Budgetary Information
80
Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual:
General Fund and Major Special Revenue Funds
81
General Fund
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 6,270,000 $ 6,270,000 $ 6,552,757 $ 282,757
Intergovernmental 58,500 58,500 74,018 15,518
Charges for services 1,466,270 1,466,270 1,444,382 (21,888) Use of money and property 391,009 391,009 676,052 285,043 Fines and forfeitures 38,500 38,500 57,124 18,624
Miscellaneous 45,210 45,210 65,734 20,524
Total revenues 8,269,489 8,269,489 8,870,067 600,578
EXPENDITURES
Current:
General government 2,414,726 2,414,726 2,392,950 21,776 Public safety 2,942,200 2,942,200 2,866,169 76,031
Public works 1,807,161 2,219,946 2,107,751 112,195
Cultural and recreation 940,241 1,233,102 1,284,728 (51,626) Capital outlay 44,600 44,600 366,205 (321,605)
Debt service:
Principal retirement — — 41,780 (41,780)
Interest expense and fiscal charges — — 984 (984)
Total expenditures 8,148,928 8,854,574 9,060,567 (205,993) Excess (deficiency) of revenues
over (under) expenditures 120,561 (585,085) (190,500) 394,585
OTHER FINANCING SOURCES (USES)
Transfers in 59,000 59,000 69,717 10,717
Transfers out (141,289) (141,289) (1,690,722) (1,549,433) Total other financing sources (uses) (82,289) (82,289) (1,621,005) (1,538,716) Net change in fund balance 38,272 (667,374) (1,811,505) (1,144,131) Fund balance-beginning 10,507,293
Fund balance-ending $ 8,695,788
CITY OF GRAND TERRACE, CALIFORNIA
General Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
82
Housing Authority
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ — $ — $ 63,143 $ 63,143
Use of money and property — — 45,494 45,494
Total revenues — — 108,637 108,637
EXPENDITURES
Current:
Economic development 19,567 19,567 22,338 (2,771)
Total expenditures 19,567 19,567 22,338 (2,771)
Net change in fund balance $ (19,567) $ (19,567) 86,299 $ 105,866 Fund balance-beginning 2,059,335
Fund balance-ending $ 2,145,634
CITY OF GRAND TERRACE, CALIFORNIA
Housing Authority
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
83
NOTE 1: BUDGETARY DATA
The annual budget is adopted by the City Council after the holding of a hearing and provides for the general operation of the City. The operating budget includes proposed expenditures and the means of financing them.
The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year. This "appropriated budget" (as defined by GASB Code Section 2400.109) covers City expenditures in all governmental funds, except for the Public Financing Authority Debt Service Fund. This entity does not adopt an annual budget as effective budgetary control is achieved through bond indenture and other instrument provisions.
Actual expenditures may not exceed budgeted appropriations at the fund level.
Formal budgetary integration is employed as a management control device during the year. Commitments for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures. Encumbrances and unencumbered appropriations lapse at year-end.
Annual budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items.
Capital projects are budgeted through the Capital Project Funds. Appropriations for capital projects authorized, but not constructed or completed during the year, lapse at year-end, and are then included as a part of appropriations in the following year's annual budget.
For the fiscal year ending June 30, 2025, the following funds had no adopted annual budgets:
• Emergency Management Preparation Grant
• Enhanced Infrastructure Financing District
• ARPA
• Firestation Proceeds
• Barton/Colton Bridge
• Capital Projects
• Capital Projects Bond Proceeds
• Capital Projects - Parks
• Capital Projects - Commerce Way Project
• Dog Park Endowment
CITY OF GRAND TERRACE, CALIFORNIA
Notes to the Required Supplementary Information
For the Year Ended June 30, 2025
84
Supplementary Information
85
Nonmajor Governmental Funds
86
Combining Balance Sheet
Special Revenue Funds
Street
Improvement
Storm Drain
Improvement
Park
Development
AB 3229
COPS
ASSETS
Cash and investments $ 825,861 $ 318,781 $ 104,764 $ 28,522 Receivables (net of allowance for uncollectible):
Accounts — — — —
Due from other governments — — — —
Due from other funds 9,000 9,000 9,000 —
Total assets $ 834,861 $ 327,781 $ 113,764 $ 28,522
LIABILITIES
Accounts payable $ — $ — $ — $ —
Due to other funds — — — —
Deposits payable 4,663 — — —
Total liabilities 4,663 — — —
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues — — — —
Total deferred inflows of resources — — — —
FUND BALANCES (DEFICITS)
Restricted 830,198 327,781 113,764 28,522
Unassigned — — — —
Total fund balances (deficits) 830,198 327,781 113,764 28,522 Total liabilities, deferred inflows of resources, and
fund balances (deficits) $ 834,861 $ 327,781 $ 113,764 $ 28,522
CITY OF GRAND TERRACE, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
87
Special Revenue Funds
Air Quality
Improvement State Gas Tax Traffic Safety
Facilities
Development
ASSETS
Cash and investments $ 98,011 $ 313,071 $ 32,140 $ 193,658 Receivables (net of allowance for uncollectible):
Accounts — — — —
Due from other governments 4,191 31,726 1,033 —
Due from other funds — — — 9,000
Total assets $ 102,202 $ 344,797 $ 33,173 $ 202,658
LIABILITIES
Accounts payable $ — $ 15,542 $ — $ —
Due to other funds — — — —
Deposits payable — — — —
Total liabilities — 15,542 — —
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues — — — —
Total deferred inflows of resources — — — —
FUND BALANCES (DEFICITS)
Restricted 102,202 329,255 33,173 202,658
Unassigned — — — —
Total fund balances (deficits) 102,202 329,255 33,173 202,658 Total liabilities, deferred inflows of resources, and
fund balances (deficits) $ 102,202 $ 344,797 $ 33,173 $ 202,658
CITY OF GRAND TERRACE, CALIFORNIA
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025
88
Special Revenue Funds
Measure I CDBG
Special
Districts
Landscape &
Lighting
Spring
Mountain
Ranch
ASSETS
Cash and investments $ 466,242 $ — $ 206,318 $ 1,011,004 Receivables (net of allowance for uncollectible):
Accounts — — — —
Due from other governments 57,131 99,443 1,697 —
Due from other funds — — — —
Total assets $ 523,373 $ 99,443 $ 208,015 $ 1,011,004
LIABILITIES
Accounts payable $ 8,327 $ 6,605 $ 361 $ —
Due to other funds — 98,988 — —
Deposits payable — — — —
Total liabilities 8,327 105,593 361 —
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues — 74,932 — —
Total deferred inflows of resources — 74,932 — —
FUND BALANCES (DEFICITS)
Restricted 515,046 — 207,654 1,011,004
Unassigned — (81,082) — —
Total fund balances (deficits) 515,046 (81,082) 207,654 1,011,004 Total liabilities, deferred inflows of resources, and
fund balances (deficits) $ 523,373 $ 99,443 $ 208,015 $ 1,011,004
CITY OF GRAND TERRACE, CALIFORNIA
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025
89
Special Revenue Funds
Cal Recycle
Grant
Senior Bus
Program
Public,
Educational &
Government
Access
Highway
Safety
Improvement
Program
ASSETS
Cash and investments $ 1,361 $ — $ 143,354 $ —
Receivables (net of allowance for uncollectible):
Accounts — — 3,506 —
Due from other governments — 237,007 — —
Due from other funds — — — —
Total assets $ 1,361 $ 237,007 $ 146,860 $ —
LIABILITIES
Accounts payable $ — $ 304 $ — $ —
Due to other funds — 221,973 — 68,018
Deposits payable — — — —
Total liabilities — 222,277 — 68,018
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues — 207,718 — —
Total deferred inflows of resources — 207,718 — —
FUND BALANCES (DEFICITS)
Restricted 1,361 — 146,860 —
Unassigned — (192,988) — (68,018)
Total fund balances (deficits) 1,361 (192,988) 146,860 (68,018) Total liabilities, deferred inflows of resources, and
fund balances (deficits) $ 1,361 $ 237,007 $ 146,860 $ —
CITY OF GRAND TERRACE, CALIFORNIA
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025
90
Special Revenue Funds
Emergency
Management
Preparation
Grant
Enhanced
Infrastructure
Financing
District RMRA
National
Opioid
Settlement
ASSETS
Cash and investments $ — $ — $ 95,963 $ 41,530
Receivables (net of allowance for uncollectible):
Accounts — — — —
Due from other governments — — 63,122 —
Due from other funds — — — —
Total assets $ — $ — $ 159,085 $ 41,530
LIABILITIES
Accounts payable $ — $ — $ — $ —
Due to other funds 7,291 46,560 — —
Deposits payable — — — —
Total liabilities 7,291 46,560 — —
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues — — — —
Total deferred inflows of resources — — — —
FUND BALANCES (DEFICITS)
Restricted — — 159,085 41,530
Unassigned (7,291) (46,560) — —
Total fund balances (deficits) (7,291) (46,560) 159,085 41,530 Total liabilities, deferred inflows of resources, and
fund balances (deficits) $ — $ — $ 159,085 $ 41,530
CITY OF GRAND TERRACE, CALIFORNIA
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025
91
Special Revenue Funds Capital Projects Funds
ARPA
Firestation
Proceeds
Capital
Improvements
- Streets
Barton /
Colton Bridge
ASSETS
Cash and investments $ — $ 819,780 $ — $ —
Receivables (net of allowance for uncollectible):
Accounts — — — —
Due from other governments — — — —
Due from other funds — — — —
Total assets $ — $ 819,780 $ — $ —
LIABILITIES
Accounts payable $ — $ — $ 1,661 $ —
Due to other funds — — 25,737 25,320
Deposits payable — — — —
Total liabilities — — 27,398 25,320
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues — — — —
Total deferred inflows of resources — — — —
FUND BALANCES (DEFICITS)
Restricted — 819,780 — —
Unassigned — — (27,398) (25,320)
Total fund balances (deficits) — 819,780 (27,398) (25,320) Total liabilities, deferred inflows of resources, and
fund balances (deficits) $ — $ 819,780 $ — $ —
CITY OF GRAND TERRACE, CALIFORNIA
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025
92
Capital Projects Funds
Capital
Projects
Capital
Projects
Bond
Proceeds
Capital
Projects -
Parks
Capital
Projects -
Commerce
Way Project
ASSETS
Cash and investments $ — $ 611,458 $ 165,471 $ 881,804
Receivables (net of allowance for uncollectible):
Accounts — — — —
Due from other governments — — — —
Due from other funds — — — —
Total assets $ — $ 611,458 $ 165,471 $ 881,804
LIABILITIES
Accounts payable $ — $ — $ — $ —
Due to other funds 33,810 — — —
Deposits payable — — — —
Total liabilities 33,810 — — —
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues — — — —
Total deferred inflows of resources — — — —
FUND BALANCES (DEFICITS)
Restricted — 611,458 165,471 881,804
Unassigned (33,810) — — —
Total fund balances (deficits) (33,810) 611,458 165,471 881,804 Total liabilities, deferred inflows of resources, and
fund balances (deficits) $ — $ 611,458 $ 165,471 $ 881,804
CITY OF GRAND TERRACE, CALIFORNIA
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025
93
Permanent
Fund
Dog Park
Endowment
Fund
Total
Nonmajor
Funds
ASSETS
Cash and investments $ 20,314 $ 6,379,407
Receivables (net of allowance for uncollectible):
Accounts — 3,506
Due from other governments — 495,350
Due from other funds — 36,000
Total assets $ 20,314 $ 6,914,263
LIABILITIES
Accounts payable $ — $ 32,800
Due to other funds — 527,697
Deposits payable 20,314 24,977
Total liabilities 20,314 585,474
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues — 282,650
Total deferred inflows of resources — 282,650
FUND BALANCES (DEFICITS)
Restricted — 6,528,606
Unassigned — (482,467)
Total fund balances (deficits) — 6,046,139
Total liabilities, deferred inflows of resources, and
fund balances (deficits) $ 20,314 $ 6,914,263
CITY OF GRAND TERRACE, CALIFORNIA
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025
94
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Special Revenue Funds
Street
Improvement
Storm Drain
Improvement
Park
Development
AB 3229
COPS
REVENUES
Taxes $ — $ — $ — $ —
Intergovernmental — — — 194,820
Charges for services — 3,195 66,919 —
Use of money and property 24,808 9,576 3,147 1,898
Fines and forfeitures — — — —
Miscellaneous — — — —
Total revenues 24,808 12,771 70,066 196,718
EXPENDITURES
Current:
General government — — — 194,820
Public safety — — — —
Public works — — — —
Cultural and recreation — — — —
Capital outlay — — — —
Total expenditures — — — 194,820
Excess (deficiency) of revenues
over (under) expenditures 24,808 12,771 70,066 1,898
OTHER FINANCING SOURCES (USES)
Transfers in — — — —
Transfers out — — — —
Total other financing sources (uses) — — — —
Net change in fund balances 24,808 12,771 70,066 1,898
Fund balances (deficit)-beginning of year, as
previously presented 805,390 315,010 43,698 26,624
Change within financial reporting entity — — — —
Fund balances (deficit)-beginning, as restated 805,390 315,010 43,698 26,624 Fund balances (deficit)-ending $ 830,198 $ 327,781 $ 113,764 $ 28,522
CITY OF GRAND TERRACE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2025
95
Special Revenue Funds
Air Quality
Improvement State Gas Tax Traffic Safety
Facilities
Development
REVENUES
Taxes $ — $ — $ — $ —
Intergovernmental 16,889 374,121 — —
Charges for services — — — —
Use of money and property 2,775 12,687 894 8,553
Fines and forfeitures — — 5,233 —
Miscellaneous — — — —
Total revenues 19,664 386,808 6,127 8,553
EXPENDITURES
Current:
General government — — — —
Public safety — 352,703 — —
Public works — — — —
Cultural and recreation — — — —
Capital outlay — — — —
Total expenditures — 352,703 — —
Excess (deficiency) of revenues
over (under) expenditures 19,664 34,105 6,127 8,553
OTHER FINANCING SOURCES (USES)
Transfers in — 70,000 — —
Transfers out — (151,021) — —
Total other financing sources (uses) — (81,021) — —
Net change in fund balances 19,664 (46,916) 6,127 8,553 Fund balances (deficit)-beginning of year, as
previously presented 82,538 376,171 27,046 194,105
Change within financial reporting entity — — — —
Fund balances (deficit)-beginning, as restated 82,538 376,171 27,046 194,105 Fund balances (deficit)-ending $ 102,202 $ 329,255 $ 33,173 $ 202,658
