Agenda packet — Gonzales City Council, September 18, 2023 (part 1 of 2)

Any writing or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at City Hall located at 147 Fourth Street, Gonzales, California, during normal business hours.

Page 1 of 3 ends

A G E N D A

JOINT MEETING OF THE

GONZALES CITY COUNCIL AND

GONZALES SUCCESSOR AGENCY
CITY COUNCIL CHAMBERS – 117 FOURTH STREET
GONZALES, CA 93926
MONDAY, SEPTEMBER 18, 2023
6:00 P.M.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

1. ROLL CALL- City Council/Successor Agency
Mayor Pro Tem/Vice Chair Scott Funk, Council/Agency Member Liz Silva, Council/Agency Member Lorraine Worthy, Council/Agency Member Maria Orozco, Mayor/Chair Jose L. Rios
Successor Agency Item

If you wish to make either a general public comment or to comment on a specific agenda item, please use the Raise Hand function. You will be allowed three minutes for your comments.

If you choose not to attend the City Council meeting but wish to make a comment on a specific agenda item, please submit your comment limited to 250 words or less by 12:00p.m. on the day of the meeting to the City Clerk at [email protected]

PRESENTATIONS

2. D’Arrigo H2A Housing Project

BUSINESS FROM THE PUBLIC

3. Business from the Public not on the Agenda; any member of the Public may address the Council/Agency for a period not to exceed three minutes on any subject not on the Agenda. The Council/Agency will listen to all communications but may take no action. *
Any writing or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at City Hall located at 147 Fourth Street, Gonzales, California, during normal business hours.

Page 2 of 3 ends

CONSENT AGENDA
All matters listed under the Consent Agenda are considered routine by the City Council and will be adopted by one action of the Council unless any Council Member has a question or wishes to make a statement or discuss an item. In that event, the Mayor will remove the item from the Consent Calendar for separate consideration.

4. Approve the Joint City Council and Successor Agency - Regular Meeting - September 5, 2023 Minutes

5. Approve City Accounts Payable Warrants #49107-49161

6. City Manager’s Report

7. Community Development Department Activity Report

8. Community Engagement & Recreation Departments Activity Report

9. Fire Department Activity Report

10. Police Department Activity Report

11. Public Works/City Engineer Department Activity Report

12. Consider Approval of Proclamation No. 2023-04 Proclaiming September 2023 as National Alcohol and Drug Addiction Recovery Month

13. Consider Approval of Resolution No. 2023-58, A Resolution of the City Council of the City of Gonzales Accepting Grant Funds and Authorizing Execution of Agreements for the Regional Early Action Planning Grant (REAP) 2.0 Program

14. Consider Approval of Resolution No. 2023-59, A Resolution of the City Council of the City of Gonzales Awarding a Landscape Maintenance Contract to Smith & Enright Landscaping, Rejecting the Other Submitted Proposals, and Authorizing and Directing the City Manager to Execute a Service Contract with Smith & Enright Landscaping for an Initial Three-Year Period with an Annual Authorization of $82,719, and an Annual Contingency Budget of $20,000 for Unanticipated Field Repairs

REGULAR AGENDA

15. Consider Approval of Resolution No. 2023-61, A Resolution of the City Council of the City of Gonzales Authorizing the Execution of a Memorandum of Understanding Between the City of Gonzales and the International Association of Fire Fighters Local 5388, for the period covering January 1, 2023 through December 31, 2024
a) Staff Report
b) Public Comment
c) Council Discussion
d) Council Action
Staff Recommended Action-Adopt Resolution No. 2023-61

16. Update on the Water and Sewer Rate Studies
a) Staff Report
b) Public Comment
c) Council Discussion
d) Council Action
Staff Recommended Action-Receive follow-up report and presentation, and authorize staff to initiate the Proposition 218 Process

17. Consider Approval of Resolution No. 2023-60, A Resolution of the City Council of the City of Gonzales authorizing execution of a Master Services Agreement with Harris Associates to provide Project and Construction Management Services for the Community Center Complex Project for an initial fee of $500,000 for services through June 30, 2024 under Task Order 1 a) Staff Report
b) Public Comment
c) Council Discussion
d) Council Action
Staff Recommended Action-Adopt Resolution No. 2023-60
*
Any writing or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at City Hall located at 147 Fourth Street, Gonzales, California, during normal business hours.

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18. Public Hearing to Consider Adoption of Ordinance No. 2023-140, An Ordinance of the City Council of the City of Gonzales Amending Title 11-Building Regulations of the Gonzales City Code by the Addition of New Chapter 11.56 Streamlined Permitting Process for Electric Vehicle Charging Stations
a) Staff Report
b) Public Hearing
c) Council Discussion
d) Council Action
Staff Recommended Action-Waive second reading, read by title only, and Adopt Ordinance No. 2023-140

19. Introduce, Waive Reading, and Read by Title Only Ordinance No. 2023-141, An Ordinance of the City Council of the City of Gonzales Authorizing the Purchase and Use of an Unmanned Aerial System (Drone) and Making Findings in Compliance with Gonzales Police Department Policy Manual 709-Military Equipment
a) Staff Report
b) Public Comment
c) Council Discussion
d) Council Action
Staff Recommended Action-Introduce, Waive Reading, and Read by Title only Ordinance No. 2023-141

GONZALES YOUTH COUNCIL UPDATES

20. Oral Communication

BUSINESS FROM CITY COUNCIL

21. City Council Board/Committee Reports
a. League of California Cities Monterey Bay Division
b. Association of Monterey Bay Area Governments
c. Monterey Salinas Transit

22. Oral Communications

BUSINESS FROM CITY MANAGER

23. Oral Communications

CLOSED SESSION
Any member of the public may address the Council on a closed session item appearing on the agenda.

Speakers shall have a limited time of three (3) minutes. Please be brief and to the point.

24. The City Council will recess to closed session pursuant to Government Code Section 54956.8 to confer with and give instructions to its real property negotiator concerning the lease of property located at/on the City’s Water Tower located adjacent to 5th Street and U.S. Highway 101.

ADJOURNMENT
In compliance with the American with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk at (831) 675-5000. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. (CFR 35.102-35.104 ADA Title II). This is a public meeting and as such, can be seen live by people present or online and is being recorded; therefore; anything you say or do here is public information. The recordings are available online.

AGRICULTURAL

HOUSING
Near the City of Gonzales, CA
Packet Pg. 4
Attachment: Powerpoint Presentation (2823 : D'Arrigo H2A Housing Project on Fanoe AGENDA
ITEM
2 DESIGN- BUILDER/ GENERAL CONTRACTOR - AVILA CONSTRUCTION COMPANY

MEET THE TEAM
OWNER/ OPERATOR-D’ARRIGO CALIFORNIA
Mike Avila
Principal/ CFO
Jeff Nohr
Project Manager
Kathryn Avila
Real Estate Entitlement &
Special Projects
Packet Pg. 5
Attachment: Powerpoint Presentation (2823 : D'Arrigo H2A Housing Project on Fanoe

PROJECT LOCATION
Packet Pg. 6
Attachment: Powerpoint Presentation (2823 : D'Arrigo H2A Housing Project on Fanoe

PROJECT BASICS & GOALS
• 139 resident apartments (45 or 46 per
phase)
• Max capacity – 1,112 residents
(360 to 372 per phase)
• 1 manager unit
• 3 rec rooms
• 3 laundry rooms
• About 375 parking stalls (about 2.7
stalls per unit)

SUMMARY
GOALS
• Provide dignified, quality housing to
residents
• Allow D’Arrigo California to improve
long term workforce stability
Packet Pg. 7
Attachment: Powerpoint Presentation (2823 : D'Arrigo H2A Housing Project on Fanoe

SIMILAR PROJECTS &

LOCATIONS
Susan St – Under Construction
60 Units
480 people to be housed
Casa Boronda
75 Units
600 people housed
Harvest Moon
150 Units
1,200 people housed
Greenfield
75 Units as of spring 2023
600 people housed as of spring
2023
30 additional units to be completed in future
240 additional people housed in future
T&A Spreckels Crossing
100 Units
800 people housed
Bengard Ranches (proposed/
undergoing approvals)
45 Units
360 people to be housed
D’Arrigo California
139 Units over 3 phases
1,112 people to be housed
Packet Pg. 8
Attachment: Powerpoint Presentation (2823 : D'Arrigo H2A Housing Project on Fanoe

SIMILAR PROJECT VIDEO
GREENFIELD, CA – 5 BUILDINGS SHOWN
Packet Pg. 9
Attachment: Powerpoint Presentation (2823 : D'Arrigo H2A Housing Project on Fanoe

SITE OPERATIONS
Who pays for the project?
• D’Arrigo Bros Co., of California
• This project is not subsidized by the government/ taxpayers Who lives at the facility?
• Agricultural workers (adults)
Who manages the facility?
• D’Arrigo California with an on- site manager
What safety precautions are taken to ensure a safe site? • On site manager
• Gated community
• Extensive security cameras
• Facility rules
• Often include: Guests must be registered, no alcohol, quiet hours, etc.

Packet Pg. 10
Attachment: Powerpoint Presentation (2823 : D'Arrigo H2A Housing Project on Fanoe

SITE OPERATIONS
When is the project occupied?
• During the growing season in the Salinas Valley (Spring/ Summer/ Fall) • Approximately March – November
• Vacated in the winter for annual maintenance and cleaning How does parking work?
• The project includes ample parking –
around 2.7 stalls per living unit (around
2 per living unit required)
• Parking is generally under utilized in
these types of projects – maxed out at
75% capacity when studied in
Greenfield project

EXPECTED PROJECT OPERATIONS
• Employer provided
bus transportation
(free) greatly
reduces the impact
of traffic on the
neighborhood
• Bus travel times are
expected to be at
off- peak hours
Packet Pg. 11
Attachment: Powerpoint Presentation (2823 : D'Arrigo H2A Housing Project on Fanoe CONFIDENTIAL – NOT FOR DISTRIBUTION

NEXT STEPS

COMMUNITY ENGAGEMENT
• Community Information and Feedback Sessions @ 340 Day St. • Wednesday, September 27th from 6- 7:30 PM
• Monday, October 9th from 6- 7:30 PM
• Saturday, October 21st from 1-2:30 PM
• Project website information will be provided on community Information and Feedback session flyers
• View project information
• Provide feedback via online submission form
• Meetings with community partners are ongoing

ENTITLEMENTS
• Processed through the County of Monterey
• Initial inter- department review submission has been made • Close coordination with the City, especially Public Works Packet Pg. 12
Attachment: Powerpoint Presentation (2823 : D'Arrigo H2A Housing Project on Fanoe

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MINUTES

JOINT MEETING OF THE

GONZALES CITY COUNCIL AND

GONZALES SUCCESSOR AGENCY
TUESDAY, SEPTEMBER 5, 2023
6:00 P.M.

CALL TO ORDER
The meeting was called to order at 6:00 PM by Mayor Pro Tem Scott Funk.

PLEDGE OF ALLEGIANCE
The flag salute was recited by all present.
1 . ROLL CALL
Attendee Name Title Status
Jose L. Rios Mayor/Chair Excused
Scott Funk Mayor Pro Tem/Vice Chair Present
Liz Silva Council/Agency Member Present
Lorraine Worthy Council/Agency Member Present
Maria Orozco Council Member Present

YOUTH COMMISSIONERS
Excused absence: Luke Naegle and Aliyah Castillo.

STAFF PRESENT
City Manager Carmen Gil, City Attorney Michael F. Rodriquez, Community Development Director Taven Kinison Brown, Executive Assistant to the City Manager/Deputy City Clerk Mary Villegas, Administrative Assistant II Marisol Gomez, Administrative Assistant II Esthela Palmerin, Public Works Director/City Engineer Patrick Dobbins, Finance Director Mike Howard, and Police Chief Keith Wise. * Successor Agency Item
Packet Pg. 13
Minutes Acceptance: Minutes of Sep 5, 2023 6:00 PM (CONSENT AGENDA) AGENDA
ITEM
4

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PUBLIC NOTICE
This meeting is being conducted consistent with State of California Executive Order N-29-20 dated March 17, 2020, regarding the COVID-19 pandemic. The public may participate in person or online via zoom at https://us06web.zoom.us/j/88437363691 or call 1 (669) 900-6833 and use Meeting ID: 884 3736 3691. If you wish to make either a general public comment or to comment on a specific agenda item, please use the Raise Hand function. You will be allowed three minutes for your comments.

BUSINESS FROM THE PUBLIC

2. Business from the Public not on the Agenda; any member of the Public may address the Council for a period not to exceed three minutes on any subject not on the Agenda. The Council will listen to all communications, but may take no action.

Ivan Olsen, 48 C Street, thanked Council Member Orozco and Community Development Director Kinison Brown for helping him gain knowledge about the Swiss building on Alta Street, and commented about talking to the Alliance for Monterey Area Preservation who suggested that he ask the City to take a look at its historical value and reference to the CEQA Historical American Buildings Survey. He also suggested selling it to avoid the cost of the demolition.

CONSENT AGENDA

3. Approve the Joint City Council, Successor Agency, and Planning Commission - Regular Meeting – August 21, 2023 Minutes

4. Approve City Accounts Payable Warrants #49059-49106

5. Consider Approval of, and Allow the City Manager to Accept a New Grant from the Community Foundation for Monterey County and the County’s VIDA Program in the Amount of $55,000 for the Community Health Worker aspect of the Gonzales Cares Program RESULT: APPROVED [UNANIMOUS]
MOVER: Maria Orozco, Council Member
SECONDER: Liz Silva, Council Member
AYES: Scott Funk, Liz Silva, Lorraine Worthy, Maria Orozco EXCUSED: Jose L. Rios

REGULAR AGENDA

6. Follow-up Report on the Community Center Complex Project Staff Report: Public Works Director Dobbins presented the staff report.

Mitch Fine, WRNS Studio, went over the current plan and occupancy of the community hall and other options including number of seats, built in stage, and portable stage.

Public Comment: Rosa Rodriguez, 307 Ayrshire Way, spoke in support of a permanent stage and elaborated on the St. Theodore Church Hall layout that includes a patio when it’s rented. *
Packet Pg. 14
Minutes Acceptance: Minutes of Sep 5, 2023 6:00 PM (CONSENT AGENDA)

Page 3 of 6 ends

Roman Barba, 123 Second Street, spoke in support of the fitness center and wondered how the stage would be.

Emily Rios, 231 Third Street, thanked everyone for having her involved in this process and inviting her to the different meetings. She urged the Council to consider making the community hall a larger size than it currently is since the City is going to be expanding in the future. She thought 200 seemed a little bit small, and it would be nice to have a bigger space, especially since people look somewhere else to have big events like weddings and quinceañeras.

Council Discussion: City Manager Gil shared the comments that were given to her from the meeting he had with the Mayor since he was absent today. He informed her that he would be okay with taking out the permanent stage and having a portable stage in order to accommodate more capacity. There was discussion by the Council and consultants about the types of stage and square footage, possibility of accommodating at least 300 people, auditorium capacity, and awareness of construction costs for changes, furnishings, and maintaining the project.

It was the Council’s consensus to move forward with Option 1 which has the fitness center and portable stage on page 27 of the agenda packet. The Council also directed staff to work with the consultant and look at what the cost would be to expand the hall’s square footage in the future to accommodate 300-350 people.

7. Introduce, Waive Reading and Read by Title only Ordinance No. 2023-140, An Ordinance of the City Council of the City of Gonzales Amending Title 11-Building Regulations of the Gonzales City Code by the Addition of New Chapter 11.56 Streamlined Permitting Process for Electric Vehicle Charging Stations
Staff Report: Community Development Director Kinison Brown presented the staff report.

Public Comment: Rosa Rodriguez, 307 Ayrshire Way, suggested hiring someone to update the website with all the current codes.

Council Discussion: There was none.

RESULT: APPROVED [UNANIMOUS]
MOVER: Liz Silva, Council Member
SECONDER: Lorraine Worthy, Council Member
AYES: Scott Funk, Liz Silva, Lorraine Worthy, Maria Orozco EXCUSED: Jose L. Rios

GONZALES YOUTH COUNCIL UPDATES

8. Oral Communication
There were no updates.

BUSINESS FROM CITY COUNCIL

9. Consider Appointment of Voting Delegate for the League of California Cities Conference Packet Pg. 15
Minutes Acceptance: Minutes of Sep 5, 2023 6:00 PM (CONSENT AGENDA)

Page 4 of 6 ends

RESULT: APPROVED [UNANIMOUS] to Appoint Council Member Orozco as the Voting Delegate
MOVER: Liz Silva, Council Member
SECONDER: Lorraine Worthy, Council Member
AYES: Scott Funk, Liz Silva, Lorraine Worthy, Maria Orozco EXCUSED: Jose L. Rios

BUSINESS FROM CITY COUNCIL

10. City Council Board/Committee Reports
a. Transportation Agency for Monterey County
Mayor Pro Tem Funk mentioned Mayor Rios sent his committees’ update to staff. City Manager Gil read his report regarding $10 million from TAMC awarded to King City, Soledad and Salinas, and the County.
b. Mayor Selection Committee
City Manager Gil read the Mayor's report about having Supervisor Alejo presentation on the homeless situation in Monterey County which has gone down by 16%, but as a result we have lost $1.5 million from the State. He felt like we've been penalized for doing a good job.

His report also mentioned about the Nacimiento damn water release. c. Salinas Valley Recycles
Council Member Silva announced the next meeting September 21st here in the Chambers and she reported at the last meeting that Salinas Valley Recycles had their employee recognition dinner on August 18th at the Crazy Horse Golf Course and she heard it was fun. d. Measure K Oversight Committee
Council Member Worthy reported on the last meeting regarding the overview of the grants and the application for this new fiscal year being open, but will close soon. e. South Salinas Valley Broadband Authority
No report.

10. Oral Communications
Council Member Worthy asked if anyone knew why Gonzales didn't apply for the TAMC grants.

Mayor Pro Tem Funk mentioned that was based on transportation projects and Gonzales doesn't have any transportation projects on the 101 corridor.

Council Member Worthy thanked Public Works Director Dobbins for working with her and MST regarding the new bus stops, and also thanked Community Development Director Kinison Brown regarding the different locations around town. She asked the residents if they have a concern that they want to take care of and want it addressed, they can file a formal complaint with the City, and if it's an issue with the Police Department, they can also file a complaint with the Police Department and staff can follow up on that. She thought it was important for all of us to work together because there's a lot of things going on in our community and it's a concern to many if a neighbor is doing something they're not supposed to be doing, they need to say something and they can remain anonymous.

Council Member Silva agreed with Council Member Worthy about saying something if they see something. She mentioned things can't be remedied overnight and it takes time so she asked everyone to be understanding of that. She asked the residents if they hear gossip around town, they need to ignore it and bring it to the attention of the people who might be able to look into things.

Packet Pg. 16
Minutes Acceptance: Minutes of Sep 5, 2023 6:00 PM (CONSENT AGENDA)

Page 5 of 6 ends

Council Member Orozco reported on the Monterey County Housing Authority meeting she attended and invited the new Director to come to Gonzales and take a look at some of our projects that we have, and if there's a plan to maybe renovate some of these homes and expand additional housing units. She also reported on the meeting she had with the Red Cross who will be distributing new smoke detectors to residents that live in apartments, the trailer camp on Belden Street, Alpine Camp, and Corda Camp. She also said Grupos Unidos received a grant to do CPR classes for training for students.

Mayor Pro Tem Funk thanked staff for all their efforts keeping everything moving.

BUSINESS FROM CITY MANAGER

11. Oral Communications
City Manager Gil reported on getting two CSUMB Computer Science Interns who will be helping with the website and social media design. She also mentioned that staff was trialing another website and were going through the lengthy process before changing it. She also announced a Trunk or Treat event on October 28th on Fourth Street, and more details to come.

Community Development Director Kinison Brown announced a City-wide yard sale on October 14th and 15th, and the following week, Tri-Cities is having their big clean up day.

Mayor Orozco suggested maybe in the future having a yard sale at the park for those residents who live in apartments and don't have space.

Public Works Director Dobbins reported on the pool heater options which will be coming later on to the Council.

Police Chief Wise announced a Dog License and Vaccination Clinic with the SPCA on September 30th at the Police Department, and it is by appointment only.

CLOSED SESSION
Any member of the public may address the Council on a closed session item appearing on the agenda.

Speakers shall have a limited time of three (3) minutes. Please be brief and to the point.

There was none.

12. The City Council will recess to closed session pursuant to Government Code Section 54956.9(A) to confer with its Attorney regarding pending litigation which has been initiated formally and to which the City is a party: Madera v. City of Gonzales et al.

Council conferred with legal counsel. No other reportable action was taken.

13. The City Council will recess to closed session pursuant to Government Code Section 54956.8 to confer with and give instructions to its real property negotiator concerning the lease of property located at/on the City’s Water Tower located adjacent to 5th Street and U.S. Highway 101.

Council conferred with its real property negotiator and provided direction. No other reportable action was taken.

Packet Pg. 17
Minutes Acceptance: Minutes of Sep 5, 2023 6:00 PM (CONSENT AGENDA)

Page 6 of 6 ends

ADJOURNMENT
RESULT: APPROVED [UNANIMOUS]
MOVER: Scott Funk, Mayor Pro Tem
SECONDER: Liz Silva, Council Member
AYES: Scott Funk, Liz Silva, Lorraine Worthy, Maria Orozco EXCUSED: Jose L. Rios
The meeting was adjourned at 7:35 PM.

ATTEST:

Mary Villegas, Deputy City Clerk
Packet Pg. 18
Minutes Acceptance: Minutes of Sep 5, 2023 6:00 PM (CONSENT AGENDA) City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 1
Time: 2:08 pm
Date: 08/31/2023
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
49107 08/23/23 Printed 4789 BLACH CONSTRUCTION Gonzales Community Center Project, 100,000.00 DBE Stipend
49108 08/23/23 Printed 4790 ZIM INDUSTRIES INC Repair Pump #7 6,200.00 Total Checks: 2 Checks Total (excluding void checks): 106,200.00 Total Payments: 2 Bank Total (excluding void checks): 106,200.00 Total Payments: 2 Grand Total (excluding void checks): 106,200.00 AGENDA
ITEM
Packet Pg. 19
Attachment: Warrants #49107-49161 (2818 : Approve City Acocunts Payable Warrants #49107-49161) 5 City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 1
Time: 2:09 pm
Date: 08/31/2023
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
ALLIANT INSURANCE 10,005.00

SERVICES
49109 08/24/23 Printed 3045 Vehicle Insurance - MXI 93058679 Total Checks: 1 Checks Total (excluding void checks): 10,005.00 Total Payments: 1 Bank Total (excluding void checks): 10,005.00 Total Payments: 1 Grand Total (excluding void checks): 10,005.00 Packet Pg. 20
Attachment: Warrants #49107-49161 (2818 : Approve City Acocunts Payable Warrants #49107-49161) City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 1
Time: 2:06 pm
Date: 08/31/2023
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
49110 09/01/23 Printed 3168 AUTOZONE INC. Fire - Vehicle Maint. 231.45 49111 09/01/23 Printed 74 DEPT. OF CONSERVATION SMIP Fee Report 2023 First Quarter 378.70 49112 09/01/23 Printed 2396 MANDEGO APPAREL Team Shirts 108.38 49113 09/01/23 Printed 27 TRI - CITIES DISPOSAL Trash Services June 174,819.98 WINZER FRANCHISE 333.85

COMPANY
49114 09/01/23 Printed 3615 Super Glue & Lubricant
Total Checks: 5 Checks Total (excluding void checks): 175,872.36 Total Payments: 5 Bank Total (excluding void checks): 175,872.36 Total Payments: 5 Grand Total (excluding void checks): 175,872.36 Packet Pg. 21
Attachment: Warrants #49107-49161 (2818 : Approve City Acocunts Payable Warrants #49107-49161) City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 1
Time: 9:39 am
Date: 09/01/2023
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
49115 09/01/23 Printed 4343 4LEAF, INC. Building Plan Review Services July 2023 947.94 ALVAREZ TECHNOLOGY 5,925.99
GROUP INC.
49116 09/01/23 Printed 2180 Computer Lease Agreement
ALVAREZ TECHNOLOGY 1,100.70
GROUP, INC.
49117 09/01/23 Printed 3893 PC Replacement - PW
49118 09/01/23 Printed 137 AMERICAN SUPPLY CO. Janitorial Supplies 1,032.58 49119 09/01/23 Printed 341 PATRICK ASKEW Retiree Medical Insurance Sept 361.00 49120 09/01/23 Printed 3168 AUTOZONE INC. Vehicle Maint. 627.62 CAL COAST AUTOMOTIVE 250.00

REPAIR &
49121 09/01/23 Printed 3831 Vehicle Maint.

CAL-WEST LIGHTING AND 100.00
SIGNAL
49122 09/01/23 Printed 3838 Street Light Maint.
49123 09/01/23 Printed 3187 ANDREA CASILLAS Travel: Public Records Act 8/23/2023 - 426.79 8/26/2023
CHALLENGER TEAMWEAR 950.98
LLC
49124 09/01/23 Printed 3984 Youth Soccer Balls
49125 09/01/23 Printed 4165 NATHAN CORDOBA Per Diem: ICI Core Course 9/11/2023 - 525.00 9/22/2023
49127 09/01/23 Printed 1821 CSK AUTO, INC. Vehicle Maint. 828.16 CYPRESS COAST FORD 172.29

LINCOLN
49128 09/01/23 Printed 4063 Maint./Repair
49129 09/01/23 Printed 3892 ESRI ESRI Subscription 15,500.00 49130 09/01/23 Printed 3839 CARMEN GIL Travel Reimb.: Meetings 6/27/2023 & 105.22 7/13/2023
GONZALES ACE HARDWARE 367.24
INC.
49132 09/01/23 Printed 3274 Well Repair
49133 09/01/23 Printed 118 GONZALES RX PHARMACY Blood Glucose Test Strips 17.38 GONZALES TIRE & AUTO 53.67
SUPPLY
49134 09/01/23 Printed 3477 Vehicle Maint. Supplies
49135 09/01/23 Printed 3827 JC TREE EXPERTS INC. Tree Removal & Pruning 4,200.00 LECHOWICZ & TSENG 10,365.00

MUNICIPAL
49136 09/01/23 Printed 4320 Water/Sewer Rate Study
49137 09/01/23 Printed 1965 SANTIAGO MELGOZA Travel: Crime Scene Invest. 8/20/2023 - 123.14 8/25/2023
49138 09/01/23 Printed 2423 JUAN MENDOZA Reimb. Lunch for Monthly South County 132.59 Gang Info Meeting
49139 09/01/23 Printed 72 MISSION UNIFORM SERVICE Towels & Mats 378.87 49140 09/01/23 Printed 3970 MNS ENGINEERS, INC. Rianda Cooler Project 234.94 MONTEREY COUNTY 46,347.48

EMERGENCY
49141 09/01/23 Printed 470 911 Fees Quarter 2 FY 2023/24 49142 09/01/23 Printed 3364 MP EXPRESS Citations 918.94 49143 09/01/23 Printed 3669 MY BARK CO., INC. Readyplay Wood Fiber 2,764.97 49144 09/01/23 Printed 92 NATIVIDAD MEDICAL CENTER Blood Draw - Suspect 31.00 49145 09/01/23 Printed 1532 PACIFIC TRUCK PARTS, INC Vehicle Maint. 185.99 SALINAS VALLEY PRO 2,128.87
SQUAD
49146 09/01/23 Printed 2979 Uniforms
49147 09/01/23 Printed 2685 SC FUELS Fire Truck Gas Services 714.02 49148 09/01/23 Printed 2449 SMITH & ENRIGHT Monthly Landscape Maint. 7,040.00 SOUTH SALINAS VALLEY 25,000.00

BROADBAND
49149 09/01/23 Printed 4778 JPA Broadband
49150 09/01/23 Printed 3670 T-MOBILE Hotspot #1 Acct # 967822032 22,724.66 49151 09/01/23 Printed 3670 T-MOBILE Hotspot #2 Acct # 967822590 7,569.83 THE SPCA OF MONTEREY 3,864.00
COUNTY
49152 09/01/23 Printed 1890 July Services
49153 09/01/23 Printed 27 TRI - CITIES DISPOSAL Trash Services July 2023 61,388.85 49154 09/01/23 Printed 3718 TRINI'S PLUMBING Repairs 1,219.79 49155 09/01/23 Printed 2192 TYLER TECHNOLOGIES, INC. Online Utility Billing 315.00 49156 09/01/23 Printed 103 USA BLUE BOOK Well Repair 3,550.00 VALLEY SAW & GARDEN 191.63

EQUIPMENT
49157 09/01/23 Printed 174 Maint./Repair
49158 09/01/23 Printed 3471 VERIZON WIRELESS Cellphones - July Acct # 304.08 742128049-00001
49159 09/01/23 Printed 3895 VESTRA RESOURCES INC. GIS Support 90.25 49160 09/01/23 Printed 99 VOSTI'S, INC. Maint. 148.01
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Attachment: Warrants #49107-49161 (2818 : Approve City Acocunts Payable Warrants #49107-49161) City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 2
Time: 9:39 am
Date: 09/01/2023
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
WEST VALLEY 13,637.28

CONSTRUCTION CO
49161 09/01/23 Printed 476 Water Leak
Total Checks: 45 Checks Total (excluding void checks): 244,861.75 Total Payments: 45 Bank Total (excluding void checks): 244,861.75 Total Payments: 45 Grand Total (excluding void checks): 244,861.75 Packet Pg. 23
Attachment: Warrants #49107-49161 (2818 : Approve City Acocunts Payable Warrants #49107-49161) On August 30th
, the City of Gonzales, in partnership with the Gonzales Unified School District, celebrated the academic achievement of 30 of our local graduates with the annual “Future Focused” student banner ceremony at Central Park. Students will be representing our town throughout colleges and universities near and far, such as at the University of Portland, UC Davis, UC Merced, Hartnell College, Monterey Peninsula College and Sonoma State among others.

