Fountain Valley City Council
June 21, 2022

PUBLIC WORKS
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
Operating Expense
Internal Service Charges
Salaries & Benefits
Engineering
Traffic
Engineering
Construction
Inspection Street Lighting Rights of Ways
Tree Maintenance
Park Maintenance
Concrete
Maintenance
Pavement
Maintenance
Storm Drain
Maintenance
Traffic Control
Street Sweeping
Recreation Center
Graffiti Removal
Pollution
Reduction
Government
Buildings (ISF)
Fleet
Management (ISF)
Sewer Fund
Water Fund
98

PUBLIC WORKS
FY19/20
Actual
FY20/21
Actual
FY21/22
Revised
FY22/23
Proposed FTE Change

STAFFING
Director of Public Works 1.0 1.0 1.0 1.0 0.0
Administrative Assist./ Secretary 1.0 1.0 1.0 1.0 0.0
Deputy Director of PW/ City Engineer 1.0 1.0 1.0 1.0 0.0 Management Aide 1.0 1.0 1.0 2.0 1.0
Environmental Services Administrator 1.0 1.0 1.0 1.0 0.0 Engineering Associate 2.0 2.0 2.0 2.0 0.0
Assistant Engineer 0.0 0.0 0.0 1.0 1.0
Engineering Techn III 2.0 2.0 2.0 2.0 0.0
Public Works Inspector 1.0 1.0 1.0 1.0 0.0
Field Services Manager 1.0 1.0 1.0 1.0 0.0
Administrative Specialist 1.0 1.0 1.0 1.0 0.0
Management Analyst 1.0 1.0 1.0 0.0 -1.0
SR. Management Analyst 0.0 0.0 0.0 1.0 1.0
Internal Services Supervisor 1.0 1.0 1.0 1.0 0.0
Public Services Supervisor 1.0 1.0 1.0 1.0 0.0
Landscape Inspector 1.0 1.0 1.0 1.0 0.0
Foreman 4.0 4.0 4.0 3.0 -1.0
Landscape Inspector 0.0 0.0 0.0 1.0 1.0
Equipment Operator I & II 1.0 1.0 1.0 1.0 0.0
Irrigation Technician 2.0 2.0 2.0 2.0 0.0
Maintenance Worker II 11.0 11.0 11.0 11.0 0.0
Mechanic 3.0 3.0 3.0 3.0 0.0
Water Supervisor 2.0 2.0 2.0 2.0 0.0
Foreman 1.0 1.0 1.0 1.0 0.0
Water Quality Technician 1.0 1.0 1.0 1.0 0.0
Equipment Operator Non-Certified 1.0 1.0 1.0 1.0 0.0
Water Systems Operator 3.0 3.0 3.0 2.0 -1.0
Water Foreman 0.0 0.0 0.0 1.0 1.0
Maintenance Worker II 8.0 8.0 8.0 8.0 0.0
Maintenance Worker II Non-Certified 1.0 1.0 1.0 1.0 0.0 Sewer/ Storm Drain Supervisor 1.0 1.0 1.0 1.0 0.0
Equipment Operator- Storm Drains 1.0 1.0 1.0 1.0 0.0
Equipment Operator- Sewer 1.0 1.0 1.0 1.0 0.0
Maintenance Worker II- Sewers/ Storm 2.0 2.0 2.0 2.0 0.0

59.0 59.0 59.0 61.0 2.0

SIGNIFICANT CHANGES
99

RECREATION & COMMUNITY SERVICES
Mission Statement
The Fountain Valley Recreation and Community Services Department, in collaboration with our community partners, enriches lives by providing quality programs, human services and recreational opportunities that create positive and memorable experiences.

Organizational Chart
Recreation & Community Services
Director
Recreation Services
Sports Park
Contract Classes
Youth & Adult Sports
Facility Reservations
Field/Tournament
Scheduling
Park Patrol
Community Services
Community
Partnerships
Annual Community
Events
Community Foundation
Advisory Committee for
Persons with
Disabilities
Human & Senior Services
Art Programs
Facility Rentals
Senior Transportation
& Social Services
Senior Special Events
& Programs
Fitness Center, Classes
& Seminars
100

The Recreation & Community Services Department facilitates community enrichment by providing quality programs, services, and recreation opportunities that create positive and memorable experiences. The Department heightens the quality of life and sense of place for Fountain Valley residents and the greater
community by organizing and implementing
more than 18 major community events while
also promoting health and wellness through
a variety of athletic leagues and programs. In
addition to physical benefits, the Recreation
and Community Services Department fosters
human development with its summer
programs and camps, Arts programs, Human
and Senior Services, and recreational
opportunities.

The Department operates the City of
Fountain Valley Recreation Center and Sports
Park and The Center at Founders Village
Senior and Community Center. These
facilities service more than 400,000 visitors annually, support economic, and community development by hosting regional and national community events and athletic tournaments.

In Fiscal Year 2021/22, the Community Services Department has amended its focus and delivery models in an effort to provide the community with the events and programs they were accustomed to in past years. With an unwavering commitment to quality of life, staff have worked to develop and deliver programs which provide much needed social, emotional, and recreational opportunities.

FY 2021-22 ACCOMPLISHMENTS
Hosted the first major special event in California after the CDPH and OCHCA provided updated health guidelines. The event, Summerfest, was extremely well attended and appreciated by the community!
Collaborated with FVPD to contract with City Net to provide housing assistance for persons experiencing homelessness in our community
Provided the community a comprehensive sponsorship opportunity in collaboration with the Fountain Valley Community Foundation (FVCF) promoting progressive collaborations between public, private and nonprofit organizations.

With support from the Recreation Center Interior Committee, collaborated with the Public Works Department to renovate the interior of the Recreation Center to enhance facility accessibility and “rentability”.
101

implemented a temporary (no fee)
park permit program to support
businesses and organizations
affected by the State and Local
health occupancy guidelines.

Received grant appropriation from
Prop. 68, State of California Office
of Grants and Local Services
(OGALS).

Provided online and hybrid
programming for annual contract
classes, camps and senior groups.

Collaborated with OC Meals on Wheels to provide 1000’s of meals every week to food insecure seniors.

Implemented a Park Patrol program to support and educate the community related to local and state health guidelines. Staff visits each Fountain Valley park weekly to assist FVPD and other internal departments in responding to community inquires, and support calls.

Maintained professional collaborations with Fountain Valley Regional Hospital, Orange Coast Memorial Medical Center, and other local health care agencies to provide educational and health related services and education to the senior community.

Provided affordable transportation to seniors living in Fountain Valley who have limited or no access to other transportation.

Implemented a new Senior Social Services program through a collaborative partnership with Fresh Beginnings Ministries in response to the COVID-19 pandemic.

Provided the community with a complete annual events program 102

FY 2022-2023 Goals
Continue to explore public/private partnerships to expand the recreational portfolio of the City of Fountain Valley.

Finalize funding in collaboration with Prop 68 grant opportunities to build the City’s first All Abilities Inclusive Playground at the FV Sports Park.

Work with the County of Orange and OC Parks to assist, when applicable, in regards to the Mile Square Regional Park Expansion Project.

Continue to facilitate a professional relationship with the Fountain Valley Community Foundation through collaboration on select special events, class scholarships and as a Board of Directors representative. - Annually
Provide to the community a wide variety of Recreational and Human Service programs/classes for all ages. - Annually
Continue to collaborate with local hospitals and medical centers to provide educational and health related programs to our senior community. - Annually Implement the new rental program for the Recreation and Community Centers focused on community accessibility and flexible use for the community.

Complete renovation of the Recreation Center Interior.
103

FY19/20
Actual
FY20/21
Actual
FY21/22
Revised
FY 22/23
Proposed
Percent
Change

EXPENSES BY DEPARTMENT
Salaries & Benefits $ 1,271,606 $ 962,448 $ 1,385,343 $ 1,449,732 5% Internal Service Charges $ 925,754 $ 877,988 $ 1,016,268 $ 1,295,499 27% Operating Expense $ 213,743 $ 163,058 $ 367,255 $ 380,410 4% Total Expenses by Department $ 2,411,103 $ 2,003,494 $ 2,768,866 $ 3,125,641 13%

EXPENSES BY DIVISION
Athletics
Salaries & Benefits $ 134,489 $ 128,882 $ 174,988 $ 153,150 -12% Internal Service Charges $ 171,840 $ 164,988 $ 199,087 $ 254,908 28% Operating Expense $ 20,044 $ 12,063 $ 55,115 $ 55,960 2% Total Athletics $ 326,373 $ 305,933 $ 429,190 $ 464,018 8% Field Operations
Salaries & Benefits $ 139,166 $ 126,296 $ 165,695 $ 173,892 5% Internal Service Charges $ 88,779 $ 83,416 $ 99,632 $ 125,935 26% Operating Expense $ - $ 698 $ 1,500 $ 12,000 700%
Total Field Operations $ 227,945 $ 210,410 $ 266,827 $ 311,827 17% Annual Festivals
Salaries & Benefits $ 21,244 $ 11,978 $ 33,450 $ 28,570 -15% Internal Service Charges $ - $ - $ - $ 2,764 100%
Operating Expense $ 9,731 $ 57,101 $ 50,000 $ 50,000 0% Total Annual Festivals $ 30,975 $ 69,079 $ 83,450 $ 81,334 -3% Park Patrol
Park Patrol- New Program in FY21/22
Salaries & Benefits $ 59,342 $ 12,996 $ 87,159 $ 74,936 -14% Internal Service Charges $ 32,105 $ 29,694 $ 29,820 $ 35,207 18% Operating Expense $ 1,030 $ 635 $ 2,250 $ 4,450 98%
Total Park Patrol $ 92,477 $ 43,325 $ 119,229 $ 114,593 -4% Aquatics- Program Eliminated in FY21/22
Salaries & Benefits $ 59,342 $ - $ - $ - 0%
Internal Service Charges $ 32,106 $ - $ - $ - 0%
Operating Expense $ 13,576 $ - $ - $ - 0%
Total Aquatics $ 105,024 $ - $ - $ - 0%
Recreation & Tennis Center
Salaries & Benefits $ 181,795 $ 191,506 $ 217,671 $ 273,362 26% Internal Service Charges $ 209,026 $ 228,303 $ 240,019 $ 306,714 28% Operating Expense $ 4,425 $ 7,427 $ 13,850 $ 18,350 32% Total Recreation & Tennis Ctr $ 395,246 $ 427,236 $ 471,540 $ 598,426 27%

RECREATION & COMMUNITY SERVICES
104

RECREATION & COMMUNITY SERVICES
Community & Senior Center
Salaries & Benefits $ 268,706 $ 253,768 $ 376,309 $ 408,123 8% Internal Service Charges $ 210,170 $ 198,778 $ 236,440 $ 301,122 27% Operating Expense $ 6,831 $ 10,943 $ 14,250 $ 15,700 10% Total Community & Senior Ctr $ 485,707 $ 463,489 $ 626,999 $ 724,945 16% Contract Classes
Salaries & Benefits $ 291,787 $ 133,338 $ 169,124 $ 168,893 0% Internal Service Charges $ 87,524 $ 83,445 $ 101,841 $ 129,497 27% Operating Expense $ 32,300 $ 21,904 $ 49,040 $ 57,200 17% Total Contract Classes $ 411,611 $ 238,687 $ 320,005 $ 355,590 11% Special Events
Salaries & Benefits $ 96,689 $ 85,968 $ 135,998 $ 141,811 4% Internal Service Charges $ 94,204 $ 89,364 $ 109,429 $ 139,352 27% Operating Expense $ 43,984 $ 18,745 $ 78,750 $ 63,250 -20% Total Special Events $ 234,877 $ 194,077 $ 324,177 $ 344,413 6% Senior Transportation
Salaries & Benefits $ 19,046 $ 17,716 $ 24,949 $ 26,995 8% Internal Service Charges $ - $ - $ - $ - 0%
Operating Expense $ 81,822 $ 33,542 $ 102,500 $ 103,500 1% Total Senior Transportation $ 100,868 $ 51,258 $ 127,449 $ 130,495 2% Total General Fund $ 2,411,103 $ 2,003,494 $ 2,768,866 $ 3,125,641 13% 105

RECREATION & COMMUNITY SERVICES
FY19/20
Actual
FY20/21
Actual
FY21/22
Revised
FY22/23
Proposed FTE Change

STAFFING
Community Services Director 1.0 1.0 1.0 1.0 0.0
Community Services Manager 2.0 2.0 2.0 2.0 0.0
Community Services Supervisor 1.0 1.0 2.0 2.0 0.0
Recreation Coordinator 2.0 2.0 1.0 1.0 0.0

6.0 6.0 6.0 6.0 0.0

SIGNIFICANT CHANGES
Athletics
Field
Operations
Annual
Festivals
Park Patrol
Recreation &
Tennis Center
Community
& Senior
Center
Contract
Classes
Special
Events
Senior
Transportation
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
Operating Expense
Internal Service Charges
Salaries & Benefits
106

CAPITAL IMPROVEMENT PROGRAM
The Capital Improvement Program (CIP) identifies major public improvements to the City’s infrastructure over the next ten years and includes new projects, upgrades to existing facilities as well as rehabilitation of streets and roadways. Projects included in the CIP reflect Strategic Plan Goals adopted by the City Council including: Maintain the culture and environment of “A Nice Place to Live”, Attract and retain revenue producing businesses, and Achieve fiscal stability in accordance with the 20-Year Financial Plan.

Each year as part of the budget process, the CIP is reviewed and updated to ensure the City’s priorities and needs have not changed from the prior year, and to confirm there is sufficient revenue to support the projects planned.

Funding for capital projects is appropriated within the current fiscal year budget. For any multi-year projects that are not completed at fiscal year-end, a continuing
appropriation for the unspent balance will be carried over into the following year’s budget. In general, the CIP
b udget provides funding for infrastructure construction and rehabilitation, while the operating budget and other special funds provide funding for routine infrastructure maintenance.

Capital projects planned for FY 202 are outlined in detail in the following pages.

In addition to capital projects identified in the Capital Improvement Program, all city assets related to government buildings; equipment, tools, office furniture; information technology; and rolling fleet are listed in a ten-year replacement or maintenance schedule utilizing Internal Service Funds for each asset category. An annual review and update of the City’s needs has been completed and the Fiscal Year 202 budget includes funding for those capital replacement items that need to be purchased.

The Fiscal Year 2 budget continues to carry out the ten-year replacement program. includes FD cardiac monitors, ballistic vests, turn-out gear, 800 MHz radio replacement, a concrete saw, and other smaller items citywide. Included in will be the regular change out of older computer workstations, printers; and iPads for fire personnel. will replace several trucks, four police cars, two police motorcycles, an aerial truck, and other related equipment. rehabilitation includes roofing repairs at the corporate yard, upgrades to the telephone and alarm systems, and painting. 107

CITY OF FOUNTAIN VALLEY

RESPONSIBLE SPENDING PLEDGE
The City of Fountain Valley’s mission is to deliver cost-effective quality public services to provide a safe and desirable community that enriches its residents and businesses.

The City goals are to:

Enhance economic development
Achieve financial stability
Attract, develop and retain quality staff within financial constraints Maintain and enhance infrastructure and facilities
Enhance community outreach and engagement
The Pledge: The City of Fountain Valley is committed to sound financial policies that maximize the highest level of City services for the people of Fountain Valley. The City Council recognizes the need to protect the City’s assets and to ensure long-term financial sustainability.

The City of Fountain Valley, like many cities in California, is experiencing significant financial challenges.

This is due to the continued state revenue take-away; dissolution of redevelopment and increased costs which are out of the City’s control. The City has taken significant steps to cut costs including permanent staff reductions, reduced benefits, employee pickup of costs, and contracting out services. The City of Fountain Valley is a built out bedroom community, which has limited ability to generate significant new revenues, to cover the cost of a growing structural budget deficit. This has impacted City services.

Therefore, in the event there are any significant increases in the City of Fountain Valley’s revenues, we believe that the majority of this money should be used to maintain:

Essential City services including public safety / 911 emergency response; Keep Fire Station 2 open and maintain firefighter / paramedics; Police Station and Police officers; restore anti-gang / drug programs; Senior and youth programs;
Streets / sidewalks / roadways and repair storm water systems Parks and play equipment; and
Provide other essential City services.

We also believe, that whenever additional revenue gains are realized, City leadership should seek opportunities to:

Pay off, pay down, consolidate or refinance the City’s outstanding debt; Pay down unfunded liabilities; and
Rebuild and maintain the City’s established reserves levels. (Such reserve policies have been adopted to protect the residents of Fountain Valley in the event of a natural disaster or severe economic downturn and for working cash flow and to fund “pay-go” capital projects.) Finally, the City Council believes this pledge is a clear guide to helping keep Fountain Valley a “Nice Place to Live”. Adopted by the City Council on October 18, 2016. Ayes: Nagel, Vo, Collins, Brothers Noes: McCurdy 118

FINANCIAL POLICIES
One of the chief responsibilities of the City of Fountain Valley to its residents is the care of public funds. These budget and financial management policies are designed to ensure the fiscal stability of the City of Fountain Valley and guide the development and administration of the annual operating and capital improvement budgets through wise and prudent management of municipal finances, while providing for the adequate funding of the services desired by the public and the maintenance of public facilities.

Objectives
The City’s financial objectives address revenues, cash management, expenditures, debt and risk management, capital needs, budgeting and management. Specific objectives are:

To protect the policy-making ability of the City Council by ensuring important policy decisions are not dictated by financial problems or emergencies.

To assist City management by providing accurate and timely information on financial conditions.

To provide sound principles to guide the fiscal decisions of the City Council and City management.