CITY OF GRAND TERRACE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
96
Special Revenue Funds
Measure I CDBG
Special
Districts
Landscape &
Lighting
Spring
Mountain
Ranch
REVENUES
Taxes $ — $ — $ 65,903 $ —
Intergovernmental 332,298 73,929 — —
Charges for services — — — —
Use of money and property 17,360 — 5,604 30,134
Fines and forfeitures — — — —
Miscellaneous — — — —
Total revenues 349,658 73,929 71,507 30,134
EXPENDITURES
Current:
General government — — — —
Public safety 115,260 45,563 35,253 —
Public works — — — —
Cultural and recreation — — — —
Capital outlay — — — —
Total expenditures 115,260 45,563 35,253 —
Excess (deficiency) of revenues
over (under) expenditures 234,398 28,366 36,254 30,134
OTHER FINANCING SOURCES (USES)
Transfers in — — — —
Transfers out (220,337) — — —
Total other financing sources (uses) (220,337) — — —
Net change in fund balances 14,061 28,366 36,254 30,134 Fund balances (deficit)-beginning of year, as
previously presented 500,985 (109,448) 171,400 980,870
Change within financial reporting entity — — — —
Fund balances (deficit)-beginning, as restated 500,985 (109,448) 171,400 980,870 Fund balances (deficit)-ending $ 515,046 $ (81,082) $ 207,654 $ 1,011,004
CITY OF GRAND TERRACE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
97
Special Revenue Funds
Cal Recycle
Grant
Senior Bus
Program
Public,
Educational &
Government
Access
Highway
Safety
Improvement
Program
REVENUES
Taxes $ — $ — $ — $ —
Intergovernmental — 48,334 — —
Charges for services — — — —
Use of money and property 338 — 4,088 —
Fines and forfeitures — — — —
Miscellaneous — — 17,465 —
Total revenues 338 48,334 21,553 —
EXPENDITURES
Current:
General government 21,219 — — —
Public safety — 75 9,910 —
Public works — 101,515 — —
Cultural and recreation — — — —
Capital outlay — — — —
Total expenditures 21,219 101,590 9,910 —
Excess (deficiency) of revenues
over (under) expenditures (20,881) (53,256) 11,643 —
OTHER FINANCING SOURCES (USES)
Transfers in — 24,289 — —
Transfers out — — — —
Total other financing sources (uses) — 24,289 — —
Net change in fund balances (20,881) (28,967) 11,643 —
Fund balances (deficit)-beginning of year, as
previously presented 22,242 (164,021) 135,217 (68,018)
Change within financial reporting entity — — — —
Fund balances (deficit)-beginning, as restated 22,242 (164,021) 135,217 (68,018) Fund balances (deficit)-ending $ 1,361 $ (192,988) $ 146,860 $ (68,018)
CITY OF GRAND TERRACE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
98
Special Revenue Funds
Emergency
Management
Preparation
Grant
Enhanced
Infrastructure
Financing
District RMRA
National
Opioid
Settlement
REVENUES
Taxes $ — $ — $ — $ —
Intergovernmental — — 358,197 —
Charges for services — — — 27,075
Use of money and property — — 12,417 1,157
Fines and forfeitures — — — —
Miscellaneous — — — —
Total revenues — — 370,614 28,232
EXPENDITURES
Current:
General government — — — —
Public safety — — — —
Public works — — — —
Cultural and recreation — — — —
Capital outlay — — — —
Total expenditures — — — —
Excess (deficiency) of revenues
over (under) expenditures — — 370,614 28,232
OTHER FINANCING SOURCES (USES)
Transfers in — — — —
Transfers out — — (525,391) —
Total other financing sources (uses) — — (525,391) —
Net change in fund balances — — (154,777) 28,232
Fund balances (deficit)-beginning of year, as
previously presented (7,291) (46,560) 313,862 13,298
Change within financial reporting entity — — — —
Fund balances (deficit)-beginning, as restated (7,291) (46,560) 313,862 13,298 Fund balances (deficit)-ending $ (7,291) $ (46,560) $ 159,085 $ 41,530
CITY OF GRAND TERRACE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
99
Special Revenue Funds Capital Projects Funds
Formerly Major
Fund
ARPA
Firestation
Proceeds
Capital
Improvements
- Streets
Barton /
Colton Bridge
REVENUES
Taxes $ — $ — $ — $ —
Intergovernmental — — — —
Charges for services — — — —
Use of money and property — 24,434 — —
Fines and forfeitures — — — —
Miscellaneous — — — —
Total revenues — 24,434 — —
EXPENDITURES
Current:
General government — — — —
Public safety — — 896,749 —
Public works — — — —
Cultural and recreation — — — —
Capital outlay — — — —
Total expenditures — — 896,749 —
Excess (deficiency) of revenues
over (under) expenditures — 24,434 (896,749) —
OTHER FINANCING SOURCES (USES)
Transfers in — 795,346 896,749 —
Transfers out (69,717) — — —
Total other financing sources (uses) (69,717) 795,346 896,749 — Net change in fund balances (69,717) 819,780 — —
Fund balances (deficit)-beginning of year, as
previously presented — — (27,398) (25,320)
Change within financial reporting entity 69,717 — — —
Fund balances (deficit)-beginning, as restated 69,717 — (27,398) (25,320) Fund balances (deficit)-ending $ — $ 819,780 $ (27,398) $ (25,320)
CITY OF GRAND TERRACE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
100
Capital Project Funds
Capital
Projects
Capital
Projects Bond
Proceeds
Capital
Projects -
Parks
Capital
Projects -
Commerce
Way Project
REVENUES
Taxes $ — $ — $ — $ —
Intergovernmental — — 204,382 —
Charges for services — — — —
Use of money and property — 18,316 3,342 26,283
Fines and forfeitures — — — —
Miscellaneous — — — —
Total revenues — 18,316 207,724 26,283
EXPENDITURES
Current:
General government — — — —
Public safety — — — —
Public works — — — —
Cultural and recreation 33,810 — — —
Capital outlay — 945 29,373 —
Total expenditures 33,810 945 29,373 —
Excess (deficiency) of revenues
over (under) expenditures (33,810) 17,371 178,351 26,283
OTHER FINANCING SOURCES (USES)
Transfers in — 801,087 — —
Transfers out — — — —
Total other financing sources (uses) — 801,087 — —
Net change in fund balances (33,810) 818,458 178,351 26,283 Fund balances (deficit)-beginning of year, as
previously presented — (207,000) (12,880) 855,521
Change within financial reporting entity — — — —
Fund balances (deficit)-beginning, as restated — (207,000) (12,880) 855,521 Fund balances (deficit)-ending $ (33,810) $ 611,458 $ 165,471 $ 881,804
CITY OF GRAND TERRACE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
101
Permanent
Fund
Dog Park
Endowment
Fund
Total
Nonmajor
Funds
REVENUES
Taxes $ — $ 65,903
Intergovernmental — 1,602,970
Charges for services — 97,189
Use of money and property — 207,811
Fines and forfeitures — 5,233
Miscellaneous — 17,465
Total revenues — 1,996,571
EXPENDITURES
Current:
General government — 216,039
Public safety — 1,455,513
Public works — 101,515
Cultural and recreation — 33,810
Capital outlay — 30,318
Total expenditures — 1,837,195
Excess (deficiency) of revenues
over (under) expenditures — 159,376
OTHER FINANCING SOURCES (USES)
Transfers in — 2,587,471
Transfers out — (966,466)
Total other financing sources (uses) — 1,621,005
Net change in fund balances — 1,780,381
Fund balances (deficit)-beginning of year, as
previously presented — 4,196,041
Change within financial reporting entity — 69,717
Fund balances (deficit)-beginning, as restated — 4,265,758 Fund balances (deficit)-ending $ — $ 6,046,139
CITY OF GRAND TERRACE, CALIFORNIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
102
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103
Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual:
Nonmajor Special Revenue Funds
104
Street Improvement
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Charges for services $ 86,000 $ 86,000 $ — $ (86,000)
Use of money and property 2,000 2,000 24,808 22,808
Total revenues 88,000 88,000 24,808 (63,192)
Net change in fund balance $ 88,000 $ 88,000 24,808 $ (63,192) Fund balance-beginning 805,390
Fund balance-ending $ 830,198
CITY OF GRAND TERRACE, CALIFORNIA
Street Improvement
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
105
Storm Drain Improvement
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Charges for services $ — $ — $ 3,195 $ 3,195
Use of money and property 800 800 9,576 8,776
Total revenues 800 800 12,771 11,971
Net change in fund balance $ 800 $ 800 12,771 $ 11,971
Fund balance-beginning 315,010
Fund balance-ending $ 327,781
CITY OF GRAND TERRACE, CALIFORNIA
Storm Drain Improvement
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
106
Park Development
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Charges for services $ — $ — $ 66,919 $ 66,919
Use of money and property 800 800 3,147 2,347
Total revenues 800 800 70,066 69,266
Net change in fund balance $ 800 $ 800 70,066 $ 69,266
Fund balance-beginning 43,698
Fund balance-ending $ 113,764
CITY OF GRAND TERRACE, CALIFORNIA
Park Development
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
107
AB 3229 COPS
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 185,500 $ 185,500 $ 194,820 $ 9,320 Use of money and property — — 1,898 1,898
Total revenues 185,500 185,500 196,718 11,218
EXPENDITURES
Current:
General government 185,550 185,550 194,820 (9,270)
Total expenditures 185,550 185,550 194,820 (9,270)
Net change in fund balance $ (50) $ (50) 1,898 $ 1,948
Fund balance-beginning 26,624
Fund balance-ending $ 28,522
CITY OF GRAND TERRACE, CALIFORNIA
AB 3229 COPS
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
108
Air Quality Improvement
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 16,400 $ 16,400 $ 16,889 $ 489
Use of money and property — — 2,775 2,775
Total revenues 16,400 16,400 19,664 3,264
Net change in fund balance $ 16,400 $ 16,400 19,664 $ 3,264 Fund balance-beginning 82,538
Fund balance-ending $ 102,202
CITY OF GRAND TERRACE, CALIFORNIA
Air Quality Improvement
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
109
State Gas Tax
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 368,000 $ 368,000 $ 374,121 $ 6,121 Use of money and property 400 400 12,687 12,287
Total revenues 368,400 368,400 386,808 18,408
EXPENDITURES
Current:
Public safety 287,379 333,379 352,703 (19,324)
Total expenditures 287,379 333,379 352,703 (19,324)
Excess (deficiency) of revenues
over (under) expenditures 81,021 35,021 34,105 (916)
OTHER FINANCING SOURCES (USES)
Transfers in 70,000 70,000 70,000 —
Transfers out (151,021) (151,021) (151,021) —
Total other financing sources (uses) (81,021) (81,021) (81,021) — Net change in fund balance $ — $ (46,000) (46,916) $ (916) Fund balance-beginning 376,171
Fund balance-ending $ 329,255
CITY OF GRAND TERRACE, CALIFORNIA
State Gas Tax
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
110
Traffic Safety
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ — $ — $ 894 $ 894
Fines and fees 5,000 5,000 5,233 233
Total revenues 5,000 5,000 6,127 1,127
EXPENDITURES
Current:
General government 4,000 4,000 — 4,000
Total expenditures 4,000 4,000 — 4,000
Net change in fund balance $ 1,000 $ 1,000 6,127 $ 5,127 Fund balance-beginning 27,046
Fund balance-ending $ 33,173
CITY OF GRAND TERRACE, CALIFORNIA
Traffic Safety
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
111
Facilities Development
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Charges for services $ 800 $ 800 $ — $ (800)
Use of money and property 1,000 1,000 8,553 7,553
Total revenues 1,800 1,800 8,553 6,753
Net change in fund balance $ 1,800 $ 1,800 8,553 $ 6,753 Fund balance-beginning 194,105
Fund balance-ending $ 202,658
CITY OF GRAND TERRACE, CALIFORNIA
Facilities Development
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
112
Measure I
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 330,000 $ 330,000 $ 332,298 $ 2,298 Use of money and property 400 400 17,360 16,960
Total revenues 330,400 330,400 349,658 19,258
EXPENDITURES
Current:
Public safety 121,188 121,188 115,260 5,928
Total expenditures 121,188 121,188 115,260 5,928
Excess (deficiency) of revenues
over (under) expenditures 209,212 209,212 234,398 25,186
OTHER FINANCING SOURCES (USES)
Transfers out (208,812) (208,812) (220,337) (11,525)
Total other financing sources (uses) (208,812) (208,812) (220,337) (11,525) Net change in fund balance $ 400 $ 400 14,061 $ 13,661
Fund balance-beginning 500,985
Fund balance-ending $ 515,046
CITY OF GRAND TERRACE, CALIFORNIA
Measure I
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
113
CDBG
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 90,000 $ 90,000 $ 73,929 $ (16,071) Total revenues 90,000 90,000 73,929 (16,071)
EXPENDITURES
Current:
Public safety 90,000 90,000 45,563 44,437
Total expenditures 90,000 90,000 45,563 44,437
Net change in fund balance $ — $ — 28,366 $ 28,366
Fund balance (deficit)-beginning (109,448)
Fund balance (deficit)-ending $ (81,082)
CITY OF GRAND TERRACE, CALIFORNIA
CDBG
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
114
Special Districts Landscape & Lighting
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 60,732 $ 60,732 $ 65,903 $ 5,171
Use of money and property — — 5,604 5,604
Total revenues 60,732 60,732 71,507 10,775
EXPENDITURES
Current:
Public safety 52,325 52,325 35,253 17,072
Total expenditures 52,325 52,325 35,253 17,072
Net change in fund balance $ 8,407 $ 8,407 36,254 $ 27,847 Fund balance-beginning 171,400
Fund balance-ending $ 207,654
CITY OF GRAND TERRACE, CALIFORNIA
Special Districts Landscape & Lighting
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
115
Spring Mountain Ranch
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 2,000 $ 2,000 $ 30,134 $ 28,134 Total revenues 2,000 2,000 30,134 28,134
Net change in fund balance $ 2,000 $ 2,000 30,134 $ 28,134 Fund balance-beginning 980,870
Fund balance-ending $ 1,011,004
CITY OF GRAND TERRACE, CALIFORNIA
Spring Mountain Ranch
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
116
Senior Bus Program
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 90,707 $ 90,707 $ 48,334 $ (42,373) Total revenues 90,707 90,707 48,334 (42,373)
EXPENDITURES
Current:
Public safety — — 75 (75)
Public works 114,996 114,996 101,515 13,481
Total expenditures 114,996 114,996 101,590 13,406
Excess (deficiency) of revenues
