984 when the steel mill closed. Today, Fontana has emerged as an affordable suburb, attracting both residents and businesses.

The City was incorporated on June 25, 1952, under the laws of the State of California and enjoys all the rights and privileges applicable to a general law city. The City is governed by a five member City Council under the Council-Manager form of government. Policy-making and legislative authority are vested in a governing council consisting of the mayor and four other members. The council is elected on a non-partisan basis. Council members serve four-year staggered terms, with two council members elected every two years. The mayor is elected to serve a four-year term. The mayor is elected at large and the four council members are elected by district. The governing council is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and hiring both the City Manager and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the governing council, for overseeing the day-to-day operations of the government, and for appointing the heads of the various departments.

The City of Fontana employs approximately 600 full-time employees. Services provided include police protection; contract for fire services; the construction and maintenance of highways, streets, and other infrastructure; wastewater and sanitation services; and recreational activities and cultural events. In addition to general government activities, the City Council also serves as the ii
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Board of Directors of the Fontana Industrial Development Authority, the Fontana Public Financing Authority, the Fontana Public Facilities Financing Authority, the Fontana Housing Authority, the Fontana Community Foundation, the Fontana Fire Protection District as well as the Successor Agency for the Former Fontana Redevelopment Agency. Therefore, these activities have been included as an integral part of the City of Fontana’s financial statements. Additional information on these entities can be found in Note 1 in the notes to the financial statements.

The annual budget serves as the foundation for the City of Fontana’s financial planning and control. Each year the City Council reviews budget development guidelines for use in preparing the next year’s budget. These guidelines are structured to reflect the City Council’s goals and objectives and to provide the framework in which the Operating Budget is prepared. The Finance Department is responsible for compiling the estimated revenues and appropriations for the City Manager. Prior to the beginning of the new fiscal year, the City Council adopts the annual Operating Budget at a public meeting.

The City’s budget policy is that all appropriations lapse at fiscal year-end. Outstanding encumbrance balances at fiscal year-end require re-approval by the City Council at the First Quarterly Budget Review. The City Council may amend the budget at any time during the fiscal year. Budget reports are presented to the City Council and the public on a quarterly basis. They include appropriation adjustments and revised revenue projections as needed. The legal level of budgetary control is set at the department level. Budget-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriate annual budget has been adopted.

Factors Affecting Financial Condition

The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Fontana operates.

Local economy. The Inland Empire continued to recover from the COVID-19 pandemic, which disrupted lives and businesses alike. The Inland Empire’s housing markets are strengthening, new home developers are continuing to build, job growth is strong and consumer spending is continuing to grow. Despite the increase in the interest rates by the Federal reserve, the Inland Empire’s economy does not expect an economic slowdown.

Strong Jobs, Balanced Growth. After experiencing significant job reductions in the wake of the State government COVID -19 shut down of the non-essential portions of the economy with unemployment reaching a high rate of 14.7% in May 2020 Fontana has continuously decreased their unemployment rate from 4.7% in February 2022 to 4.2% in February 2023.

Retail Sales Are Increasing. Taxable sales are a major revenue source for cities. Due to the State government COVID -19 shutdown, taxable retail sales declined 3.9% from June 2019 to June 2020 within the City. During fiscal year 2020-21 sales tax rebounded by growing 20% from June 2020 and increased again by 10% from June 2021 to June 2022. For San Bernardino County, the taxable sales were up 13.4% in the first quarter and 7.2% in the second quarter of 2022. iii
537
Housing Market Steady Prices, Modest Sales. The Inland Empire’s housing markets, as a whole, remain stuck in a narrow band of home sales that has gone on nine years. Lack of supply combined with increased demand and barriers for consumers to obtain financing continue to drive price escalation in San Bernardino County, where home prices increased 11.8% from June 2021 to June 2022. Affordability remains high in the Inland Empire, when compared to other southern California communities. coastal communities, where 43-54 percent of home buyers can afford the median priced home. Lack of affordability in the coastal communities, where only 24-27 percent of wage earners can afford a median priced home, will continue to drive homebuyers inland.

The median home prices for the City of Fontana continued to increase in Fiscal Year 2022 and were up 12.93% for existing homes $620,000which is reflected in the growth of assessed valuations for the city of Fontana as it increased by about 7 percent to $25.25 billion for FY2022.

Fontana has competitive advantages related to its neighbors in the Inland Empire as it continues to be the westernmost city with available space to accommodate both residential and industrial development. It offers new residents housing cost advantages and companies locating here can benefit from lower labor costs. Fontana continues to experience a robust level of new housing permits for the last 3 years and, based on the availability of land and redevelopment opportunities, expects that trend to continue over the next decade.

The Ventana Specific Plan is coming to fruition. Planning Area 6 of the Ventana Specific Plan brings a taste of Europe to Fontana.

The project consists of 257 units and will have many recreational amenities including a fitness center, pool area, recreation room, and open plazas. Paseos and walkways will weave through the project to give it an old-world feel. The project is located at the Interstate 15 and Duncan Canyon Road.

The center of San Bernardino County’s growth is moving west into Fontana. The population has grown 7 percent over the past ten years and, at 212,809 Fontana is the second largest city in San Bernardino County, the third largest in the Inland Empire, and twentieth in the State.

With the ever-increasing demand for housing and ongoing addition of new residential units in the City, it is expected that the City’s population will exceed 280,900 by the year 2040.

The City of Fontana continued to see a number of significant events during the past year 0%
1%
2%
3%
4%
5%
70,000
100,000
130,000
160,000
190,000
220,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

GROWTH RATE

POPULATION
Population Growth
iv
538
Significant Events of FY 2021-22
■ Auto Center: Construction has been completed and Fontana Hyundai opened for business at the corner of Sierra Avenue and South Highland Avenue in August 2021. Construction is currently underway on Fontana Chrysler, Dodge, Ram and Jeep, which is expected to be open in early 2023.
■ Energy Services Project (Parks): The city completed the energy services project a $3.6m project that included upgrading and replacing lighting at 30 different parks with new Light Emitting Diode (LED) fixtures. .
■ Central City Park Project: Central City Park was accepted as complete at the beginning of Fiscal Year 2021-2022. Central City Park was opened to the public on May 6, 2021. It is a premier 14.5 Acre sports facility and community gathering place located adjacent to the existing Cypress Community Center and also serves as a trail head to the Pacific Electric Trail. The park includes (3)lighted turf fields, a concession stand/restroom building, horseshoe pits, and an inclusive ADA compliant playground.
■ South Fontana Sports Park: Construction is underway on this 18-acre sports park with four lighted artificial turf fields for football and soccer use. The project will include parking, restroom, snack bar, playground and storage facilities. It’s located on Santa Ana Avenue between Cypress Avenue and
Juniper Avenue. Construction begins March 2022, with an estimated completion date of September 2023
■ 9/11 Memorial Monument: City Council identified funds for the 9/11 memorial monument project. The actual steel beam recovered from the World Trade Center site will be used as a main piece of the monument. The 18’ long beam will be resurrected to its upright position as it once stood at the World Trade Center. The upright position of the beam speaks to resilience, perseverance, and strength against tragedy. The conceptual design has been approved and the detailed design is currently underway. Completion of the v
539
project construction is projected in summer 2023, with a dedication ceremony planned for September 11, 2023.
■ Fire Station #80: The training center (Phase 1) will be approximately 3,300 square feet with a training tower that will be incorporated into a future Fire Station #80 (Phase 2) planned for the same site (Cherry and So. Highland Avenues). Design and environmental phases began in March 2021 with construction expected to commence in 2022. ■ American Rescue Plan Act (ARPA) Grant: To aid the country in the recovery from the government imposed COVID-19 lockdown, the U.S. Treasury issued the $350 billion American Rescue Plan Act (ARPA). The City of Fontana was allocated $50.3 million which includes various spending categories such as: support public health expenditures; address negative economic impacts; serve the hardest-hit communities and families; replace lost public sector revenue; provide premium pay for essential workers; and invest in water, sewer, and broadband infrastructure. The City Council has approved various eligible projects within these categories.
■ Pavement Rehabilitation Program: The program is an ongoing program that targets various areas of the City to repair potholes, sidewalks, curb miles, and gutters.