To provide essential public and capital facilities and prevent their deterioration.

To set forth operational principles that minimize the cost of government and financial risk, to the extent consistent with services desired by the public.

To enhance the policy-making ability of the City Council by providing accurate information on program costs.

To employ revenue policies that seek to prevent undue or unbalanced reliance on one or a relatively few revenue sources; and,
To implement a system of internal controls that ensures the legal and appropriate use of all City funds.

LONG RANGE FINANCIAL PLANNING POLICIES
The City’s fiscal policy is guided by the 20-Year Financial Plan, which is a comprehensive plan that encompasses the long-term operating and capital needs of the General Fund. The long-term goal is to achieve fiscal sustainability with a balanced operating budget when Measure HH sunsets in 2037. In 2037/38, the City strives to be debt free with the City’s unfunded actuarial pension liability (UAL), Pension Obligation Bonds and Lease Revenue Bonds completely paid off.

The twenty-year forecast is updated during the budget preparation process as well as in the Fall after preliminary fiscal year-end figures are calculated. Incorporating the budget, all known information and assumptions for growth into the twenty-year plan shows an annual operating surplus of approximately $ when Measure HH sunsets in 2037. This surplus will be maintained through active management of expenses, new revenue sources from economic development, and consistent action to pay down debt. Due to Measure HH and strong fiscal stewardship, the City is on a solid path towards long-term fiscal sustainability. 119

FINANCIAL POLICIES

BUDGET POLICIES
The City develops an annual Operating Budget which:

Establishes budgets for all funds of the City
Is balanced as to resources and appropriations
Does not exceed state constitutional limits
Is adopted prior to the beginning of the fiscal year in which they are to take effect Allows adjustments to the budget with proper approvals
Utilizes encumbrances of appropriations as a budgetary control technique Is adopted by resolution of the City Council
Exercises budget controls at the department level
Balanced Budget
The City Manager will present a balanced budget for adoption by the City Council prior to the beginning of the fiscal year. A balanced budget is defined as operating revenues equal to or greater than operating expenditures, including any debt service obligations. In some years, it is allowable for total expenditures to exceed revenues with the difference supported by fund balance, if necessary to fund capital improvements projects or other one-time, non-recurring expenditures.

Budget Process & Calendar
The City of Fountain Valley
operates on a fiscal year basis,
starting July 1 and ending June

30. The budget is prepared by
the Finance Department with the
support of each operating
department under the direct
supervision of the City Manager.

The Finance Department is
responsible for coordinating all
revenue estimates contained in
the budget. Estimates are
reached by analyzing revenue
history; national and local
economic trends and indices; and
development patterns in our
local economy. Revenue projections used in the context of the annual budget are based on conservative assumptions to assure the City has adequate financial resources to meet its Departments begin
preparing their indiviual
budgets
February
Finance finalizes revenue
projections, internal
service charges and
personnel expenses
April
Finance and Public
Works finalize Capital
Improvement Plan
City Manager presents
Proposed FY2021/22 Budget
to Public and City Council
May
Budget Approval
City Council
May
Fiscal Year Begins
July 1
120

FINANCIAL POLICIES
obligations and complete all programs approved by the City Council within the course of the fiscal year. When appropriate, these assumptions and specific program allocations are adjusted during the fiscal year.

The Finance Department coordinates the development of the expenditure and internal service budgets with the support of each operating department and the City Manager.

The proposed budget is then presented to the City Council and the community in public workshop meetings in May and June for review, public input, and deliberation. After providing opportunities for public review and discussion at City Council workshops and City Council meetings, the budget is adopted by the City Council prior to June 30 at either a regular or special City Council meeting.

After adoption, the budget may be amended by the City Council.

Budget Structure:

The General Fund budget, typically referred to as the operating budget, is the City’s annual fiscal blueprint. The General Fund is a guide for the receipt and disbursement of funds used to provide daily, routine public services to the community. The General Fund outlines the many municipal services, programs and projects provided by the City during the fiscal year..

Special Funds are used to account for revenues and expenditures that are restricted by law or set aside for a special purpose. Each fund can be classified into one of six categories: Committed or Assigned General Fund Reserve, Special (Restricted), Capital Project, Debt Service, Enterprise, Internal Service, or Trust and Agency Funds.

The Capital Improvement Program (CIP) budget details the acquisition, construction or rehabilitation of major capital facilities and infrastructure within the current fiscal year. The CIP budget is used to account for the receipt and disbursement of funds for specific CIP projects. For many projects, revenue resources and expenditures may extend over several years and continuing appropriations will be a part of the annual budget to track multi-year capital projects. In addition, the City will update the ten-year Capital Improvement Plan each budget year. However, the adoption of the plan does not authorize the funding for projects beyond the current fiscal year.

Budget Administration
The Council may amend or supplement the budget at any time after its adoption by majority vote of the Council members. The City Manager has the authority to make administrative adjustments to the budget as long as those changes will not have a significant policy impact nor affect authorized year-end fund balances.

Each operating department will be responsible for the bottom-line budget within each department/ fund. In addition, each department will insure that adequate funds are available within each expenditure line item before a purchase is made. Departments are required to complete a budget transfer form and get approval to move budgeted money from one operating line item to another within the same fund. Only the City Manager is authorized to transfer budgeted money from/to salaries, internal service or capital line items within the same fund. 121

FINANCIAL POLICIES
Financial Reporting
On a regular basis, the Finance Department will evaluate financial performance relative to the adopted and adjusted budget, and prepare and present reports to the City Manager, City Department Directors and Managers. The purpose of these reports is as follows:

Provide an early warning of potential concerns and problems Identify, investigate and correct accounting errors
Evaluate and explain significance of on-going variances Give decision makers time to consider actions that may be needed if major deviations in budget-to-actual expenditures or revenues become evident General Fund Budgeting
The basic format of the budget shall identify programs within organizational structures. Programs are defined as specific services provided to the public, other departments, or other organizations.

All assumptions, transfers and other relevant budget data shall be clearly stated.

The City will avoid budgetary procedures that balance current expenditures at the expense of meeting future years’ expenses, such as postponing expenditures, accruing future years’ revenues, or rolling over short-term debt. Where possible, the budget and subsequent status reports will integrate performance measurement and productivity indicators.

In instances where specific activities/purchases are authorized by the City Council in a certain fiscal year and remain incomplete and/or unexpended, revenues and/or fund balance may be carried forward, at City Council’s discretion, into the next fiscal year to support such activities/purchases through the continuing appropriation authorization.

Provisions will be made for adequate maintenance of capital and equipment and for orderly rehabilitation and replacement within available revenue and budgetary limits. To show true cost of services, revenues and expenditures will be budgeted and accounted for directly in the appropriate fund. Costs for services provided by Special Funds to General Fund activities will be budgeted as an expense in the General Fund and as revenue to the Special Fund.

Budgetary and accounting procedures will conform to Generally Accepted Accounting Principles (GAAP) for governmental agencies.

Special Fund Budgeting
The term “Special Funds” shall be used to identify all funds other than the General Fund (011), inclusive of the following fund types: General Reserve, Special Revenue, Capital Projects, Debt Service, Enterprise, and Internal Service Funds. Special Funds shall be created when legally required, requested by the City Council, or to facilitate internal accounting and financial reporting procedures.
122

FINANCIAL POLICIES
The annual budget for each Special Fund shall be prepared in conjunction with the General Fund budget and shall be submitted to the City Council for adoption prior to the beginning of the fiscal year. Special Funds budgetary and accounting procedures will conform to GAAP.

Activities of the Special Funds shall be reported to the City Council on a regular basis consistent with General Fund reporting responsibilities. To show true cost of services, revenues and expenditures will be budgeted and accounted for directly in the appropriate fund. Costs for services provided between funds will be budgeted as an expense in the fund receiving the services and as revenue to the fund providing the services.

REVENUE MANAGEMENT POLICIES
Sources of Revenue
The City will strive to maintain a diversified and stable revenue system to provide protection from short-run fluctuations in any single revenue source to promote consistent service levels.

Intergovernmental assistance shall be used to finance only those capital improvements that are consistent with the capital improvement plan and local government priorities, and whose operation and maintenance costs have been included in Operating Budget forecasts.

Programs and services funded by restricted revenue will be clearly designated as such. Restricted revenue shall only be used for the purposes legally permissible and in a fiscally responsible manner.

Restricted revenues shall be used prior to unrestricted revenue as legally permissible.

The City shall develop and maintain methods of forecasting future revenues and expenditures.

These methods shall project the City’s future revenues and expenditures through a variety of methods including, but not limited to, forecasts of the economy and future development of the City.

Revenue Collection
The City shall strive to improve its tax collection rate through legislative initiative and advocacy at the state level and cooperative effort at the county level.

Revenue Projection
The City will estimate General Fund revenues using an objective and analytical process, as well as documenting and maintaining specific assumptions. In instances where there is uncertainty as to assumptions, conservative revenue projections shall be provided. 123

FINANCIAL POLICIES
Fees and Cost Recovery
User fees and charges shall be established at a level related to the direct and indirect cost of providing the service, wherever possible. The City will recalculate the full cost of activities supported by user fees to identify the impact of inflation and other cost increases. Fees shall be adjusted where appropriate to reflect these increases.

Development process costs and related administrative expense shall be totally offset by development fees, wherever possible.

In setting user fees and cost recovery levels, the following factors will be considered:

The level of user fee cost recovery should consider the community-wide versus special service nature of the program or activity. The use of generalpurpose revenues is appropriate for community-wide services, while user fees are appropriate for services that are of special benefit to easily identified individuals or groups.

After considering community-wide versus special benefit of the service, the concept of service recipient versus service driver should also be considered. For example, it could be argued that the applicant is not the beneficiary of the City's development review efforts: the community is the primary beneficiary; however, the applicant is the driver of development review costs, and as such, cost recovery from the applicant is appropriate.

The level of cost recovery and related pricing of
services can significantly affect the demand and subsequent level of services provided. At full cost recovery, this has the specific advantage of ensuring that the City is providing services for which there is genuinely a market that is not overly-stimulated by artificially low prices.

Conversely, high levels of cost recovery will negatively impact the delivery of services to lower income groups. This negative feature is especially pronounced, and works against public policy, if the services are specifically targeted to low income groups.

Although it may be determined that a high level of cost recovery may be appropriate for specific services, it may be impractical or too costly to establish a system to identify and charge the user. Accordingly, the feasibility of assessing and collecting charges should also be considered in developing user fees, especially if significant program costs are intended to be financed from that source.

Grants and Federal Funds
The City shall aggressively pursue all grant opportunities; however, before accepting grants, the City will consider the current and future implications of both accepting and rejecting the monies, including:
124

FINANCIAL POLICIES
The amount of matching funds required
In-kind services needed to be provided
Requirements for reporting, earmarking and level of effort requirements The related operating expenses; and
Length of grant and consequential disposition of service (i.e. is the City obliged to continue the services after the grant has ended)
Gifts, Bequests and Donations to the City
Gifts and donations to the City will be evaluated to determine what, if any, obligations are to be placed upon the City. Gifts and bequests will be considered as “over and above” basic City appropriations and recorded in accordance with the Generally Accepted Accounting Principles.

Any gift, donation and/or bequest given shall solely be used for the purpose intended by the donor.

Unrestricted gifts will be expended in a manner deemed best by the City Council and/ or appropriate board or commission.

Development Fee Deferrals
Recognizing some fees are collected in advance of the work being performed and revenue collected in the prior year funding current expenses, a budget and accounting methodology for the recognition and deferral of development fees is necessary. By recognizing and deferring development fees on an established basis, the revenue activity will be more accurate relative to the revenue budget.

The development fee deferred revenues from the prior fiscal year will be recognized and posted to the appropriate current year revenue accounts during the new fiscal year. Beginning in April of each fiscal year, Planning and Public Works staff will provide an estimate by the tenth of the month to Finance for the fee amount and accounts collected during the month that should be deferred to the next fiscal year.

Finance will process journal entries recognizing prior year deferred revenues and deferring appropriate current year revenues as appropriate. At the end of each fiscal year, the total amount deferred will be reallocated to the next fiscal year based on this procedure.

The development revenue and deferral policies are recognized in the City’s budget model.

EXPENDITURE POLICIES
The City will maintain a level of expenditures which will provide for the public well-being and safety of the residents of the community.

Council approval is required before expending General Fund or contingency reserves.

Unexpended expenditures budgeted in one fiscal year are not automatically carried over into the next budget year. In instances where the purpose for which the expenditure was budgeted has 125

FINANCIAL POLICIES
not been completed by the end of the fiscal year, it may be reauthorized in the following fiscal year through the continuing appropriations process. Multi-year CIP projects that are under construction will be carried into the next fiscal year utilizing the continuing appropriations process.

Staffing
The annual Operating Budget will fully appropriate the
resources needed for authorized regular staffing and
will limit programs to the regular staffing authorized.

The City Council will annually approve an Authorized
Position Control Schedule. Operating expenditure
budgets which have been changed solely as the result
of Council approved labor agreements need not be reapproved by the Council.

Overtime Management
Overtime should be used only when necessary and when other alternatives are not feasible or cost effective.

All overtime must be pre-authorized by a department head or designee unless it is assumed preapproved by its nature. For example, overtime that results when an employee must respond to an emergency and/or overtime automatically created as a result of a memoranda of understanding.

Department operating budgets should reflect anticipated annual overtime costs and departments will regularly monitor overtime use and expenditures and will be held accountable for such expenditures.

When considering the addition of regular or temporary staffing, the use of overtime as an alternative will be considered. The department will take into account:

The duration that additional staff resources may be needed The cost of overtime versus the cost of additional staff The skills and abilities of current staff
Training costs associated with hiring additional staff
Overtime which is reimbursable from another government agency such as Fire Strike Teams or mutual aid is not subject to the above requirements. However, such expenses and the resulting reimbursements require City Council approval.

Measure HH – Essential City Services – Responsible Spending Pledge The City of Fountain Valley is committed to sound financial policies that maximize the highest level of City services for the people of Fountain Valley. The City Council recognizes the need to protect the City’s assets and to ensure long-term financial sustainability. 126

FINANCIAL POLICIES
On October 16, 2016, the City Council adopted the Responsible Spending Pledge. The commitment is to maintain essential city services including public safety; senior and youth programs; parks & roadways; other critical city services and paying down debt; and rebuilding reserves.

The Responsible Spending Pledge sets forth that in the event there are any significant increases in the City of Fountain Valley’s revenues, we believe that the majority of this money should be used to maintain:

Essential City services including public safety & 911 emergency response; Keep Fire Station 2 open and maintain firefighter & paramedics; Police Station and Police officers; restore anti-gang & drug programs; Senior and youth programs;
Streets, sidewalks, & roadways and repair storm water systems; Parks and play equipment; and
Provide other essential City services.

In addition, whenever additional revenue gains are
realized, City leadership should seek opportunities to:

Pay off, pay down, consolidate or refinance the
City’s outstanding debt;
Pay down unfunded liabilities; and
Rebuild and maintain the City’s established
reserves levels.

ACCOUNTING POLICIES
Accounting and Annual Reporting Policies
The City’s ( ) presents the government and its
component units’ (entities for which the government is considered to be financially accountable) financial and operating activities. The City's blended component units, although legally separate entities, are, in substance, part of the City's operations and financial data from these units are combined with data of the City. The City’s financial statements and accounting records are maintained in accordance with the recommendations of the Governmental Accounting Standards Board (GASB).

The government-wide financial statements report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of inter-fund activity has been removed from these statements. Governmental activities, normally supported by taxes and inter-governmental revenues, are reported separately from businesstype activities that rely, to a significant extent, on fees and charges for support. 127

FINANCIAL POLICIES
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the providers have been met. As a general rule, the effect of inter-fund activity has been eliminated from the governmentwide financial statements. Direct expenses have not been eliminated from the functional categories; indirect expenses and internal payments have been eliminated.

Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period.

For this purpose, the City considers revenues available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences are recorded only when payment is due.

Taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and are therefore recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered measurable and available only when the City receives cash.

The City reports the following governmental fund types:

Special Revenue Funds account for proceeds of specific revenue sources that are legally restricted or otherwise designated for specific purposes Debt Service Funds account for the accumulation of resources for and the payment of principal and interest on general long-term debt
Capital Projects Funds account for financial resources used for the acquisition or construction of infrastructure and major capital facilities The City reports the following proprietary funds:
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FINANCIAL POLICIES
The Water Utility Fund accounts for the activities of the City’s water operations.

The Sewer Utility Fund accounts for the fees and services for sewer activities.

The Solid Waste Fund accounts for the fees and services for trash disposal.

Additionally, the City reports the following fund types:

Internal Service Funds account for operations that provide services to other departments of the City on a cost reimbursement basis. These services include self-insurance (liability/workers compensation); acquisition, replacement and maintenance of the City’s vehicle fleet & equipment; mail, telephone, duplicating & strategic IT technology equipment; government building maintenance and operations; and employee benefits.

The Other Post-Employment Benefit (OPEB) Trust Fund accounts for the resources set-aside for pre-funding OPEB obligations.

Agency Funds are used to account for various activities in which the City acts as an agent, not as a principal. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations.

Successor Agency activity is accounted for in a Private-Purpose Trust Fund.

Audit and Financial Reporting
Each year an audit will be conducted by an independent Certified Public Accountant Firm (CPA Firm). The selection of the independent CPA Firm shall be in conformance with the City’s professional services bidding procedures. Generally, the City shall request bids for audit services no less frequently than every five years. The CPA Firm shall provide the City Council with an Audit Communication Letter addressing significant findings of the auditors in conjunction with their opinion on the City’s Comprehensive Annual Financial Report. These reports shall be submitted to the City Council within sixty (60) days of receipt of the report.