Gonzales Community Center Complex
• At their September 5th meeting, the City Council approved the building footprint of the Gonzales Community Center Complex (see image below), getting us closer to a final design. We are set to receive the final 50% Design in early September and expect the Design Development Phase to be completed by October 30th. After that, the Design/Build Team will move into construction documents and permits to work toward the groundbreaking of Phase 1 in May of 2024!
The design with a portable stage for the community hall was approved at the September 5 th meeting.

City of Gonzales
City Manager Report
August 2023
June 2023
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Attachment: City Manager Report August (2825 : City Manager's Report) AGENDA
ITEM
6 • Staff and the team of consultants plan to hold numerous user group meetings to continue the refinement of the building design and aesthetics in September. • Staff and consultants have been working around the clock to provide information and requested documentation to USDA staff to secure a $9 million dollar loan needed for the construction of Phase 1.
• Phase 1 includes the Teen Innovation Center, the Library, Site Work, and the Outdoor Amphitheater (see image below).

Economic Development and Revenue Generation
• The City’s Community and Economic Development Department has secured a Regional Early Action Planning Grant from AMBAG in the amount of $128,750. These funds will support the City’s Housing Element update. Specifically, it supports rezoning and environmental review work.
• The Rianda Cooler project continues to move forward. The project is set to go for LAFCO for annexation on September 25th. The project is expected to bring in 436 jobs and contribute $75,000 in taxes for the City. It is expected to open in the Spring of 2025. • D’Arrigo and Avila Construction are moving forward an application for an H2A Housing Project just outside Gonzales. They will be hosting Public Information and Feedback Sessions on September 27th from 6:00pm - 7:30pm; October 9 th from 6:00pm - 7:30pm;
and October 21st from 2:00pm - 3:30pm at Fowler Hall in the Gonzales Community Church, located at 340 Day Street.

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Attachment: City Manager Report August (2825 : City Manager's Report) • City representatives attended the Pajaro CDC’s grand opening on August 30th and are looking at ways to bring small business support programs here.

Community Engagement
Save the Dates and be on the lookout for more information for the following:
• October 14th & 15th for the 1
st Community-wide Garage Sale. Register your site by
October 13th. Scan the QR Code to register or for more information.

• October 21st for Annual Halloween Movie in the Park at Centennial Park. • October 28th the City will be hosting a Fall Festival along Fourth Street.

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Attachment: City Manager Report August (2825 : City Manager's Report) City of Gonzales

COMMUNITY DEVELOPMENT DEPARTMENT

ACTIVITY REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 18, 2023
FROM: Taven Kinison Brown, Community Development Director THROUGH: Carmen Gil, City Manager
SUBJECT: Community Development Department Activity Report

ECONOMIC DEVELOPMENT
On Wednesday, September 13, Community Development staff joined the Building Business Back program of the Monterey County Business Council. The meeting was titled Business Builders and invited business owners and operators from King City, Greenfield, Soledad and the City of Gonzales to meet for a lunchtime bilingual presentation of resources and business training available to our local businesses.

On Thursday, September 14, the Community Development Director met with Angel Johnstone to further discuss opportunities and constraints of the City becoming a non-entitlement City, potentially allowing the City greater freedom of access to federal grant monies and programs, as the City once had under previous administrations. It is staff’s intent to gather and leverage as many tools as possible, so that we may better assist business and property owners.

Gloria Road Cooler Project. On Monday September 25, 2023, LAFCo will consider approval to formally extend the City of Gonzales city limits around the Gloria Road Cooler Project, a 45-acre project area within our Sphere of Influence along the southeast flank of Gloria Road. Upon expected approval, the matter will then be sent to the California Board of Equalization to formally acknowledge the annexation. The City will continue to meet with the applicant to further condition compliance activities and site development conditions. Staff will commission new maps to be drawn for the City representing the new territory added.

Legacy Signs is now considering a small lease of City-owned property on the west side of Hwy 101, approaching the Constellation facility. Staff is providing guidance on how Legacy can approach the City Council again to address the Council’s initial concerns described in late 2022. Should the Council’s concerns be allayed, Legacy will likely proceed with a proposal to change text within the City’s sign code AGENDA
ITEM
7 Packet Pg. 27
to allows such a sign and will propose a small lease area and access agreement with the City. Such processes and review will require a CEQA determination, Planning Commission review and City Council action on the changes to the sign code Ordinance and accepting a lease agreement.

HOUSING
Housing Element. Present activities in September include gathering and identifying “opportunity sites” within the City’s existing land areas. It is imperative that the city find the capacity in our existing incorporated areas to provide a substantial number of new housing opportunities to meet our state and regional obligations under RHNA. The City cannot rely solely on the specific plan incorporation efforts.

After identifying opportunity sites within the existing City, the City will need to develop targeted strategies and programs aimed at serving the greatest need among the greatest number of citizens and to do this through furthering the most inclusive and affirmative processes possible. A program to substantially up-zone the existing City’s residential and core commercial areas is expected to arise from the Housing Element update.

Housing Element and a significant AMBAG Grant. Under separate cover in this agenda is a resolution to approve a Memorandum of Understanding (MOU) with AMBAG to receive a $128,750 grant to assist the City with implementation of its Housing Element (once completed). Staff anticipated going out to bid for professional assistance and CEQA work on a substantial upzone for the City’s residential and core commercial areas. Such zoning would re-define our existing residential zoning regulations to include, single family residences, single room occupancies (SROs), boarding houses, group homes, duplexes, triplexes, multiplexes, apartments, smaller ownership condo-type units among other housing conventions and have a base density allowance of 20-26 units per acre.

ADUs. Staff will soon present four plan types in four plan sets that may be purchased over the counter at City Hall. Plans will be offered for a low administrative fee, but applicants should save money significantly by not having to hire an architect and/or civil engineer. Rolling out such a program also involves updating and activating the City’s website, bilingual handout materials and instructions and having determined the appropriate fees for cost recovery.

Vista Lucia. In addition to an intense focus on the financing of public facilities and infrastructure, detailed work is progressing on the CEQA environmental review and the various components and deal points of the draft Development Agreement. Prior to submission to LAFCo, the EIR will need to be completed, and the project and its many components brought to the Planning Commission for recommendation and to City Council for action in December 2023.

The D’Arrigo Property. City staff is actively trying to draw developer attention and interest to this property and has facilitated contacts and conversations. We continue to work closely with the D’Arrigo management leaders and speak regularly about potential opportunities.

CODE ENFORCEMENT
Emphasizing greater attention to life, health and safety issues in the community, the City Manager, Community Development Director and City Building Official, along with other staff are taking a more aggressive approach to non-permitted structures and unsafe living situations. The City continues to meet with property owners, inspect potential violations and start documentation to progress to remedies. RVs on public streets connected to private utilities are still problematic.

BUILDING DIVISION ACTIVITY
From August 1, 2023 to August 31, 2023, the City issued 13 permits from the Building Division for demolition, reroofing, electrical for solar system, fire sprinklers, and an ADU. The estimated valuation of Packet Pg. 28
all improvements was $198,792.00.

CALBO Training Institute's Fall 2023 Education Week The California Building Officials (CALBO) Training Institute (CTI) hosted its annual Education Week for the Fall of 2023. Building staff had the opportunity to attend this significant training along with other Building Staff/Officials from various Cities in California. The event was a great opportunity to enhance staff’s knowledge and skills in the field.

Education Week was held in Burlingame from August 28 to August 31, 2023. Notably, all courses featured in this training were updated to reflect the latest updates in the 2022 Building Codes, ensuring that attendees received the most current information. These courses covered a wide range of subjects, including technical code understanding, significant changes, and topical code-related elements.

City Staff attended the following courses:
• Permit Technician Career Advancement: The Core Essentials • Permit Technician Career Advancement: How to Properly Screen Plans for Successful Permit Services
• Code Enforcement Building Blocks for California Building Departments • Means of Egress in the 2022 California Building Code
This diverse array of courses provided staff with comprehensive educational experience, and knowledge about the various facets of building regulations and code enforcement.

COMMUNITY ENGAGEMENT
In collaboration with Tri-Cities Disposal &Recycling Service, Inc., the City of Gonzales will be hosting a two-day garage sale/yard sale citywide on Saturday and Sunday, October 14 and 15.

Mailers will be going out with Tri-Cities and the city is also initiating an online registry for citizens with the simplicity of a QR code.

Staff will translate entries to a graphic map that will be posted online nearer to the event so that bargain hunters can map out their strategy.

Items that do not sell can be considered for the following weekend’s event October 21, 2023 for the Reuse, Recycle & Cleanup Day Event at Fairview Middle School.

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City of Gonzales

CITY MANAGER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 18, 2023
FROM: Carmen Gil, City Manager
SUBJECT: Community Engagement & Recreation Departments Activity Report Current Activities
City Sports Leagues
• Gonzales Youth Soccer league registration is going very well. Numbers are great. We have 167 participants registered. There will be 4 divisions from ages 2 ½ - 12 years of age. The age groups are 2 ½ - 3 ½, 4 - 5, 6 - 8 and 9-12. Skills assessment was held on August 30th and 31st. We have 28 participants in ages 2 ½ - 3 ½, 44 participants in age 4 - 5, 51 participants in ages 6- 8, and 51 participants in ages 9-12. We have a total of 16 teams and 14 coaches. Some coaches are coaching in more than one division. We have 4 soccer officials. • This month, the Recreation Department was invited to attend an Alliance on Aging Chamber Mixer in Salinas. We got to witness the announcement of the grant they received from the California Department of Aging to develop a local age-friendly plan for Monterey County (including Gonzales). We were able to meet and talk to various guests at the mixer. We learned new things about their programs and what their plans are for the future. We gained a lot of new ideas on how to introduce new programs and activities to our senior citizens here in Gonzales.

Kid Power
• We kicked off the school year with Kid Power after school program. For the month of August, we had a total of 39 children who signed up for the program which runs from TK through 5th grade. • The focus of Kid Power after school program is to assist the children with their homework; however, we also make time for fun activities. At the end of each week, we have what we call “Fun Fridays” which consists of arts and crafts and games. For the month of August, our Fun Fridays consisted of playing soccer and allowing the children to make Play-Doh! AGENDA
ITEM
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• Aside from Fun Fridays, in August we also allowed the children to have swim time at the Gonzales Community Pool every Thursday due to early dismissal, so they have been having a lot of fun.

Gonzales Youth Council
• In the Month of August, the Gonales Youth Commissioners and Ambassadors Summer Fellowship attendees geared their focus on the Community Center. On August 1st, they participated in the National Night Out and assisted with getting community input on the Community Center Complex, specifically on the multiple ways the rooms can be used. On August 2nd, the students were able to connect with the Construction and Design Team for the Community Center. Some of the major takeaways from the meeting focused on the timeline of the design, reflecting on the initial input the GYC had provided, and how much has progressed since then. They were also able to connect with the construction-design team on their pathways to career and success which was a great opportunity to expose them to local opportunities with Otto Construction in Monterey.
• On August 4th, we concluded the Gonales Youth Commissioners and Ambassadors Summer Fellowship by having a big lunch with City employees, as well as the summer aquatics employees and summer camp kids. Thank you to Frank from the Public Works Department for grilling hot dogs for us all!
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Activities in the Planning Phase
• The GYC, in collaboration with the Building and Design Team, will be doing outreach at Gonzales High School during their lunch hour on Tuesday, September 12th. The Design-Build Team will return at the end of September and participate at one of the GYC meetings and provide a summary of student’s input and takeaways regarding the look, feel, and use of the Gonzales Community Center.
• The Recreation Department will be hosting two Halloween events starting with a Movie Night on Saturday, October 21st at Centennial Park, followed by a Fall Festival on Saturday, October 28th.

We are currently working on finalizing the movie we will be sharing and the agenda for the Fall Festival.

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City of Gonzales

FIRE DEPARTMENT

ACTIVITY REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 18, 2023
FROM: Jason Muscio, Fire Chief
THROUGH: Carmen Gil, City Manager
SUBJECT: Fire Department Activity Report
Emergency Response
August was a busy month for the Fire Department with a total of 61 calls for service, and a year-to-date total of 502 calls. We responded to 36 EMS related calls including medical emergencies and vehicle accidents, 8 service calls to assist the elderly or residents with mobility issues, 6 false fire alarms, 8 calls which we were dispatched and cancelled, or no emergency was present, 2 calls for hazardous conditions, and 1 structure fire. The structure fire occurred on August 3rd and involved a farm shop on Carr Road in the rural fire district, the shop was a total loss. The fire appeared to have started by workers doing welding in the shop earlier in the day and smoldering materials were left unattended. Good weather has continued to keep the number of vegetation fires surprisingly low for what is usually the peak of our fire season. We are beginning to see an uptick in the number of patients we encounter with COVID-19 or related symptoms.

Department Operations
There are currently no vacancies in our full-time staff, all positions have been filled and our new Firefighter Daniel Escobar has completed his introductory training and has been assigned to A shift.

Lieutenant Vasquez has been out on paternity leave for the birth of his son Noah since August 6th, and is expected to return on September 10th, Lieutenants Prader and Avina will be covering all of Vasquez’s shifts. We currently have two active volunteer firefighters who continue to work night shifts as their schedules allow. We have received one application for volunteer firefighter and will be beginning the hiring process for the applicant next month. Engine 8112 continues to be plagued with various mechanical issues and has only been in service for a few days in August. Skinner Equipment Repair replaced the brakes, cab hold down brackets, and repaired the coolant system. The ladder rack continues to have problems which result in the engine being unable to move due to built-in safety features. Our AGENDA
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City mechanic currently has Engine 8112 in his shop and is continuing to troubleshoot the problem and make repairs. Engine 8111 was briefly out of service for a repair to one of the tires.

Prevention and Community Engagement
There were 8 business inspections conducted during the month and few issues were found, none of them serious. 13 residential rental units were inspected, and no serious violations were found. Our Firefighters took part in the National Night Out Celebration, and assisted with the distribution of the fans that were donated to our residents.

Grants
We were awarded a grant in the amount of $6362 from the California Fire Foundation to purchase new wildland fire shelters for all our personnel. This grant covers the entire cost of the purchase of these vital pieces of safety equipment.

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City of Gonzales

POLICE DEPARTMENT

ACTIVITY REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 18, 2023
FROM: Keith Wise, Chief of Police
THROUGH: Carmen Gil, City Manager
SUBJECT: August 2023 Activity Report
Crime and Arrests
The Gonzales Police Department investigated 6 Part I Crimes (Homicide, Robbery, Theft, Burglary, Rape, Assault and Motor Vehicle Theft) during the month of August 2023. During the same time last year, there were 9 Part I Crimes investigated.

During the month of August 2023, Officers made 13 arrests. During the same time last year, there were a total of 13 arrests.

Calls for Service
The Department responded to 651 calls for service in August 2023. There were 57 crimes, accidents, and information reports taken during the month.

Animal Control
During the month of August 2023, the Animal Control Officer (ACO) provided the following services:

Animal
Control
Trapped/Stray Dead Injured Bite Cases Returned to
Owner
Transported
to the SPCA
Cats 0 0 0 0 0 0
Dogs 1 1 0 1 0 1
Total = 1 1 0 1 0 1
AGENDA
ITEM
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Significant Cases
Although the Police Department responded to 651 calls for service during the month of August 2023, the most significant cases involved 6 Part I crimes. 0- Homicide 1 - Rape, 0 - Robbery, 4 -Assault, 0 -Burglary, 1 -Larcenies, and 0 -Stolen Motor Vehicle Thefts.

Training
The Department continues to conduct in-house training.

Captain Juan Mendoza attended a tabletop active shooter drill at the local Constellations winery on August 16, 2023.

Sergeant Melgoza and Officer Pruneda attended an 80-hour Crime Scene Investigation course on August 21, 2023 - August 25, 2023. The five-day course was hosted by the South Bay Regional Public Safety Training Consortium in Milpitas, CA. This course is designed for law enforcement professionals to enhance their skills in processing and preserving crime scene evidence using the latest techniques and technology.

Records Supervisor Andrea Casillas attended a 16-hour California Law Enforcement Public Records Training hosted by PRI Management Group at the Hunington Beach Police Department in Hunington Beach, CA. on August 24, 2023 – August 25, 2023. This course covers the standards the law sets for state and local agencies regarding what records must be released by law enforcement under the law as well as exemptions to release information and the balance between the public’s right to know and individual’s right to privacy.

Other
On August 1, 2023, the Gonzales Police Department hosted the annual National Night Out Event in our efforts to continue to enhance the relationships between neighbors and law enforcement. The event took place in the 100 block of Fourth Street in Gonzales, Ca. Games, free food, and prizes were available for approximately 300 Gonzales community members.

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City of Gonzales

PUBLIC WORKS / CITY ENGINEER DEPARTMENT

ACTIVITY REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 18, 2023
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Public Works Activity Report

BUILDINGS

1. Community Center Complex Project – An award of contract to Otto Construction/WRNS Design/Build Team was approved at the 6/5/2023 Council meeting. The Notice to Proceed for design services for Phases 1 and 2 was issued on 6/16/2023 and a kick-off with the Otto Construction/WRNS Team was held on 6/28/2023. UPDATES:
• The Project Team is holding weekly progress meetings. • Staff provided a progress report at the 8/21/2023 Council Meeting and presented a follow-up report at the 9/05/2023 Council Meeting
• On 9/05/2023 Staff and the Design/Build team met with interested residents and a business owner and discussed the Community Hall and Commercial Kitchen. • On 9/07/2023 WRNS Studios (project architect) emailed their 50% Design Development submittal to City staff for review.
• On 9/12/2023 City staff and the Design/Build team met with the GYC and other high school students at the High School Quad over the lunch hour to get their input on the design aspects of the Teen Innovation Center.

WASTEWATER

1. Industrial Wastewater (IW) System – Construction documents for the IW Conveyance and Treatment Facility were completed in September 2022. Staff, City surveyor and real estate appraiser are finalizing the temporary and permanent easements needed for the pipeline contract. City staff is coordinating with the State Water Resources Control Board regarding the City’s State Revolving Fund loan application (most recent virtual meeting was 8/04/2023).

AGENDA
ITEM
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2. Water/Sewer Rate Study – A contract with Lechowicz & Tseng to prepare a Water/Sewer Rate Study was approved at the 11/21/2023 Council meeting. They reviewed the City’s rate structure, utility billing data, impact fee studies and capital improvement programs and developed a financial model.

On 8/07/2023 Staff and consultant met with Industrial Business Park facilities managers and presented an overview of the Water/Sewer Rate Study. Staff and the consultant presented the initial rates at the 8/07/2023 Council meeting. UPDATES:
• On 9/18/2023 Staff and consultant will meet with Industrial Business Park facilities managers to discuss the Draft Water/Sewer Rate Study.
• Staff and consultant will present the Draft Water/Sewer Rate Study at the 9/18/2023 Council meeting.

3. Capital Improvement Program (CIP) – Psomas updated the wastewater projects of the City’s CIP for use in the Water/Sewer Rate Study. The sewer CIP was approved at the 8/07/2023 Council meeting.

WATER

1. Johnson Canyon Parallel Waterline – A design contract with Schaaf & Wheeler was approved at the 6/20/2023 Council meeting. The contract was executed, and a kick-off meeting was held on 6/29/2023.

2. Capital Improvement Program – Schaaf & Wheeler updated the City’s Water Model and updated the water projects of the City’s Capital Improvement Program for use in the Water/Sewer Rate Study.

The water section of the CIP was approved at the 8/07/2023 Council meeting.

3. Alpine Court Water/Sewer Service – At the 8/07/2023 meeting, the City Council approved submitting grant agreements with the State Water Resource Control Board (SWRCB) to fund construction of extending water and sewer service from Gonzales River Road to Alpine Camp.

4. Salinas Valley Basin Groundwater Sustainability Agency – Staff is an alternate on the SVBGSA Technical Advisory Committee (King City staff is the representative for South Valley Cities and our City Manager is the Alternate).

ROADS

1. Fifth Street Truck Ban – This project was issued for public bid on 7/17/2023 and one bid was opened on 8/17/2023. The Design Consultant is reviewing the single bid as it exceeds the cost estimate.

PARKS

1. Meyer Park – Staff has coordinated numerous maintenance items over the last several months including fixing light fixtures, replacing uplifted sidewalk, pruning trees, and replacing the rubber mulch under the swings with wood fiber. We are working with MST on installing a bus shelter that the City and MST will split the cost for. Staff is reviewing a proposal for a consultant to prepare a Needs Assessment for Meyer Park.

SOLID WASTE

1. Maury Treleven with Tri-Cities Disposal coordinated a Reuse, Recycle & Cleanup Event on 6/24/2023. The event was held at Fairview Middle School and 168 vehicles showed up. This event meets the outreach criteria for the City’s storm water permit as it provides alternatives to illegal dumping (especially the safe collection of items commonly dumped in storm drains) and outreach Packet Pg. 38
surveys conducted by Save the Whales. The next Reuse, Recycle & Cleanup Event is scheduled for 10/21/2023.

2. Quarterly Tri-Cities Franchise Agreements Meetings – Staff from the Salinas Valley Solid Waste Authority, Tri-Cities Disposal & Recycling and the cities of Gonzales, Soledad, and Greenfield meet on a quarterly basis to discuss the various waste collection programs (commercial accounts, food waste, organic waste), compliance with latest state regulations, public outreach and education, customer surveys, etc.

3. On 3/17/2023 the Salinas Valley Solid Waste Authority issued a Request for Proposals for Collection of Solid Waste, Recyclables and Organic Waste. The RFP includes compliance with the recent State mandates such as AB 341, AB 1826, and SB 1383. Three proposals were received by the 6/30/2023 deadline. A meeting with representatives from the four South Valley cities was held on 8/11/2023 to discuss the proposals and “next steps” such as potentially scheduling interviews with two or all three companies.

DEVELOPMENT PROJECTS

1. Vista Lucia Development (City’s Sphere of Influence - East of US 101) a. Psomas developed a capital program of improvements to convey sewage from the SOI to the City WWTP for treatment and provided the draft technical memo in Mid-November for staff’s review.

The Final Technical Memorandum was submitted in April 2022. b. Staff and our on-call traffic engineer have coordinated with Caltrans District 5 staff on the process for preparation of a Project Study Report/Project Development Support (PSR-PDS). Staff is preparing a Request for Proposals to engage a consultant to prepare the PSR-PDS documents. c. Staff met with Monterey County staff on 10/7/2022 and discussed executing a Maintenance Agreement for the City to be responsible for maintenance of Associated Lane when it’s widened as part of the Vista Lucia Development (maintenance will be funded by an assessment district formed as part of the development). UPDATE: Staff attended a follow-up meeting with County staff on 8/16/2023.

2. Rianda Cooler Development Project (Gloria Road) – Staff is coordinating with the applicant’s site civil engineer on frontage improvements along Gloria Road and the extension of City water/sewer service to the project site. We participate in bi-weekly meetings with the applicant’s consultant team.

On 6/12/2023 staff and the Building Official met with the applicant to discuss the building plan review process and the expected construction schedule.

OTHER PROJECTS

1. Computer Network Server Replacement – Alvarez Technology is replacing the computer servers for City Hall, Fire Station and the Police Department. This $130,000 effort began with an eight month procurement phase and the physical work is being performed over a six month period which is expected to be completed by the end of October 2023.

2. South Salinas Valley Broadband Authority – On 7/05/2023, the City received the High Level Design package funded by the $250,000 CPUC Local Agency Technical Assistance grant. UPDATE: Staff is currently reviewing an encroachment permit application to extend the fiber to the Police Station where the IT Servers for City Hall, Police Department and Fire Department reside.

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3. GIS – City staff continues to work on a GIS mapping system by inputting field data for water, sewer and storm drainage systems. Our water and wastewater consultants are using GIS to develop capital improvement projects to serve the proposed development projects in the SOI. GIS Staff with AMBAG is supporting our efforts including coordinating with County GIS staff to obtain additional mapping layers.

4. FEMA Flood Map Updates – Over the two years, FEMA and their consultants have been remapping seven watersheds in the Gabilan Mountains in the vicinity of South Salinas, Chualar, Gonzales and Soledad to update their Flood Maps. FEMA did not revise the flood maps based on City review comments and the new maps are effective 11/30/2023.

5. Transportation Agency for Monterey County – Patrick Dobbins attends the monthly Technical Advisory Committee meetings and is the TAC Vice Chair for 2023.

PUBLIC WORKS OPERATIONS AND MAINTENANCE

WASTEWATER
Staff performs testing and daily inspections of the influent and effluent at the wastewater treatment plant.

Staff repaired one of the grinders at the headworks. Staff also removed and repaired two of the aerators in the treatment ponds. The percolation ponds are regularly disced and ripped to ensure good percolation.

Staff also performed rodent control and weed abatement at the WWTP.

Staff attended Sanitary Sewer Overflow training and drills with the South County Public Works crews.

WATER
Staff continue to test and maintain the water system. Staff has repaired several meter leaks this month.

Staff performed dead end line flushing this quarter. Staff also keeps the pool clean.

Staff repairing a water line. Staff repairing the pool cleaner.

STORM WATER
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Staff continue to perform dry weather maintenance on storm drains inlets. Staff is beginning to prepare for the winter storm season.

PARKS
Staff mow turf areas in City parks on a weekly basis. Staff cleans restrooms, cleans trash, and makes repairs in parks regularly. Staff also performed rodent control. Staff perform work on the redwoods to ensure they are getting the proper water and care needed to thrive.

Staff performed inspections of the playground equipment. Staff refilled all park playgrounds with engineered wood fiber and removed broken equipment.

Staff perform maintenance at Central Park, Centennial Park, Meyer Park, Venice Park, Canyon Creek Park and Canyon Creek Tot Park.

GOVERNMENT BUILDING
Staff continue to perform maintenance of the City owned buildings. Staff replaced filters in all buildings this month as a part of regular maintenance on the HVAC units. The air conditioner at the PD server room was replaced.

STREETS
Staff continue to paint street markings. Staff recently replaced several street name signs.

TRAINING
Staff participated in Sanitary Sewer Overflow classes and drills. Staff learned how to better estimate overflows, more thorough documentation, and prepare for Sewer Overflows.

Sewer overflow drill for estimating spill amounts.

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AGENDA
ITEM
PROCLAMATION NO. 2023-04
WHEREAS, mental health and substance use disorders affect all communities nationwide, with commitment and support, those impacted can embark on a journey of improved health and overall wellness; and
WHEREAS the focus of National Recovery Month this September is to celebrate all people that make the journey of recovery possible; and
WHEREAS, the impact of mental health and substance use disorders is apparent in our local community, and an estimated 22 million people in United States aged 12 or older self-reported needed substance abuse treatment in the past year: and WHEREAS, through Recovery Month, people become more aware and able to recognize the signs of mental health and substance use disorders and encourages people in need of recovery services to seek help; and
WHEREAS, the Recovery Month observance continues to work to improve the lives of those affected by mental health and substance use disorders by raising awareness and educating communities about the effective services that are available; and WHEREAS, prevention of mental and substance use disorders works, treatment is effective, and people recover in our area and around the nation; and NOW, THEREFORE, for the above reasons, I am asking the citizens of the City of Gonzales to join me in celebrating this September as National Recovery Month. I, Mayor Jose Rios, on behalf of the Gonzales City Council do hereby proclaim the month of September 2023 as “NATIONAL ALCOHOL AND DRUG ADDICTION RECOVERY MONTH” throughout the City of Gonzales and call upon our community to observe this month with compelling programs and events that support this year’s observance, the 34th anniversary of Recovery Month by embracing the 2023 theme, “Recovery is For Everyone: Every Person, Every Family, Every Community.”
Jose L. Rios, The Honorable Mayor
September 18, 2023
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Attachment: Proclamation No. 2023-04 (2820 : Proclamation No. 2023-04 September National Alcohol & Drug Addiction Recovery Month) 12 City of Gonzales

COMMUNITY DEVELOPMENT DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 18, 2023
FROM: Taven Kinison Brown, Community Development Director THROUGH: Carmen Gil, City Manager
SUBJECT: Regional Early Action Planning Grants of 2021 (REAP 2.0)

RECOMMENDATION
It is recommended that the City Council approve Resolution No. 2023-58, A Resolution of the City Council of the City of Gonzales Accepting Grant Funds and Authorizing Execution of Agreements for the Regional Early Action Planning Grant (REAP) 2.0 Program.