Challenges Ahead
While the City recovers from the COVID-19 pandemic, there are other challenges that lie ahead. The following is a summary of challenges that the City will face over the next few years.  Inflation. As the economy emerges from COVID-19 and the Russian-Ukrainian Crisis, a combination of the year-over-year growth and various national political decisions have brought about inflation levels not seen in decades. To cool down the record inflation growth the Federal Reserve has announced periodic interest rate hikes that in turn will raise the cost to buy homes.

The affect on Fontana’s housing market remains to be seen but will be watched.  State Budget. The economic fallout from the pandemic happened quickly and hit the economy hard. The pandemic did its worst damage in California in the labor market. Since California’s labor market underperformed the nation in 2020, the expectation is that this will translate into higher job gains for the state’s economy in 2021 and future years. By the end of March 2023, the state unemployment rate was 4.4% which stayed consistent from March 2022 but decreased from 8% in March 2021. The unemployment rate for the U.S. as of March 2023 was 3.5%. California’s state unemployment rate is vi
540
forecasted to be 4.7% this year and increase to 5.2% in 2024 with the slowing of job growth.  California Public Employees Retirement System (CalPERS). At the July 2021 board meeting, CalPERS further reduced the discount rate assumption from 7.0% to 6.8% due to the Funding Risk Mitigation Policy, requiring the reduction of the discount rate in years of high investment returns. CalPERS also adopted new actuarial assumptions which included longer life expectancies and earlier retirement ages. the City’s PERS Rate Stability Reserve has a balance of $10.8 million.  Unfunded Liability. The City’s CalPERS net pension and OPEB liabilities are $120.8 million and $68.9 million, respectively, as of June 30, 2022. The Annual required contribution to fund the City’s retiree health program for both current and future retiree has been calculated to be $2.5 million (excludes implicit subsidy amount). The retiree health program has been closed to new hires since 1990.
 Property Value Reassessments. The annual Consumer Price Index (CPI) adjustment which provides the basis for changes in assessed valuations state-wide continues at the 2% level, although properties that have enjoyed Prop 8 valuation reductions are not subject to this limit.
 Capital Reinvestment Program. Since 1996/1997, the City Council has been investing a portion of the annual General Fund Budget back into the community in the form of capital projects (streets, parks and facilities), with a goal of 10%. A total of $7.20 million from various funds was allocated in the FY 2022-23 Operating Budget to this critical area.  Proposition 218. On November 5, 1996, the California electorate approved Proposition 218 affecting a change to the California State Constitution by making numerous changes to local government finance law. This measure impacts the generation and use of many fundamental revenue sources including fees, charges, assessments, and taxes. This proposition also changes the methods by which certain assessments and taxes are challenged by the electorate. The FY 2022-23 Operating Budget fully complied with the provisions of Proposition 218.  Services and Growth. The City of Fontana has experienced significant growth over the past several years. With this growth comes the need to service a growing community. The funding sources for these additional services are revenue growth and the Municipal Services Fiscal Impact Fee Program (MSFIF).

Financial Information. Management of the City is responsible for establishing and maintaining internal control designed to ensure that the assets of the government are protected from loss, theft, or misuse, and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with U.S. generally accepted accounting principles.

Internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurances recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.

This report consists of management’s representations concerning the finances of the City. As a result, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. Management asserts that, to the best of their knowledge and belief, this financial report is complete and reliable in all material respects. vii
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Budgetary controls. The City maintains budgetary controls, the objective of which is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund, special revenue funds, debt service funds, capital project funds, and all the proprietary funds are included in the annual appropriated budget. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the department level. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbrances generally are re-appropriated as part of the following year’s budget.

Regarding long-term financial planning, as of June 22, 2021, the City Council adopted the City’s first biennial budget for fiscal years 2021-2022 and 2022-2023. Additionally, as a companion to approving the budget plan, a seven-year Capital Improvement Plan was presented to the City Council. The seven-year plan links anticipated expenditures for infrastructure development with community needs and desires and provides a citywide perspective of recommended projects and proposed funding sources. The Capital Improvement Plan was finalized in June 2021 and totaled $806.8 million for the seven-year fiscal period ending June 30, 2028. The seven-year Capital Improvement Plan has been submitted and annually updated, in its present form, since 1991, for effective long-range planning purposes. It is City Management’s belief that these two plans give City Council members an expanded opportunity to set policy and provide direction for implementation, resulting in improved management efficiency and improved financial results.

Debt administration. At June 30, 2022, the City had a number of debt issues outstanding as shown in detail in the notes to the financial statements. The City’s ratios of net bonded debt to assessed valuation and the amount of net general bonded debt per capita are useful indicators of our debt position to management, citizens, and investors.

At June 30, 2022, the City has $53.0 million in authorized, outstanding tax supported general obligation bonds with no authorized but unissued general obligation bonds. This level of general obligation debt is well below the legal limit of $3,604 million, or 15% of assessed valuation.

Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for the fiscal year ended June 30, 2020. This was the twenty-eighth consecutive year that the City has received this award. The Certificate of Achievement is the highest form of recognition in governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government unit and its management. In order to be awarded this certificate, a governmental unit must publish an easily readable and efficiently organized annual comprehensive financial report, with contents that conform to program standards. These reports must satisfy both generally accepted accounting principles and applicable legal requirements. We believe our current Annual Comprehensive Financial Report conforms to the Certificate of Achievement program requirements The Government Finance Officers Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to the City for its Popular Annual Financial Report for the fiscal year ended June 30, 2019. This was the twentieth consecutive year the city has received this award. This is a prestigious national award viii
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ix
543
544
Matthew C. Ballantyne City Manager
Phillip Burum Deputy City Manager / Development Services Ramon Ebert Deputy City Manager / Administrative Services Jennifer Barcenas Innovation & Technology Director
Jeffrey Baughman Director of Building & Safety
Jeffrey Birchfield Fire Chief
Jessica Brown Chief Financial Officer
Michael Dorsey Chief of Police
Gia Kim Public Works Director / City Engineer
Patty Nevins Director of Planning
Daniel Schneider Community Services Director
Rakesha Voss Director of Human Resources & Risk Management Vacant Deputy City Clerk

ELECTED OFFICIALS
(At Date of Issuance)