During the annual budget process, the City will make available a preliminary year-end, unaudited, General Fund fund balance. It should be recognized, however, that the balance provided is subject to both unforeseen financial transactions of a material nature and subject to findings of the independent audit. An audit verified year-end balance will be available by the end of December and will be included within the year-end financial analysis report.

The City will use generally accepted accounting principles in preparing its annual financial statements, and will strive to meet the requirements of the GFOA’s Award for Excellence. 129

FINANCIAL POLICIES

INVESTMENT POLICIES
The City has adopted a formal Investment Policy that is reviewed annually and approved by the City Council. The City’s Investment Policy is intended to provide specific criteria for the prudent investment of City funds with the goal to enhance the economic status of the City while protecting pooled funds and meeting daily cash flow demands.

The Investment Policy is in conformance with all
federal, state and local laws governing the
investment of monies under the control of the City
Treasurer and applies to the City’s Pooled
Investment Portfolio. The portfolio includes the
General Fund, Capital Project funds, Debt Service
funds, Trust & Agency, Proprietary funds, Special
Revenue funds, Reserve funds and Other funds as
created.

Financial assets held and invested by trustees or fiscal agents are subject to and governed according to the regulations established by the State of California pertaining to local agencies as wells as any relative bond indentures or trust agreements.

Delegation of Authority
The Fountain Valley Municipal Code and the authority granted by City Council assign the responsibility of investing unexpended cash to the City Treasurer, which is usually the Director of Finance.

The City Treasurer may delegate daily investment activity, such as carrying out the treasurer’s investment instructions, confirming treasury transactions and other routine activities.

Investments with a maturity of greater than five years must be approved by the City Council.

Prudence
The treasurer operates the City’s pooled cash investment program under § 53600.3 of the California Government Code, applicable state laws, and a Prudent Investor Rule. This affords a broad spectrum of investment opportunities so long as the investment is deemed prudent and permissible by the State of California, various bond indentures and the City’s Annual Investment Policy. The treasurer strives to invest 100% of idle funds.

Treasury Objectives
The City will diversify use of investment instruments to avoid incurring unreasonable risks inherent in over-investing in specific instruments, individual financial institutions or maturities.
130

FINANCIAL POLICIES
The Treasurer maintains a diversified portfolio to accomplish the primary objectives in the following order of priority: safety, liquidity and yield.

Maximum Maturities
Maturities of investments will be selected based on liquidity requirements to minimize interest rate risk and maximize earnings. Current and expected yield curve analysis will be monitored and the portfolio will be invested accordingly.

The City will not invest in securities maturing more than five (5) years from the date of trade settlement, unless the City Council has by resolution granted authority to make such an investment.

Portfolio Reporting
On a quarterly basis, or as otherwise requested by the City Manager, the City Treasurer shall provide to the City Council a report indicating each of the City’s investments. The report shall include a statement certifying the ability of the City to meet its expenditure requirements for the next six months, or provide an explanation as to why sufficient
money shall, or may not, be available. The investment
portfolio report shall include market information for all investments.

Authorized Investments
The City is governed by the California Government
Code, §§ 53600 et seq. Within the context of these
limitations, and based on the cost at time of purchase.

A more detailed list of authorized investments are in
the adopted Investment Policy.

FUND BALANCE POLICY
To maintain the City’s credit rating and meet seasonal cash flow shortfalls, economic downturns or a local disaster, the budget shall provide for an anticipated fund balance for general government and enterprise fund types. Fund balance shall be exclusive of all restrictions, commitments, and assignments not available for use in emergencies and contingencies.

There are almost always important limitations on the purpose for which all or a portion of the resources of a governmental fund can be used. The forces of these limitations can vary significantly, depending upon their source. Therefore, the various components of fund balance are designed to indicate, “
the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the fund can be spent.” Fund balance is categorized in five classifications, depicting the relative strength of the spending constraints placed on the purposes for which the resources can be used. The five classifications are:
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FINANCIAL POLICIES
Non-spendable: amounts not in spendable form or are required to be maintained intact (inventories, prepaid items, endowment)
Restricted: portions of fund balance that reflect resources subject to externally enforceable legal restrictions. Amounts constrained to specific purposes by their providers, through constitutional provisions, or by enabling legislation (bond proceeds, Pension Trust Fund assets, Measure M, creditors, grantors, restricted donations or contributions)
Committed: amounts constrained to specific purposes by a government itself, using its highest level of decision-making authority (City Council), and remains binding unless removed in the same manner
Assigned: amounts a government intends to use for a specific purpose; intent can be expressed by the governing body, or by an official or body to which the governing body delegates the authority (year-end encumbrances, infrastructure and rehabilitation funding)
Unassigned: amounts available for any purpose; reported only in the General Fund The following sets forth the Fund Balance Policy for the General Fund, which is subject to periodic review by the City Council.

Pension Reserves– $1
The City has established a Section 115 Pension Trust Fund to set aside pension reserves in an irrevocable trust fund. The Pension Trust Fund may be used to offset volatility in pension contributions. In Fiscal Year 2017/18, the City funded the Pension Trust with an initial contribution of $2.8 million. The City contributed an additional $4.5 and $3.0 million in FY2018/19 & FY2019/20 respectively. The projected balance at June 30, 2022 is $1 which includes estimated investment earnings.

Emergency Reserves – $1
The reserve for emergencies shall be maintained at $1 . million unless the City Council declares an emergency for natural disasters or financial emergencies. A financial emergency is considered when annual General Fund operating revenues decrease by 5% or more or when annual General Fund operating expenditures increase by 5% of more. The targeted reserve leve of $ million equates to approximately 55% of total sales tax revenue (inclusive of Measure HH) and is reviewed annually. This reserve addresses a number of risk factors including natural disasters, budget stabilization, revenue source stability, expenditure volatility and liquidity.

Economic Development Reserves – $1,
One of the City’s 3-Year Strategic Plan Goals is to enhance economic development. In 2014 $2.5 million was set-aside for Economic Development. $1,000,000 has been budgeted in Fiscal Year 132

FINANCIAL POLICIES
2019/20 to be spent on the General Plan update which is currently underway. The available unappropriated balance for Economic Development Reserves is $1, General Fund Capital Reserves – $
The City has significant capital improvement expenditures that can be funded on a pay-go basis without the issuance of debt. Specific projects will continue to be identified by staff and may be presented to the City Council during the budget process or throughout the year as capital needs arise. The estimated reserve balance at June 30, 2022 is $ Contingency Reserves – $500,000
Contingency reserves includes spendable amounts not otherwise restricted, committed or assigned and is intended to be used for expenses that surface after the end of the traditional budgeting process. Contingency reserves in excess of $500,000 are assigned to General Fund Capital Reserves.

Internal Service Funds
The City has established and maintains a Fleet Management Fund to provide for the timely replacement of vehicles and related equipment with an individual replacement cost of $15,000 or more. The amount retained in this fund, coupled with the annual contributions received by it from any source, shall be adequate to fully fund the replacements approved in the ten-year Financial Plan on any given year. Currently, the desired reserve fund balance is $2,000,000. The projected Fleet Management Fund balance for is $2,7 The City has established an Information Services Fund to provide for the timely replacement of information technology, both hardware and software. The amount retained in this fund, coupled with annual contributions received by it from any source, shall be adequate to fully fund the improvements included in the ten-year schedule.

The City has a long term objective of maintaining a minimum reserve fund balance of at least $800,000. The projected ending Information Service Fund balance for is $800, . The City has established a Government Buildings fund for the purpose of financing the cost of improvements city-owned, general government building and structures. The amount retained in this fund, coupled with annual contributions received by it from any source, shall be adequate to fully fund the improvements included in the ten-year schedule.

The City has a long term objective of maintaining a minimum reserve balance of $1,750,000.

The projected Government Building Fund balance for 20 is $1,7 The City has established a Capital Equipment Fund for the purpose of financing the replacement cost of equipment and furniture utilized by city departments.

The amount retained in this fund, coupled with annual contributions received by it from any source, shall be adequate to fully fund the improvements included in the ten-year schedule. The City has a healthy fund balance derived with the long term objective of maintaining a 133

FINANCIAL POLICIES
balance of at least $800,000. The projected Capital Equipment Fund balance for 2021/22 is $
Reserves will be maintained at a level to cover the cost of ongoing employee benefits during each fiscal year. The City policy is to maintain $2,000,000 reserve to cover long-term obligations. The projected Employee Benefits Fund balance for 2 is $2,
Reserves will be maintained at a level which, together with purchased insurance policies, adequately protect the City. The City will strive to maintain a reserve of $3,000,000 to cover future obligations. The projected Self-Insurance Fund balance for 2 is $4, The planned increase in fund balance addresses anticipated claims for the fiscal year.

CAPITAL IMPROVEMENT POLICIES
The City utilizes the following policies to govern its Capital Improvement Program and the use of special funds that address community capital project needs.

Ten-Year Capital Improvement Program
The City Manager shall develop and maintain a ten-year projection of capital improvement projects based on the General Plan, Specific Plans, and on City Council approved projects. The ten-year projection shall be presented as part of the proposed annual budget. The Capital Improvement Program (CIP) should be tied to projected revenue and expenditure constraints. Future planning should consider periods of revenue surplus and shortfall, and adjust projects and programs accordingly. The ten-year projection shall include new capital projects, rehabilitation needs and long-term maintenance.

Capital Improvement Program (CIP) - Current Fiscal Year Appropriation The current fiscal year CIP budget details the projected costs of acquisition, construction or rehabilitation of major capital facilities and infrastructure. The CIP Project Fund is used to track the receipt and disbursement of funds for specific CIP projects. For many projects, revenue resources and expenditures may extend over several years and continuing appropriations will be a part of the annual budget to track multi-year capital projects.

Accordingly, project appropriations are generally made when contracts are awarded. If project costs at the time of bid award are less than the budgeted amount, the balance will be unappropriated and returned to fund balance or allocated to another project. If project costs at the time of bid award are greater than budget amounts, five basic options are available:

Eliminate the project.

Defer the project for consideration to the next Financial Plan period.

Re-scope or change the phasing of the project to meet the existing budget.

Transfer funding from another specified, lower priority project.

Appropriate additional resources as necessary from fund balance. 134

FINANCIAL POLICIES
The City’s CIP projects are budgeted on an annual basis. As a result, monies are allocated to projects in the fiscal year the funding sources are identified, available and approved by Council.

Annual appropriations for capital projects are contained in the appropriate special funds budget.

Ten-Year Capital Improvement Plan
The City will update the ten-year Capital Improvement Plan each budget year. However, the adoption of the ten-year plan does not authorize the funding of projects identified within the tenyear plan beyond the current fiscal year.

The City’s capital improvement plan will recognize the borrowing limitation of not only the City but also the debt tolerance (direct and overlapping debt) of the City as a whole. The adopted annual budget shall contain a ten-year summary projection of revenues and expenditures, which specifies the revenue sources and anticipated allocation schedule for the ten-year CIP. This multiyear plan shall be updated on an annual basis. Individual capital improvement projects shall include a projected cost amount for City administration, whereby project estimates reflect the total cost of the project.

Capital Improvement Funding
Within the limitation of existing law, various funding sources may be utilized for capital improvements. Capital projects shall not be dictated by the nature of funding available except to the extent that the projects meet an initial test required to achieve City goals and to the extent that projects must be placed in priority in order to utilize outside funding. The City shall actively pursue outside funding sources for all capital improvement projects.

CIP Budget Carryover
Unexpended project balances shall be carried forward to future fiscal years to complete the intent of the original budget, contingent upon approval by the City Council. The annual budget shall identify an estimated “Continuing Appropriation” balance that will be carried over to complete each specific multi-year project. The City Council will adopt by resolution all continuing appropriations after the fiscal year is closed and final numbers are known.

Upon completion of each capital project, unspent funds shall be reported to the City Council through the year-end budget report. The City Manager shall provide recommendations to redirect the use of unspent capital project funds in the year-end report and the annual budget.

CIP Funding Criteria
The City will use the following criteria to evaluate pay-as-you-go versus long-term financing (payas-you-use) in funding capital improvements:
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FINANCIAL POLICIES
Current revenues and adequate fund balances are available or project phasing can be accomplished.

Existing debt levels adversely affect the City's credit rating.

Market conditions are unstable or present difficulties in marketing.

Revenues available for debt service are deemed sufficient and reliable so that long-term financings can be marketed with investment grade credit ratings.

The project securing the financing is of the type, which will support an investment grade credit rating.

Market conditions present favorable interest rates and demand for City financings.

A project is mandated by state or federal requirements, and resources are insufficient or unavailable.

The project is immediately required to meet or
relieve capacity needs and current resources are
insufficient or unavailable.

The life of the project or asset to be financed is
ten (10) years or longer.

Vehicle leasing when market conditions
and operational circumstances present
favorable opportunities.

ENTERPRISE FUND FEES AND RATE STRUCTURE
Water, Solid Waste and Sewer The City will set fees and rates at levels which fully cover the total direct and indirect costs—including operations, capital outlay, and debt service—of the following enterprise programs: water, solid waste, and sewer.

Ongoing Rate Review: The City will review and adjust enterprise fees and rate structures as required to ensure that they remain appropriate and equitable.

City Services: In accordance with long-standing practices, the City will treat the water, solid waste and sewer funds in the same manner as if they were privately owned and operated. This means assessing reasonable charges that are reimbursed to the City for the use of City owned facilities, equipment, vehicles and other related services to fully recover these costs. 136

FINANCIAL POLICIES
Enterprise Fund Debt Capacity: The City will set enterprise fund rates at levels needed to fully cover debt service requirements as well as operations, maintenance, administration and capital improvement costs. The ability to afford new debt for enterprise operations will be evaluated as an integral part of the City’s rate review and setting process.

APPROPRIATIONS LIMIT
The Council will annually adopt a resolution establishing the City's appropriations limit calculated in accordance with Article XIII-B of the Constitution of the State of California, §7900 of the State of California Government Code, and any other voter approved amendments or state legislation that affect the City's appropriations limit.

The supporting documentation used in calculating the City's appropriations limit and projected appropriations subject to the limit will be available for public and Council review at least 10 days before Council consideration of a resolution to adopt an appropriations limit. The Council will generally consider this resolution in connection with final approval of the budget.

The City will strive to develop revenue sources, both new and existing, which are considered nontax proceeds in calculating its appropriations subject to limitation.

The City will annually review user fees and charges and report to the Council the amount of program subsidy, if any, that is being provided by the General or Enterprise Funds.

The City will actively support legislation or initiatives sponsored or approved by League of California Cities which would modify Article XIII-B of the Constitution in a manner which would allow the City to retain projected tax revenues resulting from growth in the local economy for use as determined by the Council.

The City will seek voter approval to amend its appropriation limit at such time that tax proceeds are in excess of allowable limits.

DEBT POLICIES
Debt Financing
Debt financing shall generally be limited to one-time capital improvement projects and only under the following circumstances:

When the project’s useful life will exceed the term of the financing; When project revenue or resources will be sufficient to service the debt; and 137

FINANCIAL POLICIES
When the project will benefit the residents of Fountain Valley.

Debt financing shall not be considered appropriate for:

Investment leveraging purposes,
Current operating and maintenance expenses except for issuing short-term instruments such as revenue anticipation notes or tax anticipation notes; and Any recurring purpose (except as indicated above).

Debt Management
The City will not obligate the General Fund to secure long-term financings except when marketability can be significantly enhanced.

An internal feasibility analysis will be prepared for each long-term financing which analyzes the impact on current and future budgets for debt service and operations. This analysis will also address the reliability of revenues to support debt service.

The City will generally conduct financings on a competitive basis. However, negotiated financings may be used due to market volatility or the use of an unusual or complex financing or security structure.

The City will seek an investment grade rating (Baa/BBB or greater) on any direct debt and will seek credit enhancements such as letters of credit or insurance when necessary for marketing purposes, availability and cost-effectiveness.

The City will monitor all forms of debt annually coincident with the City's Financial Plan preparation and review process and report concerns and remedies, if needed, to the Council.

The City will diligently monitor its compliance with bond covenants and ensure its adherence to federal arbitrage regulations.

The City will maintain good, ongoing communications with bond rating agencies about its financial condition. The City will follow a policy of full disclosure on every financial report and bond prospectus (Official Statement).

Debt Refinancing
: Periodic reviews of all outstanding debt will be undertaken to determine refinancing opportunities. Refinancing will be considered (within federal tax law constraints) under the following conditions:

There is a net economic benefit;
It is needed to modernize covenants that are adversely affecting the City’s financial position or operations; and
The City wants to reduce the principal outstanding in order to achieve future debt service savings, and it has available working capital to do so from other sources.

In general, refinancing for economic savings will be undertaken whenever net present value savings of at least five percent (5%) of the refunded debt can be achieved.
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FINANCIAL POLICIES
Refinancing that produces net present value savings of less than five percent will be considered on a case-by-case basis, provided that the present value savings are at least three percent (3%) of the refunded debt.

Refinancing with savings of less than three percent (3%), or with negative savings, will not be considered unless there is a compelling public policy objective.

Legal Debt Margin
Under state law, the City has a legal debt limitation not to exceed 15% of the total adjusted assessed valuation of taxable property within City boundaries. In accordance with California Government Code § 43605, only the City’s general obligation bonds are subject to that legal debt limit. The City has no outstanding general obligation bonds.

CONTRACTING FOR SERVICES
General Policy Guidelines
Contracting with the private sector for the delivery of services provides the City with a significant opportunity for cost containment and productivity enhancements. As such, the City is committed to using private sector resources in delivering municipal services as a key element in our continuing efforts to provide cost-effective programs.