BACKGROUND
The REAP 2.0 program was established through AB 140 (July 2021) for transformative and innovative projects that implement a region's Sustainable Communities Strategy (SCS) and help achieve the objectives of more housing and transportation options that reduce reliance on cars. REAP 2.0 builds on actions completed through the REAP 1 grant program but expands the focus by integrating housing and vehicle miles traveled (VMT) reduction and allowing for broader planning and implementation investments, including infrastructure investments supporting housing development. This includes accelerating housing production and facilitating compliance with the 6th Cycle of the housing element.

REAP 2.0 is specifically designed to provide tools and resources to help implement and advance plans, primarily including Sustainable Communities Strategies (SCS) as part of Regional Transportation Plans to pursue greenhouse gas emission reduction targets through land use and transportation changes.

REAP 2.0 Program Goals include investing in housing, planning, and infilling housing-supportive infrastructure across the entire state in a manner that reduces VMT, increases housing affordability, and advances equity, consistent with all of the following:

AGENDA
ITEM
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• Advances the State Planning Priorities, as described in Section 65041.1 of the Government Code; • Affirmatively Furthering Fair Housing;
• Facilitating Housing Element compliance and progress for the Sixth Cycle RHNA; • Advancing and implementing the region's Sustainable Communities Strategy.

REAP 2.0 Program Objectives:
• Accelerating Infill Development that Facilitates Housing Supply, Choice, and Affordability • Affirmatively Furthering Fair Housing (AFFH)
• Reducing Vehicle Miles Traveled (VMT)

REVIEW & ANALYSIS
What will we use the grant for? Staff anticipates preparing an RFP for planning consulting services to evaluate and customize a rezoning proposal to broadly increase zoning densities and allow for a spectrum of housing types, and affordability levels over a substantial portion of the City. To be determined will be how broadly the rezoning/upzoning of the R-1 and R-2 zoning designations will reach northeasterly into the neighborhoods that have more distance from the downtown core and job centers. Should the zone changes also include the R-1 and R-2 past the centralized school properties and include those neighborhoods pressing up to Highway 101? Should the upzoning include those neighborhoods east of Highway 101?
In addition to the text changes and color changes to the zoning map, staff anticipates a good portion of the grant award will be needed for environmental evaluation of the impacts on fire and police services, schools and daycare systems, healthcare opportunities, and other social amenities. Streets, sewers, water, and utility systems are already in place.

What is in the MOU with AMBAG? By entering into this Agreement and accepting the award of the Program funds, the City agrees to comply with the terms and conditions of the Guidelines, application, as well as this Agreement, subsequent amendments, or modifications to this Agreement. AMBAG shall encumber the full amount pursuant to the Guidelines and provide payment upon reimbursement request and subsequent payments in accordance with this agreement.

Grant and Reimbursement Limit
• The maximum total amount encumbered to the City shall not exceed $128,750.00. • The Agreement authorizes payments and awards up to the total award amount. • The City shall submit and follow a schedule for the expenditure of the award before disbursement of funds. The schedule is subject to AMBAG approval and may be revised as AMBAG deems necessary.

Grant Timelines
• This Agreement is effective upon approval by all parties and AMBAG. • All Grant funds must be obligated no later than March 31, 2024, and expended by March 31, 2026, unless the grant recipient receives an extension to the grant expenditure deadline in writing. • Extensions to the March 31, 2026, grant spending deadline may only be granted by AMBAG to the grantee in writing after September 31, 2025, and only if the grantee has spent at least 60% of their REAP 2.0 grant by September 31, 2025.
• Final invoices must be submitted to AMBAG by April 15, 2026. Under special circumstances, approved by AMBAG and in accordance with the expenditure deadline, AMBAG may modify the invoice deadline and may provide an exception to conduct the terms of this Agreement.

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• It will be the responsibility of the City to monitor the progress and timeliness of grant fund obligations, including invoicing and reimbursements within the specified dates.

Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small town charm.

Explain: The grant funds will assist the City in implementing its coming 6th Cycle Housing Element programs and implementation measures of which we are forecasting substantially increased density (up-zoning) in the existing residential and commercial areas. This grant will not be applied to planning work in the Sphere of Influence areas where the specific plans are proposed. Without these grant funds, the City would still need to process and pay for the anticipated upzoning but has not planned for such expenditures and costs in the current budget cycle; we would have to borrow from or cancel another program.

Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ___No ___ NA
Explain: The Housing Element and its successful implementation are all meant to increase the local housing supply in Gonzales to enhance the quality of life for our community. The up-zoning of density may (hopefully) incentivize the assembly of parcels adjacent to each other, and present an opportunity for the City to consider larger new multifamily projects such as apartments, smaller condo-like ownership units, and other urban-density level developments.

Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education Yes No X N/A
Explain: Please see the explanation above for the Vision and Vision.

ALTERNATIVES
If the City Council does not accept the new grant for $125,750, we will not be able to implement a significant portion of our housing plan to construct additional housing to meet the needs of our citizens.

BUDGET IMPACT
Not having completed the Housing Element (expected early 2024), nor the action items (up zoning and otherwise) that will come from that in-depth study, and also not having gone out yet with an RFP for consultant services for the up-zoning legislative actions and environmental review (Feb-April 2024 expected), staff does not have a forecast on the true cost of these yet to be determined expenses. Staff will work hard to cap these expenses not to exceed the $128,750 grant award, but there is no guarantee that the Packet Pg. 45
City will not need to find additional grants, revenue sources or make adjusted priorities with other programs and expenditures.

CONCLUSION
It is recommended that the City Council approve Resolution No. 2023-58, A Resolution of the City Council of the City of Gonzales Accepting Grant Funds and Authorizing Execution of Agreements for the Regional Early Action Planning Grant (REAP) 2.0 Program.

Attachments:

1. Resolution No. 2023-58

2. MOU regarding Regional Early Action Planning Grants Program of 2021

3. REAP 2.0 Grant application packet
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RESOLUTION NO. 2023-58

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES

ACCEPTING GRANT FUNDS AND AUTHORIZING EXECUTION OF AGREEMENTS FOR THE REGIONAL EARLY ACTION PLANNING GRANT (REAP) 2.0 PROGRAM WHEREAS, the California Department of Housing and Community Development (HCD) is authorized to provide up to $510,000,000 to Metropolitan Planning Organizations and Councils of Government listed in Health and Safety Code Section 50515.08, subdivisions (a)(1)-(6) under the Regional Early Action Planning Grants Program (REAP 2.0), as detailed in Health and Safety Code Section 50515.08-10; and
WHEREAS, the REAP 2.0 program was established through AB 140 (July 2021) for transformative and innovative projects that implement a region's Sustainable Communities Strategy (SCS) and help achieve the objectives of more housing and transportation options that reduce reliance on cars. This includes accelerating housing production and facilitating compliance with the 6th Cycle of the Housing Element; and
WHEREAS, the State of California Department of Housing and Community Development (HCD) issued a Notice of Funding Availability on July 26, 2022, for REAP 2.0 grants available to Metropolitan Planning Organizations and Councils of Government; and WHEREAS, the Association of Monterey Bay Area Governments (AMBAG) requested funds from HCD pursuant to Health and Safety Code Section 50515.08(c) to develop and accelerate the implementation of the requirements described in Health and Safety Code section 50515.08(c)(1); and
WHEREAS, HCD approved AMBAG’s Request for Funds, subject to the terms and conditions of Eligibility, Guidelines, NOFAs, Program requirements, and the Standard Agreement by and between HCD and AMBAG; and
WHEREAS, AMBAG is authorized to suballocate REAP 2.0 funds to eligible applicants in the AMBAG region and will administer the REAP 2.0 grant program and provide oversight of the grant program in the AMBAG region; and
WHEREAS, AMBAG developed a suballocation program in cooperation with HCD and eligible applicants in the AMBAG region; and
WHEREAS, AMBAG issued a Notice of Funding Availability for a REAP 2.0 suballocation program for eligible applicants in the AMBAG region on June 15, 2023; and WHEREAS, the City of Gonzales is eligible to submit a request for allocation for a portion of REAP 2.0 funds from AMBAG; and
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Attachment: Resolution No. 2023-58 (2812 : Resolution No. 2023-58 Regional Early Action Planning Grants of 2021 (REAP 2.0)) WHEREAS, the City of Gonzales Community Development Department prepared a Local Suballocation Grant Program (LSGP) Application to the Association of Monterey Bay Area Governments (AMBAG), and submitted the application in a timely manner by August 15, 2023; and
WHEREAS, on September 1, 2023, the City of Gonzales was informed that we had been awarded a Regional Early Action Planning 2.0 (REAP 2.0) Local Suballocation Grant Program (LSGP) grant, contingent upon execution of an MOU with AMBAG and a resolution authorizing acceptance of the grant in the amount of $128,750; and
WHEREAS, the City anticipates preparing an RFP for planning consulting services to evaluate and customize a rezoning proposal to broadly increase zoning densities and allow for the spectrum of housing types, and affordability levels over a substantial portion of the City; and

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GONZALES:

1. The City of Gonzales is hereby authorized to accept an allocation not to exceed $128,750 from the Association of Monterey Bay Area Governments for REAP 2.0 grant funding, and

2. The City of Gonzales is hereby authorized to enter into agreements and take further actions as may be necessary to give effect to this resolution, such as executing amendments, memorandums of understanding, and approving funding applications with the Association of Monterey Bay Area Governments for REAP 2.0 grant funding.

PASSED AND ADOPTED by the City Council of the City of Gonzales at a meeting held on this 18th day of September 2023 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Jose L. Rios, The Honorable Mayor
ATTEST:

Mary Villegas, Deputy City Clerk
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Attachment: Resolution No. 2023-58 (2812 : Resolution No. 2023-58 Regional Early Action Planning Grants of 2021 (REAP 2.0))

MEMORANDUM OF UNDERSTANDING
between

THE ASSOCIATION OF MONTEREY BAY AREA GOVERNMENTS
and
the City of GONZALES
Regarding
REGIONAL EARLY ACTION PLANNING GRANTS PROGRAM OF 2021
WHEREAS, on June 29, 2021, Governor Newsom signed the Budget Act of Fiscal Year 2021-2022 which established the Regional Early Action Planning Grants Program of 2021 (REAP 2.0 or Program) which allocated $600 million in one-time funds to accelerate infill housing development, affirmatively further fair housing, and reduce VMT; and
WHEREAS, the California Department of Housing and Community Development (HCD) has been assigned as the state agency overseeing this program; and
WHEREAS, a portion of REAP 2.0 funds have been allocated to the Association of Monterey Bay Area Governments (AMBAG); and
WHEREAS, AMBAG will grant the majority of REAP 2.0 funds to eligible entities in the AMBAG area; and WHEREAS, eligible entities may apply for a portion of AMBAG’s REAP 2.0 funds according to an allocation method approved by the AMBAG Board; and
WHEREAS, AMBAG shall approve grant applications subject to the terms and conditions of eligibility, guidelines, Notices of Funding Availability, and program requirements.

THEREFORE, BE IT RESOLVED:

The following agreement is entered into between the City of GONZALES (Grantee) and the Association of Monterey Bay Area Governments (AMBAG).

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Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action

AUTHORITY, PURPOSE, AND SCOPE OF WORK

1. Authority
The Regional Early Action Planning Grants Program of 2021 (REAP 2.0 or Program) is established for the purpose of providing regions with one-time funding, including grants for transformative planning and implementation activities. Up to eight million six hundred and twenty-five thousand ($8,625,000) shall be distributed by AMBAG to eligible entities in the AMBAG area under the Program in accordance with Chapter 3.15 of the California Health and Safety Code (Statute). The Association of Monterey Bay Area Governments (AMBAG) shall administer the Program to eligible entities in the AMBAG area in accordance with the Statute and AMBAG’s REAP 2.0 Local Suballocation Grant Program and Regional Competitive Grant Program Guidelines (Guidelines), pursuant to Health and Safety Code section 50515.10(h), and program guidance.

This Agreement (Agreement) authorizes the encumbrance of the total funds available to the awardee, subject to all statutory requirements and all applicable provisions, including but not limited to the Guidelines, approved applications, and any subsequent modifications.

The Grantee shall consult with AMBAG on any amendment modification or other provision related to the implementation of the Program. AMBAG’s decisions related to the administration of the Program shall be final.

2. Purpose
In accordance with the authority cited above, the Grantee has been awarded financial assistance in the form of a grant from the Program. AMBAG has agreed to make the grant for planning and implementation activities pursuant to the Guidelines and this Agreement. By entering into this Agreement and thereby accepting the award of the Program funds, the Grantee agrees to comply with the terms and conditions of the Guidelines, application, as well as this Agreement, subsequent amendments or modifications to this Agreement and the requirements of the authority cited above.

Based on all representations made by the Grantee, AMBAG shall encumber the full amount pursuant to the Guidelines and provide payment upon reimbursement request and subsequent payments in accordance with this agreement. All terms, conditions and other relevant provisions will be subject to amendments as a result of subsequent applications and awards for remaining funds in accordance with this agreement.

3. Definitions
Terms herein shall have the same meaning as defined by the Guidelines and Statute.

4. Scope of Work
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Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action Grantee shall use the awarded funds in accordance with the approved scope of work as contained in the timeline and budget and related information outlined in the approved application as attached hereto and incorporated herein by this reference, and as set forth in this agreement. The scope of work may be amended in compliance with statutory requirements subject to approval by AMBAG.

5. Monitoring
A. The Grantee shall maintain books, records, documents, and other evidence that demonstrates the funding was used for the appropriate purposes, as described in the Statute, Guidelines, Scope of Work, application, subsequent approved applications and all other pertinent documents. These books, records, documents and other evidence shall be available for audit and inspection by AMBAG at AMBAG’s principal place of business.

B. AMBAG may request additional information, as needed, to demonstrate statutory compliance, satisfaction of program requirements and necessary amendments to this Agreement, including but not limited to reporting or audit requirements, or award amount to the Grantee.

C. AMBAG may monitor expenditures and activities of the Grantee, as AMBAG deems necessary, to ensure compliance with statutory or AMBAG requirements.

D. AMBAG may, as it deems appropriate or necessary, request the repayment of funds from a Grantee or pursue any other remedies available to it by law for failure to comply with Program requirements pursuant to Health and Safety Code section 50515.10 (g).

E. AMBAG’s decision to approve or deny an application or request for funding pursuant to the program, and its determination of the amount of funding to be provided, shall be final pursuant to Health and Safety Code section 50515.10(i).

F. Monitoring provisions may be amended and are subject to additional provisions in accordance with this Agreement or subsequent amendments.

6. AMBAG Contract Coordinator
The Contract Coordinator of this Agreement for AMBAG is Paul Hierling, Senior Planner. Any notice, report, or other communication required by this Agreement shall be submitted under the penalty of perjury by email to [email protected].

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Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action

BUDGET DETAIL AND PAYMENT PROVISIONS

1. Application for Funds
A. AMBAG is entering into this Agreement on the basis of, and in reliance upon, facts, information, assertions and representations contained in any application or award or any subsequent modifications or additions to such thereto approved by AMBAG.

All awarded applications for funding and any approved modifications and additions thereto are hereby incorporated into this Agreement.

B. The Grantee warrants that all information, facts, assertions and representations contained in any approved application, award or approved modifications and additions thereto are true, correct, and complete to the best of the Grantee’s knowledge. In the event that any part of an application and any approved modification and addition thereto is untrue, incorrect, incomplete, or misleading in such a manner that would affect AMBAG's approval, disbursement, or monitoring of the funding and the grant or activities governed by this Agreement, AMBAG or AMBAG’s designee may declare a breach hereof and take such action or pursue such remedies as are provided for breach hereof.

2. Grant and Reimbursement Limit
A. The maximum total amount encumbered to the Grantee pursuant to this Agreement shall not exceed $128,750.00,
B. This Agreement authorizes payments and awards up to the total award amount as described in Section 2A of this Exhibit and is subject to AMBAG approval.

C. The Grantee shall submit and follow a schedule for the expenditure of the award prior to disbursement of funds as attached hereto and incorporated hereby this reference. The schedule is subject to AMBAG approval and may be revised as AMBAG deems necessary.

3. Grant Timelines
A. This Agreement is effective upon approval by all parties and AMBAG.

B. All Grant funds must be obligated no later than March 31, 2024 and expended by March 31, 2026 unless the grant recipient receives an extension to the grant expenditure deadline in writing.

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Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action C. Extensions to the March 31, 2026 grant spending deadline may only be granted by AMBAG to the grantee in writing after September 31, 2025 and only if the grantee has spent at least 60% of their REAP 2.0 grant by September 31, 2025.

D. Final invoices must be submitted to AMBAG by April 15, 2026. Under special circumstances, approved by AMBAG and in accordance with the expenditure deadline, AMBAG may modify the invoice deadline and may provide exception to carry out the terms of this Agreement.

E. It is the responsibility of the Grantee to monitor the progress and timeliness of grant fund obligations, including invoicing and reimbursements within the specified dates.

4. Allowable Uses of Grant Funds
A. AMBAG shall not award or disburse funds unless it determines that the grant funds shall be expended in compliance with the terms and provisions of the Statute and REAP 2.0 Guidelines which includes associated forms and guidelines, approved applications and this Agreement.

B. Grant funds shall only be used by the Grantee for project activities approved by AMBAG that involve planning and implementation activities in accordance with the Statute and REAP 2.0 Guidelines.

C. Grant funds may not be used for administrative costs of persons employed by the Grantee for activities not directly related to eligible activities.

D. A Grantee that receives funds under this Program may use a subcontractor and Grantee shall be accountable to AMBAG to ensure subcontractor’s performance of the subcontract shall comply with all the requirements of the Program. The subcontract shall not relieve the Grantee of its responsibilities under the Program.

E. After the Agreement has been executed by AMBAG and all parties, approved and eligible costs for eligible activities may be reimbursed for the project(s) upon completion of deliverables in accordance with the scope of work and subject to the terms and conditions of this Agreement.

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Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action REAP 2 .0 TERMS AND CONDITIONS

1. Accounting and Records
A. The Grantee, its employees, contractors, and subcontractors shall establish and maintain an accounting system and reports that properly accumulate incurred project costs by line. The accounting system shall conform to Generally Accepted Accounting Principles (GAAP), enable the determination of incurred costs at interim points of completion, and provide support for invoices. Grantees may establish and maintain an accounting system and reports, as described above, on behalf of contractors and subcontractors.

B. The Grantee must establish a separate ledger account for receipts and expenditures of grant funds and maintain expenditure details in accordance with the budget and timeline. Separate bank accounts are not required.

C. The Grantee shall maintain documentation of its normal procurement policy and competitive bid process (including the use of sole source purchasing), and financial records of expenditures incurred during the course of the project in accordance with GAAP.

D. The Grantee agreesthat AMBAG or designated representative shall have the right to review and to copy any records and supporting documentation pertaining to the performance of the Agreement.

E. The Grantee agrees to maintain such records for a possible audit after the final payment for at least five years after all funds have been expended or returned to AMBAG unless a longer period of records retention is stipulated. Wherever practicable, such records should be collected, transmitted, and stored in open and machine- readable formats.

F. Contractors and subcontractors employed by the Grantee and paid with moneys under the terms of this Agreement shall be responsible for maintaining accounting records as specified above.

2. Invoicing
A. Grant funds cannot be disbursed until the Agreement has been fully executed.

B. The Grantee will be responsible for compiling and submitting all invoices and Packet Pg. 54
Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action reporting documents.

C. The Grantee must bill AMBAG based on clear deliverables outlined in the Agreement or budget timeline. Generally, approved and eligible costs incurred for work after execution of the Agreement and completed during the grant term will be reimbursable.

D. The Grantee shall submit to AMBAG on a quarterly basis or upon completion of deliverable, and each requisition for payment (Invoice) shall accompanied by a narrative progress report. Quarters are defined as July 1 to September 30, October 1 to December 31, January 1 to March 31, and April 1 to June 30. Project invoices may be submitted to AMBAG by the Grantee on a quarterly basis or upon completion of a deliverable, subject to AMBAG’s approval.

E. The grantee shall submit an invoice to AMBAG no later than fifteen calendar days (15) after the close of each quarter. Invoices shall describe progress toward completion of tasks, projects, and products, conformance with project schedules and reporting of costs incurred.

F. Year-end Invoices, reports, and supporting documentation submitted in the quarter April 1 to June 30 submitted over fifteen calendar days (15) after the close of the quarter shall not be paid.

G. All invoices must also include supporting documentations including receipts or backup for all expenses for which reimbursement is sought. Supporting documentation may include, but is not limited to, purchase orders, receipts, progress payments, subcontractor invoices, timecards, reports, or any other documentation as deemed necessary by AMBAG to support the reimbursement to the Grantee for expenditures incurred.

H. Payment of Invoices is contingent upon receipt by AMBAG or the above documentation provided by the Grantee. Payment to Grantee is further contingent upon AMBAG’s determination that the performance of the Grantee meets State and AMBAG standards.

I. All Grantee funds must be spent and work completed by March 31, 2026.

J. AMBAG must indicate approval of Grantees invoices before they will be considered complete

3. Audits
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Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action A. At any time during the term of the Agreement, AMBAG may perform or cause to be performed a financial audit of any and all phases of the award. At AMBAG’s request, the Grantee shall provide, at its own expense, a financial audit prepared by a certified public accountant. AMBAG has the right to review project documents and conduct audits during project implementation and over the project life.

B. The Grantee agrees that AMBAG or AMBAG’s designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to performance of this Agreement.

C. The Grantee agreesto provide AMBAG, or AMBAG’s designee, with any relevant information requested.

D. The Grantee agrees to permit AMBAG or AMBAG’s designee access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees who might reasonably have information related to such records and inspecting and copying such books, records, accounts, and other material that may be relevant to a matter under investigation for the purpose of determining compliance with statutes, REAP 2.0 Guidelines, and the Agreement.

E. AMBAG may request additional information, as needed, to meet other applicable audit requirements.

F. AMBAG or AMBAG’s designee may monitor expenditures and activities of a Grantee or its designees, contractors or subcontractors, as AMBAG deems necessary, to ensure compliance with REAP requirements.

G. If there are audit findings, the Grantee must submit a detailed response acceptable to AMBAG or AMBAG’s designee for each audit finding within 90 days from the date of the audit finding report.

H. The Grantee agrees to maintain such records for possible audit after the final payment for at least five years after all funds have been expended or returned to AMBAG unless a longer period of records retention is stipulated. Wherever practicable, such records should be collected, transmitted, and stored in open and machine- readable formats.

I. If any litigation, claim, negotiation, audit, monitoring, inspection, or other action has been started before the expiration of the required record retention period, all records must be retained by the Grantee and its designees, contractors, and subcontractors until completion of the action and resolution of all issues which arise from it. In any contract that it enters into in an amount exceeding $10,000, the Packet Pg. 56
Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action Grantee shall include AMBAG’s right to audit the contractor’s records and interview their employees.

J. The Grantee shall comply with and be aware of the requirements and penalties for violations of fraud and for obstruction of investigation as set forth in California Public Contracts Code Section 10115.10.

4. Remedies and Non-Performance
A. Any dispute concerning a question of fact arising under this Agreement that is not disposed of by agreement shall be decided by AMBAG’s Executive Director, or the Executive Director’s designee, who may consider any written or verbal evidence submitted by the Grantee. The decision of AMBAG’s Executive Director or Designee shall be AMBAG’s final decision regarding the dispute, not subject to appeal.

B. Neither the pendency of a dispute nor its consideration by AMBAG will excuse the Grantee from full and timely performance in accordance with the terms of this Agreement.

C. In the event that it is determined, at the sole discretion of AMBAG, that the Grantee is not meeting the terms and conditions of the Agreement, immediately upon receiving a written notice from AMBAG to stop work, the Grantee shall cease all work under the Agreement. AMBAG has the sole discretion to determine that the Grantee meets the terms and conditions after a stop work order, and to deliver a written notice to the Grantee to resume work under the Agreement.

D. AMBAG has the right to terminate the Agreement at any time upon 30 calendar days written notice. The notice shall specify the reason for early termination and may permit the Grantee or AMBAG to rectify any deficiency(ies) prior to the early termination date. The Grantee will submit any requested documents to AMBAG within 30 calendar days of the early termination notice.

E. The applicant must demonstrate a clear and significant nexusto REAP 2.0 Program goals and objectives and must carry out provisions to meet the Program goals and objectives and other requirements, including, but not limited to, adoption or completion of activities toward policy outcomes and implementation of eligible use activities funded through a suballocation process. Any lack of action or action inconsistent with REAP 2.0 requirements may result in review and could be subject to repayment of the grant.

F. At any time, if AMBAG finds the Grantee included false information in application, as part of the application review, or subsequent amendments, AMBAG may require Packet Pg. 57
Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action the repayment of funds.

G. Grantees are responsible for suballocations meeting all REAP 2.0 requirements.

H. If a grantee has not spent at least 20% of a REAP 2.0 grant awarded by December 31, 2024, that grantee’s funding will be deobligated and reallocated to another grantee and/or purpose at the discretion of AMBAG’s Executive Director or the Executive Director’s designee.

I. If a grantee has not spent at 60% of a REAP 2.0 grant awarded by September 31, 2025, that grantee’s funding may be deobligated and reallocated to another grantee, and/or purpose at the discretion of AMBAG’s Executive Director or the Executive Director’s designee.

J. Examples of a breach of this Agreement:

1. Grantee’s failure to comply with any term or condition of this Agreement.

2. Use of, or permitting the use of, grant funds provided under this Agreement for any ineligible costs or for any activity not specified and approved under this Agreement.

3. Any failure to comply with the deadlines set forth in this Agreement unless approved by the Program Manager in writing.

K. AMBAG may, as it deems appropriate or necessary, require the repayment of funds from a Grantee, or pursue any other remedies available to it by law for failure to comply with all REAP 2.0 Program requirements or breach of this agreement.

L. In addition to any other remedies that may be available to AMBAG in law or equity for breach of this Agreement, AMBAG may at its discretion, exercise a variety of remedies, including but not limited to:

1. Revoke existing REAP 2.0 award(s) to the Grantee;

2. Require the return of unexpended REAP 2.0 funds disbursed under this Agreement;

3. Require repayment of REAP 2.0 Funds disbursed and expended under this Agreement;

4. Seek a court order for specific performance of the obligation defaulted upon, or the appointment of a receiver to complete the obligations in accordance Packet Pg. 58
Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action with the REAP 2.0 Program requirements; and

5. Other remedies available at law, by and through this Agreement. All remedies available to AMBAG are cumulative and not exclusive.

6. AMBAG may give written notice to the Grantee to cure the breach or violation within a period of not less than 15 calendar days.

M. The Grantee may be subject to amendment of this section as a result of subsequent applications and awards.

N. AMBAG and the Grantee are fully committed to working with each other throughout the Term of this Agreement and agree to communicate regularly with each other at all times so as to avoid and minimize disputes. AMBAG and the Grantee agree to act in good faith to prevent and resolve potential sources of conflict before they escalate into a question or controversy. AMBAG and the Grantee each commit to resolving such dispute in an amicable, professional, and expeditious manner and agree to use the following procedure for resolving the dispute: (a) either party may give notice to the other of the dispute and will meet within three (3) business days to attempt to resolve the dispute; (b) a meeting or meetings shall be promptly between the representatives of the parties regarding the dispute to attempt in good faith to negotiate a resolution of the dispute; (c) if within thirty (30) days after a dispute has arisen, the parties have not succeeded in negotiating a resolution of the dispute, they agree to submit the dispute to mediation; (d) the mediator shall be jointly selected by the parties, or failing agreement on the selection of a mediator within thirty (30) days after the parties fail to negotiate an informal resolution of any dispute, the mediator shall be a retired judge or justice selected by the supervising judge of the Civil Division of the Monterey County California Superior Court. In any mediation conducted pursuant to this section, the provision of the California Evidence Code section 1152 shall be applicable to limit the admissibility of evidence disclosed by the parties in the course of the mediation; and € if the parties are not successful in resolving the dispute through the mediation, then the parties agree that the dispute shall be submitted to binding arbitration to a single arbitrator in accordance with the existing Rules of Practice of Judicial Arbitration and Mediation Services, Inc. (JAMS) within thirty (30) days of the close of mediation as declared by the mediator.

O. In the event either party brings an action or proceeding for damages arising out of the other's performance under this Agreement or to establish the right or remedy of either party, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs as part of such action or proceeding, whether or not such action or proceeding is prosecuted to judgment. This Agreement shall be construed and interpreted according to California law, and any action to enforce the terms of this Packet Pg. 59
Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action Agreement or for the breach thereof shall be brought and tried in the County of Monterey.

5. Reporting
A. At any time during the term of the Agreement, AMBAG may request a performance report that demonstrates satisfaction of all requirements identified in the Agreement with emphasis on eligible activities, eligible uses, and expenditures according to timelines and budgets referenced in the Agreement.

B. Reports shall include the following information:

1. The status of the Proposed Uses and expenditures listed in the Grantee’s applications for funding and progress of each proposed use toward all the objectives of the REAP 2.0 program as provided in the Guidelines and explained in the applications.