CITY OF FONTANA

LIST OF PRINCIPAL OFFICIALS

ADMINISTRATIVE STAFF
Janet Koehler-Brooks, City Treasurer
Germaine Key, City Clerk
Acquanetta Warren, Mayor
Phillip Cothran, Council Member
Peter Garcia, Mayor Pro Tem
John B. Roberts, Council Member
Jesus Sandoval, Council Member
X
545
546
Citizens of Fontana
Elected Officials
Mayor
City Council
City Treasurer
City Clerk
City Manager
Matthew C. Ballantyne
City Attorney
Administrative
Services
Ramon Ebert
Deputy City Manager
Police
Michael Dorsey
Police Chief
Development
Services
Phillip Burum
Deputy City Manager
Human Resources
Rakesha Voss
Finance
Jessica Brown
Planning
Patty Nevins
Community Services
Daniel Schneider
Building & Safety
Jeffrey Baughman
Public Works/City Engineer
Gia Kim
Fire Protection
District
Jeffrey Birchfield
Fire Chief
Office of the City Clerk
Vacant
Innovation Technology
Jennifer Barcenas
xi
547
City Council
City of Fontana
Fontana, California
Independent Auditor’s Report
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Fontana (the “City”), as of and for the year ended June 30, 2022, 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 accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information, the Budget to Actual Statement of the General Fund, the Budget to Actual Statement of the Fire Protection Special Revenue Fund, the Budget to Actual Statement of the Housing Authority Low/Mod Housing Fund Special Revenue Fund, and the Budget to Actual Statement of the Economic Stimulus Special Revenue Fund, of the City of Fontana as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the 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.

Emphasis of Matter
As described further in Note 4 to the financial statements, during the year ended June 30, 2022, the City implemented Government Accounting Standard (GASB) No. 87: Lease Accounting. In addition, the financial statements reflect certain prior 1 548
period adjustments as described further in note 19 to the financial statements. Our opinion is not modified with respect to these matters.

Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for one year after the date that the financial statements are issued.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, 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. 2 549
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, Schedule of Changes in Net Pension Liability and Related Ratios During the Measurement Period, Schedule of Pension Plan Contributions, and Schedule of Changes in Total OPEB Liability and Related Ratios during the Measurement Period be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with 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.

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 combining and individual nonmajor fund financial statements and budget to actual schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and budget to actual schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements.

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

Report on Summarized Comparative Information
We have previously audited the City of Fontana’s 2021 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated June 9, 2022. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2021 is consistent, in all material respects, with the audited financial statements from which it has been derived.
3 550
Other Information
Management is responsible for the other information included in the Annual Comprehensive Financial Report. The other information comprises the introductory section and statistical section but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 13, 2023 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of 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.

Irvine, California
July 13, 2023
4 551
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MANAGEMENT’S DISCUSSION AND ANALYSIS
This narrative overview and analysis of the City of Fontana’s financial activities for the fiscal year ended June 30, 2022 is presented by the management of the City of Fontana to readers of the City’s financial statements. Management encourages readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report and the City’s basic financial statements in the financial section of this report.

FINANCIAL HIGHLIGHTS
▪ The City’s governmental and business-type activities resulted in total assets and deferred outflows of resources exceeding its liabilities and deferred inflows of resources by $1,085.5 million as of June 30, 2022 (“current fiscal year”). Of this amount, $272.0 million represents the portion for restricted uses as specified by entities outside of the City government, the amount for unrestricted uses in accordance with finance-related legal requirements as reflected in the City’s fund structure is in a positive position at $84.6 million, and $728.8 million accounts for investments in capital assets in excess of related debt. ▪ The City’s total net position increased $25.0 million during the current fiscal year. The increase is primarily due to the $7.4 million increase in property taxes, $5.3 million in increase in sales tax and $11.8 million increase in charge for services. In addition, our overall expenses decreased compared to FY2021.
▪ As of the fiscal year end, the City’s Governmental Funds ending fund balances were $559.3 million, an increase of approximately $32.1 million or 6.1% from the prior fiscal year. Of this balance, $286.2 million is either nonspendable or restricted for use set by various legal requirements, $10.9 million is committed for PERS rate fluctuations and $262.2 million is either assigned or unassigned based on the nature of the funding source.
▪ The General Fund’s fund balance at the close of the current fiscal year was $124.1 million, an increase of approximately $7.0 million or 6% from the previous year. The General Fund’s fund balance consists of $1.9 million in nonspendable and restricted fund balance, $10.9 million committed for the purposes of PERS rate fluctuations, and $111.3 million in assigned and unassigned fund balances. See page 15 for further discussion.
▪ The City’s business-type activities yielded operating revenues of $27.2 million, while operating expenses amounted to of $24.7 million. ▪ General Fund revenues were $3.6 million more than the final budget, and expenditures were $18.8 million less than the final budget. 6 553

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS
Management’s Discussion and Analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements include three components: government-wide financial statements; fund financial statements; and notes to the basic financial statements.

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

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

The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, community development, community services and engineering. The business-type activities of the City include sewer and water operations. 7 554

Component units are included in the basic financial statements and consist of legally separate entities for which the City is financially accountable and that have the same governing board as the City. The blended component units include the Successor Agency of the Former Fontana Redevelopment Agency, the Fontana Public Financing Authority, the Fontana Public Facilities Financing Authority, the Fontana Housing Authority, the Fontana Industrial Development Authority, the Fontana Community Foundation and the Fontana Fire Protection District. The redevelopment agency was dissolved as of January 31, 2012 through the California Supreme Court decision on Assembly Bill 1X26. See Note 17 of the notes to the financial statements for more information on the dissolution.

The government-wide financial statements can be found on pages 21 and 22 of this report.

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

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year.

Such information may be useful in evaluating the City’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to the governmentwide financial statements in order to facilitate this comparison between governmental funds and governmental activities.

The City maintains 53 individual governmental funds for financial reporting purposes. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the General Fund, the Fire Protection District Special Revenue Fund, the Housing Authority Special Revenue Fund, the Economic Stimulus Special Revenue Fund, the Capital Reinvestment Fund, the Future Capital Projects Fund, the Sewer Expansion Fund, the Community Facility Districts Fund, and the Traffic Mitigation Capital Project Fund, which are considered to be major funds. Data for the other 44 governmental funds are combined in a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the non-major funds supplementary section of this report.

The City adopts an annual appropriated budget for its general fund, special revenue funds, debt service funds, and capital project funds. A budgetary comparison statement has been provided for the General Fund, the Fire Protection District Special Revenue Fund, the Housing Authority Low/Mod Housing Special Revenue Fund, and the Economic Stimulus Special Revenue Fund in the basic financial statements and for the remaining special revenue funds, the debt service funds, and the capital project funds in the supplementary information.

The governmental fund financial statements can be found on pages 23-30 of this report. 8 555

Invested in capital
assets, net of related
debt 67%
Restricted:

Community
development 10%
Restricted: Public
safety 4%
Restricted: Public
works 5%
Restricted: Debt
Service 0%
Restricted:

Government-access
channel 0%
Restricted: Capital
Unrestricted 8% projects 6%
Net Assets by Type
Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Sewer and Water Operations. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions.

The City uses an internal service fund to account for its fleet of vehicles; because this service predominantly benefits governmental rather than business-type functions, it has been included with governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements can be found on pages 31-33 of this report.

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs.

The accounting used for fiduciary funds is much like that used for proprietary funds.

The basic fiduciary fund financial statements can be found on page 34-35 of this report.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 36-92 of this report.