Private sector contracting approaches under this policy include construction projects, professional services, outside employment agencies and ongoing operating and maintenance services.

In evaluating the costs of private sector contracts compared with in-house performance of the service, indirect, direct, and contract administration costs of the City will be identified and considered.

Whenever private sector providers are available and can meet established service levels, they will be seriously considered as viable service delivery alternatives using the evaluation criteria outlined below.

For programs and activities currently provided by City employees, conversions to contract services will generally be made through attrition, reassignment or absorption by the contractor.

Evaluation Criteria
Within the general policy guidelines stated above, the cost-effectiveness of contract services in meeting established service levels will be determined on a case-by-case basis using the following criteria:
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FINANCIAL POLICIES
Is a sufficient private sector market available to competitively deliver this service and assure a reasonable range of alternative service providers? Can the contract be effectively and efficiently administered? What are the consequences if the contractor fails to perform, and can the contract reasonably be written to compensate the City for any such damages? Can a private sector contractor better respond to expansions, contractions or special requirements of the service?
Can the work scope be sufficiently defined to ensure that competing proposals can be fairly and fully evaluated, as well as the contractor's performance after bid award? Does the use of contract services provide us with an opportunity to redefine service levels?
Will the contract limit our ability to deliver emergency or other high priority services? Overall, can the City successfully delegate the performance of the service and still retain accountability and responsibility for its delivery?
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FUND DESCRIPTIONS
The City budget consist of a number of
different funds. A fund is defined as a fiscal
and accounting entity with a self-balancing
set of accounts, segregated for the purpose
of carrying on specific activities, or
complying with special regulations,
restrictions, or limitations. The following
provides a description of accounting funds
used by the City of Fountain Valley.

Each distinct fund contains program
expenditures and revenues that relate to the
purpose of the fund. The three types of fund
categories are governmental funds,
proprietary funds and fiduciary funds and
are defined in detail below.

The measurement focus for governmental funds is on current spendable resources, and as such, the balance sheets for these types of funds include only current assets and current liabilities.

Governmental funds are accounted for on a modified accrual basis, thus revenues are recognized when measurable and available, (60 days) and expenditures are recorded when the related liability is incurred.

The General Fund is the City’s single largest fund type and accounts for unrestricted revenues such as general taxes and intergovernmental revenue, user fees, fines, rents, and other miscellaneous general revenues. This fund supports basic services including Police, Fire, Building and Planning, Community Services and general administration Special revenue funds are used to account for the proceeds from specific revenue sources that are legally or contractually restricted to expenditures for specific purposes.

AB2766 - Air Quality Improvement Fund
This fund accounts for the City's programs implementing Assembly Bill (AB) 2766, the California Clean Air Act of 1988. Under the provisions of AB 2766, 40% of the fees imposed by the South Coast Air Quality Management District (SCAQMD) are allocated to local jurisdictions to fund expenditures for the reduction of air pollution from motor vehicles. Past qualifying projects have Operating
Budget
Fiduciary
Funds
Successor
Agency Fund
OPEB Trust
Governmental
Funds
General Fund
Special
Revenue Funds
Proprietary
Funds
Enterprise
Funds
Internal
Service Funds
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FUND DESCRIPTIONS
included the purchase of alternative fuel (CNG) vehicles, acquisition of emission credits pursuant to SCAQMD Rule 2202, and various educational and outreach programs to encourage commuter use of transit and rail systems.

Criminal Diversion (Federal & State Asset Forfeiture / Other Public Safety Grants) The Asset Forfeiture fund is the depository for equitable sharing payments received from the Departments of Justice and US Department of the Treasury for assistance in forfeiture cases.

Under state and federal statutes, the City of Fountain Valley receives an equitable share of seized drug funds and real property, along with reimbursement of related overtime expenses in exchange for participating in the program.

By law, these funds may only be spent for law enforcement purposes and are intended to supplement, not supplant, existing funds. Examples of uses of these funds include training, supplies, equipment, and ammunition. Due to the uncertain nature of the timing and amount of forfeitures, and in accordance with fund guidelines, revenues should not be budgeted until actually received.

This fund also accounts for federal, state and local grants and donations assigned for Public Safety activities. Previously awarded grants include the Urban Area Security Initiative, Avoid the 38, Justice Assistance Grant, Office of Traffic Safety STEP Grant, BSCC County Grant, Every 15 Minutes, and Sobriety Checkpoint Grants.

Citizen Options for Public Safety (COPS/SLESF) - Supplemental Law Enforcement Services Funds Grant
Assembly Bill 3229, Chapter 134, Statue of 1996, established the Citizen’s Option for Public Safety (COPS) Program. Per Government Code §§ 30061-30065, compliant cities are allocated a proportionate share of COPS funds by the State, for the exclusive purpose of funding supplemental front line law enforcement services. Proportionate shares are based on population estimates determined by the California Department of Finance. Under the standard grant program allocation, the City of Fountain Valley is eligible to receive the minimum grant amount of $100,000 each year. Funds from this program cannot supplant existing funding and are to be used for onetime items including equipment.

Community Development Block Grant (CDBG)
This fund was established to satisfy legal requirements that Community Development Block Grant (CDBG) funds be segregated from other funds. CDBG funds are used to provide a variety of public service programs throughout the community. A separate staff report is presented to the City Council for budgeting purposes for each Fiscal Year, which may include reprogramming of remaining unused budgeted funds from prior years, repayments to the CDBG Fund for loans previously made, and programming of the new grant revenue and related appropriations. 142

FUND DESCRIPTIONS
Gas Tax
The City receives Gas Tax funds p e r v a r i o u s s ections of the Streets and Highways Code.

State law requires these funds be
utilized solely for street-related
purposes such as new street
construction, rehabilitation, and
maintenance. Specific capital projects
for street and traffic signal
improvements and rehabilitation
endeavors are identified in the Capital
Improvement Program (CIP) budget.

Housing Authority Fund -
In June 2011, the Redevelopment Dissolution Act, AB1x26, was signed by the Governor and later upheld by the California Supreme Court on December 29, 2011. As a result of the Court's ruling on the Dissolution Act, all redevelopment agencies in California were dissolved effective February 1, 2012. On January 10, 2012, the City opted out of being the Successor Agency for the Housing functions of the former agency and assigned the Fountain Valley Housing Authority as the successor to the housing assets and activities. The Fountain Valley Housing Authority Fund accounts for the City’s Housing activities.

HOME Grant
This fund is used to account for federal HOME Investment Partnership Program Funds, which facilitate the development of affordable housing projects in the City.

Local Park Impact Fee
The Subdivision Map Act of the California Government Code requires developers to provide either land or fees to the local municipal government for the purpose of providing or improving recreational facilities in the area of the proposed developer improvements. This legislation is also known as the Quimby Act. The City allocates these funds to various parks and recreation projects in conjunction with the annual CIP budget.

Measure M Fairshare M2
This fund accounts for the City's share of the Measure M2 one-half cent sales tax approved by Orange County voters and administered by the Orange County Transportation Authority.

Funding is allocated to the City for streets, roads and transit projects. Measure M also provides funds for the City’s Senior Mobility program.
143

FUND DESCRIPTIONS
Road Maintenance & Rehabilitation Program (SB1)
This fund was created to account for the City's share of proceeds from SB 1, the Road Repair and Accountability Act of 2017. The City is schedule to receive these funds for the next 10 years to assist in road maintenance & rehabilitation, congestion relief, and corridor improvements.

Fountain Valley Public Finance Authority
This fund is used to account for the debt service payments and construction of certain water improvements associated with the issuance of the 2014 Revenue Bonds, the 2016A Lease Revenue Bonds (Refinanced 2003 COP), and the Clean Energy Renewable Bonds (CREBS).

Drainage Fund
This fund was established in order to implement the goals and objectives of the master drainage plan and to mitigate water runoff impacts of new development in the drainage area. The Drainage Development Impact Fee is needed in order to finance drainage public improvements and to pay for the development’s fair share of required improvements.

Traffic Improvement
This fund is used to account for various public roadway improvements. Revenues are received from transportation impact fees and grants or transfers in from Measure M, Gas Tax, Sewer, or Water funds.

Proprietary funds account for operations that are financed and operated in a manner similar to private sector enterprises, in that goods and services are provided to the general public (external users) or other City department (internal users), and the costs are financed or recovered primarily through fees and service charges charged directly to the users of the goods and services.

Enterprise funds are used to report activities for which service charges or fees are charged to external users. These funds are used to account for operations that are financed and operated in a manner similar to private sector enterprises wherein the cost of providing the goods and services to the general public (Utility Customers) is paid through a user rate structure that is appropriate, fair and equitable based on the cost of the commodity.
144

FUND DESCRIPTIONS
Water Fund
The City of Fountain Valley established its
Municipal Water Department in April of
1962. Its goal is to provide safe, reliable, high
quality water to City customers at a
reasonable rate. The fund accounts for all the
activities related to the water operations,
including, but not limited to, administration,
operations, maintenance, capital acquisition
and contraction, financing and related debt
service, production, distribution and storage
systems, SCADA, recycled water, capital improvements, meter reading and utility billing processes.

Solid Waste Fund
The City contracts with Republic Services to provide residential and commercial waste collection, and recycling. The City utilizes the Water billing process to include the waste collection charges owed to Republic Services. The City collects a fee for each bill sent for this service. Republic also pays the City an annual Road Rehabilitation fee to help the city pay for repairs to public roadway due to the heavy weight of the trash vehicles.

Sewer Fee and Connection Fund
This fund accounts for all activities related to the wastewater collection system serving Fountain Valley. There is an established sewer fee assessed to every water customer to cover the cost of maintaining, repairing and rehabilitation of the sewer collection system. This fund was also established to meet the goals and objectives of the master plan of sewers of the City and to mitigate wastewater impacts caused by new development within City limits. A Development Impact Fee is charged to finance the sewer public improvements and to pay for the development’s fair share of the required sewer improvements. The City, as a condition to granting the application and furnishing sewer service to a parcel of land, shall charge and collect fees to support the cost of the system and future replacements and extensions.

Internal Service Funds are used to report activities for which service charges or fees are charged to internal users. These funds account for the financing of goods or services provided by one department to another on a cost reimbursement basis. These functions include information services, purchasing services, government buildings, equipment, fleet, self-insurance and employee services.
145

FUND DESCRIPTIONS
Information Technology / Purchasing & Duplication
This fund accounts for the capital acquisition and replacement cost of citywide computers, network equipment, printers, copiers, scanners, telephones, and duplication and mailing equipment. Operating costs include IT and Purchasing staffing and related maintenance and supplies. Funding is provided by charges back to user departments.

Government Buildings
The Government Buildings Fund includes all maintenance, custodial, staffing and equipment costs associated with the operation of City Hall, Recreation & Senior Center, City Yard, Fire and Police Stations. The expenses associated with facility maintenance and operations are recorded in this fund with supporting revenues from the General Fund and other funds that use this service.

Revenues are allocated from the departments' budgets based on share of square footage. A portion of the fund balance is reserved to fund capital equipment necessary for the efficient operation of the various City buildings.

Capital Equipment Fund
The Equipment Fund administers the acquisition, replacement and maintenance of furniture, equipment, machines, large tools, other capital equipment not accounted for in IT or government buildings. This fund is financed from charges paid by the departments.

Fleet Services Fund
The Fleet Services Fund is the operating fund
that provides for the capital purchase,
replacement and maintenance, and fueling for
all city vehicles. The Public Works department
manages all of the City's fleet vehicles. Rental
rates are charged to the various user
departments and those rates are designed to
recover the associated acquisition, replacement,
maintenance and fuel costs. Those rental rates,
based on this fund's operating budget and
costs, are included in each department's budgeted expenditures.

Self-Insurance Fund
The Self-Insurance Fund administers a loss prevention program that protects the City against financial loss from on-the-job injuries; administers the City's general liability risk, property insurance programs, and accounts for workers compensation, unemployment insurance, and long-term disability costs. This fund is financed from self-insurance premiums paid by the departments.
146

FUND DESCRIPTIONS
Employee Benefits Fund
The Employee Benefits Fund captures the cost associated with employee retirement (CalPERS); retiree medical (OPEB) held in trust with PARS; employee health and dental insurance programs; employer Medicare contributions; life insurance; employee assistance program (EAP); and uncompensated absence liability (employee vested vacation and sick leave).

Funds that account for resource held in a trustee, custodial or agency capacity for others.

Successor Agency Fund -
The Fountain Valley Agency for Community Development [Redevelopment Agency (RDA)] was established in 1976 to prepare a redevelopment project area and plan for two specific areas within the City called the City Center and the Industrial Area Redevelopment Projects. Funds were created to account for operations associated with these RDA activities.

In June 2011, the Redevelopment Dissolution Act, AB1x26, was signed by the Governor and later upheld by the California Supreme Court on December 29, 2011. As a result of the Court's ruling on the Dissolution Act, all redevelopment agencies in California were dissolved effective February 1, 2012. On January 10, 2012, the City elected to become the Successor Agency to the RDA to wind down its affairs. A new fund was created to account for the activities of the Successor Agency during the dissolution process.

Special Deposit Fund
This fund is a custodial fund used to account for Asset Seizure deposits that are to be disbursed upon legal order.

OPEB Trust Fund
This fund is used to account for deposits, interest, and withdrawals from the trust that the City established in 2011 to pay for Other Post-Employment Benefits (OPEB). This is a 115 Trust, which restricts use of these funds specifically for OPEB payments. 147

The City of Fountain Valley is a well-planned, urban community, which includes a balance of land use and City services. It is located in the heart of Orange County just minutes from points of interest such as Disneyland, Knott’s Berry Farm, the
beach and world class shopping. The City is
geographically located just north of Huntington Beach,
Costa Mesa and Newport Beach, and is just south of
Santa Ana and Anaheim. Fountain Valley is served by
the San Diego (405) freeway and offers convenient
access to three major airports.

The City of Fountain Valley was incorporated June 13,
1957, and became the 21st City in the County of Orange. Since its incorporation in 1957 and throughout its rich history, the City of Fountain Valley has been known as “A Nice Place to Live”.

Residents of the City have adopted this motto thanks to the well maintained streets and parkways, 18 parks, wide range of recreation programs for all ages, great weather and overall quality of life.

Business also consider Fountain Valley to be a “Nice Place to do Business” as well.

The City is comprised of 9.8 square miles with vibrant commercial areas, neighboring residential communities, recreational facilities, beaches, high profile corporate headquarters and small entrepreneurial and retail businesses.

Long before the Santa Ana River banks were lined with concrete, the land that is now Fountain Valley was saturated with peat bogs and willow thickets. Early settlers dug deep wells at a distance from the banks of the unpredictable river to reach the water that was draining down from the higher ground above. The pressure of the water created an upward flow in these wells (known as Artesian Wells) and fountains of water spurted from the openings. Today a beautiful fountain in front of City Hall reminds us how Fountain Valley got its name.

A Nice Place to Live

Community Profile
148

COMMUNITY PROFILE
The Tongva (“People of the Earth”) were the first
inhabitants of the land and it was Tongva Native
Americans who paddled out from the shore of what is
now San Pedro to greet explorer, Cabrillo, in 1542.

From the time of Cabrillo’s arrival until 1822 California remained under Spanish rule. In 1797 Governor Pedro
Fages gave an ex-soldier named Manuel Nietos a
29,000 acre land grant that encompassed today’s cities
of Fountain Valley, Westminster, Garden Grove, and
northern Huntington Beach. The land became known
as Las Bolsas (“The Pockets”) because it was primarily
marshland with just pockets of solid ground.

In 1834, after Mexico gained independence from Spain, Alta California governor, Jose Figueroa, gave the land to Nieto’s heirs and a number of other groups and individuals. At the end of the Mexican-American War in 1848, Mexico ceded all of Alta California to the United States and Rancho Las Bolsas was sold at a public auction soon after California became the 31st U.S. state in 1850. Abel Stearns bought the entire parcel of land for $15,000 and renamed it The Stearns Ranch Company. Stearns was a cattle rancher and as he bought more and more land, he became the largest land owner in California. His fortune soon
changed, however, when the Santa Ana River
flood of 1861 wiped out his cattle industry. The
great flood was followed by severe drought and
in 1862 Stearns sold the Rancho to The Los
Angeles and San Bernardino Land Company.

Families moved in one by one which
necessitated business and services. The first
school house was near Garfield and Florida
streets in the City of Huntington Beach and a
large building named Sycamore Hall was built
and utilized as a meeting place. Soon more and
more buildings were erected as settlers migrated
to what was often referred to as the “Gospel Swamps” because of the lively spirituals held there.

With this pivotal series of events, the rapid development of the Santa Ana Valley began.

The fantastic growth rate which Fountain Valley experienced in the 1960's, which could easily have wreaked havoc with the planning of most cities, took place within the framework of a Master Plan adopted before any development had begun. Unlike many communities, Fountain Valley's Master Plan did not have to play "catch up" with existing developments. It is for this reason that Fountain Valley has often been referred to as Orange County's best-planned community. 149

COMMUNITY PROFILE
Fountain Valley, CA climate is warm during summer when temperatures tend to be in the 70's and cool during winter when temperatures tend to be in the 50's.

The warmest month of the year is August with an average maximum temperature of 84.20 degrees Fahrenheit, while the coldest month of the year is December with an average minimum temperature of 46.00 degrees Fahrenheit.

The annual average precipitation at Fountain Valley is 13.84 Inches. Rainfall in is fairly evenly distributed throughout the year. The wettest month of the year is January with an average rainfall of 3.18 Inches.