2. An explanation and quantification, where appropriate, of the progress achieved toward all of the objectives of the REAP 2.0 program, barriers and solutions for each Proposed Use that is consistent with and incorporates the metrics in the full application, including, but not limited to:
i. Housing units accelerated,
ii. Reductions in Vehicle Miles Traveled Per Capita,
iii. Location of investment,
iv. Socioeconomic statistics about the impacted geography, and v. Regional impact explanation
The report must identify whether proposed uses overlap with other programs that share the same objectives as REAP 2.0. The Grantee should also identify any measurement challenges that persist and highlight any administrative barriers that prevent it from obtaining the information it needs to perform better analysis of progress made achieving REAP 2.0 Objectives and make adjustments to the extent possible in subsequent reporting years.

C. Upon completion of all deliverables within the Agreement, the Grantee shall submit a close out report in a manner and form prescribed by AMBAG.

6. Indemnification
Neither AMBAG nor any officer, employee or designee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted by the Grantee, its officers, Packet Pg. 60
Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action employees, agents, its contractors, its sub-recipients or its subcontractors under or in connection with any work, authority or jurisdiction conferred upon the Grantee under this Agreement, Guidelines or Statute. It is understood and agreed that the Grantee shall fully defend, indemnify and save harmless AMBAG and all of AMBAG’s staff from all claims, suits or actions of every name, kind and description brought forth under, including, but not limited to, tortuous, contractual, inverse condemnation or other theories or assertions of liability occurring by reason of anything done or omitted to be done by the Grantee, its officers, employees, agents, contractors, sub-recipients, or subcontractors under this Agreement, Guidelines or Statute.

7. Waivers
No waiver of any breach of this Agreement shall be held to be a waiver of any prior or subsequent breach. The failure of AMBAG to enforce at any time the provisions of this Agreement, orto require at any time, performance by the Grantee ofthese provisions, shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Agreement or the right of AMBAG to enforce these provisions.

8. Relationship of Parties
It is expressly understood that this Agreement is an agreement executed by and between two independent governmental entities and is not intended to, and shall not be construed to, create the relationship of agent, servant, employee, partnership, joint venture or association, or any other relationship whatsoever other than that of an independent party.

9. Third Party Contracts
A. All REAP 2.0 related funded procurements must be conducted using a fair and competitive procurement process. The Grantee may use its own procurement procedures as long as the procedures comply with all City/County laws, rules and ordinances governing procurement, and all applicable provisions of California state law.

B. Any contract entered into as a result of this Agreement shall contain all the provisions stipulated in this Agreement and shall be applicable to the Grantee’s subrecipients, contractors, and subcontractors. Copies of all agreements with subrecipients, contractors, and subcontractors shall be submitted to AMBAG’s program manager.

C. AMBAG does not have a contractual relationship with the Grantee’s subrecipients, contractors, or subcontractors, and the Grantee shall be fully Packet Pg. 61
Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action responsible for monitoring and enforcement of those agreements and all work performed thereunder.

10. Compliance with State and Federal Laws, Rules, Guidelines and Regulations A. The Grantee agrees to comply with all state and federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, equal opportunity, and all other matters applicable to the grant, the Grantee, its contractors or subcontractors, and any other grant activity.

B. During the performance of this Agreement, the Grantee assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, ancestry, national origin, sex, gender, gender identity, gender expression, genetic information, age, disability, handicap, familial status, religion, or belief, under any program or activity funded by this contract, as required by Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 USC 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975 and all implementing regulations.

C. The Grantee shall include the nondiscrimination and compliance provisions of this clause in all agreements with its sub-recipients, contractors, and subcontractors, and shall include a requirement in all agreements that each of them in turn include the nondiscrimination and compliance provisions of this clause in all contracts and subcontracts they enter into to perform work under the REAP 2.0 Program.

D. The Grantee shall, in the course of performing project work, fully comply with the applicable provisions of the Americans with Disabilities Act (ADA) of 1990, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA. (42 U.S.C. 12101 et seq.) E. The Grantee shall adopt and implement affirmative processes and procedures that provide information, outreach and promotion of opportunities in the REAP project to encourage participation of all persons regardless of race, color, national origin, sex, religion, familial status, or disability. This includes, but is not limited to, a minority outreach program to ensure the inclusion, to the maximum extent possible, of minorities and women, and entities owned by minorities and women, as required by 24 CFR 92.351.

11. Litigation
A. If any provision of this Agreement, or an underlying obligation, is held invalid by a Packet Pg. 62
Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action court of competent jurisdiction, such invalidity, at the sole discretion of AMBAG, shall not affect any other provisions of this Agreement and the remainder of this Agreement shall remain in full force and effect. Therefore, the provisions of this Agreement are, and shall be, deemed severable.

B. The Grantee shall notify AMBAG immediately of any claim or legal action undertaken by or against it, which affects or may affect this Agreement or AMBAG, and shall take such action with respect to the claim or legal action consistent with the terms of this Agreement and the interests of AMBAG.

12. Changes in Terms/Amendments
A. The Grantee may be subject to amendments to this section as a result of subsequent applications and awards.

B. This Agreement may only be amended or modified by mutual written agreement of both parties.

13. State-Owned Data
A. Definitions

1. Work:

The work to be directly or indirectly produced by the Grantee, its employees, or by and of the Grantee’s contractor’s, subcontractor’s and/or sub-recipient’s employees under this Agreement.

2. Work Product:

All deliverables created or produced from Work under this Agreement including, but not limited to, all Work and deliverables conceived or made or, hereafter conceived or made, either solely or jointly with others during the term of this Agreement and during a period of six months after the termination thereof, which relates to the Work commissioned or performed under this Agreement, are considered Work Product. Work Product includes all deliverables, inventions, innovations, improvements, or other works of authorship Grantee and/or Grantee’s contractor subcontractor and/or sub-recipient may conceive of or develop in the course of this Agreement, whether or not they are eligible for patent, copyright, trademark, trade secret or other legal protection.

B. Sharing of Work Product and Rights
Packet Pg. 63
Attachment: MOU regarding Regional Early Action Planning Grants Program of 2021 (2812 : Resolution No. 2023-58 Regional Early Action All Work Product shall be shared with AMBAG and its partners for various purposes, including education, outreach, transparency and future learning.

14. Special Conditions
AMBAG reserves the right to add any special conditions to this Agreement it deems necessary to assure that the policy and goals of the Program are achieved.

15. Term
This Memorandum of Understanding shall end on March 31, 2027. ___________________________
Date: _____________
Maura F. Twomey
Executive Director
____________________________
Date: ______________
[Eligible Applicant Authorized Representative]
[Title]
[Agency/Entity]
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Attachment: REAP 2.0 Grant application packet (2812 : Resolution No. 2023-58 Regional Early Action Planning Grants of 2021 (REAP 2.0)) Project Title:

Tasks
Rezoning to
implement 6
th Cycle
Housing Element
Total:

Regional Early Action Planning Grants 2021 (REAP 2.0)

LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
Budget Start Date End Description and Deliverables Date $128,750 10/1/2023 3/31/2026 Rezoning to implement 6
th Cycle Housing
Element
$127,750
17 Packet Pg. 81
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Attachment: REAP 2.0 Grant application packet (2812 : Resolution No. 2023-58 Regional Early Action Planning Grants of 2021 (REAP 2.0)) City of Gonzales

PUBLIC WORKS / CITY ENGINEER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 18, 2023
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution 2023-59 Award Landscape Maintenance Contract to Smith & Enright

RECOMMENDATION
It is recommended that the City Council Adopt Resolution No. 2023-59, A Resolution of the City Council of the City of Gonzales Awarding a Landscape Maintenance Contract to Smith & Enright Landscaping, Rejecting the Other Submitted Proposals, and Authorizing and Directing the City Manager to Execute a Service Contract with Smith & Enright Landscaping for an initial three year period with an annual authorization of $82,719 and an annual contingency budget of $20,000 for unanticipated field repairs.

BACKGROUND
In 2015, the City decided to engage a contractor for landscape maintenance services to supplement Public Works staff’s efforts. In February 2016, staff issued a bid document for landscape maintenance within the four assessment districts, at the Community Pool (when in use) and select roadway areas (North Alta Entrance). Five bids were submitted and opened on March 15, 2016 and the contract was awarded to the low bidder, Smith & Enright at the March 21, 2016 Council meeting.

Smith & Enright has done a very good job on this contract over the last seven years. It’s “best practice” with an on-going contract to periodically issue a Request for Proposal for the following reasons:
• Dissatisfaction with the current provider (not the case here) • Current provider may get complacent over time and lower their level of service. • Allow new contractors in the area to submit a proposal as part of a formal Request for Proposal. • Substantial industry shifts (ie, increased use of electric powered maintenance equipment) AGENDA
ITEM
14 Packet Pg. 83

REVIEW & ANALYSIS
Over the last six months, staff compiled a Request for Proposal for Landscape Maintenance Service including a bid schedule, exhibits and technical specifications. The Request for Proposal was issued on July 21, 2023 and sent to the Central Coast Builders Exchange in Salinas, the Santa Clara/San Benito County Builders Exchange, the Bay Area Builders Exchange, and San Luis Obispo County Builders Exchange for review by local contractors. A Notice Inviting Proposals was also published in the Monterey Coast Weekly on July 27.

A non-mandatory pre-proposal meeting for this contract was held on August 4, 2023. At the pre-bid meeting, the staff provided an overview of the contract and expected services, schedule for the bid/award phase and bidders had an opportunity to ask questions. On August 17, 2023, the following bids were received and opened:

BIDDER TOTAL
1 Smith & Enright, Salinas (low bidder) $82,719
2 Barrera Landscaping, Gonzales $155,210
3 Radiant Landscaping, Salinas $184,432
Staff reviewed the proposals and determined that the lowest responsive and responsible proposal was submitted by Smith & Enright. Therefore, staff is recommending the City Council award the service contract to Smith & Enright and that the City Council reject the other submitted proposals.

How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small town charm.

Explain: The Landscape Maintenance Service Contract supports our vision by of clean, well maintained community parks, play areas, retention ponds and open spaces.

City services will be delivered in a cost-effective, respectful and friendly manner to insure the safety and well being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____ No ____ N/A Explain: See Vision explanation above.

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Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: See Vision above.

ALTERNATIVES
a. Not award the contract and use City field personnel for all landscape maintenance
b. Direct staff to re-bid the contract.
c. Amend or modify staff recommendation.

BUDGET IMPACT
Work performed under this contract within Assessment Districts will be funded by the specific Assessment District. Work performed in street medians will be funded by City Street Funds and any work in City parks will be funded by City General Funds

CONCLUSIONS
It is recommended that the City Council Adopt Resolution No. 2023-59, A Resolution of the City Council of the City of Gonzales Awarding a Landscape Maintenance Contract to Smith & Enright Landscaping, Rejecting the Other Submitted Proposals, and Authorizing and Directing the City Manager to Execute a Service Contract with Smith & Enright Landscaping for an initial three year period with an annual authorization of $82,719 and an annual contingency budget of $20,000 for unanticipated field repairs.

Attachments:

1. Public Notice

2. Resolution No. 2023-59

3. Agreement
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Attachment: Public Notice (2816 : Resolution No. 2023-59 Award Landscape Maintenance Contract to Smith & Enright)

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RESOLUTION NO. 2023-59

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES

AWARDING A LANDSCAPE MAINTENANCE CONTRACT TO SMITH & ENRIGHT,

REJECTING THE OTHER SUBMITTED PROPOSALS, AND AUTHORIZING AND

DIRECTING THE CITY MANAGER TO EXECUTE A SERVICE CONTRACT WITH

SMITH & ENRIGHT LANDSCAPING FOR AN INITIAL THREE YEAR PERIOD WITH AN ANNUAL AURHORIZATION OF $82,719 WITH AN ANNUAL
CONTINGENCY BUDGET OF $20,000 FOR UNANTICIPATED FIELD REPAIRS WHEREAS, on July 27, 2023, the City issued a Request for Proposals for the Landscape Maintenance Contract (“Contract”); and
WHEREAS, on August 17, 2023, the City received the following bids for the Contract:

BIDDER TOTAL
1 Smith & Enright, Salinas (low bidder) $82,719
2 Barrera Landscaping, Gonzales $155,210
3 Radiant Landscaping, Salinas $184,432
WHEREAS, staff determined that Smith & Enright Landscape provided the lowest responsive and responsible bid, and that Smith & Enright Landscape is qualified to undertake the proposed work and willing to perform the same on a timely basis; and NOW THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Gonzales that the City hereby determines that Smith & Enright Landscape submitted the lowest responsive and responsible bid for work associated with the Landscape Maintenance Contract, that the City accepts Smith & Enright Landscape bid and that the contract is hereby awarded to the Smith & Enright Landscape. All other bids are rejected, and the City Manager is directed to notify all other bidders in writing of the City’s decision.

BE IT FURTHER RESOLVED that the City Manager is authorized and further directed to prepare and execute an appropriate contract for the Landscape Maintenance Service Contract with Smith & Enright Landscaping for an initial three-year period with an annual authorization of $82,719 with an annual contingency budget of $20,000 for unanticipated field repairs.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Gonzales duly held on the 18th day of September 2023, by the following vote:

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AYES: COUNCILMEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Jose Rios, The Honorable Mayor
ATTEST:

Mary Villegas, Deputy City Clerk
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Attachment: Resolution No. 2023-59 (2816 : Resolution No. 2023-59 Award Landscape Maintenance Contract to Smith & Enright) Consulting Services Agreement between September 18, 2023 City of Gonzales and Smith & Enright, Inc. Page 1 of 13 1168358

AGREEMENT FOR LANDSCAPE MAINTENANCE SERVICES BETWEEN
THE CITY OF GONZALES AND SMITH & ENRIGHT LANDSCAPING, INC.

THIS AGREEMENT for Landscape Maintenance Services is made by and between the City of Gonzales ("City") and Smith & Enright Landscaping, Inc. ("Contractor") (together sometimes referred to as the "Parties") as of September 18, 2023 (the "Effective Date").

Section 1. SERVICES. Subject to the terms and conditions set forth in this Agreement, Contractor shall provide the services described in the Scope of Work attached as Exhibit A at the time and place and in the manner specified therein. In the event of a conflict in or inconsistency between the terms of this Agreement and Exhibit A, the Agreement shall prevail.

1.1 Term of Services. The term of this Agreement shall begin on the Effective Date and shall end on June 30, 2027, the date of completion specified in Exhibit A, and Contractor shall complete the work described in Exhibit A on or before that date, unless the term of the Agreement is otherwise terminated or extended, as provided for in Section 8. The time provided to Contractor to complete the services required by this Agreement shall not affect the City's right to terminate the Agreement, as referenced in Section 8.

1.2 Standard of Performance. Contractor shall perform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Contractor is engaged.

1.3 Assignment of Personnel. Contractor shall assign only competent personnel to perform services pursuant to this Agreement. In the event that City, in its sole discretion, at any time during the term of this Agreement, desires the reassignment of any such persons, Contractor shall, immediately upon receiving notice from City of such desire of City, reassign such person or persons.

1.4 Time. Contractor shall devote such time to the performance of services pursuant to this Agreement as may be reasonably necessary to meet the standard of performance provided in Section 1.1 above and to satisfy Contractor's obligations hereunder.

Section 2. COMPENSATION. City hereby agrees to pay Contractor a sum not-to-exceed $82,719 on an annual notwithstanding any contrary indications that may be contained in Contractor's proposal, for services to be performed and reimbursable costs incurred under this Agreement. In the event of a conflict between this Agreement and Contractor's proposal, attached as Exhibit A, regarding the amount of compensation, the Agreement shall prevail. City shall pay Contractor for services rendered pursuant to this Agreement at the time and in the Packet Pg. 89
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manner set forth herein. The payments specified below shall be the only payments from City to Contractor for services rendered pursuant to this Agreement. Contractor shall submit all invoices to City in the manner specified herein. Except as specifically authorized by City in writing, Contractor shall not bill City for duplicate services performed by more than one person.

Contractor and City acknowledge and agree that compensation paid by City to Contractor under this Agreement is based upon Contractor's estimated costs of providing the services required hereunder, including salaries and benefits of employees and subcontractors of Contractor.

Consequently, the parties further agree that compensation hereunder is intended to include the costs of contributions to any pensions and/or annuities to which Contractor and its employees, agents, and subcontractors may be eligible. City therefore has no responsibility for such contributions beyond compensation required under this Agreement.

2.1 Invoices. Contractor shall submit invoices, not more often than once a month during the term of this Agreement, based on the cost for services performed and reimbursable costs incurred prior to the invoice date. Invoices shall contain the following information:
 The beginning and ending dates of the billing period
 A Task Summary containing the original contract amount, the amount of prior billings, the total due this period, and the balance available under the Agreement
 At City's option, for each work item in each task, a copy of the applicable time entries or time sheets shall be submitted showing the name of the person doing the work, the hours spent by each person, a brief description of the work, and each reimbursable expense

2.2 Payment. City shall make payments, based on invoices received, for services satisfactorily performed, and for authorized reimbursable costs incurred. City shall have 30 days from the receipt of an invoice that complies with all of the requirements above to pay Contractor.

2.3 <<Not Used>>

2.4 Total Payment. City shall pay for the services to be rendered by Contractor pursuant to this Agreement. City shall not pay any additional sum for any expense or cost whatsoever incurred by Contractor in rendering services pursuant to this Agreement. City shall make no payment for any extra, further, or additional service pursuant to this Agreement.

In no event shall Contractor submit any invoice for an amount in excess of the maximum amount of compensation provided above either for a task or for the Packet Pg. 90
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entire Agreement, unless the Agreement is modified prior to the submission of such an invoice by a properly executed change order or amendment.

2.5 Hourly Fees. Fees for work performed by Contractor on an hourly basis shall not exceed the amounts shown on the rate schedule attached hereto as Exhibit B.

2.6 Reimbursable Expenses. Reimbursable expenses shall not exceed $20,000 each year. Reimbursable expenses are included in the total amount of compensation provided under this Agreement that shall not be exceeded.

2.7 Payment of Taxes. Contractor is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes.

2.8 Payment upon Termination. In the event that the City or Contractor terminates this Agreement pursuant to Section 8, the City shall compensate the Contractor for all outstanding costs and reimbursable expenses incurred for work satisfactorily completed as of the date of written notice of termination.

Contractor shall maintain adequate logs and timesheets to verify costs incurred to that date.

2.9 Authorization to Perform Services. The Contractor is not authorized to perform any services or incur any costs whatsoever under the terms of this Agreement until receipt of authorization from the Contract Administrator.

Section 3. FACILITIES AND EQUIPMENT. Contractor shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perform the services required by this Agreement.

Section 4. INSURANCE REQUIREMENTS. Before beginning any work under this Agreement, Contractor, at its own cost and expense, unless otherwise specified below, shall procure the types and amounts of insurance listed below against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Contractor and its agents, representatives, employees, and subcontractors. Consistent with the following provisions, Contractor shall provide proof satisfactory to City of such insurance that meets the requirements of this section and under forms of insurance satisfactory in all respects, and that such insurance is in effect prior to beginning work to the City.

Contractor shall maintain the insurance policies required by this section throughout the term of this Agreement. The cost of such insurance shall be included in the Contractor's bid.

Contractor shall not allow any subcontractor to commence work on any subcontract until Contractor has obtained all insurance required herein for the subcontractor(s) and provided evidence that such insurance is in effect to City. Verification of the required insurance shall be Packet Pg. 91
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submitted and made part of this Agreement prior to execution. Contractor shall maintain all required insurance listed herein for the duration of this Agreement.

4.1 Workers' Compensation. Contractor shall, at its sole cost and expense, maintain Statutory Workers' Compensation Insurance and Employer's Liability Insurance for any and all persons employed directly or indirectly by Contractor. The Statutory Workers' Compensation Insurance and Employer's Liability Insurance shall be provided with limits of not less than $1,000,000 per accident. In the alternative, Contractor may rely on a self-insurance program to meet those requirements, but only if the program of self-insurance complies fully with the provisions of the California Labor Code. Determination of whether a selfinsurance program meets the standards of the Labor Code shall be solely in the discretion of the Contract Administrator. The insurer, if insurance is provided, or the Contractor, if a program of self-insurance is provided, shall waive all rights of subrogation against the City and its officers, officials, employees, and volunteers for loss arising from work performed under this Agreement.

4.2 Commercial General and Automobile Liability Insurance.

4.2.1 General requirements. Contractor, at its own cost and expense, shall maintain commercial general and automobile liability insurance for the term of this Agreement in an amount not less than $1,000,000 per occurrence, combined single limit coverage for risks associated with the work contemplated by this Agreement. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from activities contemplated under this Agreement, including the use of owned and non-owned automobiles.

4.2.2 Minimum scope of coverage. Commercial general coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG 0001 (most recent edition) covering comprehensive General Liability on an "occurrence" basis. Automobile coverage shall be at least as broad as Insurance Services Office Automobile Liability form CA 0001, Code 1 (any auto). No endorsement shall be attached limiting the coverage.

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4.2.3 Additional requirements. Each of the following shall be included in the insurance coverage or added as a certified endorsement to the policy:
a. The Insurance shall cover on an occurrence or an accident basis, and not on a claims-made basis.
b. City, its officers, officials, employees, and volunteers are to be covered as insureds as respects: liability arising out of work or operations performed by or on behalf of the Contractor; or automobiles owned, leased, hired, or borrowed by the
Contractor.
c. For any claims related to this Agreement or the work hereunder, the Contractor's insurance covered shall be primary insurance as respects the City, its officers, officials, employees, and volunteers.

Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Contractor's insurance and shall not contribute with it. d. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party, except after 30 days' prior written notice has been provided to the City.

4.3 <<Not Used>>

4.4 All Policies Requirements.

4.4.1 Acceptability of insurers. All insurance required by this section is to be placed with insurers with a Bests' rating of no less than A:VII.

4.4.2 Verification of coverage. Prior to beginning any work under this Agreement, Contractor shall furnish City with complete copies of all policies delivered to Contractor by the insurer, including complete copies of all endorsements attached to those policies. All copies of policies and certified endorsements shall show the signature of a person authorized by that insurer to bind coverage on its behalf. If the City does not receive the required insurance documents prior to the Contractor beginning work, it shall not waive the Contractor's obligation to provide them. The City reserves the right to require complete copies of all required insurance policies at any time.

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4.4.3 Deductibles and Self-Insured Retentions. Contractor shall disclose to and obtain the written approval of City for the self-insured retentions and deductibles before beginning any of the services or work called for by any term of this Agreement. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, employees, and volunteers; or the Contractor shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration and defense expenses.

4.4.4 Wasting Policies. No policy required by this Section 4 shall include a "wasting" policy limit (i.e., limit that is eroded by the cost of defense).

4.4.5 Waiver of Subrogation. Contractor hereby agrees to waive subrogation which any insurer or contractor may require from vendor by virtue of the payment of any loss. Contractor agrees to obtain any endorsements that may be necessary to affect this waiver of subrogation.

The Workers' Compensation policy shall be endorsed with a waiver of subrogation in favor of the entity for all work performed by the Contractor, its employees, agents, and subcontractors.

4.4.6 Subcontractors. Contractor shall include all subcontractors as insureds under its policies or shall furnish separate certificates and certified endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein.

4.5 Remedies. In addition to any other remedies City may have if Contractor fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option exercise any of the following remedies, which are alternatives to other remedies City may have and are not the exclusive remedy for Contractor's breach:
 Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under the Agreement;  Order Contractor to stop work under this Agreement or withhold any payment that becomes due to Contractor hereunder, or both stop work and withhold any payment, until Contractor demonstrates compliance with the requirements hereof; and/or
 Terminate this Agreement.

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Attachment: Agreement (2816 : Resolution No. 2023-59 Award Landscape Maintenance Contract to Smith & Enright) Consulting Services Agreement between September 18, 2023 City of Gonzales and Smith & Enright, Inc. Page 7 of 13 1168358
Section 5. INDEMNIFICATION AND CONTRACTOR'S RESPONSIBILITIES. Contractor shall, to the fullest extent allowed by law, with respect to all Services performed in connection with this Agreement, defend with counsel acceptable to City, indemnify, and hold City, its officers, employees, agents, and volunteers, harmless from and against any and all claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor, ("Claims"). Contractor will bear all losses, costs, damages, expense and liability of every kind, nature and description that arise out of, pertain to, or relate to such Claims, whether directly or indirectly ("Liability"). Such obligations to defend, hold harmless and indemnify the City shall not apply to the extent that such Liabilities are caused by the sole negligence, active negligence, or willful misconduct of the City.

With respect to third party claims against the Contractor, the Contractor waives any and all rights of any type of express or implied indemnity against the Indemnitees.

Notwithstanding the forgoing, to the extent this Agreement is a "construction contract" as defined by California Civil Code section 2783, as may be amended from time to time, such duties of Contractor to indemnify shall not apply when to do so would be prohibited by California Civil Code Section 2782.

Section 6. STATUS OF CONTRACTOR.

6.1 Independent Contractor. At all times during the term of this Agreement, Contractor shall be an independent contractor and shall not be an employee of City. City shall have the right to control Contractor only insofar as the results of Contractor's services rendered pursuant to this Agreement and assignment of personnel pursuant to Subparagraph 1.3; however, otherwise City shall not have the right to control the means by which Contractor accomplishes services rendered pursuant to this Agreement. Notwithstanding any other City, state, or federal policy, rule, regulation, law, or ordinance to the contrary, Contractor and any of its employees, agents, and subcontractors providing services under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any and all claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in the California Public Employees Retirement System (PERS) as an employee of City and entitlement to any contribution to be paid by City for employer contributions and/or employee contributions for PERS benefits.

6.2 Contractor Not an Agent. Except as City may specify in writing, Contractor shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Contractor shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.

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Section 7. LEGAL REQUIREMENTS.

7.1 Governing Law. The laws of the State of California shall govern this Agreement.

7.2 Compliance with Applicable Laws. Contractor and any subcontractors shall comply with all laws and regulations applicable to the performance of the work hereunder, including but not limited to, the California Building Code, the Americans with Disabilities Act, and any copyright, patent or trademark law.

Contractor's Failure to comply with any law(s) or regulation(s) applicable to the performance of the work hereunder shall constitute a breach of contract.

7.3 Other Governmental Regulations. To the extent that this Agreement may be funded by fiscal assistance from another governmental entity, Contractor and any subcontractors shall comply with all applicable rules and regulations to which City is bound by the terms of such fiscal assistance program.

7.4 Licenses and Permits. Contractor represents and warrants to City that Contractor and its employees, agents, and any subcontractors have all licenses, permits, qualifications, and approvals of whatsoever nature that are legally required to practice their respective professions. Contractor represents and warrants to City that Contractor and its employees, agents, any subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals that are legally required to practice their respective professions. In addition to the foregoing, Contractor and any subcontractors shall obtain and maintain during the term of this Agreement valid Business Licenses from City.

7.5 Nondiscrimination and Equal Opportunity. Contractor shall not discriminate, on the basis of a person's race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexual orientation, against any employee, applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programs provided by Contractor under this Agreement. Contractor shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscrimination in employment, contracting, and the provision of any services that are the subject of this Agreement, including but not limited to the satisfaction of any positive obligations required of Contractor thereby.

Contractor shall include the provisions of this Subsection in any subcontract approved by the Contract Administrator of this Agreement.

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Section 8. TERMINATION AND MODIFICATION.

8.1 Termination. City may cancel this Agreement at any time and without cause upon written notification to Contractor.

Contractor may cancel this Agreement upon 60 days' written notice to City and shall include in such notice the reasons for cancellation.

In the event of termination, Contractor shall be entitled to compensation for services performed to the effective date of termination; City, however, may condition payment of such compensation upon Contractor delivering to City any or all documents, photographs, computer software, video and audio tapes, and other materials provided to Contractor or prepared by or for Contractor or the City in connection with this Agreement.

8.2 Extension. City may, in its sole and exclusive discretion, extend the end date of this Agreement beyond that provided for in Subsection 1.1. Any such extension shall require a written amendment to this Agreement, as provided for herein.

Contractor understands and agrees that, if City grants such an extension, City shall have no obligation to provide Contractor with compensation beyond the maximum amount provided for in this Agreement. Similarly, unless authorized by the Contract Administrator, City shall have no obligation to reimburse Contractor for any otherwise reimbursable expenses incurred during the extension period.

8.3 Amendments. The parties may amend this Agreement only by a writing signed by all the parties.

8.4 Assignment and Subcontracting. City and Contractor recognize and agree that this Agreement contemplates personal performance by Contractor and is based upon a determination of Contractor's unique personal competence, experience, and specialized personal knowledge. Moreover, a substantial inducement to City for entering into this Agreement was and is the professional reputation and competence of Contractor. Contractor may not assign this Agreement or any interest therein without the prior written approval of the Contract Administrator. Contractor shall not subcontract any portion of the performance contemplated and provided for herein, other than to the subcontractors noted in the proposal, without prior written approval of the Contract Administrator.

8.5 Survival. All obligations arising prior to the termination of this Agreement and all provisions of this Agreement allocating liability between City and Contractor shall survive the termination of this Agreement.

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8.6 Options upon Breach by Contractor. If Contractor materially breaches any of the terms of this Agreement, City's remedies shall included, but not be limited to, the following:

8.6.1 Immediately terminate the Agreement.

8.6.2 Retain the plans, specifications, drawings, reports, design documents, and any other work product prepared by Contractor pursuant to this Agreement.

8.6.3 Retain a different Contractor to complete the work described in Exhibit A not finished by Contractor; or

8.6.4 Charge Contractor the difference between the cost to complete the work described in Exhibit A that is unfinished at the time of breach and the amount that City would have paid Contractor pursuant to Section 2 if Contractor had completed the work.