over (under) expenditures (24,289) (24,289) (53,256) (28,967)
OTHER FINANCING SOURCES (USES)
Transfers in 24,289 24,289 24,289 —
Total other financing sources (uses) 24,289 24,289 24,289 — Net change in fund balance $ — $ — (28,967) $ (28,967)
Fund balance (deficit)-beginning (164,021)
Fund balance (deficit)-ending $ (192,988)
CITY OF GRAND TERRACE, CALIFORNIA
Senior Bus Program
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
117
Public, Educational & Government Access
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 300 $ 300 $ 4,088 $ 3,788
Miscellaneous 19,000 19,000 17,465 (1,535)
Total revenues 19,300 19,300 21,553 2,253
EXPENDITURES
Current:
Public safety 16,800 16,800 9,910 6,890
Total expenditures 16,800 16,800 9,910 6,890
Net change in fund balance $ 2,500 $ 2,500 11,643 $ 9,143 Fund balance-beginning 135,217
Fund balance-ending $ 146,860
CITY OF GRAND TERRACE, CALIFORNIA
Public, Educational & Government Access
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
118
Highway Safety Improvement Program
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
EXPENDITURES
Capital outlay $ 1,691 $ 1,691 $ — $ 1,691
Total expenditures 1,691 1,691 — 1,691
Net change in fund balance $ (1,691) $ (1,691) — $ 1,691 Fund balance (deficit)-beginning (68,018)
Fund balance (deficit)-ending $ (68,018)
CITY OF GRAND TERRACE, CALIFORNIA
Highway Safety Improvement Program
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
119
RMRA
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 305,000 $ 305,000 $ 358,197 $ 53,197 Use of money and property — — 12,417 12,417
Total revenues 305,000 305,000 370,614 65,614
Excess (deficiency) of revenues
over (under) expenditures 305,000 305,000 370,614 65,614
OTHER FINANCING SOURCES (USES)
Transfers out (305,000) (305,000) (525,391) (220,391)
Total other financing sources (uses) (305,000) (305,000) (525,391) (220,391) Net change in fund balance $ — $ — (154,777) $ (154,777) Fund balance-beginning 313,862
Fund balance-ending $ 159,085
CITY OF GRAND TERRACE, CALIFORNIA
RMRA
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
120
National Opioid Settlement
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Charges for services $ 3,400 $ 3,400 $ 27,075 $ 23,675
Use of money and property — — 1,157 1,157
Total revenues 3,400 3,400 28,232 24,832
Net change in fund balance $ 3,400 $ 3,400 28,232 $ 24,832 Fund balance-beginning 13,298
Fund balance-ending $ 41,530
CITY OF GRAND TERRACE, CALIFORNIA
National Opioid Settlement
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
121
Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual:
Capital Project Funds
122
Capital Improvements - Streets
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
EXPENDITURES
Current:
Public safety $ 811,304 $ 868,825 $ 896,749 $ (27,924)
Total expenditures 811,304 868,825 896,749 (27,924)
Excess (deficiency) of revenues
over (under) expenditures (811,304) (868,825) (896,749) (27,924)
OTHER FINANCING SOURCES (USES)
Transfers in 664,833 664,833 896,749 231,916
Total other financing sources (uses) 664,833 664,833 896,749 231,916 Net change in fund balance $ (146,471) $ (203,992) — $ 203,992 Fund balance (deficit)-beginning (27,398)
Fund balance (deficit)-ending $ (27,398)
CITY OF GRAND TERRACE, CALIFORNIA
Capital Improvements - Streets
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2025
123
This Page Left Intentionally Blank
124
LSLCPAS.COM
February 20, 2026
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Grand Terrace, California (hereafter, the City) for the year ended June 30, 2025. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated May 19, 2025. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year 2024- 2025. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the City’s financial statements were:
Management’s estimates of the net pension liability and total other post-employment benefits liability are based on actuarial valuations. We evaluated the methods, assumptions, and data used to develop the net pension liability and total other postemployment benefits liability in determining that they are reasonable in relation to the financial statements taken as a whole.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated February 20, 2026.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to management’s discussion and analysis, the budgetary comparison schedules for the General Fund and major special revenue funds, and the required pension and other postemployment benefits schedules, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
We were engaged to report on the combining and individual fund statements and schedules which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
Future GASB Pronouncements
The following Government Accounting Standards Board (GASB) pronouncements will be effective for the following fiscal years’ audits and should be reviewed for proper implementation by management:
Fiscal Year 2025-2026
GASB Statement No. 103, Financial Reporting Model Improvements GASB Statement No. 104, Disclosure of Certain Capital Assets Future Projects
Comprehensive Project, Revenue and Expense Recognition
Major Project, Going Concern Uncertainties and Severe Financial Stress Major Project, Infrastructure Assets
Practice Issue, Subsequent Events
Restriction on Use
This information is intended solely for the information and use of City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
Irvine, California
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Grand Terrace, California (hereafter, the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated February 20, 2026.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
February 20, 2026
AGENDA REPORT
MEETING DATE: March 10, 2026
TITLE: Housing Successor Agency Annual Financial Report for the Year Ended June 30, 2025
PRESENTED BY: Christine Clayton, Finance Director
RECOMMENDATION: RECEIVE AND FILE THE AUDITOR'S ANNUAL FINANCIAL REPORT AND
RELATED DOCUMENT FOR THE CITY'S HOUSING SUCCESSOR
AGENCY
2030 VISION STATEMENT:
This staff report supports Goal #1, Ensuring Our Fiscal Viability” through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations.
BACKGROUND:
Each year, the City has an independent audit conducted of its financial statements and related internal control procedures. Included in this is the Audit of the City’s Housing Successor Agency. The audit for the Housing Successor Agency for the fiscal year ending June 30, 2025 has been completed, and the Annual Financial Report was issued by the City’s auditor, Lance, Soll & Lunghard, LLP.
DISCUSSION:
One of the key aspects of any annual financial audit is the Independent Auditor’s Report, which is provided on page 1 of the Annual Audit Report (Exhibit A). The Independent Auditor’s Report provides its opinion on whether or not the financial statements fairly represent, in all material respects, the respective financial position of the governmental activities, and the major fund, as of the end of the fiscal year, and the respective changes in financial position and cash flows, where applicable, in conformance with Generally Accepted Accounting Principles (GAAP). The resulting “opinion letter” is either unmodified or modified. The “opinion letter” received by the City for its Housing Successor Agency financial statements for the period ending June 30, 2025, is unmodified, indicating that the financial statements fairly represent the City’s financial position in accordance with GAAP.
In addition to the Annual Financial Report, the independent auditor issued the related document, which is summarized below:
· Internal Control & Compliance Report (Exhibit B)
The Internal Control & Compliance Report identifies any material internal control deficiencies that impact the financial statements. The results of the tests performed by the City auditors did not identify any deficiencies in internal control that are required to be reported under Government Auditing Standards. In addition, the results of the Auditor’s tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
ENVIRONMENTAL IMPACT:
N/A
FISCAL IMPACT:
There is no fiscal impact associated with the receipt of the Annual Financial Report and related documents for the year ended June 30, 2025.
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GRAND TERRACE
HOUSING SUCCESSOR AGENCY
Grand Terrace, California
Financial Statements
For the Year Ended June 30, 2025
GRAND TERRACE
HOUSING SUCCESSOR AGENCY
GRAND TERRACE, CALIFORNIA
Financial Statements
For the Year Ended June 30, 2025
Table of Contents
Page
Number
Independent Auditors’ Report ...................................................................................................................................... 1 Independent Auditors’ Report on Compliance with Applicable Requirement and on Internal Control Over Compliance ....................................................................................... 4 Basic Financial Statements
Statement of Net Position and Governmental Fund Balance Sheet ..................................................................... 6 Statement of Activities and Governmental Statement of Revenues, Expenditures and Changes in Fund Balance ....................................................................................................... 7 Notes to Financial Statements ................................................................................................................................. 8 Required Supplementary Information
Budgetary Comparison Schedule ........................................................................................................................ 11 Other Information
Computation of Housing Successor Excess/Surplus ........................................................................................... 12
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and the governmental fund information of the City of Grand Terrace Housing Successor (hereafter, the Housing Successor) a special revenue fund of the City of Grand Terrace, California (hereafter, the City) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Fund’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and the governmental fund information of the Housing Successor, as of June 30, 2025, and the changes in financial position, for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements of the Housing Successor are intended to present the financial position and the changes in financial position of only that portion of the governmental activities and the governmental fund information of the Housing Successor that is attributable to the transactions of the Housing Successor. They do not purport to, and do not, present fairly the financial position of the City of Grand Terrace, as of June 30, 2025, and the changes in its financial position, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary comparison information, as listed on the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. 2
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Housing Successor’s basic financial statements. The accompanying Computation of Excess/Surplus (supplementary information) are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 9, 2025, on our consideration of the City’s internal control over the Housing Successor’s financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over the Housing Successor’s financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over the Housing Successor’s financial reporting and compliance.
Irvine, California
December 9, 2025
3
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE
AND ON INTERNAL CONTROL OVER COMPLIANCE
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
Report on Compliance
Opinion
We have audited the City of Grand Terrace Housing Successor (hereafter, the Housing Successor)’s compliance with the types of compliance requirements identified as subject to audit in the California Health and Safety Code sections applicable to the California Housing Successor Agencies (the HSC) that could have a direct and material effect on each of the City’s Housing Successor Program (the Program) for the year ended June 30, 2025.
In our opinion, the Housing Successor complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on the Program for the year ended June 30, 2025.
Basis for Opinion
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of the HSC. Our responsibilities under those standards and the HSC are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the Housing Successor and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for the Program. Our audit does not provide a legal determination of the Housing Successor’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Program.
Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Housing Successor’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the HSC will always detect material noncompliance when it exists.
The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Housing Successor’s compliance with the requirements of the Program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the HSC, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the Housing Successor’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the Housing Successor’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the HSC, but not for the purpose of expressing an opinion on the effectiveness of the Housing Successor’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of the Program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the Program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of the Program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditors’ Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the HSC. Accordingly, this report is not suitable for any other purpose.