According to the 2019 United States Census, American Community Survey Department, the Fountain Valley’s city population is 56,026.

Fountain Valley is also a well-educated population. According to the American Community Survey Department of the US Census bureau, of those over 25 years, 90.4% graduated from high school and 43.5% have a Bachelor’s degree or higher with the median household income of $93,075.

On the Westside of Mile Square Park the City owns and operates a seventyeight acre Recreation Center and Sports Park. This facility, expanded and renovated in 2009, contains a Recreation Center building with an indoor gymnasium, 2 indoor racquetball courts and 2 community rooms. Outdoors are 15 baseball/softball fields, 4 dedicated soccer fields, 11 lighted tennis courts, 4 pickleball courts and 2 hitting walls, 3 lighted racquetball courts, 6 outdoor lighted basketball courts. There is a 5/4 mile walking trail, a large playground for children, and a great lawn for community events such as the Annual Concerts in the Park, Summerfest, Movies in the Park, and the annual Tree Lighting Ceremony. The City also has a dedicated Senior Center known as “The Center at Founders Village” located on Bushard Street. The center offers an array of programs, Human and Social services and classes focused on the community’s senior population.

The City of Fountain Valley has partnered with “The Fountain Valley Community Foundation”, a non-profit group, to help support many of the special events that are held by the City throughout the year. The Foundation also holds several events that are funded fully by the donations that are raised throughout the year from residents and business community members.
150

COMMUNITY PROFILE
There were 19,363 households in Fountain Valley
according to the 2020 State of California Department of Finance Housing Estimate. Over 70% of the city’s housing units are owner occupied and 30% were renters. Vacancy
rates are very low at less than 2.6% of the total households.

More than three quarters of these households are family households.

The median sale price of a home in Fountain Valley is
$870,000. This represents a 6% increase over the prior
year.

Fountain Valley has excellent public and private schools. This is one of the reasons why families and businesses choose to live in the city. The Fountain Valley School District was founded around 1898 with the first school being Fountain Valley School on Bushard and Talbert. There are nine elementary schools, two middle schools (6-8), and one K-8 alternative school. Coastline Community College and three major universities are within 20 minutes of Fountain Valley.
33%
5%
2%
9% 1%
51% 50%
Single Family Detached Housing and Families
Single Family Attached
Mulit Family (2 4 Units)
Multi Family (5+ Units)
Mobile Homes
Total
151

COMMUNITY PROFILE
Fountain Valley is fortunate to have two fully accredited and respected health facilities within its city boundaries. Fountain Valley Regional Hospital with 400 beds and Orange Coast Memorial Hospital with 230 beds to provide the quality health care citizens need.

Fountain Valley is located in Orange County and is 30 miles southeast of Los Angeles, 400 miles south of San Francisco and 90 miles northeast of San Diego.

Within our City limits there are many places of interest to visit. The City boasts of 20 neighborhood/community parks, a fifty-five acre recreation center with tennis, basketball and racquetball courts, a gymnasium, the Kingston Boys & Girls club, a public library, a bowling alley, miniature golf course, roller skating and a performing arts center. Fountain Valley also has beautiful Miles Square Park, with hiking trails, picnic areas and fishing along with three 18- hole golf courses.

One of the City’s greatest amenities is Mile Square Regional Park. Miles Square is an urban park with a total of 640 acres of beautiful land. Within the park’s boundaries are three regulation golf courses, two regulation soccer fields, baseball & softball diamonds, an archery range and a wilderness area. There are also two fishing lakes; concession operated bike and paddle boat operations, and a wide expanse of picnic areas as well as numerous picnic shelters. Within a driving distance of 30 minutes there are also many activities to enjoy.

Huntington Beach 10 Minutes
Newport Beach 15 Minutes
Disneyland 20 Minutes
Orange County Airport 15 Minutes
Anaheim Convention Center 20 Minutes
Knott’s Berry Farm 30 Minutes
152

COMMUNITY PROFILE
Fountain Valley’s strong economic climate is reflected in the fact that many companies have chosen to locate their business or headquarters here including Hyundai Motor America. Over 5,000 service, retail, and industrial businesses call the City “A Nice Place to do Business”.

In partnership with the Fountain Valley Chamber of Commerce and the Agency for Community Development, the City values a strong and varied business community. The City offers free Business Resources and Services to assist our businesses in realizing their highest potential in the good times and to assist them in the tough times.
1865
1098
974
728
463
375
350
293
285
209

FV REGIONAL HOSPITAL

ORANGE COAST MEMORIAL HOSPITAL

MEMORIAL HEALTH SERVICES

KINGSTON TECHNOLOGIES COMPANY
HYUNDAI MOTOR AMERICA, INC.

COSTCO WHOLESALE #411
ANTECH DIAGNOSTICS, INC.

SUREFIRE, LLC
CERIDAN TAX SERVICES, INC.

SAM'S CLUB #6615
Top Ten Employers In Fountain Valley, California
153

COMMUNITY PROFILE
The City of Fountain Valley has a diverse property tax base with the 10 largest taxpayers constituting less than 11% of the total property tax revenues.

Top 10 Property Tax Payers Based On Net
Source: HDL Coren & Cone
154

In November 1979 the voters of the State of California approved Proposition 4, commonly the State Constitution placing limits on the amount of revenue which can be spent by all entit
the 1980-81 fiscal year, but the formula for calculating the limit was based on the 1978- n
population and cost of living.

Section 9710 of the California Government Code, added in 1980 by the State Legislature, establish its appropriations limit for the fo the California Voters approved Proposition 111. Among other things, Proposition 111 provided new adjustment formulas, which make the Appropriations Limit more responsive to local growth issues. Only tax proceeds are subject to the limit. Charges for services, regulatory fees, grants, loans, donations and other non-tax proceeds are not subject to the limit.

Proposition 111 also established a requirement for an annual review of Limit calculations.

Each year the City Council must adopt by resolution the C for FY 2022-23.
ce with
Article XIIIB of the California State Constitution and Section 7902 of the California Government Code. The City will be below its legal appropriations limit by $109,773,326 using the per capita personal income growth and county population growth factors.

GANN APPROPRIATIONS LIMIT CALCULATION FY 2022-23
FY 2020-21 Appropriations Limit $155,763,891
Population Growth (City or County) = (-0.23%) 0.9977
Cost of Living (Per Capita or Non-residential construction growth) = 7.55%

1.0755
FY 2022-23 Appropriations Limit
($155,763,891 x 0.9977 x 1.0755)
$167,138,759
155

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOUNTAIN

VALLEY, CALIFORNIA APPROVING AND ADOPTING THE ANNUAL
APPROPRIATIONS LIMIT FOR FISCAL YEAR 2022/23
WHEREAS, the State Constitution Article XIIIB restricts the appropriations growth rate for cities and other local jurisdictions; and
WHEREAS, the Article XIIIB, as amended by Proposition 111, requires cities to calculate their annual appropriations limit by the percentage change in 1) City population growth or county population growth; and 2) California per capita personal income or the increase in non-residential assessed valuation due to new construction; and WHEREAS, documentation used in the determination of the appropriations limit for fiscal year 2022/23 has been available to the public in the Finance Department for fifteen days prior to this meeting as required by Government Code Section 7910; and WHEREAS, a summary of this computation is provided in Exhibit “A”, which is incorporated by reference and attached hereto.

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

SECTION 1. That the Appropriations Limit for 2022/23 shall be $167,138,759, as calculated in Exhibit A, and the Appropriations Subject to Limitation in Fiscal Year 2022/23 shall be $57,365,433 and therefore is $109,773,326 under the limit.

SECTION 2. That the City of Fountain Valley reserves the right to recalculate said limitation at a future time.

SECTION 3. That the City Clerk shall certify to the passage and adoption of this Resolution, and enter it into the book of original Resolutions.

PASSED and ADOPTED by the City Council of the City of Fountain Valley at a regular City Council meeting held on this day of June, 2022 by the following vote:

AYES:

NOES:

ABSENT:
156

Mayor
ATTEST:

Rick Miller, City Clerk
APPROVED AS TO FORM:

HARPER & BURNS LLP
Colin Burns
Attorneys for the City
157

EXHIBIT A
Appropriations Limit
City of Fountain Valley
Fiscal Year 2022-23
AMOUNT
Last Year’s Limit (2021-22) $155,763,891
Adjustment Factors

1. Population(1) 0.9977

2. Inflation(2) 1.0755
Total Adjustment Factor(3) 1.073
Total Adjustments 11,374,868
Appropriations Limit for Fiscal Year 2022-23 $167,138,759 Appropriations Subject to Limit:

Proceeds of Taxes $57,365,433 55 Minus Exclusions - Appropriations Subject to Limit $57,365,433 Fiscal Year 2022-23 Appropriations Limit 167,138,759
Less Appropriations Subject to the Limit 57,365,433
Difference Under the Limit $109,773,326
(1)The population factor may be based on the change in population of 1) the City; or 2) the County of Orange, as provided by the State of California’s Department of Finance. (2)The inflation factor may be based on 1) the change in per capita personal income for the State of California as provided by the State of California’s Department of Finance; or 2) the change in assessed valuation due to new nonresidential construction within the City.

The inflation factor adopted by the City for the current year appropriation limit represents the change in per capita personal income for the State of California as provided by the State of California Department of Finance.
(3)The total adjustment factor is calculated by multiplying the population factor by the inflation factor.
158

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOUNTAIN

VALLEY, CALIFORNIA, ADOPTING AN ANNUAL BUDGET AND RELATED

DOCUMENTS FOR THE CITY OF FOUNTAIN VALLEY, FOR FISCAL YEAR 2022/23
WHEREAS, the City Manager and Budget Manager have, heretofore, presented to the City Council a Proposed Operating Budget for Fiscal Year 2022/23; and WHEREAS, the Proposed Operating Budget includes the City of Fountain Valley, and information related to the Successor Agency, Housing Authority, and Public Financing Authority; and
WHEREAS, the City Council did hold a public workshop on May 17, 2022, in the Council Chambers of City Hall of said City, in order to review the proposed budget documents for Fiscal Year 2022/23; and
WHEREAS, the City Council did review proposed budget for the Fiscal Year 2022/23.

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

SECTION 1. Said Proposed Operating Budget, as so amended, is hereby adopted as the Operating Budget for the City of Fountain Valley for the fiscal year commencing July 1, 2022 and ending June 30, 2023, and consists of estimated and anticipated expenditures and revenues for that fiscal year.

SECTION 2. The City Council does hereby approve and authorize the salary allocations as presented throughout the various departmental programs; the schedule of Inter-fund transfers, estimated continuing appropriations amounts; 2022/23 Capital Improvement Program expenditures along with the use of Capital Reserve Fund monies; and authorize the identified assigned or committed allocation of the General Fund cash balances.

SECTION 3. The City Council does hereby adopt the ten year Capital Improvement Plan which is consistent with the seven year CIP program submitted to the Orange County Transportation Authority (OCTA) as part of the annual Measure M2 Eligibility process.

SECTION 4. The City Manager or his/her designee, for purposes of administrative necessity in implementing the budget, is hereby authorized to transfer funds between accounts, programs and line item expenditures as long as the transfer does not exceed the total appropriation within a given fund or where such transfer is expressly prohibited in a resolution or ordinance approved by the City Council.

SECTION 5. The Fiscal Year 2022/23 Financial & Budget Policies as presented in the 2022/23 Annual Budget are hereby adopted by the City Council. The City Council does hereby adopt a budget that does meet the requirements of the Financial & Budget Policies related to the “Balanced Budget” section of the policies.
159

SECTION 6. That the City Clerk shall certify to the passage and adoption of this Resolution, and enter it into the book of original Resolutions.

PASSED and ADOPTED by the City Council of the City of Fountain Valley at a regular City Council meeting held on this day of June, 2022 by the following vote:

AYES:

NOES:

ABSENT:
, Mayor
ATTEST:

Rick Miller, City Clerk
APPROVED AS TO FORM:

HARPER & BURNS LLP
Colin Burns
Attorneys for the City
160

1 RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL FOR THE CITY OF FOUNTAIN

VALLEY, CALIFORNIA, ESTABLISHING PROPERTY RENTAL TERMS

AND CHARGES FOR ADMINISTRATIVE SERVICES FOR THE
MUNICIPAL WATER & SEWER UTILITIES.

WHEREAS, the proposed 2022/23 budget for the Water & Sewer Funds maintains funding for the operating and capital improvement expenditures of the Water & Sewer Utilities; and WHEREAS, the City owns and maintains property at various locations throughout the city that are utilized by the Water Utility to locate reservoirs, wells, equipment and facilities; and WHEREAS, the Water Utility is required to construct and maintain various pipelines and appurtenances for transmitting and distributing water for any and all purposes including mains, lines and pumps necessary or proper therefore, in, along, upon, and under the streets within the City of Fountain Valley; and
WHEREAS, the Water Utility, during the life thereof, will pay to the City an amount in the form of a right-of-way usage fee for the water mains located within the street right-of-way and related maintenance costs; and
WHEREAS, this administrative arrangement which has been in place since 1958 saves money and promises efficiency; and
WHEREAS, the Water Utility will also pay a charge for its use of land located within the City for other appurtenances such as water well pumps, reservoirs, and water operation facilities; and
WHEREAS, administrative services are also provided to the Water & Sewer Utilities; and WHEREAS, the City has determined that it is in the best interest of the community to charge the Water & Sewer Utilities the amount of $1,935,534 in 2022/23 for these rights and services; and
WHEREAS, the schedule attached “Exhibit A” is based on substantial evidence establishing that these allocations represent the costs of providing administrative services to the Water & Sewer Utilities.

NOW, THEREFORE, BE IT RESOLVED BY the City Council of the City of Fountain Valley, California, that:

The Schedule attached hereto as Exhibit “A” is approved as the basis for allocating city property and service costs to the Water & Sewer Utilities.

PASSED, APPROVED, AND SIGNED this day of June 2022, at a regular meeting of the City Council of the City of Fountain Valley.
161

2 Attest:

Mayor
Rick Miller, City Clerk
APPROVED AS TO FORM:

HARPER & BURNS LLP
Colin Burns
Attorneys for the City

ATTACHMENT
Exhibit A
162

EXHIBIT A
A. LAND LEASED TO THE WATER UTILITY

FACILITIES SITE LOCATION
SQUARE

FOOTAGE
Reservoir 1 18460 Euclid Street 93,771
City Yard 17300 Mt. Herrmann Street - City Owned 50,000 Well No. 9 9293 Poinsettia Avenue 7,600
Well No. 6 11775 Warner Avenue 12,416
Well No. 8 11669 Edinger Avenue 19,340
Total 183,127
Rental Rate $0.47 per SF/MO 1,032,836
B. BUILDINGS LEASED TO THE WATER UTILITY

FACILITIES SITE LOCATION
SQUARE

FOOTAGE
City Yard 17300 Mt. Herrmann Street 19,278
Rental Rate $2.25 per SF/MO 520,506
. INDIRECT COSTS
WATER UTILITY: Allocation
PROGRAM BASIS OF ALLOCATION % Percentage $ Amount
City Council City Council Agenda Items 1.00% 1,554
Administration Budgeted Expenditures 18.63% 137,573
City Attorney Budgeted Expenditures 18.63% 69,857
Human Resources Full-Time Equivalent Staffing 7.94% 71,679 Finance Budgeted Expenditures 18.63% 54,298
Water Utility - Total General Administrative Costs 334,961 SEWER UTILITY: Allocation
PROGRAM BASIS OF ALLOCATION % Percentage $ Amount
City Council City Council Agenda Items 3.11% 4,826
Administration Budgeted Expenditures 2.84% 20,951
City Attorney Budgeted Expenditures 2.84% 10,639
Human Resources Full-Time Equivalent Staffing 1.98% 17,920 Finance Budgeted Expenditures 2.84% 8,269
Sewer Utility - Total General Administrative Costs 62,605 Municipal Code 14.12.200 Public Fire Protection Credit (2,050 Hydrants @ $7.50) To The Water Utility (15,375) TOTAL COST PER AGREEMENT 1,935,534

SCHEDULE OF PROPERTY RENTAL TERMS AND CHARGES

ADMINISTRATIVE SERVICES FOR THE MUNICIPAL WATER & SEWER UTILITIES FISCAL YEAR 2022-23
163

BUDGET GLOSSARY
Accrual Basis of
Accounting
A method of accounting that recognizes the financial effect of transactions, events, and inter-fund activities when they occur, regardless of the timing of related cash flows.

Adjusted / Amended
Budget
The adopted budget plus any modifications (increases, decreases and transfers) approved by the City Council during the fiscal year.

Air Quality
Management District
(AQMD)
The air pollution control agency for the four-county region including Los Angeles and Orange counties, as well as parts of Riverside and San Bernardino counties (www.aqmd.gov).

Air Quality
Management Plan
(AQMP)
A plan developed by the AQMD that serves as the blueprint for all the future rules necessary to bring the area into compliance with federal and state clean air standards.

Allocation of Funds Setting aside funds for a specific purpose or program. An allocation of funds makes them available for expenditure.

Appropriation A specific amount of money authorized by the City Council for an approved work program.

Arterial Highway
Financing Program
(AHFP)
A Measure M funded program for pavement rehabilitation projects on arterial roadways in the county.

Assessed Property The value set upon real estate or other property by the County Tax Assessor.

Assessed Valuation A measure of the taxable value of property located within the City against which the tax rate is applied.

Assessed Valuation
(Secured)
That part of the assessment roll containing state assessed property and property the taxes on which are a lien on real property sufficient to secure payment of taxes.