Section 9. KEEPING AND STATUS OF RECORDS.

9.1 Records Created as Part of Contractor's Performance. All reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that Contractor prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the City. Contractor hereby agrees to deliver those documents to the City upon termination of the Agreement. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this Agreement are prepared specifically for the City and are not necessarily suitable for any future or other use. City and Contractor agree that, until final approval by City, all data, plans, specifications, reports and other documents are confidential and will not be released to third parties without prior written consent of both parties.

9.2 Contractor's Books and Records. Contractor shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services or expenditures and disbursements charged to the City under this Agreement for a minimum of three (3) years, or for any longer period required by law, from the date of final payment to the Contractor to this Agreement.

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9.3 Inspection and Audit of Records. Any records or documents that Section 9.2 of this Agreement requires Contractor to maintain shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of the City. Under California Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds $10,000.00, the Agreement shall be subject to the examination and audit of the State Auditor, at the request of City or as part of any audit of the City, for a period of three (3) years after final payment under the Agreement.

Section 10 MISCELLANEOUS PROVISIONS.

10.1 Attorneys' Fees. If a party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provision of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.

10.2 Venue. In the event that either party brings any action against the other under this Agreement, the parties agree that trial of such action shall be vested exclusively in the state courts of California in the County of Monterey or in the United States District Court for the Northern District of California.

10.3 Severability. If a court of competent jurisdiction finds or rules that any provision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement.

10.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement.

10.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the parties.

10.6 Use of Recycled Products. Contractor shall prepare and submit all reports, written studies and other printed material on recycled paper to the extent it is available at equal or less cost than virgin paper.

10.7 Conflict of Interest. Contractor may serve other clients, but none whose activities within the corporate limits of City or whose business, regardless of location, would place Contractor in a "conflict of interest," as that term is Packet Pg. 99
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defined in the Political Reform Act, codified at California Government Code Section 81000 et seq.

Contractor shall not employ any City official in the work performed pursuant to this Agreement. No officer or employee of City shall have any financial interest in this Agreement that would violate California Government Code Sections 1090 et seq.

10.8 Solicitation. Contractor agrees not to solicit business at any meeting, focus group, or interview related to this Agreement, either orally or through any written materials.

10.9 Contract Administration. This Agreement shall be administered by Patrick Dobbins, Public Works Director ("Contract Administrator"). All correspondence shall be directed to or through the Contract Administrator or his or her designee.

10.10 Notices. Any written notice to Contractor shall be sent to:

Selena Herrin, Business Manager
Smith & Enright Landscaping, Inc
540 Work Street, Suite C
Salinas, CA 93901
Any written notice to City shall be sent to:

Carmen Gil, City Manager
City of Gonzales
P.O. Box 647
Gonzales, CA 93926

10.11 <<Not Used>>

10.12 Integration. This Agreement, including the scope of work attached hereto and incorporated herein as Exhibits A and B represents the entire and integrated agreement between City and Contractor and supersedes all prior negotiations, representations, or agreements, either written or oral.

Exhibit A Scope of Services
Exhibit B Compensation Schedule
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10.13 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

10.14 Non-Responsibility for General Contractor Responsibilities and Duties. Unless otherwise agreed by City and Contractor in writing, nothing in Contractor's services shall be construed to mean that Contractor assumes any of the contractual responsibilities or duties of the general contractor. The general contractor is solely responsible for construction means, methods, sequences and procedures used in the construction of a project and for related performance in accordance with its contract with the City. The general contractor shall not be relieved of its responsibility for the safety of the workplace or for the method or manner of construction. The Contractor and its personnel have no authority to exercise any control over or charge of acts or omissions of the general contractor or their employees in connection with the construction work.

The Parties have executed this Agreement as of the Effective Date.

CITY OF GONZALES SMITH & ENRIGHT LANDSCAPING (CONTRACTOR) Carmen Gil, City Manager Rick Enright, Owner
Attest:

Mary Villegas, Deputy City Clerk
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EXHIBIT A

SCOPE OF SERVICES
.

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EXHIBIT B

COMPENSATION SCHEDULE
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FINANCE DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 18, 2023
FROM: Mike Howard, Finance Director
THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution No. 2023-61 - International Association of Fire Fighters Local 5388 Memorandum of Understanding

RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 2023-61, A Resolution of the City Council of the City of Gonzales Authorizing the Execution of a Memorandum of Understanding Between the City of Gonzales and the International Association of Fire Fighters Local 5388, for the period covering January 1, 2023 through December 31, 2024.

BACKGROUND
In late 2022, the City Council and staff were informed at a City Council meeting of the intent of the City’s full-time fire fighter employees to organize. The City and the representative from the International Association of Fire Fighters (IAFF) began discussions after signature cards and other materials were delivered to the City Attorney and City staff in compliance with Chapter 15 of the City’s Personnel Rules, Regulations and Policies.

On February 17, 2023, the City and IAFF Local 5388 held its first meeting to negotiate a new Memorandum of Understanding (MOU) between the City of Gonzales and IAFF Local 5388. Mr. Tony Spitaleri was the lead negotiator for the Union and at times, all the fire fighters were in attendance at negotiation meetings. The City and the Union held a total of 15 meetings, concluding on September 8, 2023 with a Tentative Agreement to be presented to the membership for ratification. During the negotiations, the parties dealt with a total of 46 proposals, 41 from the Union and five from the City.

It is important to note that this is a new MOU and negotiations involved discussions on the creation of all the language contained in the MOU, and is the reason for the number of meetings and time it took to get to reach a final agreement.

AGENDA
ITEM
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The IAFF Local 5388 held a ratification vote on September 9, 2023, and ratified the MOU by the membership.

REVIEW AND ANALYSIS
As referenced in the background, the MOU between the City of Gonzales and the IAFF Local 5388 is a new agreement. Therefore, the MOU in its final form will be drafted by the two lead negotiators, Tony Spitaleri and Mike Howard in the coming weeks.

During the period of seven months and 15 meetings, the two parties came to a final “tentative agreement” on September 8, 2023. Key items in the new MOU for the City of Gonzales Fire Fighters are listed below. • The term of the MOU will be 2 years, retroactive to January 1, 2023 • For the Fire Fighters in the Fire Department, the City will use a 56-hour work week schedule which is standard in the industry.
• Vacation and Sick Leave accruals will be adjusted for the 56-hour work schedule. • Implementation of “caps” or maximum accruals are in place for Vacation and Compensation Time • The City will issue a Uniform Allowance check once a year instead of employees purchasing and turning in receipts for their uniforms.
• Certification Pay: The City will pay an additional 3.5% of an employee’s base wage for employees who complete the Firefighter 2 Certification Training Standard and for employees who complete the State Fire Training Company Officer Certification Training Standards Certificate, the City will pay an additional 3.5% of the employee’s base pay. This provision would be similar to the section in the Police Officer’s MOU related to POST Intermediate and Advanced Certificates. • Wages: January 2023, employees to receive a 3.75% COLA (which was already given to employees), and January 2024, employees to receive a 4% COLA. The City had already planned to give the fire fighters 3.75% as part of the public safety increase before the decision to organize so the actual increase to the budget is .25%.
• Provisions of the new MOU will take effect the first pay period following ratification by the union membership and City Council.

As stated earlier, many other sections of the MOU were negotiated such as the grievance procedure, department “standing orders”, unpaid leaves, recognition of the Union, union dues check-off, etc.

Explain: The proposed MOU supports the vision by maintaining stability for the two-year period in a critical public safety function that is necessary to maintain a safe family-friendly community.

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City services will be delivered in a cost-effective, respectful and friendly manner to ensure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ___No NA Explain: Please see explanation above for the Vision
Strong fiscal reporting allows us to provide appropriate resources for:
• Public Safety X Yes No N/A
• Housing Yes No X N/A
• Recreation Yes No X N/A
• Environment X Yes No N/A
• Education Yes No X N/A
Explain: A stable organization is needed to ensure a high level of service necessary to promote public safety for the community and to maintain the City’s infrastructure.

ALTERNATIVES
The City Council has the authority to not approve the MOU and direct staff to continue negotiations with further policy direction. While this action is not recommended, should this occur, the existing employment practices would continue until an MOU is approved.

BUDGET IMPACT
The financial impact to the Budget for the life of the MOU is estimated to be about $25,000.

Approximately $16,000 will be in the current fiscal year and the balance in FY 2024-2025.

CONCLUSION
It is recommended that the City Council adopt Resolution No. 2023-61, A Resolution of the City Council of the City of Gonzales Authorizing the Execution of a Memorandum of Understanding Between the City of Gonzales and the International Association of Fire Fighters Local 5388, for the period covering January 1, 2023 through December 31, 2024.

Attachments:

1. Resolution No. 23-61
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RESOLUTION NO. 2023-61

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES

AUTHORIZING THE EXECUTION OF A MEMORANDUM OF UNDERSTANDING

BETWEEN THE CITY OF GONZALES AND THE INTERNATIONAL
ASSOCIATION OF FIRE FIGHTERS LOCAL 5388, FOR THE PERIOD COVERING JANUARY 1, 2023 THROUGH DECEMBER 31, 2024
WHEREAS, the City Council of the City of Gonzales and the City staff were notified in late 2022 of the Fire Department firefighters’ desire to form an employee organization; and WHEREAS, after compliance with provisions of Chapter 15 of the City of Gonzales Personnel Rules, Regulations and Policies for initiating the formation of an employee organization, the City and the Union formally began negotiations for a Memorandum of Understanding (MOU) between the parties on February 17, 2023 and reached a tentative agreement on September 8, 2023; and
WHEREAS, the provisions of the new MOU will take effect on the first pay period following ratification by the Union Membership and the City Council; and WHEREAS, the International Association of Fire Fighters, Local 5388 held a ratification vote on September 9, 2023, where the new MOU was ratified by the membership.

NOW, THEREFORE, BE IT HEREBY RESOLVED, that the City Council of the City of Gonzales hereby approves the Memorandum of Understanding between the City of Gonzales and the International Association of Fire Fighters Local 5388, for the period covering January 1, 2023 through December 31, 2024.

PASSED AND ADOPTED by the City Council of the City of Gonzales at a regular meeting duly held on the 18th day of September 2023, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Jose L. Rios, The Honorable Mayor
ATTEST:

Mary Villegas, Deputy City Clerk
Packet Pg. 122 Attachment: Resolution No. 23-61 (2822 : Resolution No. 2023-61 International Association of Fire Fighters Local 5388 MOU) City of Gonzales

PUBLIC WORKS / CITY ENGINEER DEPARTMENT

RECOMMENDATION
It is recommended that the City Council receive a follow-up report and presentation on the Water and Sewer Rate Studies and authorize staff to initiate the Proposition 218 Process.

BACKGROUND
At the August 7, 2023 Council meeting, staff and our consultant presented the initial information on the Water and Sewer Rate Study. This staff report is in follow- up to that presentation.

Following accepted best Governance Accounting practices, the city funds the operation and maintenance of the water and sewer systems with the respective utility rates which are separate from the General Fund.

As stated in the staff report for the August 7, 2023 Council meeting, the objectives of the Water and Sewer Rate Studies are to:
• Analyze the existing rate structures to determine if adjustments are needed to adequately fund the city’s current and projected water and sewer operations, maintenance, and capital improvements. • Include costs of anticipated debt obligations used to finance capital improvements (ie, State Revolving Fund loan for the Industrial Wastewater System Project). • Address maintenance of infrastructure by incorporating reasonable projections for facility replacement within the revenue requirements and rate calculations. • Review city financial policies and make recommendations where appropriate with respect to adequate reserves for operations, rate stabilization, and capital improvements. • Affirm the appropriateness of existing user categories and/or develop new or combine categories to simplify rates and ensure equity among users.
• Provide recommended rate structures that comply with Proposition 218 requirements.

AGENDA
ITEM
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• This includes:
o Using a Five-year projection of capital improvements, utility costs, debt payments and expected revenues.
o Mailing a notice to property owners outlining rate adjustments, holding a public hearing and conducting a mail “protest vote”.

REVIEW & ANALYSIS
Lechowicz & Tseng is the city’s Rate Consultant and over the last nine months, Alison Lechowicz and her staff received and analyzed the following information:

Financial Information
• Annual revenue by customer class for 2020 through 2022 • Water and sewer cash balances as of July 1, 2023
• Updated water and sewer capital improvement plans
• Secured or expected grants or loans for capital projects • Payment schedules for outstanding debt obligations (ie 2006 Bond Debt for the Water and Sewer Systems)
Customer and Usage Information
• Number of residential, commercial, industrial, and lift station customers • Projected new development over the next 10 years to estimate new customers • Large industrial customers use data
• Detailed Billing data by month for the past 3 years
• Example utility bill from a typical customer
• Billing data for customers not included in the City’s billing software (ie, Gonzales School District for sewer use)
The following is an overview of the rate study process:
o Revenue Requirements - Revenue requirements are analyzed via financial plans developed from the Water and Sewer Fund budgets. Based on the best information currently available, the financial plans incorporate projected operation and maintenance costs, capital expenditures, debt service, and growth to estimate annual revenue requirements. The plans serve as a roadmap for funding the City’s future operating and capital programs while maintaining long-term fiscal stability. o Cost of Service Allocation - The cost of service process builds on the financial plan analysis and assigns water and sewer system costs to functional cost components: metering and customer service, base, and extra for water, and customer service, flow, BOD, and TSS for sewer. o Rate Design - Rate design involves developing a rate structure that proportionately recovers costs from customers. Final rate recommendations are designed to (a) fund the utilities’ short- and longterm costs of providing service; (b) proportionately allocate costs to all customers and customer classes; and (c) comply with the substantive requirements of Proposition 218.

The rates developed in this report were based on the information gathered from City budgets, audits, and input from staff. The cost allocations are based on American Water Works Association methodologies and industry standard practice. The proposed rates are based on the reasonable cost of providing service and are proportional to the benefits received by each customer.

Based on Lechowicz & Tseng’s analysis of the provided information and input from City staff they are recommending changes to the City’s rate structure. The following sections describe those changes.

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WATER FEES - The city’s water rates are comprised of a monthly meter fee plus the amount of water used (aka consumed). The amount of water consumed is measured in units of hundred cubic feet (ccf) One hundred cubic feet equals 748 gallons. The current and proposed water rates under normal water year conditions are provided in the following table. We are recommending annual seven percent increases. It is recommended that the City eliminate its tiered consumption rate structure and implement a single rate for all customers at all levels of use.

It is also recommended that the City adopt drought rates. The City does not currently have a schedule of drought rates. The proposed drought rates would only be implemented during a water shortage emergency. Under drought conditions, the meter charges would remain the same, but the consumption fee would increase according to the level of water cutback. The increased consumption fee is intended to make the water utility financially whole despite a decline in water sales during a drought.

Packet Pg. 125
PROPOSED WATER RATES – NORMAL WATER YEAR

PROPOSED
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date July 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028

FIXED METER CHARGE
Meter Size +7% +7% +7% +7%
5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22
1" $23.50 $23.50 $24.68 $26.40 $28.25 $30.22
1-1/2" $24.86 $46.12 $49.36 $52.80 $56.50 $60.44
2" $26.26 $73.79 $78.98 $84.48 $90.40 $96.70
2-1/2" $27.28 $110.69 $118.46 $126.72 $135.60 $145.06
3" $29.12 $147.58 $157.95 $168.96 $180.80 $193.41
4" $30.53 $230.60 $246.80 $264.00 $282.50 $302.20
6" $31.94 $461.20 $493.60 $528.00 $565.00 $604.40
CONSUMPTION FEES ($/ccf)
Residential/Commercial
0 - 25 ccf $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
26 - 30 ccf $2.35 $2.41 $2.58 $2.76 $2.95 $3.16
31 - 49 ccf $2.56 $2.41 $2.58 $2.76 $2.95 $3.16
50+ ccf $2.84 $2.41 $2.58 $2.76 $2.95 $3.16
Industrial
All use $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
1 - One unit = 100 Cubic Feet (ccf) = 748 gallons

PROPOSED DROUGHT CONSUMPTION FEES

PROPOSED
Fiscal Year 2023/24 2024/25 2025/26 2026/27 2027/28
Effective Date Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 CONSUMPTION FEES ($/ccf for all customers at all levels of use) Normal Water Year $2.41 $2.58 $2.76 $2.95 $3.16
10% Water Cutback $2.61 $2.79 $2.98 $3.19 $3.42
25% Water Cutback $3.00 $3.21 $3.43 $3.67 $3.93
40% Water Cutback $3.58 $3.83 $4.10 $4.39 $4.69
1 - One unit = 100 Cubic Feet (ccf) = 748 gallons
Packet Pg. 126
SEWER RATES – The current and proposed sewer rates are in the following table.

1. Noticing Requirement – The City must mail a notice of the proposed rate increases to all affected property owners or ratepayers. The notice must specify the amount of the fee, the basis upon which it was calculated, the reason for the fee, and the date/time/location of a public rate hearing at which the proposed rates will be considered/adopted.

2. Public Hearing – The City must hold a public hearing prior to adopting the proposed rate increases. The public hearing must be held not less than 45 days after the required notices are mailed.

3. Rate Increases Subject to Majority Protest – At the public hearing, the proposed rate increases are subject to majority protest. If more than 50% of affected property owners or ratepayers submit written protests against the proposed rate increases, the increases cannot be adopted.

To follow the process mandated by Proposition 218, the schedule to consider and adopt new rates is:

August 7, 2023 Information Meeting #1 with Industrial Facilities Initial rate recommendations at City Council meeting
September 18, 2023 Information Meeting #2 with Industrial Facilities Present Draft Rate Study recommendations at City Council meeting September 29, 2023 Mail Prop 218 notice of rate hearing to customers and property owners October - November 2023 45-day Prop 218 waiting period; conduct ratepayer outreach November 20, 2023 City Council meeting for Proposition 218 hearing January 1, 2024 New rates take effect absent a majority protest The presentation that staff and consultant will make at the Council meeting is attached for your reference.

Packet Pg. 127
How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small town charm.

Explain: Completing the rate study and adjusting rates to adequately fund the operations and maintenance of each system is fundamental to maintaining a safe and clean community for all residents and businesses.

Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes X No N/A
• Housing X Yes No N/A
• Recreation Yes X No N/A
• Environment Yes X No N/A
• Education Yes X No N/A
Explain: See Vision above.

ALTERNATIVES
Alternatives include directing staff to adjust the water and/or sewer rates.

BUDGET IMPACT
There is no budget impact to this evening’s presentation.

CONCLUSIONS
It is recommended that the City Council receive a follow-up report and presentation on the Water and Sewer Rate Studies and authorize staff to initiate the Proposition 218 Process.

Attachments:

1. Presentation

2. Draft Water/Sewer Rate Study

3. Proposition 218 Notice to Property Owners and Utility Customers Packet Pg. 128
Water and Sewer Rate Study
Final Recommendations
City Council Workshop
September 18, 2023
Alison Lechowicz
Project Manager

CITY OF GONZALES
Packet Pg. 129 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Background
 Last comprehensive water and sewer rate study was conducted in 1989  Last water and sewer CPI rate increase was July 1, 2023 (+5.3%)  The City is facing significant growth from industrial customers and needs to re-evaluate rates for service expansion
 Water and Sewer Funds are Enterprise Funds
 Self-supported by rates
 Separate from the General Fund
 Rate study will cover a 5-year period
 First rate increase effective January 1, 2024
 Subsequent increases will go into effect on January 1 of 2025, 2026, 2027, 2028 Packet Pg. 130 2 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Proposition 218
 Governs how property-related charges are adopted
 Covers rates over a maximum 5-year period
 Rates must be based on the reasonable cost of service and proportionally recover costs based on how customers take service
 Tiered water rates cannot be adopted unless based on the actual cost to deliver water at various levels of use (San Juan Capistrano legal ruling)  Procedural requirements:
 Conduct a rate study
 Mail a notice to property owners
 Hold a public hearing a minimum of 45 days after notice is mailed  Rates cannot be adopted if more than 50% of ratepayers submit written protests Packet Pg. 131 3 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study)

WATER FUND
Packet Pg. 132 4 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Water Cost of Service Analysis FY2024
 Estimated current reserves of $3.0M as of July 1, 2023  Last year, revenues of about $2.2M covered operating costs of $2M and provided $300,000 net revenues
 Debt repayment of $229,000
 $35,000 of capital projects
 $57,000 contribution to reserves
 Upcoming cost of service increases
 Inflationary cost increases for operating expenses
 City will borrow to fund $7.1M in capital projects for pipeline replacements and a new tank  New debt service payments of about $450,000 annually beginning in 2024/25  Up to $250,000 for vehicle replacements and miscellaneous repairs  Proposed rate revenue increases of +7% per year
5 2023/24 2024/25 2025/26 2026/27 2027/28
Rate Revenue
Increase 7.0% 7.0% 7.0% 7.0% 7.0%
Packet Pg. 133 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Packet Pg. 134 6 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Current Monthly Water Rates
7 Water Service Fees
Residential Per Meter
5/8" meter $21.01
1" meter $22.31
Multi-Family
1-1/2" meter $23.61
2" meter $24.94
2-1/2" meter $25.91
Commercial
3" meter $27.66
4" meter $28.99
6" meter $30.33
Unmetered Service/Standby $31.62
Consumption Fees*
Residential/Commercial Charge per ccf
0 - 25 ccf $2.16
26 - 30 ccf $2.23
31 - 49 ccf $2.43
50+ ccf $2.69
Industrial Users
All use $2.16
*One unit = 100 Cubic Feet (ccf) = 748 gallons
About 90% of single family
residential use falls in Tier 1
Packet Pg. 135 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Proposed Water Rate Adjustments
 Adopt a rate structure compliant with Proposition 218 / San Juan Capistrano legal ruling
 Current tiers are not cost-justified; do not reflect water use patterns  Eliminate the tiered rate structure for residential and commercial customers  All customer classes will pay uniform consumption charges (i.e. same $/ccf charge for all levels of use)
 Add drought rates to make the City financially whole if water sales decrease due to drought  Fund about $40,000/year in low income discounts through non-rate revenues  Realign the fixed meter fee with max capacity of each meter size  Larger meter sizes will pay higher meter fees based on capacity  5/8” and 1” meters will be combined and will be charged the same meter fee  About 97% of customers have either a 5/8” or 1” meter Packet Pg. 136 8 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Proposed Water Meter Fees
9 Proposed
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date Jan. 1, 2024 Jan. 1, 2025 Jan. 1, 2026 Jan. 1, 2027 Jan. 1, 2028 Meter Size +7% +7% +7% +7%
5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22
1" $23.50 $23.50 $24.68 $26.40 $28.25 $30.22
1-1/2" $24.86 $46.12 $49.36 $52.80 $56.50 $60.44
2" $26.26 $73.79 $78.98 $84.48 $90.40 $96.70
2-1/2" $27.28 $110.69 $118.46 $126.72 $135.60 $145.06
3" $29.12 $147.58 $157.95 $168.96 $180.80 $193.41
4" $30.53 $230.60 $246.80 $264.00 $282.50 $302.20
6" $31.94 $461.20 $493.60 $528.00 $565.00 $604.40
Packet Pg. 137 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Packet Pg. 138 10 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Packet Pg. 139 11 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Packet Pg. 140 12 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Packet Pg. 141 13 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Proposed Water Volume Rates
14 Proposed
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date Jan. 1, 2024 Jan. 1, 2025 Jan. 1, 2026 Jan. 1, 2027 Jan. 1, 2028 Volume Rates ($/ccf charged to all usage)
Residential/Commercial +7% +7% +7% +7%
0 - 25 ccf $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
26 - 30 ccf $2.35 $2.41 $2.58 $2.76 $2.95 $3.16
31 - 49 ccf $2.56 $2.41 $2.58 $2.76 $2.95 $3.16
50+ ccf $2.84 $2.41 $2.58 $2.76 $2.95 $3.16
Industrial Users
All use $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
10% Water Cutback $2.61 $2.79 $2.98 $3.19 $3.42
25% Water Cutback $3.00 $3.21 $3.43 $3.67 $3.93
40% Water Cutback $3.58 $3.83 $4.10 $4.39 $4.69
Packet Pg. 142 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Water Rate Survey – Avg Single Family Bill
Packet Pg. 143 15 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study)

SEWER FUND
Packet Pg. 144 16 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Sewer Cost of Service Analysis FY2024
 Estimated current reserves of $1.2M as of July 1, 2023  Estimated operating revenues of $2M to cover about $1.1M of operating costs plus $100,000 to $200,000 of capital outlay
 Major upcoming capital projects:
 SRF loan will be used to construct new industrial treatment plant ($25M)  New debt service payments of $1.25M expected to begin in FY2027  In addition, the sewer utility will fund $3.6M of improvements to the existing treatment plant and collection system
 Must fund $1.25M debt service reserve from rates
 Proposed rate revenue increases:
17 2023/24 2024/25 2025/26 2026/27 2027/28
Rate Revenue
Increase 20.0% 20.0% 20.0% 6% 6%
Packet Pg. 145 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Packet Pg. 146 18 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Current Sewer Rates
19 Sewer Flat Rate Per Account
Residential $31.77
Commercial $22.31
Industrial 312.62
Volume Rate Per ccf*
Commercial & Industrial $2.40
Lift Pump Users Per Account
Residential $2.35
Schools (Billed Annually) Per ADA
Average Daily Attendance (ADA) $0.91
*One unit = 100 Cubic Feet (ccf) = 748 gallons
Packet Pg. 147 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Sewer Rate Design
20  Proposed customer service fee of $10.57/month for all customers  Plus a flow charge of $3.39 per ccf to cover the costs to convey, treat, and dispose of wastewater
 Average residential flow is 205 gallons per day = 8.336 ccf/month Estimated
Monthly Flow
(ccf)
Flow Charge
($/ccf)
Total Flow
Charge
Customer
Service Fee
($/month)
Total Monthly
Charge

8.336 x $3.39 $28.26 $10.57 $38.83
Packet Pg. 148 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Proposed Sewer Rates
21 Proposed
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date July 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 Fixed Charge per Month ($/account)
+20% +20% +6% +6%
Residential $31.77 $38.83 $46.60 $55.92 $59.28 $62.84
Commercial $15.18 $10.57 $12.68 $15.22 $16.13 $17.10
Industrial $312.62 $10.57 $12.68 $15.22 $16.13 $17.10
Schools $0.91 $1.04 $1.24 $1.49 $1.58 $1.67
Commercial & Industrial Volume Rate ($/ccf) (in addition to fixed charge) $2.40 $3.39 $4.06 $4.87 $5.16 $5.47
Note: Schools are billed annually rather than monthly based on reported average daily attendance (ADA) Packet Pg. 149 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Sewer Rate Survey – Single Family Residential
Packet Pg. 150 22 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Average Water + Sewer Utility Bill
23 Current
(July 1, 2023)
Proposed
(Jan 1, 2024) Increase
Water Meter Fee
(5/8”) $22.12 $23.06 $0.94
Current
(July 1, 2023)
Proposed
(Jan 1, 2024) Increase
Water Meter Fee
(5/8”) $22.12 $23.06 $0.94
Water Usage
Charges
(12 ccf)
$27.24 $28.92 $1.68
Current
(July 1, 2023)
Proposed
(Jan 1, 2024) Increase
Water Meter Fee
(5/8”) $22.12 $23.06 $0.94
Water Usage Charges
(12 ccf) $27.24 $28.92 $1.68
Sewer Charges $31.77 $38.83 $7.06
Total $81.13 $90.81 $9.68
Packet Pg. 151 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Rate Study Schedule
 September 18: Present final recommendations to City Council  September/October: Community Outreach
 September 29 : Mail Prop 218 notice to customers
 October/November: 45-day Prop 218 waiting period; conduct ratepayer outreach  November 20: Proposition 218 hearing
 January 1: Implement new rates absent a majority protest Packet Pg. 152 24 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study) Questions?
Packet Pg. 153 25 Attachment: Presentation (2814 : Update on Water/Sewer Rate Study)

CITY OF GONZALES
Water and Sewer Utility
Rate Study 2023

DRAFT REPORT
September 2023
909 Marina Village Parkway #135
Alameda, CA 94501
(510) 545-3182
www.LTmuniconsultants.com
Packet Pg. 154 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) Packet Pg. 155 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales
Water and Sewer Utility Rate Study 2023

TABLE OF CONTENTS

Section 1: Introduction ..............................................................................................................................1

1.1 Background ...................................................................................................................................1

1.2 Requirements of Proposition 218.................................................................................................1

1.3 Rate Study Process........................................................................................................................2

1.4 Financial Analysis and Rate Structure Adjustments......................................................................3

1.5 Summary of Proposed Rates.........................................................................................................4 Section 2: Current Rates and Customer Base............................................................................................6

2.1 Current Water Rates.....................................................................................................................6

2.2 Water Customer Base ...................................................................................................................7

2.3 Current Water Sales Revenues .....................................................................................................8

2.4 Current Sewer Rates.....................................................................................................................9

2.5 Sewer Customer Base .................................................................................................................10 Section 3: Water Revenue Requirement .................................................................................................11

3.1 Water System Overview .............................................................................................................11

3.2 Water Reserves...........................................................................................................................11

3.3 Water Capital Improvement Plan ...............................................................................................11

3.4 Water Cash Flow Projection........................................................................................................12 Section 4: Water Cost Allocation and Rate Design..................................................................................15

4.1 Water Cost Allocation .................................................................................................................15

4.2 Water Rate Design ......................................................................................................................17

4.3 Water Bill Impacts.......................................................................................................................22

4.4 Drought Rates.............................................................................................................................25

4.5 Low Income Discount..................................................................................................................26 Section 5: Sewer Revenue Requirement .................................................................................................27

5.1 Sewer System Overview..............................................................................................................27

5.2 Sewer Capital Improvement Plan ...............................................................................................27

5.3 Sewer Cash Flow Projection........................................................................................................29 Section 6: Sewer Cost Allocation and Rate Design ..................................................................................31

6.1 Sewer Cost Allocation .................................................................................................................31

6.2 Sewer Rate Design ......................................................................................................................32

6.3 Sewer Flows................................................................................................................................33

6.4 Rate Derivation ...........................................................................................................................33

6.5 Sewer Bill Impacts.......................................................................................................................37 Packet Pg. 156 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales
Water and Sewer Utility Rate Study 2023

LIST OF TABLES
Table 1: Current and Proposed Water Rates................................................................................................4 Table 2: Proposed Drought Rates.................................................................................................................5 Table 3: Current and Proposed Sewer Rates................................................................................................5 Table 4: Current Monthly Water Rates.........................................................................................................7 Table 5: Inventory of Water Meters.............................................................................................................8 Table 6: Estimated 2022/23 Water Rate Revenues......................................................................................8 Table 7: Current Monthly Sewer Rates.........................................................................................................9 Table 8: Current Sewer Rate Revenue........................................................................................................10 Table 9: Water Capital Improvement Plan..................................................................................................12 Table 10: Water Cash Flow Projection........................................................................................................14 Table 11: Water Cost Allocation .................................................................................................................16 Table 12: Annual Revenue Requirement Allocation...................................................................................17 Table 13: Current and Proposed Meter Ratios...........................................................................................19 Table 14: Water Fixed Meter Charge Rate Derivation................................................................................20 Table 15: Water Consumption Rate Derivation..........................................................................................21 Table 16: Current and Proposed Water Rates............................................................................................22 Table 17: Sample Single Family Residential Bill Impacts.............................................................................23 Table 18: Drought Rates .............................................................................................................................25 Table 19: Wastewater CIP...........................................................................................................................28 Table 20: Sewer Cash Flow Projection........................................................................................................30 Table 21: Sewer Cost Allocation .................................................................................................................32 Table 22: Flow and Loading ........................................................................................................................33 Table 23: Unit Cost Calculation...................................................................................................................34 Table 24: Total Sewer Charges....................................................................................................................34 Table 25: Current and Proposed Monthly Sewer Rates..............................................................................35 Table 26: Proposed Sewer Rate Revenue - January 1, 2024 Rates if billed 12 months..............................36 Table 27: Sample Monthly Commercial Sewer Bill Impacts .......................................................................38

LIST OF FIGURES
Figure 1: Comprehensive Cost of Service Study Process..............................................................................2 Figure 2: Monthly Single Family Residential Water Bill Survey ..................................................................24 Figure 3: Monthly Single Family Residential Sewer Bill Survey ..................................................................37 Packet Pg. 157 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 1
Water and Sewer Utility Rate Study 2023
SECTION 1: INTRODUCTION

1.1 Background
The City of Gonzales (City) is located 17 miles south of Salinas, California and provides water and sewer service to a population of 8,650 residents as well as major industrial food processors. The last formal rate review was conducted in 1986 for the water utility and 1990 for the wastewater (sewer) utility.