Government-wide Financial Analysis
9 556
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. The City’s net position is comprised of Net Investment in Capital Assets, Restricted Net Position, and Unrestricted Net Position. As of June 30, 2022, assets exceeded liabilities by $1,085.5 million.

The City’s net investment in capital assets (land, buildings, infrastructure, machinery, equipment, and vehicles), less any related debt used to acquire those assets that is still outstanding, is $728.8 million. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City’s net position ($272.0 million) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position $84.6 million may be used to meet the government’s ongoing obligations to citizens and creditors, unrestricted net position is in a positive position at the end of the fiscal year.

Net Position
(000 omitted)
2022 2021 2022 2021 2022 2021
$ 697,543 $ 619,294 $ 31,702 $ 30,845 $ 729,245 $ 650,139 715,583 706,671 59,324 62,117 774,907 768,788
1,413,126 1,325,965 91,026 92,962 1,504,152 1,418,927
44,198 47,290 1,114 1,303 45,312 48,593
278,868 307,057 10,962 14,806 289,830 321,863
101,018 76,865 4,438 3,058 105,456 79,923
379,886 383,922 15,400 17,864 395,286 401,786
66,879 3,748 1,845 133 68,724 3,881
675,179 638,865 53,603 55,533 728,782 694,398
272,038 253,988 - - 272,038 253,988
63,342 92,732 21,292 20,735 84,634 113,467
$ 1,010,559 $ 985,585 $ 74,895 $ 76,268 $ 1,085,454 $ 1,061,853 Net investment in capital assets
Restricted
Unrestricted
Total net position
Deferred outflows of resources
Long-term liabilities outstanding
Other liabilities
Total liabilities
Deferred inflows of resources
Net position:

Total assets
Governmental Activities Business-Type Activities Total
Current and other assets
Capital assets
10 557
Changes in Net Position
(000 omitted)
2022 2021 2022 2021 2022 2021
Revenues:

Program Revenues:

Charges for services $ 73,330 $ 63,006 $ 26,819 $ 25,359 $ 100,149 $ 88,365 Operating grants and contributions 20,860 46,511 - - 20,860 46,511 Capital grants and contributions 27,263 68,782 337 198 27,600 68,980 General Revenues:

Property taxes 84,070 76,703 - - 84,070 76,703
Sales tax 56,727 51,408 - - 56,727 51,408
Franchise taxes 9,749 8,670 - - 9,749 8,670
Business license taxes 7,584 6,677 - - 7,584 6,677
Transient occupancy taxes 1,374 1,132 - - 1,374 1,132
Motor vehicle in lieu 459 156 - - 459 156
Investment earnings (10,525) 4,008 (749) 19 (11,274) 4,027 Other 11,901 9,176 (177) 14 11,724 9,190
Total revenues 282,792 336,229 26,230 25,590 309,022 361,819 Expenses:

General Government 40,459 41,708 - - 40,459 41,708
Public Safety 111,899 111,355 - - 111,899 111,355
Public Works 49,008 50,078 - - 49,008 50,078
Community Development 5,492 38,019 - - 5,492 38,019
Engineering 37,814 24,000 - - 37,814 24,000
Community Services 13,344 13,156 - - 13,344 13,156
Interest on long-term debt 2,134 1,860 112 - 2,246 1,860 Gain/(Loss) on sale of capital assets - - - - - -
Sewer - - 24,542 24,980 24,542 24,980
Water - - - - - -
Total expenses 260,150 280,176 24,654 24,980 284,804 305,156 Change in net position before transfers 22,642 56,053 1,576 610 24,218 56,663 Transfers 2,949 2,644 (2,949) (2,644) - -
Change in net position 25,591 58,697 (1,373) (2,034) 24,218 56,663 Net Position - beginning of year as restated 984,968 926,888 76,268 78,302 1,061,236 1,005,190 Net Position - end of year $ 1,010,559 $ 985,585 $ 74,895 $ 76,268 $ 1,085,454 $ 1,061,853 Governmental Activities Business-Type Activities Total
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Governmental activities
The most significant revenues of the governmental activities are general taxes (56.4%), which include property taxes (29.7%), sales and use taxes (20.1%), and various other taxes (6.6%), and general revenues (0.7%), which include various other revenues (4.4%) and investment earnings (-

3.7%). Program revenues are 42.9% of the total revenues of the governmental activities, which include charges for services (25.9%), operating grants and contributions (7.4%), and capital grants and contributions (9.6%).

Public safety (police and fire) is the most significant (43%) of all governmental activities’ expenses, followed by Public works (18.8%), General government (15.6%), Engineering (14.5%), Community services (5.1%) Community development (2.1%), and interest on long-term debt (0.8%).

Included in these amounts is depreciation expense, which is 14.3% of the total expenses for governmental activities.

Governmental activities revenues decreased by $53.3 million (15.9%) in the current fiscal year. The changes in revenues are a result of the following:
• General tax revenues increased by $14.9 million (10.3%) which is primarily due to increased sales tax revenue ($5.3 million) as a result of recovery from the 2020 pandemic shutdown and high inflation rate. Property tax revenues increased by $7.4 million because of increased assessed valuation. Other taxes increased by $2.2 million. • General revenues (not including general taxes) decreased by $11.35 million (-86.1%), primarily the result of unrealized/realized loss on investment securities due to the Federal Reserve board raising its interest rate.

Property taxes,

29.7%
Sales taxes,

20.1%
Franchise taxes,

3.4%
Business license
taxes, 2.7%
Transient
Occupancy
Taxes, 0.5%
Other, 4.4%
Charges for
services, 25.9%
Operating
contributions
and grants,

7.4% Capital
contributions
and grants,

9.6%

REVENUES BY SOURCE -

GOVERNMENTAL
-
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
Program Revenues
2022 Expenses

EXPENSES AND PROGRAM REVENUES -

GOVERNMENTAL ACTIVITIES
12 559
• Charges for services increased by $10.3 million (16.4%) and this is mostly attributed to 1) an increase of $3.7 million of Community Development revenue related to development activity; 2) an increase of $5.0 million in Engineering; 3) an increase in community services of $2.1 million.
• Operating contributions and grants decreased by $25.7 million due to a one time payout of U.S. Treasury Emergency Rental Assistance Grant of $6.4 million, and other grants related to the pandemic of $5.3 million in FY 2021. • Capital contributions and grants decreased from $68.8 million to $27.3 million primarily due to the decrease in creation of new CFD capital project contributions related to various land development within the city.

Governmental activities expenses decreased by $20 million (7.1%) in the current fiscal year. The most significant changes in governmental expenses were:
• Community development and Engineering expenses decreased by $18.7 million due to one-time capital acquisition under Community facilities development ,The Meadows, in the amount of $6.18 million in FY2021. In addition, this is also attributable to increase in capital expenses in FY2021 on several traffic signals and storm drain projects throughout the City, such as Valley-Oleander Traffic Signal, Etiwanda-Slover Arterial project, and Cypress Strom Drain and other various developments such as Etiwanda Ridge.

Business-type activities
Business-type activities net position decreased by $1.3 million (-1.8%).

Business-type activities revenues for current year is in-line with prior year, showing an increase of $0.6 million. • Investment earnings decreased by $1.0 million as a result of the Federal Reserve Board raising its interest rate as some of our City’s securities were purchased at a lower interest rate.
• Charges for services increased by $1.5 million primarily due to an increase in rates charged by other entities such as IEUA and City of Rialto that are collected by the city and passed through to the proper entities. • Capital contributions increased by $0.1 million due to one-time project reimbursement incurred during the current fiscal year.