Irvine, California
December 9, 2025
5
GRAND TERRACE HOUSING SUCCESSOR AGENCY
Statement of Net Position and Governmental Fund Balance Sheet June 30, 2025
Reclassifications
Governmental and Statement of
Fund Eliminations Net Position
Assets:
Cash and investments $ 1,525,436 $ - $ 1,525,436
Receivables:
Notes and loans 513,130 - 513,130
Advances to City 168,205 - 168,205
Total Assets 2,206,771 - 2,206,771
Liabilities, Deferred Inflows of Resources,
and Fund Balance:
Liabilities
Accounts payable $ 7 - 7
Total Liabilities 7 - 7
Deferred Inflows of Resources:
Unavailable revenues 61,130 (61,130) -
Total Deferred Inflows of Resources 61,130 (61,130) -
Fund Balance/Net Position:
Fund Balance
Restricted for:
Low and moderate housing activities 2,145,634 (2,145,634) - Total Fund Balance 2,145,634 (2,145,634) -
Total Liabilities, Deferred Inflows of
Resources and Fund Balance $ 2,206,771
Net Position
Restricted for:
Low and moderate housing activities 2,145,634 2,206,764 Total Net Position $ 61,130 $ 2,206,764
See Notes to Financial Statements.
6
GRAND TERRACE HOUSING SUCCESSOR AGENCY
Statement of Activities and Governmental Statement of
Revenues, Expenditures and Changes in Fund Balance
For the Year Ended June 30, 2025
Reclassifications
Governmental and Statement of
Fund Eliminations Activities
Revenues:
Intergovernmental $ 63,143 $ - $ 63,143
Use of money and property 45,494 - 45,494
Total Revenues 108,637 - 108,637
Expenditures:
Current:
Community development 22,338 - 22,338
Total Expenditures 22,338 - 22,338
Net Change in
Fund Balance/Net Position 86,299 - 86,299
Fund Balance/Net Position:
Beginning of Year 2,059,335 61,130 2,120,465
End of Year $ 2,145,634 $ 61,130 $ 2,206,764
See Notes to Financial Statements.
7
GRAND TERRACE HOUSING SUCCESSOR AGENCY
Notes to the Financial Statements
For the Year Ended June 30, 2025
I. SIGNIFICANT ACCOUNTING POLICIES
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of the Reporting Entity
The accompanying financial statements present only the Housing Successor Agency Special Revenue Fund of the City of Grand Terrace, California and do not include any other funds of the City. The City's basic financial statements are available at City Hall.
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (the Bill) that provides for the dissolution of all redevelopment agencies in the State of California. The Bill impacted the reporting entity of the City of Grand Terrace that previously had reported a redevelopment agency within the report of the City as a blended component unit.
On January 10, 2012, and in accordance with California Health and Safety Code Section 34176, the City Council as part of City resolution number CC-2012-06, elected to retain the housing assets and function of the former redevelopment agency. The City continues to report the housing assets and functions in the government special revenue fund designated City Housing Successor.
The attached basic financial statements contain information relative only to the Grand Terrace Housing Successor Agency Fund (the Housing Successor).
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (Statement of Net position and Statement of Activities) report information on all activities of the Housing Successor. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for the governmental special revenue fund.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
When both restricted and unrestricted resources are available for use, it is the Housing Successor’s policy to use restricted resources first, and then unrestricted resources as they are needed. 8
GRAND TERRACE HOUSING SUCCESSOR AGENCY
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Budget
Budget for the Housing Successor Fund is adopted on a basis substantially consistent with accounting principles generally accepted in the United States of America. Accordingly, actual revenues and expenditures can be compared with related budget amounts without any significant reconciling items.
E. Deferred Inflow of Resources
The balance sheet of the governmental fund is reporting deferred inflows of resources. This separate financial statement element represents an acquisition of net position or fund balance that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The Housing Successor has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet.
The governmental funds report unavailable revenues from long-term loans. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.
F. Fund Balance and Net Position
Fund Balance
The Housing Successor’s fund balances are classified on the governmental fund balance sheet among the following categories:
Nonspendable Fund Balance - This includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
Restricted Fund Balance - This includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
Committed Fund Balance - This includes amounts that can be used only for the specific purposes determined by a formal action of the city council.
Assigned Fund Balance - This includes amounts that are designated by the City Council for specific purposes.
Unassigned Fund Balance - This is the residual classification that includes all spendable amounts not contained in the other classifications.
When an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, the Housing Successor’s policy is to apply restricted fund balance first.
When expenditure is incurred for purposes for which committed, assigned or unassigned fund balances are available, the Housing Successor’s policy is to apply committed fund balance first, then assigned fund balance, and finally unassigned fund balance.
Net Position
The net position reported on the Statement of Net Position in the government-wide financial statements consists of the following three categories:
Invested in capital assets - This amount consists of capital assets, net of accumulated depreciation.
Restricted Net Position - This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.
9
GRAND TERRACE HOUSING SUCCESSOR AGENCY
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Unrestricted Net Position - This amount is all net position that do not meet the definition of “investment in capital assets” or “restricted net position”.
NOTE 2: STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Violations of Legal or Contractual Provisions
For the year ended June 30, 2025, expenditures exceeded appropriations in the community development function of the Housing Successor by $2,771.
NOTE 3: CASH AND INVESTMENTS
The City of Grand Terrace maintains a cash and investment pool that is available for use for all funds. Each fund type’s position in the pool is reported on the combined balance sheet as cash and investments. The Housing Successor Agency pooled cash and investments as of June 30, 2025, was $1,525,436. Information regarding the authorized types of deposits and investments, the type of risks (i.e. credit, interest rate, custodial, etc.) and other disclosures associated with the City's pooled cash and investments is included in the City's basic financial statements, which are available at City Hall.
NOTE 4: NOTES AND LOANS RECEIVABLE
The Low and Moderate Housing Fund of the City’s former redevelopment agency issued first time homebuyer and rehabilitation second trust loans with interest rates ranging from zero to 3%. The loan balances are due upon the sale of the properties. Interest of $18,590 has accrued on the loans for a total of $513,130.
NOTE 5: ADVANCES TO CITY
In previous years, the Low and Moderate Housing Fund of the City’s former redevelopment agency advanced funds in the amount $168,205 to the City’s General Fund. On June 22, 2010, the City adopted Resolution 2010-15, in which the cumulative interagency borrowings were memorialized and which set forth a repayment plan by the City to the former Agency subject to available funds.
NOTE 6: INSURANCE
The Housing Successor Agency participates in the self-insurance programs of the City of Grand Terrace.
Disclosures relating to the self-insurance programs can be found in the City’s Annual Comprehensive Financial Report.
10
GRAND TERRACE HOUSING SUCCESSOR AGENCY
Budgetary Comparison Schedule
Governmental Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 2,059,335 $ 2,059,335 $ 2,059,335 $ - Resources (Inflows):
Intergovernmental - - 63,143 63,143
Use of money and property - - 45,494 45,494
Amounts Available for Appropriations 2,059,335 2,059,335 2,167,972 108,637 Charges to Appropriations (Outflow):
Community development 19,567 19,567 22,338 (2,771)
Total Charges to Appropriations 19,567 19,567 22,338 (2,771) Budgetary Fund Balance, June 30 $ 2,039,768 $ 2,039,768 $ 2,145,634 $ 105,866 11
CITY OF GRAND TERRACE HOUSING SUCCESSOR
COMPUTATION OF HOUSING SUCCESSOR
EXCESS/SURPLUS (HSC 34176.1)
Opening Fund Balance $ 2,059,335 $ 2,145,634
Less Unavailable Amounts:
Advances to City $ (168,205) $ (168,205)
Loans receivable (452,000) (452,000)
(620,205) (620,205)
Available Housing Successor Funds 1,439,130 1,525,429
Limitation (greater of $1,000,000 or four years deposits) Aggregate amount deposited for last four years:
N/A 108,637
2023-2024 44,932 44,932
2022-2023 28,864 28,864
2021-2022 21,160 21,160
2020-2021 2,150 N/A
Total $ 97,106 $ 203,593
Base Limitation $ 1,000,000 $ 1,000,000
Greater amount 1,000,000 1,000,000
Computed Excess/Surplus $ 439,130 $ 525,429
Low and Moderate
All Project Area
July 1, 2025
Low and Moderate
All Project Area
July 1, 2024
Housing Funds Housing Funds
2024-2025
12
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and the governmental fund information of the City of Grand Terrace, California (hereafter, the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 9, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over the Housing Successor’s financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the requirements of California Health and Safety Code Applicable to California Housing Successor Agencies, noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
To the Honorable Mayor and Members of the City Council
City of Grand Terrace, California
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Successor’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Successor’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
December 9, 2025
AGENDA REPORT
MEETING DATE: March 10, 2026
TITLE: Measure I Fund Annual Financial & Compliance Report for the Year Ended June 30, 2025
PRESENTED BY: Christine Clayton, Finance Director
RECOMMENDATION: RECEIVE AND FILE THE AUDITOR'S ANNUAL FINANCIAL &
COMPLIANCE REPORT AND RELATED DOCUMENTS FOR THE CITY'S
MEASURE I FUND
2030 VISION STATEMENT:
This staff report supports Goal #1, "Ensuring Our Fiscal Viability” through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations.
BACKGROUND:
Each year, the City has an independent audit conducted of its financial statements and related internal control procedures. Included in this is the Audit of the City’s Measure I Fund. Measure I is the half-cent sales tax collected throughout San Bernardino County for transportation improvements.
The audit for the Measure I Fund for the fiscal year ending June 30, 2025 has been completed, and the Annual Financial Report was issued by the Measure I Fund Auditor, Crowe LLP.
DISCUSSION:
One of the key aspects of any annual financial audit is the Independent Auditor’s Report, which is provided on page 1 of the Annual Audit Report (Exhibit A). The Independent Auditor’s Report provides its opinion on whether or not the financial statements fairly present, in all material respects, the respective financial position of the governmental activities, and the major fund, as of the end of the fiscal year, and the respective changes in financial position and cash flows, where applicable, in conformance with Generally Accepted Accounting Principles (GAAP). The resulting “opinion letter” is either unmodified or modified. The “opinion letter” received by the City for its Measure I Fund financial statements for the period ended June 30, 2025 is unmodified, indicating that the financial statements fairly represent the City’s financial position in accordance with GAAP.
In addition to the Annual Financial Report, the independent auditor issued the related document, which is included in the Report and is summarized below:
· Internal Control & Compliance Report
The Internal Control & Compliance Report identifies any material internal control deficiencies that impact the financial statements. The results of the tests performed by the City auditors did not identify any deficiencies in internal control that are required to be reported under Government Auditing Standards. In addition, the results of the Auditor’s tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
ENVIRONMENTAL IMPACT:
N/A
FISCAL IMPACT:
There is no fiscal impact associated with the receipt of the Annual Financial Report and related documents for the Measure I Fund for the year ended June 30, 2025.
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
FINANCIAL STATEMENTS
June 30, 2025
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
San Bernardino, California
FINANCIAL STATEMENTS
June 30, 2025
CONTENTS
INDEPENDENT AUDITOR’S REPORT .................................................................................................... 1
FINANCIAL STATEMENTS
BALANCE SHEET .............................................................................................................................. 4 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE ................ 5 NOTES TO FINANCIAL STATEMENTS ............................................................................................ 6
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE - BUDGET AND ACTUAL ................................................................................................................... 9 NOTE TO REQUIRED SUPPLEMENTARY INFORMATION ............................................................ 10
ADDITIONAL INFORMATION
PROGRAM STATUS: COMPARISON OF 5-YEAR PLAN PROJECT BUDGET TO CURRENT YEAR EXPENDITURES ......................................................................................... 11 MAINTENANCE OF EFFORT: COMPARISON OF BASE LEVEL AMOUNT
TO ANNUAL EXPENDITURES ....................................................................................................... 12 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ...................................................................................................................... 13 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE MEASURE I
COMPLIANCE REQUIREMENTS AND REPORT ON INTERNAL CONTROL
OVER COMPLIANCE .......................................................................................................................... 15 SCHEDULE OF PRIOR YEAR FINDINGS AND RESPONSES ............................................................... 17
Crowe LLP
Independent Member Crowe Global
(Continued)
1. INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
San Bernardino County Transportation Authority
San Bernardino, California
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Measure I Fund of the City of Grand Terrace, California (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the Measure I Fund of the City, as of June 30, 2025, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Measure I Fund, a governmental fund, and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2025, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
(Continued)
2. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary comparison information as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Additional Information
Management is responsible for the accompanying Program Status: Comparison of 5-Year Plan Project Budget to Current Year Expenditures and the Maintenance of Effort: Comparison of Base Level Amount to Annual Expenditures (the “additional information”), which is presented for purposes of additional analysis and is not a required part of the financial statements. Our opinion on the financial statements does not cover the additional information, and we do not express an opinion or any form of assurance thereon.
3. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 3, 2025, on our consideration of the City’s internal control over financial reporting of the Measure I Fund and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance, as it relates to the Measure I Fund.