Since then, water and sewer rates have been increased annually by the Consumer Price Index (CPI). The City engaged Lechowicz & Tseng Municipal Consultants (L&T) to complete a comprehensive water and wastewater (sewer) rate study to recommend utility rates to ensure the continued financial health and stability of the City’s enterprise funds.

The City’s wastewater treatment plant is at capacity and the City will construct a new industrial treatment plant. Once flow is transferred to the new plant, the City will conduct improvements to the existing facility. These improvements will be funded through a combination of grants, loans, capacity fees and rate revenues. Rate revenues must increase to fund these costs. This rate study covers the fiveyear period beginning in Fiscal Year (FY)2023/24 through 2027/28.

1.2 Requirements of Proposition 218
The implementation of utility rates in California is governed by the substantive and procedural requirements of Proposition 218 the “Right to Vote on Taxes Act” which is codified as Articles XIIIC and XIIID of the California Constitution. The City must follow the procedural requirements of Proposition 218 for all utility rate increases. These requirements include:

2. Public Hearing – The City must hold a public hearing prior to adopting the proposed rate increases. The public hearing must be held not less than 45 days after the required notices are mailed.

Proposition 218 also established substantive requirements that apply to water and sewer rates and charges, including:

1. Cost of Service – Revenues derived from the fee or charge cannot exceed the funds required to provide the service. In essence, fees cannot exceed the “cost of service”.

Packet Pg. 158 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 2
Water and Sewer Utility Rate Study 2023

2. Intended Purpose – Revenues derived from the fee or charge can only be used for the purpose for which the fee was imposed.

3. Proportional Cost Recovery – The amount of the fee or charge levied on any customer shall not exceed the proportional cost of service attributable to that customer.

4. Availability of Service – No fee or charge may be imposed for a service unless that service is used by, or immediately available to, the owner of the property.

5. General Government Services – No fee or charge may be imposed for general governmental services where the service is available to the public at large.

Charges for water and wastewater service are exempt from additional voting requirements of Proposition 218, provided the charges do not exceed the cost of providing service and are adopted pursuant to the procedural requirements of Proposition 218.

1.3 Rate Study Process
This section details the development of the City’s water and sewer rates via the Proposition 218 process as shown in the following figure.

Figure 1: Comprehensive Cost of Service Study Process
Packet Pg. 159 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 3
Water and Sewer Utility Rate Study 2023
The following is a brief description of the rate study process:
 Revenue Requirements - Revenue requirements are analyzed via financial plans developed from the Water and Sewer Fund budgets. Based on the best information currently available, the financial plans incorporate projected operation and maintenance costs, capital expenditures, debt service, and growth to estimate annual revenue requirements. The plans serve as a roadmap for funding the City’s future operating and capital programs while maintaining longterm fiscal stability.  Cost of Service Allocation - The cost of service process builds on the financial plan analysis and assigns water and sewer system costs to functional cost components: metering and customer service, base, and extra for water, and customer service, flow, BOD, and TSS for sewer.  Rate Design - Rate design involves developing a rate structure that proportionately recovers costs from customers. Final rate recommendations are designed to (a) fund the utilities’ shortand long-term costs of providing service; (b) proportionately allocate costs to all customers and customer classes; and (c) comply with the substantive requirements of Proposition 218.

The rates developed in this report were based on the best available information gathered from City budgets, audits, and input from staff. The cost allocations proposed herein are based on American Water Works Association methodologies and industry standard practice. The proposed rates are based on the reasonable cost of providing service and are proportional to the benefits received by each customer.

1.4 Financial Analysis and Rate Structure Adjustments
Both the water and sewer funds are generating positive net revenues and are meeting their reserve fund targets. However, annual rate increases are needed to pay for operating cost increases and capital funding needs. The sewer utility will fund a new industrial treatment plant that will increase capacity for the entire system. The $25 million project will be financed with a loan from the State Revolving Fund (SRF). The new treatment plant is critical because the current treatment plant is at capacity and cannot serve new customers or increased flows. In addition to the industrial plant, the City intends to make improvements to serve the City’s collection system and domestic treatment stream.

The water rate structure changes proposed in this study are designed to comply with Proposition 218 and to more equitably recover costs from each customer class. This study recommends realigning fixed charges based on the maximum flow rates of each meter size and transitioning to a single volume rate for water consumption billing.

The sewer rate structure is not proposed to be adjusted in this study. However, the flow and pollutant loadings for all sewer customers have been updated based on an analysis of the City’s water usage and sewage flow patterns over the past three years.

Packet Pg. 160 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 4
Water and Sewer Utility Rate Study 2023

1.5 Summary of Proposed Rates
The updated water and sewer proposed rates were developed to fairly recover costs, adhere to California statute, and be affordable to customers. Current and proposed monthly water rates are provided in Table 1, drought rates are provided in Table 2, and current and proposed sewer rates are provided in Table 3. The first rate increase is proposed to go into effect January 1, 2024, and future rate adjustments are proposed to go into effect January 1 each year thereafter.

The typical monthly water use of a single family customer is 12 ccf per month. Based on these parameters, the City’s current total combined water and sewer bill for a typical single family home with a 5/8” meter is $81.13 per month. After the proposed increase, the typical combined residential bill would increase to $90.81 per month on January 1, 2024, an increase of about 12%.

Table 1: Current and Proposed Water Rates
City of Gonzales
Water and Sewer Utility Rate Study 2023

PROPOSED
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date July 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028

FIXED METER CHARGE
Meter Size
5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22
1" $23.50 $23.50 $24.68 $26.40 $28.25 $30.22
1-1/2" $24.86 $46.12 $49.36 $52.80 $56.50 $60.44
2" $26.26 $73.79 $78.98 $84.48 $90.40 $96.70
2-1/2" $27.28 $110.69 $118.46 $126.72 $135.60 $145.06
3" $29.12 $147.58 $157.95 $168.96 $180.80 $193.41
4" $30.53 $230.60 $246.80 $264.00 $282.50 $302.20
6" $31.94 $461.20 $493.60 $528.00 $565.00 $604.40
CONSUMPTION RATES ($/ccf)
Residential/Commercial
0 - 25 ccf $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
26 - 30 ccf $2.35 $2.41 $2.58 $2.76 $2.95 $3.16
31 - 49 ccf $2.56 $2.41 $2.58 $2.76 $2.95 $3.16
50+ ccf $2.84 $2.41 $2.58 $2.76 $2.95 $3.16
Industrial
All use $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
1 - One unit = 100 Cubic Feet (ccf) = 748 gallons
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Water and Sewer Utility Rate Study 2023
The proposed water rates also include a schedule of drought rates, which would only be implemented during a water shortage emergency. The City does not currently have a schedule of drought rates. Under drought conditions, the meter charges would remain the same, but the consumption rate would increase according to the level of water cutback, as shown in Table 2. Drought rates are intended to make the City financially whole and avoid a loss of revenues due to lower water sales.

Table 2: Proposed Drought Rates
City of Gonzales
Water and Sewer Utility Rate Study 2023

PROPOSED
Fiscal Year 2023/24 2024/25 2025/26 2026/27 2027/28
Effective Date Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 CONSUMPTION RATES ($/ccf for all customers at all levels of use) Normal Water Year $2.41 $2.58 $2.76 $2.95 $3.16
10% Water Cutback $2.61 $2.79 $2.98 $3.19 $3.42
25% Water Cutback $3.00 $3.21 $3.43 $3.67 $3.93
40% Water Cutback $3.58 $3.83 $4.10 $4.39 $4.69
Table 3: Current and Proposed Sewer Rates
City of Gonzales
Water and Sewer Utility Rate Study 2023

PROPOSED
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date July 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 FIXED CHARGE PER MONTH ($/account)
Residential $31.77 $38.83 $46.60 $55.92 $59.28 $62.84
Commercial $15.18 $10.57 $12.68 $15.22 $16.13 $17.10
Industrial $312.62 $10.57 $12.68 $15.22 $16.13 $17.10
Schools $0.91 $1.04 $1.24 $1.49 $1.58 $1.67
COMMERCIAL & INDUSTRIAL VOLUME RATE ($/ccf) (in addition to fixed charge) $/ccf $2.40 $3.39 $4.06 $4.87 $5.16 $5.47
Note: Schools are billed annually rather than monthly based on reported average daily attendance (ADA)
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SECTION 2: CURRENT RATES AND CUSTOMER BASE
This section provides an overview of the City of Gonzales’s current water and sewer rates, customer base, water usage statistics, and current rate revenues.

2.1 Current Water Rates
The City bills customers for water service on a monthly basis such that each billing period covers one month of service. The last water rate study was conducted in 1986. Water rates have been increased each year by the annual change in the Consumer Price Index (CPI). A schedule of current monthly water rates that went into effect on July 1, 2023 is provided in Table 4. The City’s current rate structure includes two components: (1) a Fixed Meter Charge and (2) Consumption Rates.

2.1.1 Fixed Meter Charge
All customers are charged a monthly fixed charge based on their meter size. The fixed charge is levied regardless of water consumption and recognizes that even when a customer does not use any water, the City incurs fixed costs associated with maintaining the ability or readiness to serve each connection.

Currently, the City’s meter fees have very little difference in cost when comparing the smallest and largest meter fees. Fixed charges currently generate about 22% of total water rate revenues.

2.1.2 Consumption Rates
In addition to Fixed Meter Charges, all customers pay a consumption rates per hundred feet (ccf) of water consumption. One ccf is equal to 748 gallons of water. The charges for water usage for residential and commercial customers are based on a 4-tiered rate structure where the price per unit of water is higher as more water is used. Industrial customers pay a uniform rate that does not vary based on the amount of water used. Consumption rates collect about 78% of total water rate revenues.

2.1.3 Fire Sprinkler Fee
The City also levies a flat charge to customers that have a separate meter for fire sprinklers. The fee is charged whether or not any water is used in the billing cycle and is used to fund the costs required to maintain the ability to serve each connection.

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Water and Sewer Utility Rate Study 2023
Table 4: Current Monthly Water Rates
City of Gonzales
Water and Sewer Utility Rate Study 2023
Water Service Fees
Residential Per Meter
5/8" meter $21.01
1" meter $22.31
Multi-Family
1-1/2" meter $23.61
2" meter $24.94
2-1/2" meter $25.91
Commercial
3" meter $27.66
4" meter $28.99
6" meter $30.33
Unmetered Service/Standby $31.62
Consumption Fees*
Residential/Commercial Charge per Unit
0 - 25 ccf $2.16
26 - 30 ccf $2.23
31 - 49 ccf $2.43
50+ ccf $2.69
Industrial Users
All use $2.16
*One unit = 100 Cubic Feet (ccf) = 748 gallons
Fire Sprinkler
Residential $7.49
Nonresidential $22.73

2.2 Water Customer Base
Table 5 includes a summary of the number of water accounts by customer class based on the City’s billing data. The water utility has 1,869 active accounts. 5/8” and 1” meters make up over 97% of the total meters within the City. It should be noted that the 1” meter size is the minimum meter size based on the California Building Code as the 1” size is needed for fire flow.

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Water and Sewer Utility Rate Study 2023
Table 5: Inventory of Water Meters
City of Gonzales
Water and Sewer Utility Rate Study 2023
Meter Size No. of Meters % of Total
5/8" 977 52.3%
1" 841 45.0%
1-1/2" 15 0.8%
2" 19 1.0%
2-1/2" 0 0.0%
3" 7 0.4%
4" 8 0.4%
6" 2 0.1%
Total 1,869 100.0%
Source: June 2023 billing report

2.3 Current Water Sales Revenues
Table 6 summarizes revenues derived from Meter Fees and Consumption Rates by customer class. Total Water Sales Revenues for FY2022/23 are estimated at $2.1 million.

Table 6: Estimated 2022/23 Water Rate Revenues
City of Gonzales
Water and Sewer Utility Rate Study 2023
Estimated 2022 Water Sales Revenues
Customer Class Fixed Charge Consumption Rates
Total Water
Sales Revenues
% of
Total
Residential $443,053 $489,834 $932,887 44.1%
Commercial $13,796 $230,987 $244,783 11.6%
Industrial $5,724 $930,154 $935,878 44.3%
Total $462,573 $1,650,975 $2,113,548 100.0%
% of Total 21.9% 78.1% 100.0%
Source: Utility Billing History - Usage 2022
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Water and Sewer Utility Rate Study 2023

2.4 Current Sewer Rates
The City’s last sewer rate study was conducted in 1990. Since then, sewer rates have been increased each year by the annual adjustment in the CPI. A schedule of current monthly sewer rates that went into effect on July 1, 2023 is provided in Table 7. The City’s current rate structure includes two components:
(1) a Flat Rate and (2) a Volume Rate for nonresidential customers. Schools are billed annually based on average daily attendance (ADA).

2.4.1 Flat Charge
All customers are charged a monthly Flat Charge that varies based on customer class. The Flat Charge is the minimum charge for all customers. Even when a customer does not use the sewer system, the City incurs fixed costs associated with maintaining the ability or readiness to serve each connection. The rate structure also includes a separate lift station charge for some residential customers. In the past, lift station charge has not been billed and is proposed to be phased out.

2.4.2 Volume Rate
In addition to the Flat Charge, commercial and industrial customers pay a Volume Rate per ccf based on monthly water use. Because sewer flow is not typically metered, water consumption is used as an approximation for sewer flow. It is assumed that any outdoor irrigation water use that does not flow into the sewer is separately metered through an irrigation only connection. Outdoor irrigation consumption is not billed for sewer service. The Volume Rate currently generates about 53% of total wastewater rate revenues.

Table 7: Current Monthly Sewer Rates
City of Gonzales
Water and Sewer Utility Rate Study 2023
Sewer Flat Rate Per Account
Residential $31.77
Commercial $22.31
Industrial $312.62
Volume Rate Per ccf*
Commercial & Industrial $2.40
Lift Pump Users Per Account
Residential $2.35
Schools (Billed Annually) Per ADA
Average Daily Attendance (ADA) $0.91
*One unit = 100 Cubic Feet (ccf) = 748 gallons
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2.5 Sewer Customer Base
The City’s sewer utility provides service to about 2,000 single family, multi family, commercial, industrial, and school accounts within the City. Table 8 provides the current estimated number of accounts, annual flow, and sewer service revenues by customer class. Average flows are 1.2 million gallons per day. Based on current water usage patterns, the City would collect about $1.9 million in annual revenues based on the July 1, 2023 rates. Residential revenues account for approximately 37% of total revenues while industrial accounts represent over 56%. Schools and commercial customer revenues make up the remainder.

Table 8: Current Sewer Rate Revenue
City of Gonzales
Water and Sewer Utility Rate Study 2023
Customer
Class # of Accounts Fixed Monthly Fee
Fixed Annual
Revenues % of Total
Residential 1,785 $31.77 $680,513
Commercial 155 $15.18 $28,235
Industrial 40 $312.62 $150,058
1,980 $858,806 46.1%
Flow GPD Flow ccf/year
Volume Rate
Revenues
($2.28/ccf)
Residential 354,947 173,203 NA
Commercial 63,905 31,183 $74,840
Industrial 775,000 378,175 $907,620
1,193,852 582,561 $982,461 52.8%
Fee per Student Revenues
Schools $0.91 $21,028 1.1%
Total Rate Revenue $1,862,294 100.0%
Total Revenue by Customer Class
Residential $680,513 36.5%
Commercial $103,075 5.5%
Industrial $1,057,678 56.8%
Schools $21,028 1.1%
$1,862,294 100.0%
GPD – gallons per day
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SECTION 3: WATER REVENUE REQUIREMENT
Proposition 218 requires that utility rates be based on the reasonable cost of providing service to customers. The cost of service includes annual operating expenses, capital improvement projects, and the accumulation of appropriate reserves. This section summarizes the water utility and the expenses that make up its cost of service and revenue requirement.

3.1 Water System Overview
The City derives its water supply from groundwater sources within the Salinas Valley groundwater basin.

The water system includes 4 deep-water wells, three tanks with a total capacity of seven million gallons, and many miles of pipes ranging in size from one inch to eighteen inches.

On average over the past 3 years, the City has consumed roughly 1.1 million ccf (hundred cubic feet) of water each year. Industrial use comprises more than half of the City’s total consumption at approximately 56% with the remaining 44% of use by residential, commercial, and school customers.

Based on City billing records, the current average monthly residential water use is 12 ccf per month.

3.2 Water Reserves
As of the beginning of FY2022/23, the water utility had operating fund reserves of approximately $2.98 million and is meeting its reserve fund targets. The City currently has two water reserve fund targets:
o Operating Reserve: The fund balance target is equal to 25% of annual operating expenses per City policy. This is in line with industry standards that recommend an operating reserve target of at least 25% of annual expenses to account for the time (at least 4 months) that it would take an agency to approve new rate increases to comply with Proposition 218. o Capital Reserve: The fund balance target is $500,000 to fund infrastructure projects.

Adequate fund reserves protect the City when faced with unforeseen financial challenges such as emergency expenses or revenue deficits. Fund reserves allow the City to maintain its financial health and positive credit ratings, especially during emergencies. Moreover, funding can be drawn from reserves to supplement rate revenues lost during drought conditions or other unexpected situations.

The City can also choose to use reserves to smooth cash flows and mitigate impacts to ratepayers.

3.3 Water Capital Improvement Plan
Table 9 provides the City’s capital improvement plan (CIP) by year for the rate study period, totaling $7.1 million. No projects are identified in FY2026/27 or FY2027/28. The City plans to secure loans to pay for the projects.

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Water and Sewer Utility Rate Study 2023

Table 9: Water Capital Improvement Plan
City of Gonzales
Water and Sewer Utility Rate Study 2023
1 – Total project cost is $5 million. $1M of available impact fee funds will be applied to the project

3.4 Water Cash Flow Projection
The water fund cash flow for the five-year period beginning in FY2023/24 through FY2027/28 is provided in Table 10. Revenue increases of 7.0% annually over the rate study period are needed to keep up with operating cost inflation and to fund necessary capital projects. It should be noted that this level of increase is applied to the City’s total water rate revenues and doesn’t not necessarily reflect the level of increase for individual customers. Each customer’s bill depends on meter size and water usage.

3.4.1 Water Revenues
The City’s main revenue source for the water utility is Water Service Revenues. Rate revenues are estimated at about $2.2 million in FY2023/24, comprising 95% of total water revenues. Other revenues include Interest Income, Late Charges, Meter Set Fees, Meter Sales, and Other Miscellaneous Income.

3.4.2 Water Expenses
Major expenses include Salaries and Benefits, Administrative Expenses, Supplies and Equipment, Outside Services, and Utilities. Most operating expenses are projected to increase 3.0% annually beginning in 2023/24. Utilities are escalated by 10.0% each year.

3.4.3 Debt Service
The water utility currently has one outstanding debt obligation – a 2012 Loan Agreement for $2.45 million. Total annual debt service is $229,400 and will be paid off in 2025. The City is proposing to secure $7.1 million in loans to fund the water CIP over the next 5 years. For planning purposes, debt service in the cash flow is estimated based on a 20-year loan at 3.35% interest with the first payment due in FY2024/25.

Project Title FY2023/24 FY2024/25 FY2025/26
18" Pipeline in Johnson Canyon Rd (6800 LF) [1] $2,000,000 $2,000,000 $0 12" Pipeline from Herold Way to Rincon Rd (1600 LF) $0 $0 $0 12" Pipeline from SE end of Herold Pkwy to Venice Way Park (985 LF) $0 $1,300,000 $0 12" Pipeline in 1st Street from Alta to Elko (1540 LF) $0 $0 $800,000 Hydropneumatic tank $0 $0 $1,000,000
Total Water CIP Projects $2,000,000 $3,300,000 $1,800,000 Packet Pg. 169 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 13
Water and Sewer Utility Rate Study 2023

3.4.4 Debt Service Coverage
A chief covenant for the City to secure loans, grants, or revenue bonds/Certificates of Participation (COPs) is to maintain a specific debt service coverage ratio. A debt service coverage ratio is a financial measure of an agency’s ability to repay outstanding debt. For the water fund, the debt service coverage ratio means that annual water net revenues (gross revenues less operating and maintenance expenses) must be at least 1.2 times the combined annual debt service payments on all parity obligations. Failure to meet the debt service coverage ratio on an annual basis is considered to be technical default, thereby making the revenue bonds/COPs callable or payable upon demand. Thus, rates and fees must be set to meet this legal requirement. The rates proposed in this study are expected to generate adequate revenues to meet the City’s current and future coverage requirements.

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Water and Sewer Utility Rate Study 2023
Table 10: Water Cash Flow Projection
City of Gonzales
Water and Sewer Utility Rate Study 2023
Rate Study Period
2023/24 2024/25 2025/26 2026/27 2027/28
Overall Rate Revenue Adjustment 7.0% 7.0% 7.0% 7.0% 7.0% Rate Increase Effective Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 BEGINNING FUND BALANCE [1] $2,983,000 $3,051,000 $3,035,700 $2,178,600 $2,197,300

REVENUES
Operating Revenues
Water Service Revenues [2] 2,245,000 2,403,000 2,571,000 2,751,000 2,943,000 Interest Income 15,000 15,000 15,000 15,000 15,000
Late Charges 43,000 43,000 43,000 43,000 43,000
Meter Set Fee 400 400 400 400 400
Meter Sales 0 0 0 0 0
Other Income - Misc Payments 3,000 3,000 3,000 3,000 3,000 Transfer from Sewer 60,000 60,000 30,000 0 0
Subtotal Operating Revenues 2,366,400 2,524,400 2,662,400 2,812,400 3,004,400 New Debt Proceeds 2,000,000 3,300,000 1,000,000 0 0
Total Revenues 4,366,400 5,824,400 3,662,400 2,812,400 3,004,400

EXPENSES
Operating Expenses
Salaries and Benefits 411,000 423,000 436,000 449,000 462,000 Administrative Expenses 111,000 114,000 117,000 121,000 125,000 Supplies and Equipment 58,000 60,000 62,000 64,000 66,000 Outside Services 785,000 809,000 833,000 858,000 884,000 Utilities [3] 180,000 198,000 218,000 240,000 264,000
Transfers Out to Solar 364,000 364,000 364,000 364,000 364,000 Subtotal O&M 1,909,000 1,968,000 2,030,000 2,096,000 2,165,000 Net Operating Revenues 457,400 556,400 632,400 716,400 839,400 Debt Service
2012 Loan 229,400 229,400 114,700 0 0
New Debt Service [4] 0 142,300 374,800 447,700 447,700
Subtotal Debt Service 229,400 371,700 489,500 447,700 447,700 Capital Projects
Outlay & Vehicles 160,000 200,000 200,000 250,000 250,000 Water CIP Projects 2,000,000 3,300,000 1,800,000 0 0
Subtotal Capital Projects 2,160,000 3,500,000 2,000,000 250,000 250,000 Total Expenses 4,298,400 5,839,700 4,519,500 2,793,700 2,862,700 Total Net Revenues 68,000 (15,300) (857,100) 18,700 141,700 ENDING FUND BALANCE 3,051,000 3,035,700 2,178,600 2,197,300 2,339,000 Operating Reserve Target (25% of O&M) 477,000 492,000 508,000 524,000 541,000 Capital Reserves 500,000 500,000 500,000 500,000 500,000 Total Reserve Target 977,000 992,000 1,008,000 1,024,000 1,041,000 Total Reserve Target Met? yes yes yes yes yes
Debt Service Coverage Target - 1.20x [5] 1.99 1.50 1.29 1.60 1.87 Target Met? yes yes yes yes yes
1 - Estimated 07/01/2023 fund balance from 2023/24 Budget. 2 - Revenues adjusted for Jan 1 implementation date.
3 - Utilities escalated by 10% each year.
4 - Debt service is estimated based on a 20 year term at 3.35% and $50,000 of issuance costs 5 - Net Operating Revenues divided by total Debt Service Packet Pg. 171 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 15
Water and Sewer Utility Rate Study 2023
SECTION 4: WATER COST ALLOCATION AND RATE DESIGN

4.1 Water Cost Allocation
The water revenue requirement detailed in the previous section determines the amount of revenue to be recovered from water rates, and the cost of service allocation determines how revenues will be recovered from customers based on how they use the water system. Proposition 218 requires that agencies providing “property-related services” (including water utility service) set rates and charges that are based on the cost of providing those services and are proportional to how customers use the system.

4.1.1 Overview of Water Cost of Service Methodology
The purpose of the cost allocation is to classify costs and to determine the amount of revenue that will be recovered from fixed charges and from volume rates. The American Water Works Association (AWWA) recommends methods to classify costs among various customers. Using the Base-Extra Capacity Method as recommended by the AWWA, water operating expenses are allocated to the following categories: (a) Base, (b) Extra, (c) Metering and Services, and (d) Customer Service. The Base and Extra categories are intended to recover variable (consumption) costs, while the Customer Service and Metering and Services categories are intended to recover fixed expenses that are incurred regardless of water used.
 Base: Base costs include the expenses related to providing water under average, “base” demand conditions.
 Extra: The extra category includes costs related to providing water above the system average demand (ie. related to peak, “extra” usage).
 Metering and Services: These include costs related to maintaining and replacing water meters.
 Customer Service: This category contains costs associated with serving customers, such as billing and answering customer inquiries.

4.1.2 Cost Allocation
The cost allocation for the water utility is provided below in Table 11. The FY2023/24 budget is used as the base year for the cost allocation. Costs are allocated according to how they are incurred by the City.

Based on Table 11, roughly 22% of costs will be recovered from the Fixed Charges while the remaining 78% will be recovered from the Consumption Rate.