Total expenses increased by $0.32 which is in-line with prior year levels. 13 560
Financial Analysis of the City’s Funds
The City of Fontana employs Fund Accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, assigned and unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $559.3 million, an increase of $32.1 million (6.08%) from the previous year. Of this total amount, $262.2 million constitutes assigned or unassigned fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is either nonspendable ($14.1 million), restricted ($272.0 million) or committed ($10.9 million) and is not available for new spending. The nonspendable fund balance consists of 1) land held for resale of $10.0 million, 2) deposits on account of $0.02 million, 3) inventories held ($1.2 million), and 4) loan receivables ($2.9 million). Restricted fund balance includes amounts that are constrained on the use of the resources by outside parties and committed fund balance includes amounts that are constrained on the use of the resources pursuant to City Council formal action. For additional details of the City’s fund balances, please refer to Note 15 in the Notes to the Basic Financial Statements.

Charges for
services
99%
Capital
contributions
and grants
1%

REVENUES BY SOURCE -

BUSINESS-TYPE
-
10,000,000
20,000,000
30,000,000
Sewer Water
Program Revenues
Expenses

EXPENSES AND PROGRAM REVENUES -

BUSINESS-TYPE ACTIVITIES
14 561
The general fund is the chief operating fund of the City. At the end of the current fiscal year, the assigned fund balance of the general fund was $33.9 million, while total fund balance reached $124.1 million, which was $7.0 million or 6.0% higher than the prior year. The City’s management assigns fund balance to a particular function, project or activity and may also be assigned for purposes beyond the current year. However, assigned fund balance is available for appropriation at any time. The General Fund has committed fund balance of $10.9 million for purposes of PERS rate fluctuations.

General fund revenues decreased by $5.7 million (4.1%) from the previous fiscal year; this decrease is primarily due to:
• Intergovernmental revenues decreased by $9.9 million primarily due to the one time payout of U.S. Treasury Emergency Rental Assistance Grant of $6.4 million in FY2021 and other various covid grant • Sales tax revenue increased by $4.9 (9.75%) million due to new signs of a resurgent economy emerge as the city saw sale tax increase from Fuel/Service stations and restaurants/hotels
• Property tax revenue increased by $2.5 million (8.25%) due to increased assessed property valuation. • Investment earnings decreased by $5.8 million due to Federal Reserve Board raising its interest rate as our previous treasury securities were purchased at a lower interest rate.

General fund expenditures increased by $5.3 million (4.1%) from the previous fiscal year, the increased costs were primarily due to:
• Due to the increase in personnel cost under public safety (police) and the return of part-time staff as facilities reopen and programs resume.

The Fire Protection District special revenue fund has a fund balance of $38.5 million. The Fire Protection District accounts for all of the operating activities of the Fire District. The fund balance increased by $17.3 million during the current fiscal year; current year revenues and transfer in were $62.3 million and total expenditures and transfers out were $45.0 million. Revenues increased $3.7 million (7.8%) primarily as a result of property tax valuation increases. Expenditures increased $6.5 million (19.4%) primarily as a result in increased contract costs with the San Bernardino County Fire Department for fire protection services due to inflation. In addition, there was a one-time transfer out of $10.5 million to the fire protection district for the fire station No.81 and fire station No.80.

The Housing Authority special revenue fund has a fund balance of $86.2 million. The fund balance decreased by $1.5 million during the fiscal year.

The decrease is primarily due to the decrease in investment earnings in the amount of $0.6 million due to federal reserve board raising its interest and a restatement of the housing authority due to the revenue being overstated related to one of the loan receivables in the prior year in the amount of $0.7 million.

The Capital Reinvestment fund has a total fund balance of $15.1 million. The fund balance decreased during the current fiscal year by $4.8 million mainly due to the one time purchase of land held for resale property in the amount of $3.0 million during FY2022.

The Future Capital Projects fund has a total fund balance of $42.7 million. The fund balance decreased during the current fiscal year by $2.3 million due to expenditures related to Park Lighting Upgrade project for various parks and ball fields in the City. 15 562

The Sewer Expansion Fund has a total fund balance of $0.36 million. The fund balance decreased slightly during the current fiscal year by $0.8 million due to a decrease in investment earnings in the amount of 0.6 million and an interest allocation adjustment of $0.2 million through transfer.

The Traffic Mitigation capital project fund has a fund balance of $15.4 million. The fund balance increased during the current fiscal year by $7.6 million as a result of circulation impact fees being collected.

Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position of the Sewer and Water Operations at the end of the year amounted to $19.5 million. The total increase in net position was $0.47 million, primarily due to increase in charge for services.

General Fund Budgetary Highlights
Over the course of the year, the City Council revised the City’s budget on a quarterly basis. The Council approves supplemental appropriations throughout the year based on individual items that are brought forward by various departments. The General Fund budgetary comparison statement can be found on page 27 of this report.

Revenues:

During the year, the original General Fund revenue budget was amended to increase revenues by $9.3 million. The increase is primarily due to:
• an increase in sales tax of $1.8 million, as a result of the conservative budget originally adopted due to COVID-19 and the unexpected economic recovery.
• an increase in intergovernmental revenues of $5.0 million associated with the recognition of the State and County COVID-19 Relief Fund. allocation and Coronavirus Emergency Rental Assistance program revenue in FY2022. • an increase in property tax revenue of $0.4 million due to increased assessed property valuation.

General Fund revenues of $135.9 million were $3.6 million more than the final budget. The increase from the adopted budget of $122.9 million was due to the conservative budget originally adopted due to COVID-19 and the unexpected economic recovery. The positive variance to the final budget was primarily due to:
• higher than expected tax revenues ($12.1 million) compared to the final budget, which was increased by $2.72 million from the adopted budget,
• higher than expected charges for services ($1.8 million) compared to the final budget, which was increased by $0.22 million from the adopted budget,
• higher than expected fine and forfeitures ($0.08 million) • lower than expected investment earnings ($5.4 million) • lower than expected licenses and permits revenue ($1.2 million) • lower than expected intergovernmental revenue ($3.8 million) • lower than expected licenses and permits ($0.02 million) 16 563
Expenditures:

During the year, the original General Fund expenditure budget was amended to increase appropriations by $21.45 million, the increase in appropriations was due to various requests throughout the fiscal year such as:
• increase of administrative services admin (personnel cost) in the amount of $5.05 million. • increase of $3.15 million for IT department under other professional services and $1.16 million under hardware for various IT project such as salesforce 311 and CC modernization and computer software. • increase of $0.67 million for various settlement claim.

General Fund expenditures were less than budgeted. Of the total appropriations of $154.2 million, approximately 12.2%, or $18.8 million were unspent. The budgetary savings included Treasury Emergency rental assistance in the amount of $3.0 million, Application cost, operations cost and IT administration cost with the IT department ($6.6 million), Personnel cost in the police department ($1.9 million), $2.1 million services cost in the community development and $3.4 million in HR admin cost and risk management. The aforementioned savings will be carried over to next fiscal year.