Assessed Valuation
(Unsecured)
The remainder of the assessment roll that is not on the secured roll.

The taxes on the unsecured roll are a personal liability of the assessed owner.

Assessment District
(AD)
A separate unit of government that manages specific resources within defined boundaries. Through self-financing, it can raise predictable funds, such as taxes, user fees or bonds, directly from the people who benefit from the services.
164

BUDGET GLOSSARY
Audit Prepared by an independent certified public accountant (CPA), the primary objective of an audit is to determine if the City’s financial statements fairly represent the City’s financial position and results of operations in conformity with generally accepted accounting principles. In conjunction with performing an audit, independent auditors customarily issue a Management letter stating the adequacy of the City’s internal controls as well as recommending improvements to the City’s financial management practices.

Balanced Budget A budget in which planned expenditures do not exceed planned revenues.

Bond Refinancing The pay off and re-issuance of bonds to obtain better interest rates and/or bond conditions.

Bonds A certificate of debt issued by an entity, guaranteeing payment of the original investments, plus interest.

Bradley Burns
Uniform Local Sales
& Use Tax
A 1% local sales tax is collected by the State of California as part of the larger sales and use tax levied on the total retail price of tangible personal property based on business location. Use Tax is the complement of sales tax and imposed on the purchaser, usually for goods purchased out-of-state for local use.

Budget Surplus The difference between operating revenues and operating expenditures. The Budget Surplus may be used for ongoing expenses (as opposed to year-end balance, which may be used only for onetime expenses).

Budget Amendment The Council has the sole responsibility for adopting the City’s budget and may amend or supplement the budget at any time after adoption by majority vote. The City Manager has the authority to approve transfers within funds.

California
Environmental
Quality Act
(CEQA)
A state statute enacted in 1970 that requires state and local agencies to identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible (ceres.ca.gov/ceqa).

California
Transportation
Commission
(CTC)
The agency responsible for programming and allocating funds for the construction of highway, passenger rail and transit improvements throughout California (www.catc.ca.gov)
165

BUDGET GLOSSARY
Capital Equipment Equipment (fixed assets) with an initial individual cost of $5,000 or more and an expected useful life greater than two years, such as automobiles, microcomputers and furniture.

Capital Expenditure Expenditure for tangible property with an initial individual cost of $5,000 or more and an expected useful life greater than two years per item.

Capital Improvement
Program Budget
(CIP)
A multi-year financial plan for construction of infrastructure, facilities, and rehabilitation such as buildings, streets, storm drains, and recreational facilities with an initial individual cost of at least $50,000 and an estimated useful life greater than two years.

Certificates of
Participation
(COPs)
Tax-exempt bonds issued by state entities usually secured with revenue from an equipment or facility lease. COPs enable governmental entities to finance capital projects without technically issuing long-term debt. This can be advantageous, as the issuance of long-term debt is commonly subject to voter approval and other state constitutional and statutory requirements. COPs have been used by municipalities to pay for prisons, office buildings, vehicles, and even parks.

City Council
(CC)
Comprised of five City Councilmembers who are elected at large by registered voters of the City. Councilmembers each serve a four-year term. The mayor is selected by fellow councilmember and serves a one-year term. The City of Fountain Valley has a three-term limit for elected officials. The City Council adopts legislation, sets policy, adjudicates issues and establishes the budget of the City.

Community
Development Block
Grant (CDBG)
Provides eligible metropolitan cities and urban counties with annual direct grants to revitalize neighborhoods; expand affordable housing and economic opportunities; and/or improve community facilities and services, principally to benefit low- and moderate-income persons.

Community Facilities
District
(CFD)
A special district that can issue tax-exempt bonds as a mechanism by which public entities finance construction and/or acquisition of facilities and provide public services to the district.

Community Oriented
Policing Services
(COPS)
A grant program that provides partial funding of salaries for several front line law enforcement positions.

Comprehensive
Annual Financial
Report
The summarization of the City's financial activity for the previous fiscal year which also includes a summarization of significant milestones that were accomplished during the year by department, fiscal policies, 166

BUDGET GLOSSARY
(CAFR) and statistical information. The CAFR is prepared by December of each year.

Conditional Use
Permit
(CUP)
Allows a city or county to consider special uses which may be essential or desirable to a particular community, but which are not allowed as a matter of right within a zoning district, through a public hearing process.

Congestion
Management Plan
(CMP)
Defines a network of state highways and arterials, level of service standards and related procedures.

Consumer Price
Index
(CPI)
A statistical description of price levels provided by the U.S.

Department of Labor. The change in this index from year to year is used to measure the cost of living and economic inflation.

Contingency Reserve The City has established a policy to set aside a percentage of its General Fund operating expenditures as a contingency reserve.

Cost Allocated A method used to charge General Fund costs budgeted in one department to another department or another fund.

Debt Service The payment of principal and interest on borrowed funds such as bonds.

Department,
(Function) Division
Section Organizational units within the Operations Budget that group resources together to provide related types of services.

Discretionary
Funding
Opportunities
Pertains to funds, grants or other resources that are not restricted as to use.

Drug Abuse
Resistance Program
DARE – a police officer-led series of classroom lessons that teaches children from kindergarten through 12th grade how to resist peer pressure and live productive drug- and violence-free lives (www.dare.com).

Encumbrance An encumbrance is not an expenditure, but a reservation of funds to be expended at a future date. A commitment is usually made through a purchase order for the future payment of goods and services not yet received or paid for.

Enterprise Fund This fund type is used to account for operations that are: (a) financed and operated in a manner similar to private sector enterprises and it 167

BUDGET GLOSSARY
is the City’s intent that the costs (including depreciation) of providing goods or services to the general public be financed or recovered primarily through user charges.

Environmental
Enhancement and
Mitigation Program
(EEMP)
A state funded grant program for projects related to environmental enhancement or design, particularly of transportation facilities.

Environmental
Impact Report
(EIR)
A public document used by governmental agencies to analyze the significant environmental effects of a proposed project, to identify alternatives and disclose possible ways to reduce or avoid potential environmental damage. The California Environmental Quality Act requires an EIR whenever the initial study or other evidence in the record has produced substantial evidence that the proposed project might produce significant environmental effects.

Expenditure The outflow of funds paid or to be paid for an asset, goods or services regardless of when the invoice is actually paid. This term applies to all funds.

Fair Housing Council
of Orange County
(FHCOC)
A private non-profit organization which fosters diversity in housing through education and the enforcement of state and federal fair housing laws (www.fairhousingoc.org).

Fees A general term used for any charge levied by government for providing a service or permitting an activity.

Fiscal Year
(FY)
Any period of 12 consecutive months designated as the budget year.

Fountain Valley’s budget year begins on July 1 and ends on June 30.

Fixed Asset Assets that are long-term in nature such as land, buildings, machinery, furniture and other equipment. The City has defined such assets as those with an expected life in excess of one year and an acquisition cost in excess of $5,000.

Fountain Valley
School District
(FVSD)
An elementary school district serving Fountain Valley and Huntington Beach in Orange County, California. There are nine elementary schools, two middle schools (6-8), and one K-8 alternative school. (http://www.fvsd.us)
Franchise Tax Revenue generated from taxes paid by a business that gave an exclusive contractual agreement to operate and use the public rightof-way in the City Examples includes southern California Edison, 168

BUDGET GLOSSARY
Public Cable Television, Southern California Gas and Rainbow Disposal.

Fringe Benefits These include retirement/pension; health, life, and disability insurance; workers’ compensation; and vacation, administrative, medical and special leave of absence time.

Full-Time Equivalent
(FTE)
Refers to part-time hours converted to one full-time equivalent position, which equals 40 hours per week, 52 weeks per year. (2080 hours per year)
Fund A self-balancing set of accounts to record revenues and expenditures associated with a specific purpose.

Fund Balance Within a specific fund, the funds remaining when all current and prior year liabilities (expenditures) are subtracted from current and prior year assets (revenues).

Gas Tax State tax received from gasoline sales utilized solely for street related purposes, such as new construction, rehabilitation or maintenance.

General Fund The primary operating fund of the City (as opposed to all other City funds, which are designated as “Special Funds”).

General Plan A comprehensive, long-range, policy document required by state law.

The document establishes the City’s overall spatial and temporal development pattern.

Geographical
Information System
(GIS)
A computer system capable of assembling, storing, manipulating and displaying geographically referenced information.

Goal A time/phased strategy that will implement a specific course of action or plan, typically, a long-term process.

Government Finance
Officers Association
(GFOA)
A professional association of state/provincial and local finance officers in the United States and Canada (www.gfoa.org).

Governmental
Accounting
Standards Board
(GASB)
Organized in 1984 by the Financial Accounting Foundation to establish standards of financial accounting and reporting for state and local governmental entities (www.gasb.org).
169

BUDGET GLOSSARY
Grants Contributions of cash or other assets from another governmental agency to be used or expended for a specified purpose, activity or facility.

Gross Domestic
Product (Real)
(GDP)
The total of the goods and services produced by labor and property located in the United States.

Gross State Product
(GSP)
The total of the goods and services produced by labor and property located in the State of California.

Growth Management
Area
(GMA)
Inter-jurisdictional planning regions within Orange County.

Growth Management
Program
(GMP)
A Measure M funded program intended to address the cumulative regional traffic impacts of development not addressed by specific project mitigation and existing system deficiencies.

Hotel Tax (TOT) Also known as the Transient Occupancy Tax (TOT) or bed tax – an 9% tax added to the cost of renting a hotel room within the City.

Infrastructure Inputs Includes the City’s street, bridge, traffic signal, landscaping, and trail networks. To be capitalized as part of the City’s infrastructure network, a related component must have an initial individual cost of at least $50,000 and an estimated useful life greater than two years.

Resources (e.g. dollars, staff and other assets) required to accomplish a job or provide a service.

Integrated Financial
Accounting System
InCode – Fountain Valley’s computerized accounting system used to coordinate the City’s general accounting, purchasing and utility billing processes.

Inter-Fund Transfers Payments from one fund to another fund, primarily for work or services provided Landscape, Lighting,
and Park
Maintenance
(LLPM)
An assessment district to provide funds for park and parkway landscaping, lighting and park maintenance.

Lease-Purchase
Agreement
Contractual agreements which are termed leases, but whose lease amount is applied to the purchase.
170

BUDGET GLOSSARY
Level of Effort Generally used to identify the number of staff providing a particular service. Level of Services Generally used to define the existing or current services, programs and facilities provided by government.

Levy To impose taxes, special assessments or service charges for the support of governmental activities.

Local Agency
Formation
Commission
(LAFCO)
Reviews proposals for the formation of new local governmental agencies and changes of organization in existing agencies (www.oclafco.org).

Local Agency
Investment Fund
(LAIF)
A voluntary program created by statute in 1977 in which participating agencies (local governments and special districts) invest public funds.

Long-Term Debt Debt with a maturity of more than one year after issuance.

Major Fund A fund that comprises more than 10% of total citywide budgeted revenues and transfers-in and/or 10% of total budgeted
appropriations and transfers-out. Please see the “Major Funds – Summary by Budget Category” tables presented in the Budget Summary chapter.

Measure M County-wide sales tax measure used to fund a variety of transportation related projects.

Measure M - Growth
Management Area
(M-GMA)
A county grant program that provides funding for projects that benefit the greatest number of jurisdictions within a designated growth management area (GMA) in Orange County. The primary objective of this program is to address current traffic deficiencies and the cumulative regional traffic impacts of development not addressed by specific project mitigation and existing system deficiencies.

Measure M –
Turnback
The non-competitive portion of the sales tax revenue generated through Measure M that is "turned back” to the City. Funds are restricted to circulation related projects (street, traffic signal, etc.) and are received quarterly.

Memorandum of
Understanding
(MOU)
An agreement outlining the terms of employment entered into between the City and employees of various bargaining units. 171

BUDGET GLOSSARY
Modified Accrual Basis of Accounting Basis of accounting according to which (a) revenues are recognized in the accounting period in which they become available and measurable and (b) expenditures are recognized in the accounting period in which the fund liability is incurred, or measurable, except for un-matured interest on general long-term debt and certain similar accrued obligations, which should be recognized when due.

National Pollutant
Discharge
Elimination System
NPDES – a permit program authorized by the Clean Water Act that controls water pollution by regulating point sources that discharge pollutants into waters of the United States.

Objective Describes an outcome to be accomplished in specific, well-defined and measurable terms and is achievable within a specific timeframe; generally, programs have objectives.

Operating Budget A budget for General Fund department service delivery expenditures such as salaries, utilities and supplies. The day-to-day costs of delivering essential City services.

Orange County Fire
Authority
(OCFA)
An agency that provides fire prevention/suppression and emergency services to 22 cities and all the unincorporated areas in Orange County (www.ocfa.org).

Orange County
Investment Pool
(OCIP)
A pooling of cash by the county, local agencies and school districts for investment purposes run by the Orange County Treasurer.

Orange County
Transportation
Authority
(OCTA)
A regional transportation agency formed in 1991 to develop and implement unified transportation programs and services for Orange County (www.octa.net).

Ordinances A formal legislative enactment by the governing board (i.e. City Council) of a municipality. If it is not in conflict with any higher form of law, it has the full force and effect of law within the boundaries of the municipality to which it applies.

Outputs The general results expected from programs and functions.

Part I Crimes The most serious criminal offenses, including murder, rape, robbery, aggravated assault, burglary, larceny/theft, auto theft and arson.

Part II Crimes
Pavement
Management System
All other criminal offenses not defined as Part I crimes. 172

BUDGET GLOSSARY
PMS – a computer-assisted decision-making process designed to help cities and counties prevent pavement problems through maintenance and repair in a timely, cost-effective manner.

Pavement Quality
Index
(PQI)
A scale from 1 to 10 that measures the structure, surface condition and riding comfort of the roadway.

Performance Budget A budget wherein expenditures are tied to the measurable performance of activities and work programs.

Performance
Measurements
Statistical measures that are collected to show the impact of dollars spent on City services.

Personnel Expenses Salaries and fringe benefits, such as pensions and insurance, for fulltime and part-time employees of the City.

Priority E Calls Refers to the most serious calls for emergency response for serious emergencies, in-progress calls and potentially life-threatening incidents that require a Code 3 (use of lights and siren) response.

Priority I Calls Refers to calls for emergency response for serious emergencies, in progress calls and potentially life-threatening incidents that do not require a Code 3 (use of lights and siren) response.

Program Represents major areas or support functions that can be defined as a service provided to citizens, other departments or other agencies.

Program Budget A budget wherein expenditures are displayed primarily on programs of work and secondarily by the character and object class of the expenditure.

Property Tax A tax levied on the assessed value of real property; also known as ad valorem tax. In California, this tax is limited to 1% with the exception of pre-Proposition 13 approved bond debt service. Proposition 13 On June 6, 1978, the California electorate approved Proposition 13, the “People’s Initiative to Limit Property Taxation,” which limited the tax rate for real estate as follows: the maximum amount of any tax on real property shall not exceed 1% of the full cash value of such property.

The City of FV receives $0.1287 cents per dollar of the Prop 13 tax.

Proposition 218 On November 5, 1996, the California electorate approved Proposition 218, the self-titled “Right to Vote on Taxes Act.” Proposition 218 added articles XIIIC and XIIID to the California Constitution and made 173

BUDGET GLOSSARY
numerous changes to local government finance law. Public officials are required to conduct the public’s business in compliance with Proposition 218.

Public Employees’
Retirement System
(PERS)
Provides retirement and health benefit services to members from the state, school districts and local public agencies (www.calpers.ca.gov).

Ralph M. Brown Act The Brown Act is a California law that insures the public can attend and participate in meetings of local government.

Redevelopment
Agency
(RDA)
Formerly charged with the oversight for the redevelopment process for the City of Fountain Valley. In June 2011, the Redevelopment Dissolution Act, AB1x26, was signed by the Governor and later upheld by the California Supreme Court. As a result, all redevelopment agencies in California were dissolved effective February 1, 2012.

Regional Surface
Transportation
Program
(RSTP)
A federal and state funded grant program used for projects located on highway systems (classified higher than local roads or rural minor collectors), bridges on any public highway, and transit systems.

Reserve A designated amount of funds set aside from a fund’s balance which is legally restricted for a specific purpose and is therefore not available for general appropriations.

Resolution A special or temporary order of a legislative body (e.g. City Council or Planning Commission) requiring less formality than an ordinance.

Resources Units of dollars or physical input, such as work years or work hours, and other assets used to support and attain program objectives.

Revenue Annual income received by the City.

Right of Way ROW – a strip of land occupied or intended to be occupied by a street, crosswalk, railroad, electric transmission line, oil or gas pipeline, water main, sanitary or storm sewer main, shade trees, or special use.

Service Center Used for budgetary reporting, an organizational unit that provides a distinct and unique service. Various sections within a department that provide substantially similar services may be combined into one service center – for instance, the City Clerk’s Office and City Clerk Records are combined into one service center.
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BUDGET GLOSSARY
Southern California
Association of
Governments
(SCAG)
The Metropolitan Planning Organization for Los Angeles, Orange, San Bernardino, Riverside, Ventura and Imperial counties, that is mandated by the federal government to research and draw up plans for transportation, growth management, hazardous waste management and air quality (www.scag.ca.gov).

Special Funds The City’s accounts are broken into distinct funds, each earmarked for a different purpose, with the principle and interest of the funds tracked separately. The City’s main operating fund is its General Fund, while other City funds are designated as Special Funds. These funds are legally restricted for a specific purpose and is therefore not available for general use.

Strategic Plan The City of Fountain Valley has a semi-annual strategic planning process. The strategic plan identifies the City’s Mission Statement; Core Organizational Values; Three-Year Goals and six-month strategic objectives.