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Table 11: Water Cost Allocation
City of Gonzales
Water and Sewer Utility Rate Study 2023
Expenses Budget
2023/24
Base/Extra
(Usage Rate)
Meters & Customer
Service
(Meter Fee)
Operating Expenses
Salaries and Benefits $411,000 66.67% 33.33%
Administrative Expenses $111,000 0.00% 100.00%
Supplies and Equipment $58,000 50.00% 50.00%
Outside Services $785,000 80.00% 20.00%
Utilities $180,000 100.00% 0.00%
Transfers Out to Solar $364,000 100.00% 0.00%
Subtotal Operating $1,909,000 $1,475,000 $434,000
Non-Operating Expenses
Debt Service (5-Year Average) $397,200 100.00% 0.00%
Capital Outlay & Vehicles $160,000 30.00% 70.00%
Subtotal Non-Operating $557,200 $445,200 $112,000
Total Water Expenses $2,466,200 $1,920,200 $546,000
Proposed Cost Allocation % 100.0% 77.9% 22.1%

4.1.3 Annual Revenue Requirement Allocation
Table 12 shows the annual revenue requirement for the rate study period based on the cost allocation percentages from Table 11. The total water rate revenue requirements for each year are from the cash flow projection (Table 10). The fixed charge revenue requirement is based on the Meters and Customer Service category from the cost allocation. The consumption charge revenue requirement is based on the Base/Extra category.

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Water and Sewer Utility Rate Study 2023
Table 12: Annual Revenue Requirement Allocation
City of Gonzales
Water and Sewer Utility Rate Study 2023
Cost
Allocation %

PROJECTED - RATE STUDY PERIOD
2023/24 2024/25 2025/26 2026/27 2027/28
Total Revenue
Requirement [1] $2,337,000 $2,501,000 $2,676,000 $2,863,000 $3,063,000 Allocation
Fixed Meter Charge 22.1% $516,477 $552,721 $591,396 $632,723 $676,923 Consumption Rate 77.9% $1,820,523 $1,948,279 $2,084,604 $2,230,277 $2,386,077 Total 100.0% $2,337,000 $2,501,000 $2,676,000 $2,863,000 $3,063,000 1 – 7% increase in applied to current rate revenues over 12 months

4.2 Water Rate Design
Following the allocation of costs, the next step is to derive the total cost responsibility for each customer class by developing unit costs of service for each cost function and then assigning those costs to the customer classes based on the respective service requirements of each.

4.2.1 Rate Structure Modifications
To comply with Proposition 218, the proposed modifications to the existing water rate structure are as follows:
 Fixed Meter Charge
 Combine 5/8” and 1” meters as the base meter size
o Over 97% of customers have either a 5/8” or 1” meter. To comply with State regulations, new residential construction is required to have a 1” meter for fire flow. By combining the 5/8” and 1” meters as the base meter size, a separate Fire Sprinkler Charge is no longer needed.
 All customer classes will be charged the same Fixed Meter Charges which will vary by meter size.
o L&T recommends developing a single fixed rate structure based on meter size that applies to all customer classes. Additionally, we propose to use the AWWA meter capacity ratios to calculate rates for the larger meter sizes. The re-alignment will amend the fixed charges so that each meter size will be charged based on their proportional impact on the system.

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 Consumption Rates
 Eliminate the tiered rate structure for residential and commercial customers and implement a single rate per unit of water (ccf) for all customers. o Per Proposition 218 and legal rulings, each water rate tier breakpoint (i.e. the consumption used in each tier) and the price of each tier must be individually costjustified. Higher use must be directly tied to specific costs such as imported water, higher electricity costs associated with peak pumping, increased maintenance, and/or conservation programs. Tiers can no longer be assigned to customers solely based on conservation objectives. Because the City relies solely on groundwater for its supply, it is difficult to assign additional costs to the higher tiers. Moreover, the majority of water consumption is by industrial users who are currently charged a single tier for usage.

4.2.2 Meter Equivalents
The most common method to levy fixed charges is by meter size. AWWA guidelines recommend using meter equivalents to assign demand-related costs to larger meter sizes. The ratio at which the meter charge increases is typically a function of either meter investment (estimated cost) or the meter’s safe operating capacity. Larger meters have the ability to place a greater demand on the water system and are therefore charged based on that potential demand. For example, based on the AWWA meter capacity ratios, a customer that has a 2” meter has 3.20 times the capacity equivalency of a customer with a 5/8” or 1” meter. (A 2” meter has a safe operating capacity of 160 gallons per minute (gpm) compared to a 5/8” or 1” meter which has a safe operating capacity of 50 gpm).

Table 13 shows the proposed meter equivalents based on AWWA standards and number of meter equivalents. The re-alignment will amend the fixed charges so that each meter size will be charged based on their proportional impact on the system.

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Table 13: Current and Proposed Meter Ratios
City of Gonzales
Water and Sewer Utility Rate Study 2023
No. of
Meters

CURRENT PROPOSED
Meter
Size
Monthly Fixed
Charge
Meter
Ratio
Operating
Capacity
(gpm) [1]
AWWA
Meter Ratios
No. of
Meter
Equivalents
5/8" 977 $22.12 1.00 50 1.00 977
1" 841 $23.50 1.06 50 1.00 841
1-1/2" 15 $24.86 1.12 100 2.00 30
2" 19 $26.26 1.19 160 3.20 61
2-1/2" 0 $27.28 1.23 240 4.80 0
3" 7 $29.12 1.32 320 6.40 45
4" 8 $30.53 1.38 500 10.00 80
6" 2 $31.94 1.44 1,000 20.00 40
Total 1,869 2,074
1 - Gallons per minute (gpm) safe maximum operating capacity 2 - Meter Ratio x No. of Meters

4.2.3 Fixed Meter Charge Calculation
Table 14 calculates the Fixed Meter Charge by meter size based on the AWWA meter ratios from Table 13 and the total revenue requirement from Table 12. The proposed FY2023/24 charge for a 5/8” meter is $23.06. It is proposed that the 1” meter fee remain at the current rate of $23.50 in FY2023/24 and equal the 5/8” meter fee in FY2024/25 and beyond.

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Table 14: Water Fixed Meter Charge Rate Derivation
City of Gonzales
Water and Sewer Utility Rate Study 2023

PROJECTED - RATE STUDY PERIOD
2023/24 2024/25 2025/26 2026/27 2027/28

FIXED METER CHARGE REVENUE REQUIREMENT
Total Fixed Meter Charge Revenue Requirement [1] $516,477 $552,721 $591,396 $632,723 $676,923 Total Number of Meter Equivalents [2] 1,867 1,867 1,867 1,867 1,867 Total Fixed Meter Charge for 5/8" and 1" meters $23.06 $24.68 $26.40 $28.25 $30.22 % Change 7.0% 7.0% 7.0% 7.0%

PROPOSED FIXED METER CHARGES
Meter Size Meter Ratio
5/8" 1.00 $23.06 $24.68 $26.40 $28.25 $30.22
1" [3] 1.00 $23.50 $24.68 $26.40 $28.25 $30.22
1-1/2" 2.00 $46.12 $49.36 $52.80 $56.50 $60.44
2" 3.20 $73.79 $78.98 $84.48 $90.40 $96.70
2-1/2" 4.80 $110.69 $118.46 $126.72 $135.60 $145.06
3" 6.40 $147.58 $157.95 $168.96 $180.80 $193.41
4" 10.00 $230.60 $246.80 $264.00 $282.50 $302.20
6" 20.00 $461.20 $493.60 $528.00 $565.00 $604.40
1 - Table 12
2 - Table 13. Total number of meter equivalents adjusted down to account for billing data discrepancies. 3 - To provide rate stability, it is proposed that the 1” meter fee remain the same in FY2023/24 and become aligned with the 5/8” fee in FY2024/25

4.2.4 Consumption Rate Derivation
Table 15 calculates the Consumption Rate for all customers based on the total revenue requirement from Table 12 and projected total water consumption. The proposed Consumption Rate is a single uniform tier in which all customer classes are charged the same rate for each unit of water consumption. The proposed FY2023/24 Consumption Fee is $2.41 per ccf.

Packet Pg. 177 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 21
Water and Sewer Utility Rate Study 2023
Table 15: Water Consumption Rate Derivation
City of Gonzales
Water and Sewer Utility Rate Study 2023

PROJECTED - RATE STUDY PERIOD
2023/24 2024/25 2025/26 2026/27 2027/28

CONSUMPTION FEE REVENUE REQUIREMENT
Total Consumption Fee Revenue Requirement [1] $1,820,523 $1,948,279 $2,084,604 $2,230,277 $2,386,077 Total Consumption [2] 755,000 755,000 755,000 755,000 755,000 Proposed Consumption Rate per ccf $2.41 $2.58 $2.76 $2.95 $3.16 % Change 7.1% 7.0% 6.9% 7.1%
1 - Table 12
2 - Estimated consumption reflects delinquencies, water conservation, and meter reading errors from billing in arrears and debt collection

4.2.5 Proposed Water Rates
Table 16 summarizes the proposed monthly water rates for the next five years. All accounts, including residential, commercial, and industrial customers, will be charged according to the proposed rate schedule shown. The first rate change is proposed to take effect on January 1, 2024, with subsequent rate increases each January 1 through 2028.

Packet Pg. 178 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 22
Water and Sewer Utility Rate Study 2023
Table 16: Current and Proposed Water Rates
City of Gonzales
Water and Sewer Utility Rate Study 2023

PROPOSED
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date July 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028

4.3 Water Bill Impacts
For FY2023/24, the proposed 7.0% revenue adjustment in the cash flow does not directly correlate to a

7.0% increase in rates due to the cost of service reallocation and the updated rate structure. Because of the reallocation, the bill impacts to customers for the first year will vary based on customer class, meter size, and actual consumption. Moreover, water consumption, particularly for single family customers, typically varies due to seasonal variations in weather and/or other factors. Hence, a single customer could face a range of impacts throughout the year. Table 17 includes a sample of bill impacts for single family residential customers with a 5/8” meter.

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Water and Sewer Utility Rate Study 2023
Table 17: Sample Single Family Residential Bill Impacts City of Gonzales
Water and Sewer Utility Rate Study 2023
Monthly Proposed
Use
(ccf)
Current
Bill
Jan 1,
2024
Jan 1,
2025
Jan 1,
2026
Jan 1,
2027
Jan 1,
2028
6 ccf
Fixed Meter Charge - 5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22 Consumption Charge 6 $13.62 $14.46 $15.48 $16.56 $17.70 $18.96 Total Monthly Water Bill $35.74 $37.52 $40.16 $42.96 $45.95 $49.18 $ Change $1.78 $2.64 $2.80 $2.99 $3.23
% Change 5.0% 7.0% 7.0% 7.0% 7.0%
12 ccf
Fixed Meter Charge - 5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22 Consumption Charge 12 $27.24 $28.92 $30.96 $33.12 $35.40 $37.92 Total Monthly Water Bill $49.36 $51.98 $55.64 $59.52 $63.65 $68.14 $ Change $2.62 $3.66 $3.88 $4.13 $4.49
% Change 5.3% 7.0% 7.0% 6.9% 7.1%
20 ccf
Fixed Meter Charge - 5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22 Consumption Charge 20 $45.40 $48.20 $51.60 $55.20 $59.00 $63.20 Total Monthly Water Bill $67.52 $71.26 $76.28 $81.60 $87.25 $93.42 $ Change $3.74 $5.02 $5.32 $5.65 $6.17
% Change 5.5% 7.0% 7.0% 6.9% 7.1%
40 ccf
Fixed Meter Charge - 5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22 Consumption Charge 40 $94.10 $96.40 $103.20 $110.40 $118.00 $126.40 Total Monthly Water Bill $116.22 $119.46 $127.88 $136.80 $146.25 $156.62 $ Change $3.24 $8.42 $8.92 $9.45 $10.37
% Change 2.8% 7.0% 7.0% 6.9% 7.1%
55 ccf
Fixed Meter Charge - 5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22 Consumption Charge 55 $134.18 $132.55 $141.90 $151.80 $162.25 $173.80 Total Monthly Water Bill $156.30 $155.61 $166.58 $178.20 $190.50 $204.02 $ Change ($0.69) $10.97 $11.62 $12.30 $13.52
% Change -0.4% 7.0% 7.0% 6.9% 7.1%
Packet Pg. 180 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 24
Water and Sewer Utility Rate Study 2023

4.3.1 Regional Water Bill Survey
The following figure compares the City’s current average monthly single family residential bill with those of surrounding agencies. The typical monthly water use for a single family customer is 12 ccf of water use. The City’s current average water bill is $49.36 per month. With the proposed increase for FY2023/24, the average water bill is projected to be $51.98. The City’s water rates are on the lower end of those charged by surrounding agencies.

Figure 2: Monthly Single Family Residential Water Bill Survey Packet Pg. 181 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 25
Water and Sewer Utility Rate Study 2023

4.4 Drought Rates
Drought rates are only implemented during a water shortage emergency, allowing for financial stability during periods of reduced water sales. During times of water shortages, a water utility has two core objectives: 1) to reduce the amount of water customers consume, and 2) to maintain an adequate amount of revenue to continue operations. The two competing objectives work against each other because as less water is sold, it becomes more difficult to maintain adequate revenue to cover an agency’s costs. It should be noted that under drought conditions, certain expenses will decrease relative to the decrease in water use such as electricity, supplies, and equipment. However, other costs to operate the water system such as staffing and maintaining long-term supply remain the same. The reduction in cost during drought conditions is reflected in the revenue requirements shown in Table 18.

Drought rates are designed to cover costs at decreased levels of consumption. The City recognizes that ratepayers are already doing their part to conserve. Therefore, applying the drought surcharge to only the consumption charge component gives customers the increased ability to control a portion of their water bills. The proposed drought rates would be charged on a temporary basis and would be phased out when the City determines that water supply conditions have returned to normal and droughtrelated costs and revenue reductions have been recovered. Table 18 shows the proposed drought rates for varying levels of reduction in overall consumption.

Table 18: Drought Rates
City of Gonzales
Water and Sewer Utility Rate Study 2023

PROJECTED - RATE STUDY PERIOD
2023/24 2024/25 2025/26 2026/27 2027/28
Drought Rates - 10% Cutback
Total Consumption Fee Revenue Requirement $1,770,938 $1,895,214 $2,027,826 $2,169,532 $2,321,088 Total Estimated Consumption 679,500 679,500 679,500 679,500 679,500 Proposed Consumption Rate per ccf $2.61 $2.79 $2.98 $3.19 $3.42 Drought Rates - 25% Cutback
Total Consumption Fee Revenue Requirement $1,696,560 $1,815,617 $1,942,659 $2,078,413 $2,223,605 Total Estimated Consumption 566,250 566,250 566,250 566,250 566,250 Proposed Consumption Rate per ccf $3.00 $3.21 $3.43 $3.67 $3.93 Drought Rates - 40% Cutback
Total Consumption Fee Revenue Requirement $1,622,183 $1,736,020 $1,857,493 $1,987,295 $2,126,121 Total Estimated Consumption 453,000 453,000 453,000 453,000 453,000 Proposed Consumption Rate per ccf $3.58 $3.83 $4.10 $4.39 $4.69 Packet Pg. 182 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 26
Water and Sewer Utility Rate Study 2023

4.5 Low Income Discount
The City currently offers a discount for seniors on their utility bill. The discount is calculated annually and credited back to the customers. To comply with Proposition 218’s cost of service requirements, it is recommended that the City transition to a low income discount that is offered to all customers.

Moreover, water rate revenues from one group of customers cannot be used to subsidize the rates of another group. Instead, the City can utilize non-rate revenues, such as General Fund revenues, interest earnings, or delinquent penalties to fund a low income discount program. The 2023/24 water budget includes $43,000 in Late Charges which can be used to fund a discount program.

Because non-water rate revenues will be used to pay for the discount, the amount and structure of the low income discount is based on the discretion of the City. The discount program should be reviewed annually by the City to determine whether the water fund has adequate non-rate revenues to fund the program. Additionally, to eliminate the administrative burden of the City developing its own low-income criteria, it is recommended that the City provide assistance to low income residents who meet the criteria of other local assistance programs such as PG&E’s CARE program.

Packet Pg. 183 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 27
Water and Sewer Utility Rate Study 2023
SECTION 5: SEWER REVENUE REQUIREMENT
Similar to the water utility, the sewer utility’s cost of service and revenue requirement is comprised of operating costs, capital improvement costs, and the need to maintain reasonable reserves.

5.1 Sewer System Overview
The City of Gonzales owns, operates, and maintains a wastewater collection system composed of sewer pipelines and associated manholes, five lift stations, forced and gravity fed mains, and a trunk line that runs two miles to the Wastewater Treatment Plant (WWTP). The City’s WWTP has a 1.3 million gallons per day (MGD) capacity and existing flows are approximately 1.2 MGD. Wastewater is collected via a gravity collection system and conveyed to the City’s WWTP.

5.2 Sewer Capital Improvement Plan
Table 19 below provides the sewer capital improvement plan (CIP) for all projects that will be funded through rates rather than impact fees. The CIP includes the construction of a new Industrial Wastewater Reclamation System, rehabilitation of the City’s existing WWTP, and preparation for a new Discharge Permit. This rate study excludes projects funded by impact fees that benefit growth.

The new Industrial Wastewater Reclamation System is an approximately $25 million project which is anticipated to be funded by a State Revolving Fund (SRF) loan from the State Water Resources Control Board. Ratepayers will be responsible for the financing costs related to the annual loan payment. The industrial treatment plant is expected to take three years to complete, beginning this year - FY2023/24.

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Water and Sewer Utility Rate Study 2023
Table 19: Wastewater CIP
City of Gonzales
Water and Sewer Utility Rate Study 2023
2023/24 2024/25 2025/26 2026/27

WASTEWATER TREATMENT
1 Wastewater Treatment Plan Expansion 0 0 0 0
2 Wastewater Rate Study 10,000 0 0 0
3 Wastewater Master Plan 25,000 275,000 0 0
4 Groundwater Monitoring Plan 15,000 0 0 0
5 Install New Groundwater Monitoring Wells at WWTP 125,000 0 0 0 6 Wastewater Treatment Plant Upgrades 80,000 125,000 300,000 300,000 7 Wastewater Treatment Plant Sludge Removal 0 0 0 750,000 8 Replace SCADA/Control System 0 10,000 100,000 0
9 WWTP Process Optimization 25,000 25,000 0 0
10 Renewal of WWTP WDR 20,000 0 0 0
11 Sampling, Analysis and Regulatory Report Plan 14,000 0 0 0 12 Spill Prevention, Emergency Responds and Staff Training Plans 7,500 0 0 0 13 Wastewater Disposal and Sludge Management Plan 14,000 0 0 0 14 WWTP and Collections Staffing Study 5,500 0 0 0
15 Annual Waste Discharge Requirement Fees (WWTP and IWTF) 25,000 27,500 27,500 55,000 16 CUPA Spill Prevention Control and Countermeasures Plan 0 20,000 0 0 17 Climate Change Adoption Plan 0 0 25,000 0
18 Time Schedule Compliance Plan 9,500 0 0 0
Subtotal Wastewater Treatment 376,000 483,000 453,000 1,105,000

COLLECTIONS SYSTEM
1 Industrial Wastewater Pretreatment Program 25,000 0 0 0 2 Update Sewer System Management Plan 10,000 0 0 0
3 Clean and Video Inspect 21" Trunk Sewer (Along Fermin Ln from Alta St to WWTP) 50,000 50,000 0 0 4 Rehabilitate Manholes on 21" Sewer (Along Fermin Ln from Alta St to WWTP) 100,000 100,000 0 0 5 Sewer System Condition Assessment 150,000 180,000 180,000 180,000 Subtotal Collections System 335,000 330,000 180,000 180,000

INDUSTRIAL SYSTEM
1 Industrial Wastewater Reclamation System 8,300,000 12,500,000 3,500,000 0 Subtotal Industrial System 8,300,000 12,500,000 3,500,000 0 TOTAL WASTEWATER CIP $9,011,000 $13,313,000 $4,133,000 $1,285,000 Packet Pg. 185 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 29
Water and Sewer Utility Rate Study 2023

5.3 Sewer Cash Flow Projection
Table 20 provides the sewer cash flow projection for the five-year period beginning in FY2023/24 through FY2027/28.

5.3.1 Proposed Rate Revenue Increases
The proposed revenue increases to sewer service charges are needed to ensure that the sewer fund covers its cost of service over the next five years. FY2023/24 through FY2025/26, it is proposed that rate revenues increase 20% each year. FY2026/27 and FY2027/28, annual rate increases of 6% are proposed.

The primary driver for rate increases is meeting the reserve requirements and required debt service coverage ratio for the SRF loan the City secured to finance the construction of the new Industrial Wastewater Reclamation System.

5.3.2 Sewer Revenues and Expenses
The vast majority of operating revenues are service charge (rate) revenues, though the sewer fund also has non-rate revenue sources such as late charges and miscellaneous payments. Major operating expenses include salaries and benefits, utilities, and outside services. Operating expenses in future years were projected by City staff based on anticipated inflationary increases to existing costs as well as new expenses. Projected new expenses during the rate study period include two additional WWTP Operators in FY2025/26 and FY2026/27 and annual costs for chemicals beginning in FY2024/25.

5.3.3 Debt Service and SRF Loan Requirements
The sewer fund has a current reserve balance of $1.2 million. The only current debt against the sewer fund is the 2005 Bond for improvements at the City’s Wastewater Treatment Plant (new grinders, larger capacity pumps, new aerators, and new piping from the headworks to the treatment ponds). This bond will be paid off as of December 30, 2025 and is shown in the cash flow as an annual transfer to the water fund. Adequate fund reserves protect the City when faced with unforeseen financial challenges such as emergency expenses or revenue deficits. Moreover, fund reserves allow the City to maintain its financial health and positive credit ratings. The SRF loan will require the City to maintain a reserve equal to one annual debt service payment, at minimum. It is anticipated that the City will build up the debt service reserve over the next four years from rate revenues. It is anticipated that debt repayment will begin one year after construction is complete. The recommended reserve target is 25 percent of annual operating costs plus one debt service payment. Maintaining at least 25% of annual operating costs in reserves is in line with industry standards that recommend an operating reserve target to account for the time (at least 4 months) that it would take an agency to approve new rate increases to comply with Proposition 218.

It is also imperative that the sewer fund generate sufficient rate revenues to maintain the debt service coverage ratio required for the SRF loan. A debt service coverage ratio is a financial measure of an agency’s ability to repay outstanding debt. For the purposes of the SRF loan, the required debt service coverage ratio means that annual sewer net operating revenues must be at least 1.2 times the annual debt service payment. Failure to meet the debt service ratio on an annual basis is considered to be technical default. Thus, rates and fees must be set to meet this legal requirement.

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Water and Sewer Utility Rate Study 2023
Table 20: Sewer Cash Flow Projection
City of Gonzales
Water and Sewer Utility Rate Study 2023
Years 1 -5: Proposition 218
2023/24 2024/25 2025/26 2026/27 2027/28
Overall Revenue Adjustment 20.0% 20.0% 20.0% 6.0% 6.0%
Rate Increase Effective Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 BEGINNING FUND BALANCE [1] $1,186,000 $1,044,000 $1,436,000 $2,095,000 $992,000

REVENUES
Operating Revenues
Sewer Service Revenues [2] 2,011,000 2,413,000 2,895,000 3,294,000 3,492,000 Interest Income 3,000 3,000 3,000 3,000 3,000
Late Charges 45,000 45,000 45,000 45,000 45,000
Other Income - Misc Payments 16,000 16,000 16,000 16,000 16,000 Subtotal Operating Revenues 2,075,000 2,477,000 2,959,000 3,358,000 3,556,000 Debt Proceeds 8,300,000 12,500,000 3,500,000 0 0
Grants 25,000 275,000 0 0 0
Total Revenues 10,400,000 15,252,000 6,459,000 3,358,000 3,556,000

EXPENSES
Operating Expenses [3]
Salaries and Benefits 412,000 491,000 620,000 750,000 768,000 Administrative Expenses 98,000 71,000 75,000 79,000 82,000 Supplies and Equipment 45,000 85,000 95,000 105,000 115,000 Outside Services 225,000 207,000 238,000 257,000 273,000 Chemicals 0 25,000 25,000 25,000 25,000
Utilities 160,000 107,000 113,000 189,000 203,000
Transfers Out to Water 60,000 60,000 30,000 0 0
Transfers Out to Solar 121,000 121,000 121,000 121,000 121,000 Subtotal O&M 1,121,000 1,167,000 1,317,000 1,526,000 1,587,000 Net Operating Revenues 954,000 1,310,000 1,642,000 1,832,000 1,969,000 Debt Service
SRF Loan 0 0 0 1,250,000 1,250,000
Capital Projects
Outlay & Vehicles 50,000 50,000 50,000 50,000 50,000
Wastewater Treatment 376,000 483,000 453,000 1,105,000 0 Collections System 335,000 330,000 180,000 180,000 0
Industrial System 8,300,000 12,500,000 3,500,000 0 0
Working Capital/Bridge Financing 60,000 30,000 0 0 0
Debt Service Reserve 300,000 300,000 300,000 350,000 0
Subtotal Capital Projects 9,421,000 13,693,000 4,483,000 1,685,000 50,000 Total Expenses 10,542,000 14,860,000 5,800,000 4,461,000 2,887,000 Total Net Revenues (142,000) 392,000 659,000 (1,103,000) 669,000 ENDING FUND BALANCE 1,044,000 1,436,000 2,095,000 992,000 1,661,000 Operating Reserve Target [4] 280,300 291,800 329,300 1,631,500 1,646,800 Operating Reserve Target Met? yes yes yes no yes
SRF Debt Service Coverage (Target - 1.2x) [5] 1.47 1.58 Target Met? yes yes
1 - Estimated 07/01/2023 fund balance from 2023/24 Budget 2 - Revenues adjusted for Jan 1 implementation date
3 - 2023/24 Expenses from 2023/24 adopted Budget. 2024/25 onwards, operating expenses projected by City staff 4 - 25% of O&M plus debt service payment beginning in 2025/26 5 - Net operating revenues divided by total debt service Packet Pg. 187 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 31
Water and Sewer Utility Rate Study 2023
SECTION 6: SEWER COST ALLOCATION AND RATE DESIGN
The revenue requirements detailed in the previous section determine the amount of revenue to be recovered from sewer rates. The cost of service allocation determines how revenues will be recovered from customers based on their estimated impact on the sewer system. Proposition 218 requires that agencies providing “property-related services” (including sewer service) set rates and charges that are based on the cost of providing those services.

6.1 Sewer Cost Allocation
The determination of the sewer flows, sewer loadings, and the revenue requirements of the sewer utility provide the basis for performing the cost of service analysis. The concept of proportionate allocation to each customer class indicates that allocations should take into consideration the quantity of effluent a customer contributes in addition to the strength of sewer effluent.

The key factors used to assign sewer utility costs are estimated effluent (flow) going to the wastewater treatment plant and effluent strengths, measured in biochemical oxygen demand (BOD) and total suspended solids (TSS). Higher levels of BOD or TSS typically equate to increased treatment costs. The total revenue requirement shown in the sewer cash flow projection is the net cost of providing service and is allocated to the flow, BOD, and TSS parameters. These allocations are then used as the basis to develop unit rates for the sewer parameters and to assign costs to each customer class in proportion to the sewer services rendered.

Using the FY2023/24 budget as the base year, sewer expenses are allocated to the following categories (a) Customer Service, (b) Flow, (c) Biochemical Oxygen Demand (BOD), and (d) Total Suspended Solids (TSS).
 Customer Service Costs: Base costs represent the fixed expenditures of the sewer utility, including personnel costs and overhead expenses. These fixed costs are allocated based on the total number of sewer accounts or meters.
 Flow Costs: Volume- or flow-related costs that vary with the total quantity of wastewater collected. Because most agencies do not meter wastewater discharges, metered water consumption is used to estimate contributed average wastewater volume units of service.  Strength Costs: Strength-related costs are those expenditures associated with the additional handling and treatment of high strength sewer. Sewer strength is typically measured in BOD and TSS. Increased levels of BOD or TSS typically equate to increased treatment costs.

Table 21 provides the proposed cost allocation. The budgeted expenses were allocated to each category based on how the City incurs each cost. The overall proposed allocation is 11.2% to customer service,

49.6% to flow, 19.6% to BOD, and 19.6% to TSS.

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6.2 Sewer Rate Design
The cost of service analysis calculated the revenue requirements for each customer class. The next step is rate design which determines how those revenue requirements are collected from each class based on their estimated impact on the sewer system.

As part of the rate study process, the City reviewed its current rate structure and potential alternative rate structures. Sewer rates in California are typically charged as either a fixed charge per equivalent dwelling unit (EDU), a volume rate charged per unit of wastewater flow, or as a combination of both fixed and volume rates. Ultimately, this study recommends maintaining the current rate structure. The categories of charges and customer classes are proposed to remain the same, but the amounts charged to each customer will change each year. For residential customers, fixed sewer charges provide revenue stability, are easy for customers to understand and are straightforward to bill. Because sewer flow is not individually metered for non-industrial customers (only water service is), the sewer flow of each customer is not readily apparent and thus fixed charges are appropriate.