Crowe LLP
Los Angeles, California
December 3, 2025
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
BALANCE SHEET
June 30, 2025
See notes to financial statements.
4. ASSETS
Cash and investments $ 466,242
Taxes receivable 57,131
Total assets $ 523,373
LIABILITIES AND FUND BALANCE
Liabilities
Accounts payable $ 8,327
Fund balance
Restricted for transportation 515,046
Total liabilities and fund balance $ 523,373
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE Year ended June 30, 2025
See notes to financial statements.
5. Revenue
Measure I sales tax $ 332,298
Investment income 17,221
Unrealized gain in investments 139
Total revenues 349,658
Expenditures
Construction, maintenance, and engineering 78,961
Total expenditures 78,961
Revenues over/(under) expenditures 270,697
Other financing sources (uses)
Transfers to other City funds (256,637)
Net change in fund balance 14,060
Fund balance at beginning of year 500,986
Fund balance at end of year $ 515,046
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
6. NOTE 1 – GENERAL INFORMATION
Reporting Entity: The financial statements are intended to reflect the financial position and changes in financial position of the Measure I Fund of the City of Grand Terrace, California (City) only. Accordingly, the financial statements do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2025, and the changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Measure I: Measure I is the half-cent sales tax collected throughout San Bernardino County for transportation improvements. In 2004, San Bernardino County voters approved the extension of the Measure I sales tax through 2040. See Note 4 for a detailed description of the Measure.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fund Accounting: The accounts of the City are organized on the basis of funds. A fund is defined as an independent fiscal and accounting entity wherein operations of each fund are accounted for in a separate set of self-balancing accounts that record resources, related benefits, and equity, segregated for the purpose of carrying out specific activities. The City accounts for the Measure I activities within its Measure I Special Revenue Fund.
Special revenue funds are used to account for the proceeds of revenue sources that are restricted or committed to expenditure for specified purposes.
Measurement Focus and Basis of Accounting: The special revenue funds of the City are accounted for using the current financial resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, revenues are available if they are collected within 60 days of the end of the fiscal period. Expenditures generally are recorded when a liability is incurred. Operating statements of governmental funds present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current resources.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.
Revenue Recognition: Recognition of revenues arising from nonexchange transactions, which include revenues from taxes, certain grants, and contributions, is based on the primary characteristic from which the revenues are received by the City. For the City, funds received under Measure I possess the characteristic of a voluntary nonexchange transaction similar to a grant. Revenues under Measure I are recognized in the period when all eligibility requirements have been met.
Fund Balance: Fund balance is reported according to the following classifications: nonspendable, restricted, committed, assigned, and unassigned based on the relative strength of the constraints that control how specific amounts can be spent.
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
7. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Restricted fund balance represents amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments.
When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first.
Cash and Investments: Cash and investments are pooled by the City to facilitate cash management and maximize investment opportunities and yields. Investment income resulting from this pooling is allocated to the respective funds including the Measure I Fund based upon the average cash balance. The investment policies and the risks related to cash and investments, applicable to the Measure I Fund, are those of the City and are disclosed in the City’s basic financial statements. The City’s basic financial statements can be obtained at City Hall.
The Measure I Fund’s cash and investments are reported at fair value. The fair value measurements are based on the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Measure I Fund’s deposits and withdrawals in the City Investment Pool are made on the basis of $1 and not fair value. Accordingly, the Measure I Fund’s investment in the City Investment Pool is measured based on uncategorized inputs not defined as a Level 1, Level 2, or Level 3 input.
Maintenance of Effort: In accordance with California Public Utilities Code 190300 and Ordinance No. 04- 01 of the San Bernardino County Transportation Authority (SBCTA), Local Street Program funds shall not be used to supplant existing local discretionary funds being used for street and highway purposes. The maintenance of effort (MOE) base year level was determined based upon the discretionary General Fund expenditures for transportation-related construction and maintenance activities in fiscal year 2008/2009.
The MOE base year level as approved by the SBCTA Board of Directors shall remain in effect until the expiration of Measure I 2010-2040. General Fund expenditures in excess of the MOE base year level will carry over to subsequent fiscal years and can be applied in a future year to offset the amount the local agency may need to meet the MOE requirement. The City’s determined MOE base level is $115,156.
NOTE 3 – TAXES RECEIVABLE
Taxes receivable in the amount of $57,131 represent the Measure I sales tax receipts received from SBCTA after June 30, 2025.
NOTE 4 – MEASURE I FUND
The California State Legislature authorized county transportation authorities to enact local option sales tax measures for transportation improvements in the late 1980s, under provisions of Division 19 (commencing with Section 180000) of the Public Utilities Code. In November 1989, San Bernardino County voters approved passage of Measure I, authorizing SBCTA to impose a half-cent retail transactions and use tax applicable in the incorporated and unincorporated areas of the County of San Bernardino for the 20-year period between April 1, 1990 and March 31, 2010. SBCTA is authorized to administer the programs described in the Measure.
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
NOTES TO FINANCIAL STATEMENTS
Year ended June 30, 2025
8. NOTE 4 – MEASURE I FUND (Continued)
Early in the second decade of Measure I, it became apparent that continuation of the half cent sales tax would be critical to maintaining funding for transportation in San Bernardino County. SBCTA member jurisdictions and transportation stakeholders worked to identify transportation needs, and an expenditure plan was developed to serve as a basis for the renewal of Measure I. Ordinance No. 04-01 was placed before voters in November 2004, and Measure I was renewed. The new Measure I extends the half cent sales tax for 30 years, from April 1, 2010 through March 31, 2040. The new Measure is referred to as Measure I 2010-2040 to distinguish it from the first Measure I.
Revenue from the tax can only be used for transportation improvement and traffic management programs authorized in the Expenditure Plan.
Measure I 2010-2040 has a return-to-source provision that states that funds shall be allocated to subareas in accordance with the actual revenue collected in each subarea. After deduction of required Board of Equalization fees and authorized administrative costs, revenues generated in each subarea are to be expended on projects of direct benefit to that subarea. Revenues are accounted for separately for each subarea and then allocated to specified project categories in each subarea. These project categories are termed “programs” in the Strategic Plan. Decisions on how revenues are expended within the subareas are made by the SBCTA Board of Directors based upon recommendations of local subarea representatives.
Other than the projects identified in the Cajon Pass Expenditure Plan, revenues generated within a subarea can be expended outside of that subarea only upon approval of two-thirds (2/3) of the jurisdictions within the affected subarea. A proportional share of projected state and federal transportation funds is to be reserved for use solely within the Valley subarea and individual Mountain/Desert (Colorado River, Morongo Basin, Mountains, North Desert and Victor Valley) subareas. In the San Bernardino Valley subarea, Measure I 2010-2040 contains the following programs:
• Freeway Program
• Freeway Interchange Program
• Major Street Program
• Local Street Program
• Metrolink/Rail Program
• Express Bus/Bus Rapid Transit Program
• Senior and Disabled Transit Program
• Traffic Management Systems Program
In each of the Mountain/Desert subareas, Measure I 2010-2040 contains the following programs:
• Local Street Program
• Major Local Highway Program
• Senior and Disabled Transit Program
NOTE 5 – TRANSFERS TO OTHER CITY FUNDS
During the year ended June 30, 2025, $256,637 was transferred to the City which represents activity related to the Measure I general street maintenance activities and the pavement management program in accordance with the City’s Measure I Five Year Capital Improvement Plan.
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE –
BUDGET AND ACTUAL
Year ended June 30, 2025
See Note to Required Supplementary Information.
9. Original Final Actual
Revenues
Measure I sales tax 330,000 $ 330,000 $ 332,298 $ 2,298 $ Investment income 400 400 17,221 16,821
Unrealized gain in investments - - 139 139
Total revenues 330,400 330,400 349,658 19,258
Expenditures
Construction, maintenance, and engineering 88,188 88,188 78,961 9,227 Total expenditures 88,188 88,188 78,961 9,227
Excess (deficiency) of revenues over expenditures 242,212 242,212 270,697 28,485 Other financing sources (uses)
Transfers to other City funds (241,812) (241,812) (256,637) (14,825) Net change in fund balance 400 400 14,060 13,660
Fund balance at beginning of year 500,986 500,986 500,986 - Fund balance at end of year $ 501,386 501,386 $ 515,046 $ 13,660 $ Budget Variance From
Final Budget
Positive
(Negative)
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
Year ended June 30, 2025
10. NOTE 1 – BUDGETARY DATA
The City adopts an annual budget on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the fund level.
ADDITIONAL INFORMATION
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
PROGRAM STATUS: COMPARISON OF 5-YEAR PLAN PROJECT BUDGET
TO CURRENT YEAR EXPENDITURES
Year ended June 30, 2025
11. The Measure I Five Year Capital Improvement Plan for local streets was adopted by Council Resolution No. 2024-23. Of the funds allocated under the Measure I Five Year Capital Improvement Plan, the following programs were affected during the current fiscal year:
5-Year Current Fiscal
Plan Project Year Under/(Over)
Estimate Expenditures Estimate
Local projects
Tree Maintenance Program - WCA $ 78,961 249,299 $ 170,338 $ Pavement management program 256,637 1,246,687 990,050 Total Measure I fund expenditures $ 335,598
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
MAINTENANCE OF EFFORT: COMPARISON OF BASE LEVEL AMOUNT
TO ANNUAL EXPENDITURES
Year ended June 30, 2025
12. The maintenance of effort base level amount was determined based upon fiscal year 2008/09 spending levels. Excess/(deficient) amounts are carried forward in accordance with the Measure I Strategic Plan.
Actual amounts expended in relation to the base level amount in each year subsequent to the base year are as follows:
General Fund
Street and Cumulative
Highway Base Level Excess/ Excess/
Fiscal Year Ending June 30, Funds Utilized Amount (Deficiency) (Deficiency) 2010 $ 40,142 $ (115,156) $ (75,014) $ (75,014)
2011 160,298 (115,156) 45,142 (29,872)
2012 72,664 (115,156) (42,492) (72,364)
2013 89,957 (115,156) (25,199) (97,563)
2014 99,332 (115,156) (15,824) (113,387)
2015 91,999 (115,156) (23,157) (136,544)
2016 116,749 (115,156) 1,593 (134,951)
2017 148,773 (115,156) 33,617 (101,334)
2018 206,192 (115,156) 91,036 (10,298)
2019 208,718 (115,156) 93,562 83,264
2020 151,991 (115,156) 36,835 120,099
2021 118,280 (115,156) 3,124 123,223
2022 165,960 (115,156) 50,804 174,027
2023 210,638 (115,156) 95,482 269,509
2024 224,874 (115,156) 109,718 379,227
Crowe LLP
Independent Member Crowe Global
(Continued)
13. INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND
ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors
San Bernardino County Transportation Authority
San Bernardino, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Measure I Fund of the City of Grand Terrace, California (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Measure I Fund’s basic financial statements and have issued our report thereon dated December 3, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting of the Measure I Fund (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the financial statements of the Measure I Fund of the City are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
14. Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Crowe LLP
Los Angeles, California
December 3, 2025
Crowe LLP
Independent Member Crowe Global
(Continued)
15. INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE MEASURE I COMPLIANCE
REQUIREMENTS AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE To the Board of Directors
San Bernardino County Transportation Authority
San Bernardino, California
Report on Compliance with the Measure I Ordinance
We have audited City of Grand Terrace’s (City), compliance with the types of compliance requirements described in Measure I Ordinance (the “Ordinance”), that could have a direct and material effect on the City’s compliance with the Ordinance for the year ended June 30, 2025.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its Ordinance for the year ended June 30, 2025.
Basis for Opinion on the Ordinance
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the Ordinance. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the Ordinance.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Ordinance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of the Ordinance.
16. In performing an audit in accordance with GAAS, Government Auditing Standards, and the Ordinance, we:
• exercise professional judgment and maintain professional skepticism throughout the audit. • identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Ordinance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance.
Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of the Ordinance on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the Ordinance will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of the Ordinance that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Ordinance. Accordingly, this report is not suitable for any other purpose.
Crowe LLP
Los Angeles, California
December 3, 2025
CITY OF GRAND TERRACE, CALIFORNIA
MEASURE I FUND
SCHEDULE OF PRIOR YEAR FINDINGS AND RESPONSES
Year Ended June 30, 2025
17. 2024-001 – Interest Income Allocation (Material Weakness) There was no equitable proration of interest earned to the Measure I Fund's cash and investments balance.
Status: The finding has been rectified. Interest earned for the Measure I Fund’s cash and investments has been recorded in fiscal year 2025
AGENDA REPORT
MEETING DATE: March 10, 2026
TITLE: Measure I 3.0 Draft Expenditure Plan
PRESENTED BY: Konrad Bolowich, City Manager
RECOMMENDATION: CONSIDER ADOPTION OF A RESOLUTION FOR THE MEASURE I 3.0 EXPENDITURE PLAN AS PART OF SBCTA’S MEMBER AGENCY
REVIEW PROCESS
2030 VISION STATEMENT:
This Measure directly supports the City’s 2030 Vision by securing long-term funding for essential roadway, mobility, transit, and safety improvements that preserve the community's quality of life and strengthen local and regional connectivity.