Capital Asset and Debt Administration
Capital assets. The City’s investment in capital assets for governmental and business-type activities as of June 30, 2022, amounts to $774.9 million (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, machinery and equipment, vehicles and infrastructure (roads, highways, sewer and storm drain systems). The total change in the City’s investment in capital assets net of accumulated depreciation for the current fiscal year was an increase of $6.1 million (1%). Major capital asset events during the current fiscal year included the following:
• Developer contributions (CFD 90 Summit @ Rosena phase one and CFD 85 the Meadow) related to amounting to $9.3 million were received. • Several big constructions in progress projects such as So Fontana sports park, Fire station#81, helicopter purchase permit system incurred current year cost of $12.4 million, while other small projects in aggregate incurred a total of $11.9 million. • The city also had a onetime purchase of land held for resale property from Rosemead properties in the amount of $3.0 million. • $3.4 million worth of Structure improvements were added such as Jack Bulik Part lighting improvement ($0.55 million), Ralph Lewis Park lighting improvement ($0.56 million), Bill Martin park lighting improvement ($.48 million) and other various small improvement projects. • Various machinery, equipment, vehicles, and easements were added in current year amounting to $4.0 million. • Accumulated depreciation at year-end is $38.8 million higher than prior year. 17 564
Capital Assets
(Net of depreciation)
(000 omitted)
2022 2021 2022 2021 2022 2021
Land $ 161,362 $ 156,533 $ - $ - $ 161,362 $ 156,533
Building and improvements 162,291 155,994 1,106 1,152 163,397 157,146 Machinery and equipment 4,248 5,386 7 11 4,254 5,397
Vehicles 13,968 12,497 - - 13,968 12,497
Infrastructure 313,297 334,570 57,735 60,517 371,032 395,087 Intangibles 2,929 3,001 - - 2,929 3,001
Right to use assets 106 - - 106 -
Construction in progress 52,383 33,694 477 437 52,860 34,131 Easements 4,996 4,996 - - 4,996 4,996
Total $ 715,581 $ 706,671 $ 59,324 $ 62,117 $ 774,905 $ 768,788 Governmental Activities Business-Type Activities Total
Additional information on the City’s capital assets can be found in Note 6 in the footnote disclosure.

Long-term debt. At the end of the current fiscal year, the City’s total long-term debt outstanding is $283.4 million. This amount is comprised of $120.9 million net pension liability, $68.9 million other post-employment benefits liability, $53.0 million of lease revenue bonds which are secured by future revenue sources from the lease of City property and $40.6 million of various other loans and obligations payable. 18 565
Outstanding Debt
(000 omitted)
2022 2021 2022 2021 2022 2021
$ 53,015 $ 36,185 $ - $ - $ 53,015 $ 36,185
118,172 171,768 2,674 5,447 120,847 177,215
20,654 13,983 - - 20,654 13,983
11,099 10,320 242 345 11,341 10,665
66,534 68,947 2,325 2,430 68,859 71,377
2,959 5,854 5,721 6,584 8,679 12,438
Total outstanding debt $ 272,433 $ 307,057 $ 10,962 $ 14,806 $ 283,395 $ 321,863 Other post employment benefits liability
Other debt
Governmental Activities Business-Type Activities Total
Lease revenue bonds
Net pension liability
Claims and judgments
Compensated absences
Additional information on the City’s long-term debt can be found in Note 8 in the footnote disclosure.

Economic Factors and Next Year’s Budget and Rates
In preparing the budget for Fiscal Year 2022-23, management’s goal was to produce an operating budget that adhered to City Council goals and objectives with an emphasis on cost containment. Expansion of the City’s economic base continues to be a City Council priority.

The Operating Budget for Fiscal Year 2022-23 is financially balanced and includes:
- General Fund designation of fund balance for contingencies of 15% of recurring appropriations. - A net increase in budgeted revenues of $3.5 million (or +2.9%) in the General Fund as compared to the prior year’s final budget is primarily attributed to the following:
• An increase in sale tax revenue of $1.1 million reflecting continuing post-pandemic recovery • An increase in property tax revenue of $0.8 million assuming an anticipated growth of 3 percent in assessed valuation • An increase in recreation revenue of $1.1 million projecting facilities and programs will be opened all year - A net increase in budgeted expenditures of $3.6 million or (+3.3%) in the General Fund as compared to the prior year’s final budget is primarily attribute to contractual obligations related to full-time City staff and the return of part-time staff as facilities reopen and programs resume.
19 566
Requests for Information
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City of Fontana’s finances and to show the City’s accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the City’s Finance Department at the City of Fontana, 8353 Sierra Avenue, Fontana, CA 92335.
20 567
Exhibit A
Governmental Business-Type
Activities Activities Total
Assets:

Cash and investments $ 440,652,514 $ 24,205,303 $ 464,857,817 Receivables:

Accounts 3,874,233 1,429,132 5,303,365
Assessments 862,452 - 862,452
Interest 5,097,581 50,683 5,148,264
Loans 82,581,632 4,200,937 86,782,569
Loans to Successor Agency 24,978,218 3,305,829 28,284,047 Allowance for doubtful accounts (358,698) (3,305,829) (3,664,527) Leases 17,689,158 - 17,689,158
Internal balances (1,750,465) 1,750,465 -
Due from other governments 19,959,684 12,903 19,972,587 Inventories 1,346,862 52,372 1,399,234
Deposits 19,200 - 19,200
Land held for resale 10,029,872 - 10,029,872
Restricted assets:

Cash with fiscal agent 92,562,793 - 92,562,793
Capital assets not being depreciated 218,741,384 477,105 219,218,489 Capital assets, net of depreciation 496,839,337 58,847,219 555,686,556 Total assets 1,413,125,757 91,026,119 1,504,151,876
Deferred Outflows of Resources:

Deferred outflows of resources - pension related 31,737,504 678,954 32,416,458 Deferred outflows of resources - OPEB related 12,460,834 435,467 12,896,301 Total deferred outflows of resources 44,198,338 1,114,421 45,312,759 Liabilities:

Accounts payable 16,899,325 3,610,686 20,510,011
Deposits payable 5,095,541 792,169 5,887,710
Interest payable 701,683 35,224 736,907
Due to other governments 24,865,560 - 24,865,560
Unearned revenue 52,796,542 - 52,796,542
Retentions payable 659,454 - 659,454
Noncurrent liabilities:

Due within one year 13,058,614 1,120,383 14,178,997
Due in more than one year
Net pension liability 118,172,369 2,674,376 120,846,745 OPEB liability 66,533,882 2,325,151 68,859,033
Other 81,103,155 4,842,202 85,945,357
Total liabilities 379,886,125 15,400,191 395,286,316
Deferred Inflows of Resources:

Deferred inflows of resources - pension related 40,273,332 1,517,726 41,791,058 Deferred inflows of resources - OPEB related 9,351,250 326,796 9,678,046 Deferred inflows of resources - Leases 17,254,696 - 17,254,696 Total deferred inflows of resources 66,879,278 1,844,522 68,723,800 Net Position:

Net investment in capital assets 675,178,954 53,603,452 728,782,406 Restricted for:

Community development 105,924,398 - 105,924,398
Public safety 44,772,494 - 44,772,494
Public works 57,192,723 - 57,192,723
Debt service 15,368 - 15,368
Government-access channel 1,510,351 - 1,510,351
Capital projects 62,622,768 - 62,622,768
Unrestricted 63,341,636 21,292,375 84,634,011
Total net position 1,010,558,692$ 74,895,827$ 1,085,454,519 $ See accompanying notes to financial statements