Table 21: Sewer Cost Allocation
City of Gonzales
Water and Sewer Utility Rate Study 2023
2023/24 Expense
Customer
Service Flow BOD TSS
Salaries and Benefits $412,000 15.0% 42.5% 21.3% 21.3%
Administrative Expenses $98,000 100.0% 0.0% 0.0% 0.0%
Supplies and Equipment $45,000 0.0% 50.0% 25.0% 25.0%
Outside Services $225,000 10.0% 45.0% 22.5% 22.5%
Chemicals $0 0.0% 0.0% 50.0% 50.0%
Utilities $160,000 0.0% 80.0% 10.0% 10.0%
Operating Costs $940,000 $182,300 $426,850 $165,425 $165,425

19.4% 45.4% 17.6% 17.6%
Transfers Out to Water $60,000 0.0% 50.0% 25.0% 25.0%
Transfers Out to Solar $121,000 0.0% 80.0% 10.0% 10.0%
$181,000 $0 $126,800 $27,100 $27,100
5-Year Average Debt Service $500,000 0.0% 50.0% 25.0% 25.0% Total Expenses $1,621,000 $182,300 $803,650 $317,525 $317,525 Proposed Cost Allocation % $100.0% 11.2% 49.6% 19.6% 19.6% Packet Pg. 189 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 33
Water and Sewer Utility Rate Study 2023

6.3 Sewer Flows
Total system flows and pollutant loads are estimated in Table 22. The average residential sewer flow is estimated as 205 gallons per day (gpd) for a single family home. 205 gpd is equivalent to 8.336 ccf per month. Total annual residential flows are estimated based on the number of residential accounts multiplied by 8.336 ccf less the 3 percent vacancy rate noted in the City’s 2019 Wastewater Master Plan prepared by Kimley Horn. Total flows for other customer classes are estimated based on data from the WWTP as well as water use data from 2021. Pollutant loads consist of biochemical oxygen demand (BOD) and total suspended solids (TSS). The strength factors and sewer loadings are based on data from the City’s WWTP.

Table 22: Flow and Loading
City of Gonzales
Water and Sewer Utility Rate Study 2023
Customer Class Total ADF (gallons) BOD (mg/L) TSS (mg/L) BOD
(lbs/yr)
TSS
(lbs/yr)
Residential 354,947 30% 299 163 323,068 176,121
Commercial 63,905 5% 299 163 58,165 31,709
Industrial 775,000 65% 299 163 705,394 384,546
Schools 6,148 1% 299 163 5,596 3,051
Total 1,200,000 99% 1,092,223 595,426

6.4 Rate Derivation
As noted in the cost allocation section, sewer rates are determined based on customer service costs as well as the amount of wastewater flow and pollutants flushed into the sewer system.

Total flow and pollutant loading estimates are used to derive unit costs for customer service, flow, BOD, and TSS as shown below in Table 23. The total revenue requirement to be collected from rates is divided between each category according to the percentages derived in the cost allocation (Table 21). The revenue requirement for each category is then divided by the number of billing units to calculate a unit charge.

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It is proposed that customer service costs be recovered through a fixed portion of the monthly bill that is applied to all customer classes. For commercial and industrial customers, the flow, BOD, and TSS costs are proposed to be recovered through a monthly volume rate per ccf similar to the current rate structure. For residential customers, a monthly flow charge is estimated based on existing average daily flows and added to the customer service portion of the bill to calculate a proposed fixed monthly charge, see Table 24. Schools are proposed to continue to be charged a fixed rate based on average daily attendance.

Table 24: Total Sewer Charges
City of Gonzales
Water and Sewer Utility Rate Study 2023
Customer Class Flow BOD TSS Total Cost per ccf
Residential $1.89 $0.7474 $0.7473 $3.39
Commercial $1.89 $0.7474 $0.7473 $3.39
Industrial $1.89 $0.7474 $0.7473 $3.39
Estimated
Monthly Flow
(ccf)
Flow
Charge
($/ccf)
Total Flow
Charge
Customer
Service
Fee
Total
Monthly
Charge
Residential 8.336 x $3.39 $28.26 $10.57 $38.83
Table 23: Unit Cost Calculation
City of Gonzales
Water and Sewer Utility Rate Study 2023
Cost Allocation Total Cust. Serv. Flow BOD TSS
Cost Allocation % 11.2% 49.6% 19.6% 19.6%
FY2023 Revenue Req [1] $2,234,000 $251,200 $1,107,600 $437,600 $437,600 Billing Units 1,980 585,561 1,092,223 595,426
# of accounts ccf/year lbs/year lbs/year
Rate $10.57 $1.8915 $0.4007 $0.7349
$/month $/ccf $/lb $/lb
1 - 12 months of revenue with proposed rate increases
Packet Pg. 191 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 35
Water and Sewer Utility Rate Study 2023
Current and proposed rates are provided below in Table 25. The proposed rates maintain the current rate structure. The table also provides the percentage change in each rate category for each year. The first year, the percentage change for each customer does not align with the percentage increase shown in the cash flow due to the reconfiguration of the cost allocation and the unit cost components used to calculate the rates. Following the first year, each customer’s monthly rate will increase as shown in the cash flow projection (Table 20).

Table 25: Current and Proposed Monthly Sewer Rates
City of Gonzales
Water and Sewer Utility Rate Study 2023
Proposed
Fixed Charge
($/account)
2023/24 2024/25 2025/26 2026/27 2027/28
Current Jan 1, 2024 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Residential $31.77 $38.83 22.2% $46.60 20.0% $55.92 20.0% $59.28 6.0% $62.84 6.0% Commercial $15.18 $10.57 -30% $12.68 20.0% $15.22 20.0% $16.13 6.0% $17.10 6.0% Industrial $312.62 $10.57 -97% $12.68 20.0% $15.22 20.0% $16.13 6.0% $17.10 6.0% Schools $0.91 $1.04 14% $1.24 20.0% $1.49 20.0% $1.58 6.0% $1.67 6.0% Commercial & Industrial Volume Rate ($/ccf)
(in addition to
fixed charge) $2.40 $3.39 41% $4.06 20.0% $4.87 20.0% $5.16 6.0% $5.47 6.0% Packet Pg. 192 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 36
Water and Sewer Utility Rate Study 2023
Table 26 calculates the estimated annual sewer rate revenues the City would realize if the proposed 2023/24 rates from Table 25 were billed for 12 months. Estimated annual revenues under the existing rates are also provided for comparison. Compared with the current rates, the proposed rates would generate a larger percentage of total revenues from volume rate revenues from commercial and industrial customers. However, the total percentage of revenues generated from each customer class would remain roughly equal to the existing rate structure.

Table 26: Proposed Sewer Rate Revenue - January 1, 2024 Rates if billed 12 months City of Gonzales
Water and Sewer Utility Rate Study 2023
Proposed July 1, 2023 Rates
Customer
Class
# of
Accounts
Fixed
Monthly Fee
Fixed Annual
Revenues
% of
Total
Fixed Annual
Revenues % of Total
Residential 1,785 $38.83 $831,727 $680,513
Commercial 155 $10.57 $19,660 $28,235
Industrial 40 $10.57 $5,074 $150,058
1,980 $856,460 37.8% $858,806 46.1%
Customer
Class Flow GPD
Flow
CCF/year
Volume Rate Revenues
($3.33/ccf)
Residential 354,947 173,203 NA NA
Commercial 63,905 31,183 $105,594 $74,840
Industrial 775,000 378,175 $1,280,577 $907,620
1,193,852 582,561 $1,386,170 61.2% $982,461 52.8%
Fee per
Student
Schools 23,107 $1.04 $23,957 1.1% $21,028 1.1%
Students ADA Annualized
Total Rate Revenue $2,266,587 100.0% $1,862,294 100.0%
Total Revenue by Customer Class
Residential $831,727 36.7% $680,513 36.5%
Commercial $125,254 5.5% $103,075 5.5%
Industrial $1,285,650 56.7% $1,057,678 56.8%
Schools $23,957 1.1% $21,028 1.1%
$2,266,587 100.0% $1,862,294 100.0%
Packet Pg. 193 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 37
Water and Sewer Utility Rate Study 2023

6.5 Sewer Bill Impacts
Due to the updated cost of service allocation, the bill impacts to customers for the first year will vary based on customer class.

6.5.1 Residential Bill Impacts
Residential customers are proposed to have a bill increase from $31.77 per month to $38.83 per month, as shown in Figure 3. Figure 3 also shows the current monthly sewer bills of other local agencies. Despite the bill increase, the City’s monthly sewer rates would remain low compared to the surveyed agencies.

Figure 3: Monthly Single Family Residential Sewer Bill Survey

6.5.2 Commercial Bill Impacts
For FY2023/24, the bill impacts for commercial customers will depend on actual consumption. Table 27 includes a sample of commercial sewer bill impacts at different levels of monthly water use. Higher water users will have larger increases in their FY2023/24 monthly bills.

Packet Pg. 194 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) City of Gonzales Page 38
Water and Sewer Utility Rate Study 2023
Table 27: Sample Monthly Commercial Sewer Bill Impacts
City of Gonzales
Water and Sewer Utility Rate Study 2023
Monthly Current Proposed
Flow
(ccf) Bill
Jan 1,
2024
Jan 1,
2025
Jan 1,
2026
Jan 1,
2027
Jan 1,
2028
Commercial - 10 ccf
Flat Rate $14.41 $10.57 $12.68 $15.22 $16.13 $17.10
Volume Rate 10 $24.00 $33.86 $40.60 $48.70 $51.60 $54.70 Total Monthly Sewer Bill $38.41 $44.43 $53.28 $63.92 $67.73 $71.80 $ Change $6.02 $8.85 $10.64 $3.81 $4.07
% Change 15.7% 19.9% 20.0% 6.0% 6.0%
Commercial - 25 ccf
Flat Rate $14.41 $10.57 $12.68 $15.22 $16.13 $17.10
Volume Rate 25 $60.00 $84.66 $101.50 $121.75 $129.00 $136.75 Total Monthly Sewer Bill $74.41 $95.23 $114.18 $136.97 $145.13 $153.85 $ Change $20.82 $18.96 $22.79 $8.16 $8.72
% Change 28.0% 19.9% 20.0% 6.0% 6.0%
Commercial - 50 ccf
Flat Rate $14.41 $10.57 $12.68 $15.22 $16.13 $17.10
Volume Rate 50 $120.00 $169.31 $203.00 $243.50 $258.00 $273.50 Total Monthly Sewer Bill $134.41 $179.88 $215.68 $258.72 $274.13 $290.60 $ Change $45.47 $35.80 $43.04 $15.41 $16.47
% Change 33.8% 19.9% 20.0% 6.0% 6.0%
Commercial - 80 ccf
Flat Rate $14.41 $10.57 $12.68 $15.22 $16.13 $17.10
Volume Rate 80 $192.00 $270.90 $324.80 $389.60 $412.80 $437.60 Total Monthly Sewer Bill $206.41 $281.47 $337.48 $404.82 $428.93 $454.70 $ Change $75.06 $56.01 $67.34 $24.11 $25.77
% Change 36.4% 19.9% 20.0% 6.0% 6.0%
Packet Pg. 195 Attachment: Draft Water/Sewer Rate Study (2814 : Update on Water/Sewer Rate Study) 1 City of Gonzales
Utility Billing
PO Box 647
Gonzales, CA 93926
Customer Name
Address
City, State ZIP

NOTICE OF PUBLIC HEARING ON PROPOSED WATER AND SEWER RATE INCREASES Hearing Date & Time: November 20, 2023 at 6:00PM
Hearing Location:

City Council Chambers
117 Fourth Street
Gonzales, CA 93926
September 27, 2023
Dear Customer or Property Owner,
You are receiving this notice because you are either a utility customer or you own property receiving services of the City of Gonzales (City). The City Council will hold a public majority protest hearing on November 20, 2023, at 6:00PM at 117 Fourth St, Gonzales, CA 93926 to consider increases in the water and sewer rates, effective January 1, 2024. At the hearing, the City Council will review the amount of the proposed rates as well as the methodology used to calculate the rates. If the proposed maximum rates are adopted, the City may collect rates at or below the proposed maximum as needed to meet the City’s financial needs over the next five years.

In compliance with article XIII D of the California Constitution, which was added to the Constitution pursuant to Proposition 218, this notice provides you with information regarding the services provided by the City, the reasons for the changes in the water and sewerservice rates, and the methods by which you can protest this rate increase if you so desire.

System Overview
The City provides water and sewer services to approximately 2,000 accounts including homes, businesses, and industrial facilities. The current water and sewer rates are adjusted each year based on the Consumer Price Index.

July 1, 2023, rates for both utilities were increased 5.3%. Though rates are adjusted annually, the City has not reviewed its underlying water and sewer rate structures in many years. The last formal rate review was conducted in 1986 for water and 1990 for wastewater.

Current Water and Sewer Rates
Water and sewer rates are billed monthly. For water service, customers are billed a flat charge according to the size of their meter as well as a volume rate based on metered water usage. One volumetric unit is equivalent to 100 cubic feet (ccf), which equates to 748 gallons. Residential and commercial customers have tiered volume rates, where the cost per unit of water increases as more water is used. Industrial customers pay a uniform volume rate that is the same rate at all levels of use. For sewer service, residential customers are billed a flat charge per Packet Pg. 196 Attachment: Proposition 218 Notice to Property Owners and Utility Customers (2814 : Update on Water/Sewer Rate Study) 2 account. Commercial and industrial customers are billed both a flat charge and a volume rate per ccf. Schools are billed annually based on a flat charge per student (measured using average daily attendance).

Why are rate adjustments needed?
The City relies on rate revenues to fund safe and reliable water and sewer service. The City’s water and sewer funds are currently in good financial position and operating with positive net revenues. However, both systems have aging infrastructure which requires upgrades to support existing residences and businesses as well as meet planned community growth. The City recently adopted updated Water and Sewer Capital Improvement Programs (CIP) which determined a schedule of planned projects for both the water and sewer systems. Project costs are a primary input to calculate the new rates. For the sewer system, the projects are much more extensive due to the need to construct a new Industrial Wastewater Treatment Plant and rehabilitate the existing Wastewater Treatment Plant.

Proposed Rates and Rate Structure Adjustments
The proposed rates are designed to cover the costs of planned capital projects and operating and maintenance expenses. The proposed rate structure adjustments are designed to bring the City’s rate structures into compliance with Proposition 218. It is proposed that the City update the water rate structure by increasing the fixed charges for larger meter sizes and eliminating the tiered volume rates. The vast majority of residential water use is within the first tier (about 90%). Fixed meter charges are proposed to be updated to reflect the maximum capacity of each meter size. This is in line with industry standard practice and is the policy of most other local utility providers. Table 1 provides the water rates proposed to become effective January 1, 2024. If the rate plan is approved, the City may increase the rates annually each January 1 through 2028 as shown in the table.

Table 1: Current and Proposed Monthly Water Rates

PROPOSED
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date July 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028

FIXED METER CHARGE
Meter Size
5/8" $22.12 $23.06 $24.68 $26.40 $28.25 $30.22
1" $23.50 $23.50 $24.68 $26.40 $28.25 $30.22
1-1/2" $24.86 $46.12 $49.36 $52.80 $56.50 $60.44
2" $26.26 $73.79 $78.98 $84.48 $90.40 $96.70
2-1/2" $27.28 $110.69 $118.46 $126.72 $135.60 $145.06
3" $29.12 $147.58 $157.95 $168.96 $180.80 $193.41
4" $30.53 $230.60 $246.80 $264.00 $282.50 $302.20
6" $31.94 $461.20 $493.60 $528.00 $565.00 $604.40
VOLUME RATES ($/ccf)
Residential/Commercial
0 - 25 ccf $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
26 - 30 ccf $2.35 $2.41 $2.58 $2.76 $2.95 $3.16
31 - 49 ccf $2.56 $2.41 $2.58 $2.76 $2.95 $3.16
50+ ccf $2.84 $2.41 $2.58 $2.76 $2.95 $3.16
Industrial
All use $2.27 $2.41 $2.58 $2.76 $2.95 $3.16
Packet Pg. 197 Attachment: Proposition 218 Notice to Property Owners and Utility Customers (2814 : Update on Water/Sewer Rate Study) 3 The proposed water rates also include a schedule of drought rates, which would only be implemented during a water shortage emergency. The City does not currently have a schedule of drought rates. Under drought conditions, the meter charges would remain the same, but the volume rate would increase according to the level of water cutback, as shown in Table 2.

Table 2: Proposed Drought Rates

PROPOSED
Fiscal Year 2023/24 2024/25 2025/26 2026/27 2027/28
Effective Date Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 VOLUME RATES ($/ccf for all customers at all levels of use) Normal Water Year $2.41 $2.58 $2.76 $2.95 $3.16
10% Water Cutback $2.61 $2.79 $2.98 $3.19 $3.42
25% Water Cutback $3.00 $3.21 $3.43 $3.67 $3.93
40% Water Cutback $3.58 $3.83 $4.10 $4.39 $4.69
Current and proposed sewer rates are provided in Table 3. Sewer rates are determined based on customer service costs as well as the amount of wastewater flow and pollutants flushed into the sewer system. It is proposed that the customer service costs be recovered through a fixed portion of the monthly bill that is applied to all customer classes. For commercial and industrial customers, the flow charge is proposed to be recovered through a monthly volume rate per ccf similar to the current rate structure. For residential customers, a flow charge is estimated based on existing average daily flows and added to the customer service portion of the bill to calculate a proposed fixed monthly charge. Schools are proposed to continue to be charged a fixed rate based on students’ average daily attendance.

Table 3: Current and Proposed Monthly Sewer Rates

PROPOSED
Fiscal Year Current 2023/24 2024/25 2025/26 2026/27 2027/28 Effective Date July 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 FIXED CHARGE PER MONTH ($/account)
Residential $31.77 $38.83 $46.60 $55.92 $59.28 $62.84
Commercial $15.18 $10.57 $12.68 $15.22 $16.13 $17.10
Industrial $312.62 $10.57 $12.68 $15.22 $16.13 $17.10
Schools $0.91 $1.04 $1.24 $1.49 $1.58 $1.67
COMMERCIAL & INDUSTRIAL VOLUME RATE ($/ccf) (in addition to fixed charge) $/ccf $2.40 $3.39 $4.06 $4.87 $5.16 $5.47
Note: Schools are billed annually rather than monthly based on reported average daily attendance (ADA) Packet Pg. 198 Attachment: Proposition 218 Notice to Property Owners and Utility Customers (2814 : Update on Water/Sewer Rate Study) 4 How do I file a protest or participate in the public hearing? The provisions of Proposition 218 provide that certain types of “Property Related Fees” such as water and sewer rates are subject to a “majority protest” process. Under the majority protest process, any property owner or customer of record may submit a written protest for the proposed increases; provided, however, that only one protest will be counted per identified parcel. If protests are filed on behalf of a majority of the parcels subject to the rates, the City cannot adopt the proposed rates.

Every written protest MUST include ALL of the following to be counted:

1. A statement against the proposed water rates, sewer rates, or both the water and sewer rates;

2. Name of the recorded owner or customer of record who is submitting the protest;

3. Identification of assessor’s parcel number, street address, or utility account number of the parcel with respect to which the protest is made; and

4. Original signature and legibly printed name of the record owner or customer of record who is submitting the protest.

Written protests may be submitted by:

1. Mail to - Prop 218 Protest, P.O. Box 647, Gonzales, CA 93926; or

2. In-person delivery during normal business hours to 147 Fourth Street, Gonzales, CA 93926; or

3. In-person at the Public Hearing, prior to the conclusion of the Public Hearing.

Regardless of how the written protest is submitted, it must be received by the City prior to the conclusion of the public comment portion of the Public Hearing on November 20, 2023. (Postmark dates will not be accepted.) Any protest submitted via e‐mail or other electronic means will not be accepted. Please identify on the front of the envelope for any written protest, whether mailed or submitted in person to the City, that the enclosed protest is for the Public Hearing on the Proposed Water and Sewer Rate Increases. Oral comments at the Public Hearing will not qualify as formal protests unless accompanied by a written protest.

The City will hold the Public Hearing on November 20, 2023 at 6pm. The City Council will review the amount of the rates as well as the methodology for calculating the proposed rates. At the conclusion of the hearing, protests will be counted and validated. If protests are filed on behalf of a majority of the parcels subject to the rates before the end of the Public Hearing, the City cannot adopt the proposed rates. If a majority of the parcels do not protest the proposed increase, the City has the authority to adopt the proposed rates. The first rate change, if enacted, will go into effect on or after January 1, 2024.

Additionally, pursuant to California Government Code 53759, there is a 120-day statute of limitations for challenging any new, increased, or extended fee, adopted, modified, or amended after January 1, 2022.

Packet Pg. 199 Attachment: Proposition 218 Notice to Property Owners and Utility Customers (2814 : Update on Water/Sewer Rate Study) City of Gonzales

PUBLIC WORKS / CITY ENGINEER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 18, 2023
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution 2023-60 Award Construction Management/Inspection Contract for Community Center Project

RECOMMENDATION
It is recommended that the City Council Adopt Resolution No. 2023-60, A Resolution of the City Council of the City of Gonzales authorizing execution of a Master Services Agreement with Harris Associates to provide Project and Construction Management Services for the Community Center Complex Project for an initial fee of $500,000 for services through June 30, 2024 under Task Order 1.

BACKGROUND
As the Council is aware, the Community Center Complex will be built on city-owned property at Fifth Street/Gabilan Court. Over the last two and a half years, the City Council has taken various actions to advance the design and construction of this very significant project including approving a contract with the Design/Built team of Otto Construction/WRNS Studio at the June 5, 2023 Council meeting.

Phase 1 of the project will be the Teen Innovation Center, County Library, meeting rooms, restrooms, courtyard including amphitheater and site improvements (new driveway, wet/dry utilities, parking lot and landscaping). Phase 2 is the Community Center including the Community Hall, Fitness Center, commercial kitchen, meeting rooms and restrooms.

Staff provided a progress report at the August 21,2023 Council meeting and a follow-up report at the September 5, 2023 Council Meeting.

AGENDA
ITEM
17 Packet Pg. 200

REVIEW & ANALYSIS
As the Community Center Complex project advances toward construction, staff felt it was appropriate to issue a Request for Proposal (RFP) for Project/Construction Management (PM/CM) Services to seek the best firm to provide these services on this very large and significant civic project.

The RFP for PM/CM Services was issued on June 15, 2023. A preproposal meeting with interested consultants was held on June 29, 2023. By the July 13, 2023 deadline, proposals were received from two consultants (Harris Associates and Ausonio). Swinerton (current PM/CM consultant) did not submit a proposal due to lack of local staff.

Staff reviewed the two proposals and both firms were interviewed on July 25, 2023. The interview panel was made up of the following individuals:
• Patrick Dobbins, Gonzales Public Works Director/City Engineer • Mike Howard, Gonzales Finance Director
• Don Wilcox, City of Soledad Public Works Director
Consultants were provided 25 minutes to make a presentation on their qualifications, experience, and approach for the project. Then the panel asked ten questions of each consultant team. After concluding the interviews, the panel was unanimous that Harris Associates scored the best of the two teams.

Harris Associates was the higher ranked firm for several reasons including:
• City staff ranked Harris Associates’ proposal as the better of the two submitted proposals. • Their team members have long resumes of PM/CM services on a variety of public agency building projects.
• Harris Associates staff is based in their Salinas office.

Harris Associates scope of work will include:

1. Project Management
a. Provide and manage web-based document management system. b. Run internal coordination meetings (PM/CM staff and city staff) c. Arrange and chair DBE progress meetings.
d. Track detailed action items (item status, ball-in-court, due date, etc.) e. Utility provider coordination
f. Monitor design process including verify conformity to the Design Criteria Documents g. Support the city’s Community Engagement efforts:
i. Make presentations to the City Council and other city boards. ii. Participate in periodic Community Townhall meetings. iii. Bilingual staff person (English/Spanish) for written materials and Townhall meetings
h. Update project schedule.
i. Monitor all expenditures and track various city monies and outside funding sources.

Includes managing cash flow for various expenses.
j. Grant management.
k. Ensure compliance with grant requirements including reporting. l. Include monthly status reports with invoice.
m. Collaborate with DBE team on value engineering.
n. Review construction documents for quality assurance and quality control Packet Pg. 201
o. Coordinate Building Code Review between DBE Team and City’s building services consultant (4Leaf)

2. Construction Management/Inspection
a. Review and monitor RFIs and process submittals for conformance to design criteria documents
b. Review DBE’s schedule updates.
c. Track contract time
d. Coordinate Building inspections between DBE Team and City’s building services consultant
e. Perform Site Civil inspections.
f. Coordinate specialty inspections
g. Labor compliance monitoring including Davis-Bacon wages and benefits. h. Review and certify contractor progress payments.
i. Prepare and/or review change orders or construction change directives. j. Participate in punch walks of building and site.
k. Inspect for substantial and final completion.
l. Authorize minor changes that do not affect contract time or price. m. Arrange for commissioning of completed buildings.
n. Close-out project including preparation for grant funding audits and obtain copies of O&M manuals and warranties.
o. Recommend project acceptance.

Swinerton’s PM/CM services will be wrapped by November 30, 2023 so Harris Associates will have 30 to 45 days of overlap with the Swinerton Project Executive to get “up to speed” on the Community Center Complex Project.

City staff reviewed the attached fee estimate from Harris Associates and staff recommends that the City Council authorize execution of a Master Services Agreement for Project/Construction Management services on the Community Center Complex Project at an estimated fee of $452,876, and establish a contingency budget of $47,124 for a total authorization of $500,000 for services through June 2024, under Task Order 1. Subsequent Task Orders to extend their services through FY 2023-2024 and FY 2024- 2025 will be presented for City Council approval.

Explain: Constructing a Community Center will provide residents with a facility for various public functions, arts & recreation programs for all ages, private events, and other activities which will enhance the quality of life of Gonzales residents and visitors.

City services will be delivered in a cost-effective, respectful and friendly manner to insure the safety and well being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Packet Pg. 202
Explain: See Vision explanation above.

ALTERNATIVES

1. Direct staff to seek additional proposals for this contract.

2. Do not authorize the use of a consultant to provide Project/Construction Management services on the Community Center Project.

3. Amend or modify staff recommendation.

BUDGET IMPACT
Harris Associates contract will be funded by Measure X and other monies that will make up the funding for the Community Center Complex Project (Budget Fund 112).

CONCLUSIONS
It is recommended that the City Council Adopt Resolution No. 2023-60, A Resolution of the City Council of the City of Gonzales authorizing execution of a Master Services Agreement with Harris Associates to provide Project and Construction Management Services for the Community Center Complex Project for an initial fee of $500,000 for services through June 30, 2024 under Task Order 1.

Attachments:

1. Resolution 2023-60

2. RFP for Project/Construction Management Services

3. Harris Associates Fee Estimate for Program/CM Services for October 2023-February 2025

4. Master Services Agreement with Harris Associates
Packet Pg. 203
RESOLUTION NO. 2023-60

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES

AUTHORIZING EXECUTION OF A MASTER SERVICES AGREEMENT WITH HARRIS

ASSOCIATES TO PROVIDE PROJECT AND CONSTRUCTION MANAGEMENT SERVICES FOR THE COMMUNITY CENTER COMPLEX PROJECT FOR AN INITIAL FEE OF $500,000 FOR SERVICES THROUGH JUNE 30, 2024 UNDER TASK ORDER 1
WHEREAS, design and construction of the Community Center Complex Project will be funded by a variety of sources including the Measure X (local sales tax), $5.0 M State grant secured by State Senator Anna Caballero, Community Development Block Grant monies, $1.8M County contribution to relocate existing library from the Gonzales Shopping Center, various grants, and a Capital Campaign with a $10 million goal; and
WHEREAS, as authorized by the City Council at the March 1, 2021 meeting, the City will use the Design-Build contracting approach to deliver this project; and WHEREAS, a Request for Proposals for Project/Construction Management services was issued on June 15, 2023 to various consultants; and
WHEREAS, on July 13, 2023, proposals were received from two consultants, and City staff interviewed the two teams on July 25, 2023. The interview panel scored Harris Associates as the top firm based on their proposal and interview; and
WHEREAS, City staff recommends execution of a Master Services Agreement with Harris Associates to provide Project/Construction Management services on the Community Center Complex Project at an estimated fee of $452,876, and establish a contingency budget of $47,124 for a total of $500,000 for services through June 2024 under Task Order 1.

NOW THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Gonzales that the City Manager is authorized to execute a Master Services Agreement with Harris Associates to provide Project/Construction Management services on the Community Center Complex Project at an estimated fee of $452,876, and establish a contingency budget of $47,124 for a total authorization of $500,000 for services through June 2024 under Task Order 1 PASSED AND ADOPTED at a regular meeting of the City Council of the City of Gonzales duly held on the 18th day of September 2023, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Jose L. Rios, The Honorable Mayor
ATTEST:

Mary Villegas, Deputy City Clerk
Packet Pg. 204 Attachment: Resolution 2023-60 (2817 : Resolution No. 2023-60 Award Construction Management/Inspection Contract for Community Center Packet Pg. 205 Attachment: RFP for Project/Construction Management Services (2817 : Resolution No. 2023-60 Award Construction Management/Inspection

Page 2 of 7 ends

Gonzales City CouncilSeptember 18, 2023

Gonzales City Council
September 18, 2023