BACKGROUND:
In 1989, voters in San Bernardino County approved Measure I, a half-cent sales tax dedicated to transportation improvements. The measure was later extended in 2004 and is now scheduled to expire in 2040. SBCTA has initiated Measure I 3.0, proposing a continuation of the sales tax without increasing the tax rate, consistent with the language of the draft Ballot Question (EXHIBIT C).
SBCTA has circulated the draft Measure I 3.0 Expenditure Plan for review by all member agencies, including the City of Grand Terrace. The Expenditure Plan outlines how revenue will be allocated countywide and within each subarea. Grand Terrace is within the San Bernardino Valley Subarea.
DISCUSSION:
1. WHERE THE MONEY COMES FROM AND WHERE IT GOES
Measure I is a half-cent sales tax that everyone in San Bernardino County has been paying for years to fix roads and improve transportation. The new version — Measure I 3.0 — doesn’t raise taxes, it just continues the same tax voters already pay.
Money collected in our area stays in our area.
Grand Terrace is in the San Bernardino Valley Subarea, so the money collected here must be spent on projects that benefit our communities.
2. HOW THE MONEY WILL BE DIVIDED
All the transportation money is split into different pots:
Local Mobility (25%)— This is money we control locally. It can pay for:
• Repaving streets
• Fixing potholes
• Adding sidewalks
• Bike lanes
• Streetlights
• Safety improvements
Each city gets its share based on its population. Cities also have to save a small portion for walking and biking projects.
Regional Mobility (50%) — This covers big projects that help multiple cities — highways, major road improvements, interchange upgrades, and large transit or rail projects.
These are the kinds of projects that:
• Ease traffic on major roads
• Improve safety
• Improve freeway access
• Reduce congestion
SBCTA makes decisions on these projects, but local city representatives are part of the process.
Transit Operations (25%) — This money supports the services that keep people moving day-to-day:
• Bus and rail operations
• Senior and disabled transportation programs
• First-mile/last-mile connections (getting you from home to transit) • Rideshare and safety programs
These funds help keep fares affordable for groups like students, seniors, and veterans.
3. PROJECTS THAT HELP THE WHOLE COUNTY
(Interregional Mobility – 3%) — Before the money goes into the local and regional categories, 3% is set aside countywide. This money goes toward things like:
• Improving major corridors (like Cajon Pass)
• Emergency evacuation routes
• Disaster recovery and resilience
• Fixing roads damaged by natural disasters
These are major, countywide needs that help everyone.
4. OVERSIGHT AND TRANSPARENCY
Theplan requires strict public oversight to make sure money is spent correctly. There is an Independent Taxpayer Oversight Committee (ITOC) that:
• Reviews audits
• Ensures money is spent legally and responsibly
• Reports to the public every year
This means cities — including Grand Terrace — must prove that funds are used properly.
5. WHAT THIS MEANS FOR GRAND TERRACE
If Measure I 3.0 is approved, it will help Grand Terrace:
• Fix and maintain local streets
• Improve sidewalks and pedestrian safety
• Build bike lanes and active transportation projects
• Support transit for seniors and persons with disabilities • Participate in big regional projects improving access to I-215 • Improve safety across the city
All of this supports the City’s goal to invest in critical infrastructure and maintain a safe, well-managed community.
ENVIRONMENTAL IMPACT:
Adoption of the Measure I 3.0 Expenditure Plan does not commit the City or SBCTA to any specific transportation project and therefore does not result in direct environmental impacts.
FISCAL IMPACT:
No immediate fiscal impact.
CC Reso No. 2026-xx Page 1 of 2 March 10, 2026
RESOLUTION NO. 2026-xx
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE, STATE OF CALIFORNIA, APPROVING THE EXPENDITURE
PLAN FOR THE EXPENDITURE OF REVENUES IN SAN BERNARDINO
COUNTY EXPECTED TO BE DERIVED FROM THE PROPOSED
CONTINUATION OF MEASURE I
WHEREAS, the voters of San Bernardino County passed Measure I in November 1989 and renewed it in 2004, authorizing San Bernardino Associated Governments, acting as the San Bernardino County Transportation Authority, to impose a one-half of one percent transactions and use tax for transportation improvements, applicable in the incorporated and unincorporated territory of the County of San Bernardino, through April 1, 2040, and
WHEREAS, Measure I has provided funding for numerous transportation projects, including freeways, local roads, major streets, interchanges, the Metrolink commuter train system, public buses, traffic signals, and more; and
WHEREAS, the imposition of the one-half of one percent transactions and use tax is set to expire in 2040, and
WHEREAS, San Bernardino County Transportation Authority, after engagement with private sector stakeholders and city and County representatives, has prepared an Expenditure Plan for the revenues expected to be derived from the proposed continuation of Measure I, which is anticipated to be placed on the November 3, 2026, ballot, and WHEREAS, the proposed Expenditure Plan for the continuation of Measure I is attached hereto as EXHIBIT 1, and
WHEREAS, if approved by the voters, the continuation of Measure I would authorize the collection of a one-half of one percent sales tax and generate an estimated $7.5 billion in its first 30 years for local transportation projects, and WHEREAS, if approved by the voters, the continuation of Measure I would not institute a new tax, but continue the existing one-half of one percent sales tax for transportation after April 1, 2040, and
WHEREAS, revenues raised from the continuation of Measure I would remain in San Bernardino County and could not be allocated by the state or federal government, and
WHEREAS, Measure I would provide a long-term funding source to help fight traffic congestion; improve local streets, major roads and highways; and enhance San Bernardino County’s economy by providing construction-related jobs, manufacturing jobs, and an effective transportation system to meet the needs of residents and the business community, and
CC Reso No. 2026-xx Page 2 of 2 March 10, 2026
WHEREAS, Public Utilities Code section 180206 requires that the Measure I Continuation Expenditure Plan be approved by the County Board of Supervisors and a majority of the cities representing a majority of the population residing in incorporated areas, and
WHEREAS, the City of Grand Terrace desires to approve Measure I Continuation Expenditure Plan in accordance with Public Utilities Code section 180206 in order to secure long-term funding for essential roadway, mobility, transit, and safety improvements that preserve the community’s quality of life and strengthen local and regional connectivity.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE, CALIFORNIA, DOES RESOLVE AS FOLLOWS:
1. The City Council finds that the above recitals are true and correct and accordingly, are incorporated as a material part of this Resolution.
2. The City Council of the City of Grand Terrace hereby approves the Measure I Continuation Expenditure Plan developed by the Board of Directors of the San Bernardino County Transportation Authority, attached hereto as EXHIBIT 1.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace at a regular meeting held on the 10th day of March 2026. ________________________________
Bill Hussey
Mayor
ATTEST:
________________________________
Daysi Alcocer
City Clerk
APPROVED AS TO FORM:
________________________________
Adrian R. Guerra
City Attorney
Exhibit A
Transportation Expenditure Plan
Revenue Estimates and Distribution. Allocation of revenue authorized by Ordinance No. 26-1 is established within this Expenditure Plan. Funds shall be allocated by percentage of the actual revenue received. An estimate of revenues and allocation among categories for the first 30 years is $7.5 billion. The estimated revenue is based upon 2026 value of money and is not binding or controlling.
Return to Source. After deduction of required CDTFA fees, funds dedicated for the Interregional Mobility Expenditure Plan and authorized administrative costs, revenues generated from each specified Subarea within San Bernardino County will be expended on projects of direct benefit to that Subarea.
Revenues will be accounted for separately for each Subarea and then allocated to specified project categories. Decisions on how revenues for certain project categories are expended within the Subareas will be made by the Authority Board of Directors, based upon recommendation of local representatives.
Subarea Identification. The San Bernardino Valley Subarea will include the cities of Chino, Chino Hills, Colton, Fontana, Grand Terrace, Highland, Loma Linda, Montclair, Ontario, Rancho Cucamonga, Redlands, Rialto, San Bernardino, Upland and Yucaipa and unincorporated areas in the east and west portions of the San Bernardino valley urbanized area. The Mountain/Desert area will include the following subareas: (1) The North Desert Subarea, which includes the City of Barstow and surrounding unincorporated areas; (2) The Colorado River Subarea, which includes the City of Needles and the surrounding unincorporated areas of the East Desert; (3) The Morongo Basin Subarea, which includes the City of Twentynine Palms, Town of Yucca Valley, and surrounding unincorporated areas; (4) The Mountain Subarea, which includes the City of Big Bear Lake and surrounding unincorporated areas of the San Bernardino Mountains; and (5) the Victor Valley Subarea, which includes the Cities of Adelanto, Hesperia, and Victorville; the Town of Apple Valley; and surrounding unincorporated areas including Wrightwood.
Contribution from New Development. No revenue generated from the tax shall be used to replace the fair share contributions required from new development as further described in Section 8 of the Ordinance.
Requirement for Annual Financial and Compliance Audits of Measure Funds. The San Bernardino County Transportation Authority shall undergo a biennial financial audit, and each local jurisdiction receiving an allocation of Measure revenue authorized in this Expenditure Plan shall undergo an annual financial audit, with all audits to be performed in accordance with generally accepted auditing standards and government auditing standards issued by the Comptroller General of the United States. Compliance audits also shall be conducted to ensure that each agency is expending funds in accordance with the provisions and guidelines established for Measure revenue including compliance with Maintenance of Effort provisions
The Interregional Mobility Expenditure Plan. Upon initial collection of revenue, 3% of the revenue generated across all San Bernardino County subareas will be reserved in advance of other allocations specified in this plan, in an account for the Interregional Mobility Expenditure Plan. The Interregional Mobility Expenditure Plan will provide resources for the planning and implementation of projects and programs that provide critical infrastructure to communities impacted by regional motorist, tourism, interregional travel, and goods movement. This program will help plan and deliver critical infrastructure improvements, such as enhancements in the Cajon Pass and other key corridors, that address congestion,
enhance mobility, improve safety, and strengthen resilience. It will also support evacuation planning, bolster emergency response capabilities, improve primary evacuation routes, and fund transit-related evacuation needs. In addition, the program will be available to address unexpected infrastructure damage resulting from natural or human-caused disasters, ensuring rapid recovery and the restoration of essential interregional mobility.
San Bernardino Valley Subarea Expenditure Plan. In that area described as the San Bernardino Valley Subarea, and referred to herein as the Valley Subarea, project categories shall be established as specified below. The San Bernardino Valley Subarea Expenditure Plan is illustrated in Figure A.
A. State and Federal Transportation Funds. A proportional share of projected state and federal transportation funds shall be reserved for use solely within the Valley Subarea.
B. Local Mobility 25%. Local priorities that focus on local roadway, bikeway, and sidewalk construction, repair, and maintenance for improved localized movement. Includes pass through for local priorities such as: local street widening & rehabilitation, potholes, grade separations, sidewalks, bike lanes, streetlights, and quiet zones. Allocations to local jurisdictions shall be on a per capita basis using the most recent State Department of Finance population estimates for January 1, with the County's portion based upon unincorporated population in the Valley Subarea. Estimates of unincorporated population within the Valley Subarea shall be determined by the County Planning Department, reconciled with the State Department of Finance population estimate for January 1 of each year.
Upon initial collection of revenue, each local jurisdiction shall reserve 5% of allocated revenue in a special account to be expended on active transportation projects. Eligible active transportation projects may include, at the discretion of the local jurisdiction, bicycle and pedestrian projects and costs for associated studies or plans. If, after at least ten years of revenue collection, the local jurisdiction’s governing body makes a finding that the reserve for active transportation projects is no longer necessary, and the Authority Board of Directors subsequently approves the finding, then all Local Mobility funds allocated to the local jurisdiction may be used for any eligible purpose.
Local Mobility projects are defined as local street and road construction, repair, and maintenance and other eligible local transportation priorities. Except as set forth herein, Local Mobility funds can be used flexibly for any eligible transportation purpose determined to be a local priority, including local streets, major highways, state highway improvements, transit, and other improvements/programs to maximize use of transportation facilities. Expenditure of Local Mobility funds shall be based upon a Five-Year Plan adopted annually by the governing body of each local jurisdiction after being made available for public review and comment. Local Mobility funds shall be disbursed to local jurisdictions upon receipt of the annually adopted Five-Year Plan. The locally adopted Five-Year Plan shall be consistent with local, regional, and state transportation plans.
C. Regional Mobility 50%. Regional priorities that focus on goods movement, transit, managed lanes, congestion management, and emerging transportation technologies to enhance regional movement and include: highway improvements, bus and passenger rail (capital and rehabilitation), corridors, interchanges, environmental mitigation, traffic management systems (freeway service patrol and air quality strategies), quiet zones, planning and project development, and emerging transportation technology.
Regional Mobility projects are defined as congestion relief and safety improvements to corridors that connect communities, serve major destinations, and provide freeway access. Decisions on how Regional Mobility funds are expended will be made by the Authority Board of Directors, based upon recommendation of local jurisdiction representatives. Funding priorities shall be given to improving roadway safety, relieving congestion, and street improvements at rail crossings and shall take into
account equitable geographic distribution over the life of the program. Eligible projects also include, but are not limited to, signal synchronization, systems to improve traffic flow, commuter assistance programs, freeway service patrol, and projects that contribute to environmental enhancement associated with transportation facilities.