CITY OF FONTANA
Statement of Net Position
June 30, 2022
21 568
Exhibit B
Operating Capital
Charges for Contributions Contributions Governmental Business-type Expenses Services and Grants and Grants Total Activities Activities Total General government:

City council and commissions $ 1,200,656 $ - $ - $ - $ - $ (1,200,656) $ - $ (1,200,656) City administration 7,003,932 - - - - (7,003,932) - (7,003,932) Management services 3,838,556 1,208,266 - 54,597 1,262,863 (2,575,693) - (2,575,693) Information technology 12,827,024 - - - - (12,827,024) - (12,827,024) Human resources 15,589,197 6,373,262 - - 6,373,262 (9,215,935) - (9,215,935) Public safety:

Police 70,415,712 1,082,804 7,682,166 - 8,764,970 (61,650,742) - (61,650,742) Fire 41,483,715 916,218 - - 916,218 (40,567,497) - (40,567,497) Public works 49,008,197 22,934,465 4,798,048 1,656,146 29,388,659 (19,619,538) - (19,619,538) Community development 5,492,363 25,431,821 4,593,322 21,704,957 51,730,100 46,237,737 - 46,237,737 Community services 13,344,407 3,181,475 3,580,908 - 6,762,383 (6,582,024) - (6,582,024) Engineering 37,814,087 12,201,965 206,124 3,847,869 16,255,958 (21,558,129) - (21,558,129) Interest on long-term debt 2,132,558 - - - - (2,132,558) - (2,132,558) Total governmental activities 260,150,404 73,330,276 20,860,568 27,263,569 121,454,413 (138,695,991) - (138,695,991) Business-type activities:

Sewer 24,541,611 26,819,169 - 336,864 27,156,033 - 2,614,422 2,614,422 Interest on long-term debt 112,532 - - - - - (112,532) (112,532) Total business-type activities 24,654,143 26,819,169 - 336,864 27,156,033 - 2,501,890 2,501,890 Total functions/programs 284,804,547 $ 100,149,445 $ 20,860,568 $ 27,600,433 $ 148,610,446 $ (138,695,991) 2,501,890 (136,194,101) General revenues:

Taxes:

Property taxes, levied for general purpose 84,070,144 - 84,070,144 Sales taxes 56,726,526 - 56,726,526
Franchise taxes 9,749,087 - 9,749,087
Business license taxes 7,583,660 - 7,583,660
Transient occupancy taxes 1,374,182 - 1,374,182
Total taxes 159,503,599 - 159,503,599
Intergovernmental, unrestricted:

Motor vehicle in lieu 459,175 - 459,175
Investment earnings (10,525,380) (748,794) (11,274,174) Other 11,900,515 (176,562) 11,723,953
Transfers 2,949,200 (2,949,200) -
Total general revenues and transfers 164,287,109 (3,874,556) 160,412,553 Change in net position 25,591,118 (1,372,666) 24,218,452 Net position at beginning of year, as restated 984,967,574 76,268,493 1,061,236,067 Net position at end of year 1,010,558,692 $ 74,895,827 $ 1,085,454,519 $ Governmental activities:

See accompanying notes to financial statements

CITY OF FONTANA
Statement of Activities
Year Ended June 30, 2022
Program Revenues Net (Expense) Revenue and Changes in Net Assets Functions/Programs
22 569
Exhibit C
Fire Future Community Other Total
Protection Housing Economic Capital GovernmentalGovernmental Capital Sewer Facilities Traffic General District Authority Stimulus Reinvestment FundsFunds Projects Expansion Districts Mitigation Assets:

Cash and investments $ 56,667,510 $ 38,228,944 $ 14,893,223 $ 50,356,428 $ 9,890,861 $ 7,689,424 $ 16,840,104 $ 21,461 $ 42,258,220 $ 191,648,713 $ 428,494,888 Receivables:

Accounts 3,610,035 28,755 - - 3,940 - 17,934 - 566 103,026 3,764,256 Assessments - - - - - - - - - 862,452 862,452
Interest 177,025 49,223 3,559,813 - - 19,668 - 65 86,217 1,180,715 5,072,726 Loans - - 71,819,475 - 71,128 - - - - 10,691,029 82,581,632 Loans to Successor Agency 24,978,218 - - - - - - - - - 24,978,218 Allowance for doubtful accounts (207,433) - - - - - - - - (151,265) (358,698) Leases 10,876,556 - - - - - - - - 6,812,602 17,689,158
Deposits 7,877 - - - - - - - - 11,323 19,200
Due from other funds 10,688,518 - - - - - - - - 1,177 10,689,695 Due from other governments 10,595,299 333,503 - - - - - - - 9,030,882 19,959,684 Inventories 375,878 - - - - - - - - 868,948 1,244,826
Land held for resale - - - - 5,650,178 4,379,694 - - - - 10,029,872 Advances to other funds - - - - - 30,703,911 - - - - 30,703,911 Restricted assets:

Cash with fiscal agent 31,698,881 2,933 177,835 - - - - 38,618,065 - 22,065,079 92,562,793 Total assets $ 149,468,364 38,643,358 90,450,346 50,356,428 15,616,107 42,792,697 16,858,038 38,639,591 42,345,003 243,124,681 728,294,613 Liabilities, Deferred Inflows and Fund Balances:

Liabilities:

Accounts payable $ 7,399,606 151,520$ 12,794$ 241,466$ 468,044$ (21,213)$ -$ 704,260$ 205,328$ 6,734,613$ 15,896,418$ Deposits payable 5,090,294 - 5,247 - - - - - - - 5,095,541 Retentions payable - - - - 61 142,411 - 206,447 3,936 306,599 659,454 Due to other funds 1,177 - - - - - 7,471,787 10,689,6953,216,731 - Due to other governments 967 - - - - - 16,494,821 - - 8,369,772 24,865,560 Unearned revenue - - - 49,999,562 - - - - - 2,796,980 52,796,542 Advances from other funds - - - - - - - - 26,691,542 4,012,369 30,703,911 Total liabilities 12,492,044 151,520 18,041 50,241,028 468,105 121,198 16,494,821 8,382,494 26,900,806 25,437,064 140,707,121 Deferred inflows of resources:

Unavailable revenues 2,323,515 28,055 4,272,360 - 3,940 - - - - 4,392,160 11,020,030 Leases 10,591,369 - - - - - - - - 6,663,327 17,254,696
Total deferred inflows of resources 12,914,884 28,055 4,272,360 - 3,940 - - - - 11,055,487 28,274,726 Fund balances:

Nonspendable 383,755 - - - 5,650,178 4,379,694 - - - 3,736,208 14,149,835 Restricted 1,510,351 38,463,783 86,159,945 115,400 - - - 30,257,097 15,444,197 100,087,328 272,038,101 Committed 10,886,393 - - - - - - - - - 10,886,393
Assigned 33,944,406 - - - 9,493,884 38,291,805 363,217 - - 104,408,453 186,501,765 Unassigned 77,336,531 - - - - - - - - (1,599,859) 75,736,672 Total fund balances 124,061,436 38,463,783 86,159,945 115,400 15,144,062 42,671,499 363,217 30,257,097 15,444,197 206,632,130 559,312,766 Total liabilities, deferred inflows of
resources and fund balances $ 149,468,364 728,294,613 $243,124,681 $ 38,643,358 $ 90,450,346 $ 50,356,428 $ 15,616,107 $ 42,792,697 $ 16,858,038 $ 38,639,591 $ 42,345,003 $ See accompanying notes to financial statements