Strategic Financial
Business Plan
SBP – a ten-year planning “blueprint,” updated annually, that evaluates the City’s financial capability to achieve its goals; helps set priorities for City operations and the annual budget; and guides the City’s capital improvement and rehabilitation program.

Traffic Enforcement
Index
The number of moving citations divided by the number of injury accidents.

Transaction Sales
Tax (District Tax)
Similar to the Bradley Burns Sales Tax, a transactions and use sales tax is allocated to the district where the tangible goods are delivered or placed into use. Voter approved district taxes are levied within incorporated city limits. Fountain Valley has a 1% transaction tax authorized from April 2017 to March 2037.

Transfers-In/Out A transfer of resources between different City funds (see glossary definition of “Fund”). A transfer of cash from the City’s General Fund to a City Special Fund, for example, would be designated as a transferout in the General Fund, and then a transfer-in in the receiving Special Fund.

Transient Occupancy
Tax
(TOT)
An 9% tax added to the cost of renting a hotel room within the City.

Also known as the Hotel or Bed Tax.

Transportation
Management
Association
(TMA)
An association comprised of employers and property owners that promotes the use of alternative forms of commuting to the single occupant vehicle. Traffic congestion relief and air quality benefits are the primary goals of TMA.
175

BUDGET GLOSSARY
Transportation
Management Plan
(TMP)
A plan that promotes the reduction of single occupant vehicle use in order to improve air quality and relieve congestion. Transportation Subventions Funds from outside sources used to construct transportation improvements that must be used for specific projects.

TRIPS A transit service for Fountain Valley seniors and persons with disabilities, providing pre-scheduled transportation and regular shuttle services.

Unencumbered
Appropriation
That portion of an allocation not yet expended or committed to a specific purpose. Unexpended Appropriation is that portion of an allocation not yet actually paid.

Voice Over Internet
Protocol
(VoIP)
Used to manage the delivery of voice information over the Internet.

Year-End Surplus Funds remaining at the end of a fiscal year that are available for allocation or for one-time purchases (not for on-going programs or services).
176

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
TO: Honorable Mayor and Agenda Date: June 21, 2022
Members of the City Council
SUBJECT: Approve a Memorandum of Understanding with the Cities of Garden Grove and Westminster to Advance a Homeless Navigation Center EXECUTIVE SUMMARY:

Approve a Memorandum of Understanding with the Cities of Garden Grove and Westminster to explore obtaining and funding a future navigation center to address services and support for persons experiencing homelessness.

BACKGROUND:

The City has recently experienced an expansion in the number of persons experiencing homelessness in City parks and other public property. While being homeless is not a crime, the use of public property for camping conflicts with the public uses to which those properties were intended.

The expansion of homelessness is a problem that can be seen throughout Southern California, and nationwide. Addressing the issues associated with homelessness has been the focus of local agencies and the Courts, particularly in Southern California.

While there are many approaches, one promoted by homeless advocacy groups and the courts is the continuum of care model, where persons experiencing homelessness can receive many different levels of service tailored to their individual needs, with the goal of finding long term supportive or independent housing.

The continuum of care model requires navigation centers that can accept, triage, treat, and assist persons experiencing homelessness.

DISCUSSION:

Due to the pandemic, many communities across the county and state are working tirelessly to address the growing homelessness challenges. Both residents and businesses report increased rates of disturbances, trash, mental health challenges, substance use, and nuisance related issues, particularly in areas adjacent to youth sports

Council Action Request
Navigation Center MOU
June 21, 2022

activities in the Recreation Center. Calls for service are typically handled by the Police Department, Public Works, and Recreation, who work alongside the City’s homeless street outreach service provider, City Net. City Net has had substantial success in assisting a large number of persons who had set up camp in the Recreation Center move to more suitable living arrangements. Despite City Net’s successes, some individuals have not been relocated either because shelter is not available or the person is not willing to relocate. A navigation center will provide additional shelter for persons willing to accept the assistance, and having adequate available shelter beds will also allow City to enforce its anti-camping ordinance.

In an effort to leverage resources among the Central Service Planning Area (Central SPA) Staff has been involved in joint discussions with the cities of Garden Grove and Westminster to explore a partnership and collaboration in the future development of a navigation center. To date, Staff has also received an initial commitment from the County of Orange to participate in a project to construct and operate a navigation center over a 10-year period. To memorialize the tri-cities’ collaboration in the Central SPA, Staff from the three cities drafted a Memorandum of Understanding for the City Council’s review.

The MOU outlines that the cities agree to collaborate towards a future navigation center including funding contributions towards construction and operations.

Negotiations towards a more comprehensive MOU detailing levels of funding commitments by the participating Central SPA cities (which include Garden Grove, Fountain Valley, and Westminster) and the County are in process and will further materialize once a potential site is identified.

As more individuals find themselves without shelter for a number of reasons such as behavioral, economic, family, or medical issues, Staff continues to explore housing intervention alternatives and solutions in which individuals can store their belongings, seek behavioral, mental and medical services, search for employment and housing, access mail, income and benefits, and other stabilizing aspects.

Staff requests Council approval of the MOU with the cities of Garden Grove and Westminster to advance the development of a navigation center.

FINANCIAL ANALYSIS:

There is no fiscal impact. The attached MOU does not commit any City funds to the future navigation center. However, future consideration of a possible navigation center property and related operational costs would require future budget appropriation.

ATTORNEY REVIEW:

The Attorney for the City has reviewed and approved the MOU.

Council Action Request
Navigation Center MOU
June 21, 2022

PUBLIC NOTIFICATION:

This item was noticed in compliance with the Ralph M. Brown Act.

RECOMMENDATION:

Staff recommends Council approve the attached Memorandum of Understanding.

Prepared By: Colin Burns, Attorney for the City
Fiscal Review by: Ernestine Jones, Finance Director-City Treasurer Approved By: Maggie Le, City Manager
Attachment 1: Memorandum of Understanding

1 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITIES

OF GARDEN GROVE, FOUNTAIN VALLEY, AND

WESTMINSTER TO COOPERATE ON THE DEVELOPMENT OF

A NAVIGATION CENTER FOR THE CENTRAL ORANGE

COUNTY SERVICE PLANNING AREA
This MEMORANDUM OF UNDERSTANDING (“Agreement”) is dated as of June __, 2022 (“Effective Date”), and entered into by and among the Cities of Garden Grove, Fountain Valley, and Westminster, each of which is a municipal corporation organized and existing under California law (cumulatively the “City Parties” or “Parties,” and at times individually a “City Party”), with reference to and in consideration of the following:

WHEREAS, like many other regions in California, the County of Orange (“Orange”) has seen a rapid and troubling growth in the homeless population over the past several years, a condition that has been difficult to address given the increased rates of persons with untreated addictive disorders involving substance abuse and mental health conditions, the high cost of housing and property in the area, and the shortage of emergency, transitional, and affordable housing available in the County to serve this population; WHEREAS, as a result, local jurisdictions throughout the County have experienced increased incidents of unlawful camping and loitering activities in and upon portions of the public rights-of-way, parks, and other public facilities (“Public Property”) in violation of local anticamping, anti-loitering, and/or park closure ordinances and regulations; WHEREAS, the use of Public Property in this manner creates health and safety risks to homeless persons due to traffic hazards, exposure to weather, inadequate sanitation, and other conditions detrimental to their wellbeing, and negatively impacts the health, safety, and general welfare of the community by degrading the environmental and physical condition of such Public Property, increasing risks associated the spread of illnesses, and frustrating the public purpose for which such Public Property is dedicated;
WHEREAS, in efforts to address this crisis, the County established an integrated Continuum of Care (“CoC”) to guide homeless individuals and families through a comprehensive array of services and housing designed to prevent and end homelessness; WHEREAS, to better coordinate access points, assessments, resources, and programs serving persons experiencing homelessness, the CoC divided the County into three (3) geographic “Service Planning Areas” (or “SPAs”), with the “Central Service Planning Area” (“Central SPA”) including the cities of Westminster, Garden Grove, and Fountain Valley; WHEREAS, The City Parties desire to cooperate to establish a new Navigation Center and to memorialize this non-binding statement of intent by each of the City Parties to cooperate and act in good faith to enter into a comprehensive final MOU between the City Parties which will define the respective rights and responsibilities of each City with respect to the acquisition of a site, financing, operations, and the provision of Services at the Navigation Center.

2 WHEREAS, in addition to addressing the needs of homeless persons through the provision of overnight shelter, the City Parties covenant to work together, in furtherance of the CoC, towards developing and increasing the Central SPA’s inventory of long-term affordable and supportive housing units, such that homeless persons receiving services under this Agreement may transition from temporary or emergency shelter facilities, and into long-term and stable housing solutions; and
WHEREAS, each Party has caused this Agreement to be duly approved by its respective governing body, and by so doing, has found and determined that this Agreement furthers the health, safety, and general welfare of their respective residents.

NOW THEREFORE, in consideration of the mutual covenants and conditions contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

AGREEMENT

1. PURPOSE
In furtherance of the health, safety, and well-being of all their residents and to return and preserve Public Property for its intended purpose, the City Parties, located within the Central SPA, desire to work together cooperatively and in good-faith towards developing a regional solution to the current homeless crisis within their respective jurisdictions; This Agreement is a non-binding statement of intent by each of the City Parties to cooperate and act in good faith and to expeditiously enter into a final MOU between the City Parties which will define the rights and responsibilities of the Parties with respect to the acquisition of a site, financing, operations, and the provision of Services, as defined below, at the Navigation Center.

It is the intention of the City Parties to pursue the award of available grant funds under county, state, and federal programs towards the acquisition, construction, and operation of the new Navigation Center to be located within the boundaries of the City Parties, and intended to exclusively serve the unsheltered homeless population currently residing within the jurisdiction of the City Parties;

2. DEFINITIONS
In addition to the other terms and phrases defined elsewhere in this Agreement, the following key capitalized terms and phrases used throughout this Agreement shall have the meaning assigned in this Section.

2.1. “Center Operator” shall mean and refer to the third-party contracted by a Host City to provide comprehensive and “turnkey” day-to-day management and operation of a Navigation Center.

2.2. “Guests” shall mean and refer to homeless and chronically homeless adults, children, and families located within the Program Area.

3 2.3. “Guest Capacity” shall mean and refer to the number of beds provided in a Navigation Center.

2.4. “Host City” shall mean and refer to the City of Garden Grove.

2.5. “Navigation Center” shall mean and refer to those public facilities to be acquired, constructed, and operated in the Host City under this Agreement.

2.6. “Operating Plan” shall mean and refer to plan approved by a Host City, Party Representatives, and a Center Operator, that details the terms, conditions, and standards by which Services are made available to Guests at a Navigation Center.

2.7. “Party Representative” shall mean and refer to the highest-ranking appointed executive official for each of the Parties, or his/or her duly authorized designee.

2.8. “Party Share” shall mean and refer to that portion of the City Program Costs allocated to each City Party.

2.9. “Program” shall mean and refer to the Parties’ cooperative financing and planning for the acquisition, construction, operation and the provision of Services at the Navigation Centers, and the cooperative sharing among the Parties of Guest Capacity at the Navigation Centers.

2.10. “Program Area” shall mean and refer to the area within the city limits of the City Parties.

2.11. “Program Costs” shall mean and refer to the costs incurred by the Parties in the acquisition of Navigation Center sites and the completion of modifications or capital improvements thereto, and annually to operate the Navigation Centers during the Term.

2.12. “Program Funds” shall mean and refer to all funds paid by or to the Parties under this Agreement, including but not limited to any grant funds received by the Parties and contributed towards the Program.

2.13. “Program Property” shall mean and refer to all real and personal property purchased or acquired with Program Funds.

2.14. “Services” shall mean and refer to the provision of overnight shelter and other sanitation, nutritional, health, educational, supportive, and/or basic human services at Navigation Centers, as described in an Operating Plan.

3. TERM

3.1. General Term. This Agreement shall be effective as of the date which the last of the Parties has executed the same, which shall be inserted as the Effective Date in the first

4 paragraph above, and shall remain in full force and effect until terminated by the execution of a successor MOU or 12 months from the Effective Date, whichever occurs sooner. The Term may be extended upon the mutual written agreement of the Parties, or earlier terminated in accordance with the provisions of this Agreement.

3.2. Termination by City Parties.
a) Notice and Effective Date. Notwithstanding Section 3.1, any City Party may terminate its participation in this Agreement by providing 30 day’s written notice to all other Parties.
b) Continuing Enforceability. Following the effective date of termination, the terminating City Party shall have no further obligations or rights with respect to this Agreement, except as expressly provided otherwise herein.

4. NAVIGATION CENTERS

4.1 City Navigation Centers. The Parties desire to work cooperatively and combine their respective resources for purposes of providing and coordinating the provision of Services to Guests at a Navigation Center located in the Program Area, and to acquire, construct, develop, and operate the new Navigation Center. To accomplish this task, the Parties agree to negotiate in good faith and cooperation to finalize and execute a C-SPA Navigation Center MOU which will address, at a minimum, the following topics:
a) Funding and Financial Provisions. Funding for the Navigation Center property acquisition, necessary improvements, operational equipment, fixtures and furnishings, and ongoing operations.
b) Construction and Maintenance
c) Use and Operations
d) Security
e) Community Coordination and Communication
f) Disputes, Defaults and Remedies
g) Indemnity and Insurance
h) Standard Provisions for a Multi-Agency Agreement

5. CONSTRUCTION AND MAINTENANCE OF THE NAVIGATION CENTER

5.1. Ownership. The Navigation Center shall be owned by the applicable Host City, together with any Program Property in the custody or possession of a Host City; provided the Navigation Center and Program Property shall be utilized by the Host City exclusively for purposes consistent with this Agreement.

5.2. Design. The Host City shall have final authority over the design and construction of

5 the Navigation Center located in its jurisdiction, in accordance with the Host City’s ownership rights and plenary land use authority. Prior to a Host City’s commencement of construction of, or significant modifications or improvements to, a Navigation Center, the City Managers or their delegated City Representatives will be provided a reasonable opportunity to review and provide input on the proposed design and amenities of the Navigation Center, and the Host City will, in good faith, consider the input of the Party Representatives in finalizing the same.

5.3. Host City as “Lead Agency.” The Host City for the Navigation Center shall be the “lead agency” for purposes of improvements or modifications thereto, as well for the environmental review, acquisition, development, and construction of a Navigation Center, and the operation, cleaning, maintenance, or repair of a Navigation Center.

5.4. Security. The Host City will ensure that adequate security measures and policies are incorporated into the Navigation Centers’ construction and operation, including but not limited to security plans, secured entrances, on-site security personnel, video recording equipment, adequate lighting, law enforcement patrols, and neighborhood safety controls. Detailed security procedures and protocols will be included in the Operating Plan developed by the Host City, Center Operator, and the Party Representatives.

6. USE AND OPERATION OF NAVIGATION CENTERS

6.1. Exclusive Purpose of Navigation Centers. A Navigation Center subject to this Agreement will be used by the Parties exclusively for the purpose of providing Services to Guests located within the Program Area. The Parties agree to work cooperatively and in good faith, and to take such reasonable action(s) or precaution(s) as deemed necessary, to effectuate the purpose of this Section.

6.2. Use and Access of Navigation Centers. In consideration for the City Parties’ payment of their respective Party Share, each City Party shall have the right to utilize an approximately equivalent percentage of its Party Share of total Guest Capacity in the Navigation Centers. The Parties shall have access to and utilize the monitoring and logging system developed and operated by the County to track the real-time availability of Guest Capacity in the Navigation Centers, and to make arrangements and reservations for the transportation of Guests thereto and therefrom. Parties utilizing Guest Capacity in Navigation Centers shall comply with the applicable Operating Plan.

6.3. Host City Priority. The Host City shall have priority to utilize the available Guest Capacity in their respective Navigation Center, and shall have the right of first refusal in the event of capacity overflow or shortages.

6.4. Annual Review of Party Usage. The Guest Capacity utilized by each City Party shall be reviewed not less than once per year in conjunction with an Annual Meeting and in light of an Annual Report and Annual Audit, and the results of this review shall be used for making any necessary adjustments to the Party Shares or the Cost Allocation Plan to ensure the Parties’ financial obligations hereunder accurately reflect the benefit derived; as well as to make any necessary revisions to the Operating Plans to further the goals and objectives of this Agreement.

6 6.5. Low-Barrier Access. The Navigation Centers shall be considered “low barrier” facilities for purposes of Guest access, and any entry screening, barriers, or conditions to access shall be defined in the Operating Plan, as such may be approved by the Party Representatives and reasonably necessary to accomplish the purposes of this Agreement, or as may otherwise be ordered by a court of law, or required by a settlement agreement to which the Host City is a party.

Except as required to comply with applicable law or court order, the Navigation Centers shall not be “no-barrier” facilities, and shall have, at a minimum, access or entry conditions for Guests that are substantially similar to those utilized by the other Navigation Centers, and screening for felony warrants or registration as a sex offender as may be included in the Operating Plan.

6.6. Community Coordination and Communication. The Parties are committed to communication with neighbors on an ongoing basis. During the Term, the Parties and the Center Operators will work together cooperatively and in good faith to facilitate community forums, generate educational or outreach materials, and engage in similar activities to promote or further the purposes of the Program. The goal of such efforts will be to provide members of the community with opportunities to ask questions and receive information about the Navigation Centers and the Program. Any printed or published materials relating to the Program shall be subject to approval by the Party Representatives.

7. MISCELLANEOUS

7.1. Notice. Any notices provided to any Party in connection with this Agreement shall directed to the City Manager of the City Parties.