D. Operations 25%. Resourcing the operational costs for providing mobility services via rail, transit, senior and specialized services, first/last mile connections, ridesharing, and safety support functions.
Decisions on how Operations funds are expended will be made by the Authority Board of Directors, based upon recommendations of local jurisdiction representatives. Funding priorities shall be given to maintaining core services across all modes of mobility.
Mountain/Desert Expenditure Plan. In that area described as the Mountain/Desert area, the following Expenditure Plan requirements shall apply. The Mountain/Desert Subarea Expenditure Plan is illustrated in Figure B.
A. State and Federal Transportation Funds. A proportional share of projected state and federal transportation funds shall be reserved for use solely within the Mountain/Desert Subareas.
B. Local Mobility 70%. Local priorities that focus on local roadway, bikeway, and sidewalk construction, repair, and maintenance for improved localized movement. Includes pass through for local priorities such as: local street widening & rehabilitation, potholes, grade separations, sidewalks, bike lanes, and streetlights. Allocations to local jurisdictions shall be based upon population (50 percent) and tax generation (50 percent). Population calculations shall be based upon the most current State Department of Finance estimates for January 1 of each year. Estimates of unincorporated population within each Subarea shall be determined by the County Planning Department, reconciled with the State Department of Finance population estimate. Tax generation calculations shall be based upon CDTFA data.
Upon initial collection of revenue, each local jurisdiction shall reserve 5% of allocated revenue in a special account to be expended on active transportation projects. Eligible active transportation projects may include, at the discretion of the local jurisdiction, but are not limited to, bicycle and pedestrian projects and costs for associated studies or plans. If, after at least ten years of revenue collection, the local jurisdiction’s governing body makes a finding that the reserve for active transportation projects is no longer necessary, and the Authority Board of Directors subsequently approves the finding, then all Local Mobility funds allocated to the jurisdiction may be used for any eligible purpose.
Local Mobility projects are defined as local street and road construction, repair, and maintenance and other eligible local transportation priorities. Except as set forth herein, Local Mobility funds can be used flexibly for any eligible transportation purpose determined to be a local priority, including local roads, major streets, state highway improvements, transit, including but not limited to, fare subsidies and service enhancements for seniors and persons with disabilities, and other improvements/programs to maximize use of transportation facilities. Expenditure of Local Mobility funds shall be based upon a Five-Year Plan adopted annually by the governing body of each local jurisdiction after being made available for public review and comment. Local Mobility funds shall be disbursed to local jurisdictions upon receipt of the annually adopted Five-Year Plan. The locally adopted Five-Year Plans shall be consistent with other local, regional, and state transportation plans.
C. Regional Mobility 20%. Regional priorities that focus on goods movement, transit, managed lanes, congestion management, and emerging transportation technologies to enhance regional movement and include: highway improvements, bus and passenger rail (capital and rehabilitation), corridors, interchanges, environmental mitigation, traffic management systems (freeway service patrol and air quality strategies), planning and project development, and emerging transportation technology.
Revenue collected within each Subarea shall be reserved in a special account to be expended on Regional Mobility projects of benefit to the Subarea. Regional Mobility projects are defined as major streets and highways serving as primary routes of travel within the Subarea, which may include State highways and freeways, where appropriate. Regional Mobility Projects funds can be used to leverage state and federal funds for transportation projects and to perform advance planning/project reports.
Expenditure of Regional Mobility funds shall be approved by the Authority Board of Directors, based upon a recommendation of Subarea representatives and the Mountain/Desert Policy Committee. If, after five years of revenue collection and every five years thereafter, the local representatives and the Mountain/Desert Policy Committee make a finding that Regional Mobility funds are not required for improvements of benefit to the Subarea, then revenue in the Regional Mobility category may be returned to local jurisdictions within the Subarea. Such return shall be allocated and expended based upon the formula and requirements established in the Local Mobility category.
D. Operations 10%. Resourcing the operational costs for providing mobility services via rail, transit, senior and specialized services, first/last mile connections, ridesharing, and safety support functions.
Decisions on how Operations funds are expended will be made by the Authority Board of Directors, based upon recommendation of Subarea representatives and the Mountain/Desert Policy Committee and/or Transit Committee. Funding priorities shall be given to maintaining core services across all modes of mobility services.
The Authority Board of Directors, based upon recommendation of Subarea representatives and the Mountain/Desert Policy Committee, may provide additional funding beyond 10% upon a finding that such increase is required to address unmet transit needs of the Subarea. All increases above the 10% initial revenue collected for the Operations category shall come from the Local Mobility category of the Subarea.
E. Mountain/Desert Policy Committee. The Mountain/Desert Policy Committee of the Authority shall remain in effect and provide oversight of the implementation of the Mountain/Desert Expenditure Plan.
Measure “I”
Transportation Expenditure Plan
FIGURE A
San Bernardino Valley Subarea Expenditure Plan
14 FIGURE B
Mountain Desert Expenditure Plan
Exhibit “B”
Independent Taxpayer Oversight Committee (ITOC)
ITOC Goal and Function. Voter approval of this Measure shall result in the continuation of the existing Independent Taxpayer and Oversight Committee (ITOC) as follows:
The ITOC shall provide citizen review to ensure that all Measure funds are spent by the San Bernardino County Transportation Authority (hereby referred to as the Authority) in accordance with provisions of the Expenditure Plan and Ordinance No. 26-1, Measure I and the Measure I Expenditure Plan.
Audit Requirement. A bi-annual fiscal and compliance audit shall be performed in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. The audit shall review the basic financial statements of the Authority as defined by the Governmental Accounting Standards Board and the financial and compliance audits of the member jurisdictions.
Role of Financial and Compliance Audit and the ITOC. The ITOC shall review the annual audits of the Authority; report findings based on the audits to the Authority; and recommend any additional audits for consideration that the ITOC believes may improve the financial operation and integrity of program implementation.
The Authority shall hold a publicly noticed meeting, which may or may not be included on the agenda of a regularly scheduled Authority Board of Directors meeting, with the participation of the ITOC to consider the findings and recommendations of the audits.
Membership and Selection Process. The Authority shall have an open process to select five committee members, which shall include solicitation of trade and other organizations to suggest potential nominees to the committee. The committee members shall possess one of the following credentials: • Professional in the field of municipal audit, finance and/or budgeting with a minimum of five years in a relevant and senior decision-making position in the public or private sector. • Licensed civil engineer or trained transportation planner with at least five years of demonstrated experience in the fields of transportation and/or urban design in government and/or the private sector. No member shall be a recipient or sub-recipient of Measure funding. • Three public members who possess knowledge and skills that will be helpful to the work of the ITOC.
The Chair and the Executive Director of the Authority shall serve as ex-officio members of the ITOC.
Terms and Conditions for Committee. Committee members shall serve staggered four-year terms. In no case shall any voting committee member serve more than twelve years on the ITOC. Committee members shall serve without compensation, except they shall be reimbursed for authorized travel and other expenses directly related to the work of the ITOC. Committee members cannot be a current local elected official in the County or a full-time staff member of any city/town, the County government, local transit operator, or state transportation agency.
Non-voting ex-officio committee members shall serve only as long as they remain incumbents in their respective positions and shall be automatically replaced by their successors in those positions.
If vacancies on the ITOC occur, for any reason, Authority staff will collaborate with Authority Board members to find an appropriate replacement, within 90 days of the vacancy or as soon thereafter as possible, to fill the remainder of the term. When more than one application is received for a vacancy, the General Policy Committee will make a recommendation to the Authority Board of Directors to appoint an applicant to the ITOC.
When only one application is received, the Board President will recommend to the Board the applicant’s appointment to the ITOC.
ITOC Operation Protocols. The ITOC shall continue as long as Measure revenues are collected. Authority Board of Directors and staff shall fully cooperate with and provide necessary support to ensure the ITOC successfully carries out its duties and obligations.
Conflict of Interest. ITOC voting members shall have no legal action pending against the Authority and are prohibited from acting in any commercial activity directly or indirectly involving the Authority, such as being a consultant during their tenure on the ITOC. ITOC voting members shall not have direct commercial interest or employment with any public or private entity that receives the transportation tax funds authorized by the voters in this Ordinance.
Exhibit C (Ballot Question)
Measure “I” Local Transportation Improvement Program
San Bernardino County Road Repair/Traffic Relief Extension Without raising tax rates, shall an ordinance to fund repairing potholes; keeping local roads in good condition; completing freeway/highway projects to improve traffic flow/safety, reduce traffic bottlenecks;
upgrading aging bridges/overpasses; creating local jobs; keeping student/senior/disabled/veteran transit fares low be adopted, extending the ½¢ voter-approved transportation sales tax, providing approximately $250,000,000 annually until ended by voters, requiring audits, oversight, spending disclosure, local control?
AGENDA REPORT
MEETING DATE: March 10, 2026
TITLE: Community Benefit Fund Grant Award to Grand Terrace High School Baseball Booster in the amount of $2,000
PRESENTED BY: Christine Clayton, Finance Director
RECOMMENDATION: APPROVE THE COMMUNITY BENEFIT FUND GRANT APPLICATION
FROM GRAND TERRACE HIGH SCHOOL BASEBALL BOOSTER IN THE
AMOUNT OF $2,000.00 AND THE TRANSFER OF FUNDS FROM
ACCOUNT 61-461-200-000-000 TO 61-461-100-000-000
2030 VISION STATEMENT:
This staff report supports the following City Council Goals:
• Goal #1 - Ensure our Fiscal Viability, through the continuous monitoring of revenue receipts and expenditure disbursements against approved budget appropriations; and • Goal #4 – Develop and Implement Successful Partnerships through productive collaboration with community groups, youth programs and senior organizations.
BACKGROUND:
In past fiscal years, the City Council has approved the use of funds for the establishment of the Community Benefits Fund Grant Program. The purpose of the Community Benefits Fund Grant Program is to provide funding for local youth programs, community events, community fee waivers, and be used as an economic development tool for small business development in the City.
For Fiscal Year 2025-26, the City Council has approved the use of $20,000 toward community benefit funded programs and activities.
Various youth and senior program activities have benefited from the Community Benefits Fund including the Foundation of Grand Terrace, the REC Center, several youth sports leagues, and the Friends of the Grand Terrace Library.
Attachment A provides a summary of awarded grants by fiscal year and the recipients of said grants awarded in each fiscal year.
DISCUSSION:
1. Application received from Grand Terrace High School Baseball Booster Grand Terrace High School Baseball Boosters' mission is to provide financial, social and educational support to the baseball program at GTHS. We promote sportsmanship, unity and integrity within the
program.
Below summarizes the current application submitted by Grand Terrace High School Baseball Booster:
Project Title: Inspiring Youth through Baseball
Project Activity: The baseball program at Grand Terrace High School. The baseball program promotes diversity, acceptance and the opportunity for all students to participate at Grand Terrace High School.
Public Purpose: A program for youth that requires physical skills, strengths and personal development to gain life skills. These skills include but are not limited to discipline, teamwork and accountability. The program encourages participation in after school activities that are productive and healthy. The baseball families and residents who reside in Grand Terrace have the opportunity to connect and network with each other at the games throughout the season.
Amount Requested: $2,000.00
Utilization of Funds: Funds will be used for baseball program: Electrolyte drinks/bottle waters for players, practice baseballs, tarps to cover infield and team bonding dinners.
RECOMMENDATION:
Staff recommends that the City Council:
1. Approve the Community Benefit Fund grant application in the amount of $2,000.00 to Grand Terrace High School Baseball Booster.
Upon City Council approval, the applicant will comply with the following, if they have not already done so:
1. Issue the City of Grand Terrace an invoice for the grant amount with receipts;
2. Ensure that the City is mentioned/included as a sponsor in any material advertising the activity or event; and
3. Complete a W-9 form for reporting purposes.
Attached is the application received from Grand Terrace High School Baseball Booster.
ENVIRONMENTAL IMPACT:
N/A
FISCAL IMPACT:
Funds in the amount of $20,000.00 have been approved for the program and established in the Community Benefits Fund (Fund 61). If approved, the table below will show the balances of each category remaining in the fund:
FY2025-26 Community Benefits Fund
Fund
No.
Acct.
No.
Account
Title
Approved
Budget
Awarded
Grants
Balance
as of
Feb2026
Proposed
Grant
Awards
Revised
Balance
61 461-
100
Youth/School
Programs
$10,000 ($10,000) $0 ($2,000) ($2,000)
61 461-
200
Service
Organizations
$10,000 ($2,000) $8,000 $0 $6,000
TOTAL $20,000 ($12,000) $8,000 ($2,000) $4,000
OITY OF GRAND TERRACE COMMUNITY BENEFIITIS F'UND (GIt. OBF'') Organization Name:
Organization Mission:
Mailing Address:
The mission of GTHS Baseball Boosters is to provide financial, social and educational.support to the baseball program at GTHS. We promote sportsmanship, unity and integrity within the program.