CITY OF FONTANA
Balance Sheet
Governmental Funds
June 30, 2022
Special Revenue Capital Project
23 570
Exhibit D
Fund balances of governmental funds 559,312,766 $
Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets, net of depreciation, have not been included as financial resources in governmental fund activity. 707,168,370 Deferred outflows are not an available resources and, therefore, are not reported in the funds. 44,198,338 Long-term liabilities, including net pension liability, OPEB liability and compensated absences, are not due and payable in the current period and, therefore, is not recognized in the funds. (278,868,020) Accrued interest payable from the current portion of interest due on long-term debt has not been reported in the governmental funds. (701,683) Deferred inflows represent an acquisition of net position that applies to a future period so it will not be recognized until that time. (49,624,582) An Internal Service Fund is used by management to charge the costs of fleet management to individual funds. The assets and liabilities of the Internal Service Fund must be added to the Statement of Net Position. 18,053,473 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 11,020,030 Net position of governmental activities $ 1,010,558,692 See accompanying notes to financial statements

CITY OF FONTANA
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2022
24 571
Exhibit E
Fire Future Community Other
Protection Housing Economic Capital Capital Sewer Facility Traffic Governmental General District Authority Stimulus Reinvestment Projects Expansion Districts Mitigation Funds Totals Revenues:

Taxes $ 108,183,439 $ 50,763,828 $ - $ - $ - $ - $ - $ - $ - $ 570,081 $ 159,517,348 Licenses and permits 7,218,687 940,074 - - - - - - - 10,638,481 18,797,242 Intergovernmental 2,780,614 - - 257,551 - - - - 612,115 26,008,991 29,659,271 Charges for services 15,407,066 - - - - - - - 9,443,829 6,287,394 31,138,289 Fines and forfeitures 696,245 - - - - - - - - 79,154 775,399 Special assessments - - - - - - - - - 18,389,887 18,389,887 Investment earnings (loss) (1,966,368) (1,155,615) (413,973) 98,202 (311,993) (240,539) (526,718) 35,425 (1,309,715) (5,775,075) (11,566,369) Contribution from property owners - - - - - - - 21,704,957 - - 21,704,957 Contribution from other governments 400,300 - - - - - - - - - 400,300 Other revenue 3,132,185 2,000 127,958 - 61,820 - - - - 6,570,857 9,894,820 Total revenues 135,852,168 50,550,287 (286,015) 355,753 (240,539) (526,718) (250,173) 8,746,229 62,769,770 278,711,144 21,740,382 Expenditures:

Current:

General government:

City council and commissions 1,194,130 - - - - - - - - - 1,194,130 City administration 5,628,870 - - - - - - - - 373,806 6,002,676 Management services 3,373,760 - 536,475 250,351 381 - - - - 4,103,190 8,264,157 Information technology 8,691,404 - - - 4,555,364 - - - - 3,208 13,249,976 Human resources 9,160,752 - - - - - - - - 4,806 9,165,558 Public safety:

Police 70,200,864 - - - - - - - - 3,962,949 74,163,813
Fire - 39,440,940 - - - - - - - 1,733,419 41,174,359
Public works 14,807,433 - - - 6,018,724 1,595,098 - 4,634,322 - 27,716,051 54,771,628 Community development 6,997,587 - - - - - - - - 89,182 7,086,769 Community services 11,414,027 - - - - - - - - 3,421,447 14,835,474 Engineering 3,925,533 - - 7,200 1,400 - - 17,868,715 817,447 14,790,605 37,410,900 Debt Service:

Principal 2,474 - - - - - - - - 1,300,000 1,302,474
Interest 192 439,375 - - - - - - - 1,607,799 2,047,366
Issuance costs - - - - - - - - - 477,600 477,600
- - - - - - - - 5,089,012 5,089,012 -
Total expenditures 135,397,026 39,880,315 536,475 257,551 10,575,869 1,595,098 - 22,503,037 817,447 64,673,074 276,235,892 Excess (deficiency) of revenues
over (under) expenditures 455,142 10,669,972 (822,490) 98,202 (10,826,042) (1,835,637) (526,718) (762,655) 7,928,782 (1,903,304) 2,475,252 Other Financing Sources (Uses):
15,945,288 11,774,100 - - 6,201,797 - 2,628 - - 18,422,051 52,345,864 (9,555,877) (5,187,800) (47,600) - (283,529) (453,400) (260,815) - (181,500) (33,546,673) (49,517,194) - - - - - - - - - 23,125,000 23,125,000
Premium (discount) on bonds issued - - - - - - - - - 3,920,250 3,920,250 Leases 108,141 - - - - - - - - - 108,141
Sale of capital assets 52,830 - - - 156,944 - - - - - 209,774 Total other financing sources (uses) 6,550,382 6,586,300 (47,600) - 6,075,212 (453,400) (258,187) - (181,500) 11,920,628 30,191,835 Net change in fund balances 7,005,524 17,256,272 (870,090) 98,202 (4,750,830) (2,289,037) (784,905) (762,655) 7,747,282 10,017,324 32,667,087 Fund Balances:

Beginning of fiscal year, as restated 117,055,912 21,207,511 87,030,035 17,198 19,894,892 44,960,536 1,148,122 31,019,752 7,696,915 196,614,806 526,645,679 End of fiscal year $ 124,061,436 $ 38,463,783 $ 86,159,945 $ 115,400 $ 15,144,062 $ 42,671,499 $ 363,217 $ 30,257,097 $ 15,444,197 $ 206,632,130 $ 559,312,766 See accompanying notes to financial statements
Payment to refunded bond escrow agent

CITY OF FONTANA
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Year Ended June 30, 2022
Special Revenue Capital Projects
Transfers in
Transfers out
Proceeds of refunding bonds
25 572
Exhibit F
Net change in fund balances - total governmental funds 32,667,087 $ Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlay as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over 45,034,976 their estimated useful lives as depreciation expense. This is the amount of capital assets recorded in the current period.

In the Statement of Activities, only the gain/loss on the sale of capital assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net position differs from the change in fund balance by the cost of the capital assets sold. (83,855) Depreciation expense on capital assets is reported in the Statement of Activities, but they do not require the use of current financial resources. (36,650,025) Therefore, depreciation expense is not reported as expenditures in governmental funds.

Revenues in the Statement of Activities that do not provide current financial resources are not reported as unavailable revenues in the funds. 3,451,416 The issuance of long-term debt provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond principal is an expenditure in governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. (20,262,306) The recognition of lease payables and the net change in lease payables are not recognized in the funds (106,709) Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures (7,535,125) in governmental funds.

The Internal Service Fund is used by management to charge the costs of fleet management to individual funds. The net gain of the Internal Service 2,035,678 Fund is reported with governmental activities.

Adjustments made to the OPEB liability do not use current financial resources and, therefore, are not recognized in the funds. (786,699) Adjustments made to the Net Pension Liability do not use current financial resources and, therefore, are not recognized in the funds. 7,826,680 Change in net position of governmental activities $ 25,591,118 See accompanying notes to financial statements

CITY OF FONTANA
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended June 30, 2022
26 573
Exhibit G

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Fontana City CouncilJuly 25, 2023

Fontana City Council
July 25, 2023