7.2. Parties as Independent Contractors. Each Party is, and at all times shall be deemed to be, an independent contractor of the other Parties. Nothing herein is intended or shall be construed as creating the relationship of employer and employee, or principal and agent, between any Party, or any Party's agents or employees. Each Party shall retain all authority for rendition of services, standards of performance, control of personnel, and other matters incident to the performance of the Program pursuant to this Agreement. Each Party, and its agents and employees, shall not be considered to be employees of any other Party.

7.3. Governing Law and Venue. This Agreement has been negotiated and executed in the State of California and shall be governed by and construed under the laws of the State of California. In the event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue shall be a court of competent jurisdiction, located in Orange County, California, and the Parties agree to and hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394. Furthermore, the Parties specifically agree to waive any and all rights to request that an action be transferred for trial to another county.

7.4. Amendments / Entire Agreement. Amendments to this Agreement must be in writing and approved by the governing body of each Party. This Agreement is the entire agreement among the Parties with respect to the subject matter hereof, and it supersedes any prior written or oral agreements with respect to the subject matter.

7 7.5. Severability. If any section, subsection, paragraph, term, or provision of this Agreement, or the application thereof, is held by a court of competent jurisdiction to be invalid, void or unenforceable, such section, subsection, paragraph, term, or provision, to the extent the same is valid and enforceable, and all other remaining provisions hereof, shall remain in full force and effect, to the fullest extent possible, and shall in no way be affected, impaired or invalidated thereby to the extent such are not rendered impractical to perform taking into consideration the purposes of this Agreement.

7.6. Interpretation. This Agreement has been negotiated at arm's length and between persons sophisticated and knowledgeable in the matters dealt with in this Agreement. In addition, each Party has been represented by experienced and knowledgeable independent legal counsel of its own choosing or has knowingly declined to seek such counsel despite being encouraged and given the opportunity to do so.

7.7. Non-Waiver of Rights and Remedies. No term or provision of this Agreement shall be deemed waived and no breach excused, unless such waiver or consent shall be in writing and signed by the Party claimed to have waived or consented. Any consent by any Party to, or waiver of, a breach by the other, whether express or implied, shall not constitute consent to, waiver of, or excuse for any other different or subsequent breach.

7.8. Authority. The Parties represent and warrant that this Agreement has been duly authorized by their respective governing boards, and executed by a duly authorized representative thereof, and constitutes the legally binding obligation of their respective Party, enforceable in accordance with its terms.

7.9. Assignment. Except as otherwise expressly provided for herein, no Party shall assign any of its obligations or rights hereunder without the consent of all other Parties, and any such assignment without consent shall be null and void.

7.10. Execution in Counterparts. This Agreement may be executed in counterparts, each of which, when the Parties have signed this Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. [SIGNATURE PAGE FOLLOWS]

8 IN WITNESS WHEREOF, the Parties to this Agreement have caused the same to be executed by each of their duly authorized officers as follows:

CITY OF FOUNTAIN VALLEY
By:

Mayor
Attest:

City Clerk
Approved as to form:

City Attorney

CITY OF GARDEN GROVE
By:

City Manager
Attest:

City Clerk
Approved as to form:

City Attorney

CITY OF WESTMINSTER
By:

City Manager
Attest:

City Clerk
Approved as to form:

City Attorney

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and
Members of the City Council Agenda Date: June 21, 2022
Subject: Authorization to Distribute the Proposition 218 Notification Regarding a Proposed Residential Trash Collection Rate Increase to comply with the requirement of SB 1383, Short-Lived Climate Pollutant Reduction Strategy (i.e. Organics Recycling)
EXECUTIVE SUMMARY:

Senate Bill 1383 (SB 1383) was signed into law on September 19, 2016, and it is the most significant waste reduction mandate in the last 30 years. The purpose of the law is to reduce landfill-generated greenhouse gases to meet the state’s climate change goals. The programs mandated by SB 1383 significantly increase trash and recycling costs by expanding recycling requirements and creating programs the City has never implemented before.

After good-faith negotiations between City Staff, Michael Balliet Consulting, and Republic Services the request to increase the monthly residential trash rate by $2.92 for regular customers and $2.49 for senior customers, which corresponds to the estimated costs associated with implementing the residential component of the program. The current monthly residential rate is $23.33 and the senior discount rate is $20.54. If approved, the new residential trash collection monthly rate would be $26.25 and the senior discount monthly rate would be $23.03.

Commercial customers, which include businesses and multi-family units of five (5) or more, are also impacted by this law. The rate increase request will only apply to commercial customers’ trash service rates.

Staff recommends that the City Council authorize the distribution of notification regarding the proposed residential and commercial solid waste collection rate increase in compliance with Proposition 218.

DISCUSSION:

On September 15, 2020 and April 6, 2021, presentations were provided to City Council on SB 1383. SB 1383 was signed into law to reduce landfill-generated greenhouse gases by reducing the disposal of organic waste, increasing edible food recovery, and requiring businesses and residents to recycle food waste. The following is a summary of

City Council Request
Notification Regarding Residential Trash Rate Increase
June 21, 2022

SB 1383 program requirements that the City must implement:
 Provide organic waste recycling service to all residents and businesses;  Conduct education and outreach to businesses, residents, edible food generators, and edible food recovery organizations to comply with the new legislation;
 Ensure regulated businesses have an edible food recovery program that includes collecting edible food for redistribution to local food pantries;  Conduct inspections and investigations of businesses and residents to ensure compliance;
 Have an enforcement mechanism for non-compliant businesses and residents; and
 Purchase products derived from recycled content as well as .08 tons per resident of compost/mulch per year (approx. 4,300 tons).

Initially, Republic Services proposed a monthly residential rate increase of over $3 per household per month increase over the current rate. The Public Works Department and Michael Balliet Consulting, LLC, an independent solid waste industry expert, reviewed the proposed rate increase. Ultimately, City Staff and Republic Services agreed upon a request to increase the monthly residential trash rate by $2.92 for regular customers and $2.49 for senior customers, which corresponds to the estimated costs associated with implementing the residential component of the program.

The current monthly residential rate is $23.33 and the senior discount rate is $20.54. If approved, the new residential trash collection monthly rate would be $26.25 and the senior discount monthly rate would be $23.03.

Commercial customers include businesses and multi-family units of 5-units or more and will be required to sign up for mandatory service. Commercial customers have three types of solid waste services: trash, recycling, and organics. Initially, all three-service types were proposed to have a rate increase. Through negotiations, the proposed rate increase only affects the rate of trash service. If approved these rates would go into effect on or after September 1, 2022 depending on the readiness of Republic Services to begin services to customers.

The staff has prepared the "Notice of Public Protest Hearing Regarding Proposed Residential Trash Collection Rate Increase" per Proposition 218 requirements. Notices will be distributed by a separate mailing with the format and content shown on the attached Draft “Notice of Public Protest Hearing.” Once distributed, there will be a minimum 45-day period before the Public Protest Hearing wherein affected customers can protest the rate increase. Townhomes and attached dwellings of up to five (5) units are considered residential accounts. Only a majority of customers’ (at least 50% plus 1) written protests to the proposed rate increases will defeat a Proposition 218 "vote." Absent the majority protest, the City Council can move forward with its consideration of

City Council Request
Notification Regarding Residential Trash Rate Increase
June 21, 2022

the proposed rate increase. The proposed date of the Public Protest Hearing will be at the regular City Council Meeting on August 16, 2022. The proposed rate, if adopted by the Council would go into effect on or after September 1, 2022, depending upon Republic Services’ readiness to begin services.

FINANCIAL ANALYSIS:

Republic Services will pay for the printing and mailing of the Prop. 218 Notice. There is no fiscal impact on the General Fund.

ATTORNEY REVIEW:

The Attorney for the City has reviewed and approved the proposed procedure and Draft “Notice of Public Protest Hearing” as it pertains to Proposition 218 requirements.

PUBLIC NOTIFICATION:

This item was noticed publicly as a Council agenda item for action per the rules and regulations regarding noticing of public meetings and agendized items and topics for discussion and/or action. In advance of August 16, 2022, Public Protest Hearing, the City Clerk will notify the item per the laws and regulations relating to the posting of public hearings.

ALTERNATIVES:

Alternative No. 1: Authorize Staff to Distribute Public Hearing Notices Regarding Proposed Residential Trash Collection Rate Increase in
Compliance with Proposition 218. This is the recommended action.

Alternative No. 2: Do not authorize staff to distribute a notification regarding the proposed increase. This is not the recommended action as this notice is required to comply with Proposition 218 for rate increases.

If the City does not consider rate increases to cover the aforementioned costs, the City may not achieve trash diversion mandates and be subject to enforcement actions by the regulatory agency, CalRecycle.

Alternative No. 3: Direct staff to prepare alternations to the attached draft “Notice of Public Protest Hearing.” This is not recommended. Staff and a consultant have diligently worked to negotiate a rate that is fair and appropriate.

Alternative No. 4: Direct staff to implement an alternate method of disposing of and processing green waste material. This is not recommended. The

City Council Request
Notification Regarding Residential Trash Rate Increase
June 21, 2022

land application method is the most cost-effective and compliant option.

RECOMMENDED ACTION:

Staff recommends that the City Council approve Alternative No. 1, which is Authorize Staff to Distribute Public Hearing Notices Regarding Proposed Residential Trash Collection Rate Increase in Compliance with Proposition 218.

Prepared by: Loriana Hornik, Environmental Services Administrator Approved by: Hye Jin Lee, Public Works Director
Fiscal Review by: Ernestine Jones, Interim Finance Director Approved by: Maggie Le, City Manager
Attachment 1: Rate Increase Request from Republic Services Attachment 2: Draft Notice of Public Protest Hearing

Prop 218 Notification

NOTICE OF PUBLIC PROTEST HEARING REGARDING PROPOSED

RESIDENTIAL TRASH COLLECTION RATE INCREASE
NOTICE is hereby given that the City Council of the City of Fountain Valley will conduct a public protest hearing on Tuesday, August 16, 2022, at 6:00 p.m., in the City Council Chambers, 10200 Slater Avenue, Fountain Valley, to consider an increase in residential trash collection rates.

The proposed residential and commercial trash collection rate increase is to comply with California Senate Bill 1383 (SB 1383) that went into effect on January 1, 2022. SB 1383 requires organic waste, including food waste, to be diverted away from landfills. This State mandate is intended to reduce greenhouse gas emissions generated by decomposing organics in landfills and meet the State’s climate change goals.

SB 1383 creates new programs and expands recycling requirements which significantly increase costs. Residents and commercial customers will be required to recycle food waste so it can be processed and then turned into compost. To accomplish this, residents will need to dispose of food waste into the green bin and commercial customers will be provided with a separate cart or bin depending on organic waste generated. All customers will be automatically enrolled into the program. Waivers can be granted to certain commercial customers that qualify. Rates are subject to annual adjustment based on changes in the Consumer Price Index for Garbage and Trash.

These rates are subject to majority protest, meaning they cannot be imposed if a majority of affected property owners or residents submit written protests opposing the rates. If You Wish to Protest These New Fees You Must:
1) Notify the City in writing prior to the conclusion of the Public Protest Hearing on August 16, 2022, that you oppose the proposed fees. You must identify the property address affected by the proposed fees, indicate you are protesting the fees, and print and sign your name and send to:

City Clerk, City of Fountain Valley, 10200 Slater Avenue, Fountain Valley, CA, 92708 OR
2) Attend the August 16, 2022, public hearing at City Council meeting in Council Chambers at 10200 Slater Avenue, Fountain Valley and submit a written protest indicating the property address and including your name and signature before the close of the public hearing.

More information on SB 1383 can be found at:
https://www.fountainvalley.org/1191/Organic-Waste-Recycling Questions or comments regarding the proposed rate may be directed to the City of Fountain Valley Public Works Department at (714) 593-4441 or by e-mail at [email protected].

Prop 218 Notification

NOTICE OF PUBLIC PROTEST HEARING REGARDING PROPOSED

RESIDENTIAL TRASH COLLECTION RATE INCREASE
Residential Rates
Customer Current Rate Proposed Rate
Residential $23.33* $26.25*
Senior (62+) $20.54* $23.03*
*Includes City’s admin fee of $1.34
Commercial Rates
Commercial Trash Service Current Rate Proposed Rate
1 Cubic Yard
1 time per week $88.31 $102.45
2 times per week $139.96 $162.36
3 times per week $176.91 $205.24
4 times per week $196.85 $228.37
5 times per week $231.41 $268.46
6 times per week $268.32 $311.28
2 Cubic Yards
1 time per week $144.18 $167.27
2 times per week $209.56 $243.11
3 times per week $266.71 $309.41
4 times per week $315.72 $366.26
5 times per week $389.19 $451.50
6 times per week $448.45 $520.24
3 Cubic Yards
1 time per week $182.75 $212.00
2 times per week $279.23 $323.94
3 times per week $383.84 $445.29
4 times per week $457.89 $531.20
5 times per week $585.25 $678.95
6 times per week $685.64 $795.41
4 Cubic Yards
1 time per week $201.01 $233.20
2 times per week $307.14 $356.31
3 times per week $422.22 $489.81
4 times per week $189.03 $219.29
5 times per week $643.75 $746.82
6 times per week $754.17 $874.91
A 9% franchise fee is added to commercial rates listed above which is paid to the City monthly.

Prop 218 Notification

NOTICE OF PUBLIC PROTEST HEARING REGARDING PROPOSED

RESIDENTIAL TRASH COLLECTION RATE INCREASE
Commercial Rates
Commercial Recycle Service Current Rate Proposed Rate
95 Gallon
1 time per week NA $35
2 times per week NA $80
3 times per week NA $120
4 Cubic Yards
1 time per week NA $162.91
2 times per week NA $216.26
3 times per week NA $342.18
4 times per week NA $408.19
5 times per week NA $448.32
6 times per week NA $611.22
Only showing new recycling service options above. Rates are unchanged from 1/1/2022 for 1 cubic yard, 2 cubic yards, and 3 cubic yards. A 9% franchise fee is added to commercial rates listed above which is paid to the City monthly.

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: June 21, 2022
Members of the City Council
SUBJECT: General Plan Advisory Committee Appointment
EXECUTIVE SUMMARY:

The General Plan is a long-range planning document that represents the community’s view of its future; it is a blueprint for a city’s future growth and development. The City is currently in the process of updating its General Plan which was adopted in 1995 in order to create a vision through 2045.

One of the largest components of a General Plan Update is public outreach and community input. Public participation is facilitated through several efforts including the utilization of a General Plan Advisory Committee (GPAC). The purpose of a GPAC is to advise the City on the topics and issues addressed in the General Plan. The GPAC serves as an important channel for the community to provide input and make recommendations.

As originally conceived, the GPAC consists of 15 members comprised of the following:
• FV Council Members (2)
• FV Planning Commissioner (1)
• FV HCD Advisory Board (1)
• FV Community Foundation Board Member (1)
• Measure HH Committee Member (1)
• FV Elementary School Board Member (1)
• Huntington Beach Union High School District Board Member (1) • FV Chamber of Commerce Board Member (1)
• FV Large Business Representative (1)
• OC Board of Realtors Representative (1)
• At-large FV residents/community members (4)
In October 2018, the City Council selected the initial 15 GPAC members. Since that time, the membership of the Measure HH Committee has changed and their GPAC representative no longer sits on the committee. As such, the Measure HH Committee has selected its Chair, Stephen Schwarz, to represent them on the GPAC. The City is also in the process of gathering interest for filling the at-large FV resident position for Quadrant 2 vacancy and will be brining that before the City Council in the near future.

City Council Request
GPAC Appointment
June 21, 2022

DISCUSSION:

The Fountain Valley General Plan last received a comprehensive update in 1995. It is recommended that a city update its General Plan when appropriate to ensure the document is current with legislative requirements, community conditions and community preferences. The City Council approved a contract with PlaceWorks, Inc. to provide the City with a Comprehensive General Plan Update and associated Environmental Impact Report (EIR). Work is well underway and both the General Plan and related EIR are currently being drafted based on all of the City Council, Planning Commission, GPAC, community and other stakeholder comments provided to date.

While the General Plan update process is nearing completion, there may still be items presented to the GPAC for consideration, including the final Goals and Policies and the draft document. The GPAC has been in existence for just under four (4) years and membership has been quite consistent. However, there are currently two (2) positions in need of replacement.

The first vacancy is the representative from the Measure HH Committee as the makeup of that committee has changed over time. The Measure HH Committee has selected their Chair, Stephen Schwarz, to represent the Committee on the GPAC. The City Council is being requested as part of this agenda item to approve this selection.

The second vacancy is the at-large representative for Quadrant 2. To address this vacancy, the City is currently requesting Statements of Interest from residents living in Quadrant 2. Once the deadline for submittal has passed, Staff will present the Statements of Interest to the City Council for selection of a new representative.

FINANCIAL ANALYSIS
There are no associated costs with the formation of the GPAC. All support associated costs for the facilitation of the Committee have been included in the PlaceWorks contract that has been already approved.

ATTORNEY REVIEW:

This item does not require attorney for the city review.

ALTERNATIVES

1. Approve the selection of Steven Schwarz to represent the Measure HH Committee on the GPAC.

2. Do not approve and provide Staff further guidance.

City Council Request
GPAC Appointment
June 21, 2022

3. Continue the request for additional information.

RECOMMENDED ACTION
Staff recommends the City Council approve Alternative No. 1: Approve the selection of Stephen Schwarz to represent the measure HH Committee on the GPAC.

Prepared by: Omar Dadabhoy, Community Development Director Approved By: Maggie Le, City Manager