Grand Terrace High School Baseball Booster
\ame: Gina Kazaltzes
1903 Cordova Ave
City, State, Zip Code CJ." cigziszq
rlI"T 3 ::T"1ill_
i Organization Contact #2:
, Mailing Address:
,
C'ly,State, lip 9:9:
: Phone & E-mail:
Phone: 626-354-2069
Name: Tanya Burns
1811 Rosedale Ave
Colton CA92324
Phone: 951-536-1093
I e-mait: -,1 -
[email protected]
Have you ever applied for funding through the City's
Community Benefit FUND (CBH) before?
Secretary
t; ny;6;il'eoo g r Ji r..ot
E Yes Xruo
lf yes, please list each time you have applied, the outcome, whether you were granted funding or not, the amount your organization originally requested and the amount approved, if any.
Amount
Approved
(if any)
2000.00
t4
5. February 2,2026
: Requested Amount: i $2000,00
3. ORGANIZATION INFORMATION
Organization Contact #1 :
CityolGrandTerrace,22T95BartonRoad,GrandTerrace,CAg23l3-5295 nrywr,.grandterrace-cct.poy
CIITY OF' GRAND IIERRACE
OOMMI]NIIT\Y BENEFIIT'S F'UND (GII- CBF)
PROJECT INFORMATION
ProjecVActivity Descri ption
(description of event the
organization is seeking
funding for)
Inspiring Youth through Baseball
The baseball program at Grand Terrace High School.
The baseball program promotes diversity, acceptance
and the opportunity for all students to participate at
Grand Terrace High School.
Describe how the
projecVactivity is for a
public purpose and
benefits the residents and
or community of Grand
Terrace
ProjecVActivity Target
Population:
ProjecVActivity Date:
: Location of
1 er9199v,r9lL"l!y_.
Detailed description of
how the funds will be
utilized.
Funds to be used for baseball program:
Electrolyte drinks/bottle waters for players.
Practice baseballs, tarps to cover infield.
Team bonding dinners.
ysical skills, strengths and personal
skills include but not limited to
ity.
n in after school activities that are
productive and healthy.
The baseball families and residents who reside in Grand Terrace have the opportunity to connect and network with each other at the game through the season.
Youth E Seniors E Women
E Businesses i tr Disabled EX Yes
Persons
February 2026 - May 2026
i Grand Terrace High School-City of Grand Terrace
tun-oing not be "ppro,l"i, i fi
Negative lmpact should
The funds would need to come from the parents/
ouardians uardians that live in the citvy and do not have the nancial means for additional expenses.
Submit completed application to: City of Grand Terrace
City Manager's Office
22795 Bafton Road
Grand Terrace, CA 92313-5295
Attn: Konrad Bolowich
CityofGrandTerrace,22T95BartonRoad,GrandTerrace,CA923l3-5295 t+ww.grandlerrace-ca.gov
Title 2015-16 2016-17 2017-18 2018-19 2019-20 2021-22 2022-23 2023-24 2024-25 2025-26 TOTAL 2025-26 TOTAL
TO DATE
Proposed
in
Mar-2026 REVISED
YOUTH / SCHOOL ORGANIZATIONS
Grand Terrace Community Basketball $ 1,136 $ - $ - $ 1,450 $ - $ - $ 2,586 $ - $ 2,586 Grand Terrace High School Football Boosters - - - 2,000 2,000 - $ 4,000 - 4,000 Grand Terrace High School Legacy Regiment Boosters - - - 2,000 - - 2,000 2,000 $ 6,000 - 6,000 Grand Terrace High School Boys Basketball - - - - 2,000 - 1,040 $ 3,040 - 3,040 Grand Terrace High School Titan Wrestling Team - - - - 1,997 - 2,000 $ 3,997 - 3,997 Grand Terrace HS Titan Wrestling Booster Club 2,000 $ 2,000 - 2,000 Grand Terrace High School Cheer Booster Club - - - - - - - 2,000 2,000 2,000 $ 6,000 - 6,000 Grand Terrace High School Baseball Booster - - - - - - - - - $ - 2,000 2,000 Grand Terrace Little League 2,000 - 2,000 - - - $ 4,000 - 4,000 Titan Strikers FC - - - - - - - - 500 2,000 $ 2,500 - 2,500 Grand Terrace Youth Football & Cheer - 4,000 2,000 - - - 2,000 2,000 $ 10,000 - 10,000 Boy Scout Troop 40 2,000 2,000 $ 2,000 - 2,000
Grand Terrace Tribe Baseball Club 2,000 $ 2,000 - 2,000 Terrace View Elementary PTA 1,000 671 1,517 700 - 1,805 1,725 2,000 - $ 9,418 - 9,418 $ 4,136 $ 4,671 $ 5,517 $ 6,150 $ 5,997 $ 1,805 $ 3,725 $ 7,040 $ 10,500 $ 10,000 $ 57,541 $ 2,000 $ 59,541
NON-PROFIT / SERVICE ORGANIZATIONS
American Cancer Society $ - $ - $ 2,000 $ - $ - $ - $ 2,000 $ - $ 2,000 Drug Alternative Program - 2,000 - - - - $ 2,000 - 2,000 Foundation of Grand Terrace 2,350 2,000 1,830 - - 2,000 2,000 2,000 $ 12,180 12,180 Friends of Grand Terrace Library 3,750 2,000 2,000 4,000 - - $ 11,750 - 11,750 Grand Terrace Lions Club - 620 - - - - $ 620 - 620
Sheriff’s Central Station Explorer Program - - - 2,000 - - $ 2,000 - 2,000 The REC Center 2,187 310 - 3,100 - - $ 5,597 - 5,597
Grand Terrace Cars & Coffee - - - - - 2,000 2,000 1,000 $ 5,000 - 5,000 Christ the Redeemer Catholic Church - - - - - - 310 310 $ 620 620 Grand Terrace Living Word Foursquare Church - - - - - - 2,000 - 1,500 $ 3,500 - 3,500 New City Church - - - - - - - 2,000 $ 2,000 2,000
Grand Terrace Women's Club - - - - - - - - 2,000 2,000 $ 4,000 - 4,000 Grand Terrace Chamber of Commerce 2,000 $ 2,000 - 2,000 Church Of Fire In Christ - - - - - - - - 2,000 $ 2,000 - 2,000 Academy of Champions Figure Skating Team 2,000 2,000 $ 2,000 - 2,000 Family Service Association - - - - 2,000 - - - - $ 2,000 - 2,000 $ 8,287 $ 6,930 $ 5,830 $ 9,100 $ 2,000 $ 4,000 $ 6,310 $ 5,310 $ 9,500 $ 4,000 $59,267 $ - $ 59,267 TOTAL $ 12,423 $ 11,601 $ 11,347 $ 15,250 $ 7,997 $ 5,805 $ 10,035 $ 12,350 $ 20,000 $ 14,000 $ 116,808 $ 2,000 $ 118,808 City of Grand Terrace
Community Benefit Grant Awards
GRANT AWARD HISTORY as of Jan 31, 2026 and Approved & Proposed Applications for Mar 2026
AGENDA REPORT
MEETING DATE: March 10, 2026
TITLE: First Reading & Introduction of an Ordinance adding Chapter 9.37 (Aggressive Solicitation)
PRESENTED BY: Konrad Bolowich, City Manager
RECOMMENDATION: CONDUCT A FIRST READING & INTRODUCTION, BY TITLE ONLY, OF AN ORDINANCE ADDING CHAPTER 9.37 (AGGRESSIVE SOLICITATION) 2030 VISION STATEMENT:
This staff report supports Goal #2: Maintain Public Safety BACKGROUND:
The City of Grand Terrace has experienced an increase of complaints from residents and businesses regarding aggressive solicitation in public areas. These complaints typically involve individuals approaching pedestrians or motorists in a manner that is perceived as intimidating, obstructive, or disruptive to the normal use of public spaces.
Examples reported to the City include individuals approaching vehicles in traffic lanes or intersections, repeated solicitation after a refusal, following pedestrians, and solicitation occurring near sensitive locations such as banks, automated teller machines (ATMs), transit stops, and retail entrances.
While solicitation itself is generally protected as expressive activity under the First Amendment of the United States Constitution, courts have consistently recognized that local governments may impose reasonable time, place, and manner restrictions in order to protect public safety, maintain traffic flow, and prevent intimidation or harassment.
The proposed ordinance is intended to address aggressive forms of solicitation while preserving the constitutional rights of individuals to engage in lawful expressive activity.
DISCUSSION:
The proposed ordinance would add Chapter 9.37 – Aggressive Solicitation to the Grand Terrace Municipal Code. The chapter establishes definitions, behavioral standards, and location-based restrictions designed to prevent intimidation, obstruction, and unsafe interactions between solicitors and the public.
Key Provisions
1. Prohibition of Aggressive Solicitation
The ordinance prohibits solicitation conducted in an “aggressive manner,” which includes behaviors such as:
• Intentionally making unwanted physical contact
• Following a person while soliciting
• Continuing to solicit after a person has declined
• Blocking pedestrian or vehicular movement
• Using threatening or intimidating language or gestures These provisions focus on conduct, rather than the message or purpose of the solicitation.
2. Location-Based Restrictions
The ordinance restricts solicitation in certain locations where safety concerns or heightened vulnerability may exist, including:
• Within 25 feet of ATMs, banks, or check-cashing businesses • Within 25 feet of bus stops or transit vehicles
• Within public parking garages
• From occupants of vehicles in traffic
• On private property where the owner has requested the activity stop or has posted signage prohibiting solicitation
These restrictions are intended to address situations where solicitation can create traffic hazards, safety risks, or heightened fear of crime.
3. Constitutional Safeguards
The ordinance expressly states that it is not intended to restrict:
• Constitutionally protected free speech
• Lawful commercial activity
• Authorized business activities conducted by property owners or tenants • Emergency vehicle repair assistance
The ordinance is therefore structured as a content-neutral regulation focusing on behavior and location rather than the content of speech.
4. Enforcement
Violations of the ordinance may be prosecuted as either:
• An infraction, or
• A misdemeanor,
This is consistent with the City’s general penalty provisions and applicable sections of the California Penal Code.
This enforcement flexibility allows officers to address minor violations proportionately while preserving stronger penalties for repeated or serious violations.
LEGAL CONSIDERATIONS:
• The ordinance was drafted to comply with applicable constitutional standards governing solicitation and panhandling. Courts have consistently held that while solicitation is protected speech, municipalities may regulate aggressive behavior and restrict solicitation in narrowly defined locations where public safety concerns exist.
• The proposed ordinance reflects commonly adopted provisions used by many California municipalities and has been reviewed by the City Attorney for consistency with applicable law, including California Penal Code Sections 647 and 647c.
The proposed ordinance establishes reasonable regulations intended to protect public safety, maintain access to public spaces, and reduce intimidation associated with aggressive solicitation while respecting constitutional free speech protections.
Adoption of the ordinance will provide the City with an additional tool to address complaints from residents and businesses regarding aggressive solicitation occurring in public areas.
Staff recommends that the City Council introduce, move for adoption and waive full reading of an ordinance adding Chapter 9.37 (Aggressive Solicitation) to Title 9 (Public Peace, Morals and Welfare) of the Grand Terrace Municipal Code establishing reasonable time, place, and manner restrictions on aggressive solicitation within the City.
ENVIRONMENTAL IMPACT:
This action does not meet the threshold of a project under CEQA and is exempt.
FISCAL IMPACT:
There is no fiscal impact associated with adoption of this ordinance.
CC Reso No. xxx Page 1 of 6
ORDINANCE NO. XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE ADDING CHAPTER 9.37 (AGGRESSIVE SOLICITATION) OF TITLE 9 (PUBLIC PEACE, MORALS AND WELFARE) OF THE GRAND
TERRACE MUNICIPAL CODE
WHEREAS, the City of Grand Terrace (the “City”) finds the increase in aggressive solicitation or panhandling throughout the City has become extremely disturbing and disruptive to residents and business, and has contributed to the loss of access to and enjoyment of public places, but also to an enhanced sense of fear, intimidation, and disorder; and
WHEREAS, the City Council finds that these concerns apply equally with respect to solicitation which obstructs, impedes or interferes with the use of streets and public areas; and
WHEREAS, aggressive solicitation may include, without limitation, approaching or following pedestrians, repetitive soliciting despite refusals, the use of abusive or profane language to cause fear and intimidation, unwanted physical contact, or the intentional blocking of pedestrian and vehicular traffic; and
WHEREAS, the City Council further finds that the presence of individuals who solicit money from persons at or near banks, automated teller machines, public transportation stations, or in public transportation vehicles is especially aggressive or otherwise troublesome because of the enhanced fear of crime in those confined environments; and
WHEREAS, motorists also find themselves confronted by persons seeking money.
Such persons may, without permission, wash a motorist’s automobile windows at traffic intersections or attempt to open car doors or locate parking spaces, despite explicit indications by drivers not to do so, with the expectation that the motorist pay the solicitor.
Such activity carries with it an implicit threat to both persons and property; and WHEREAS, the City Council is enacting this ordinance pursuant to its mandate and authority, and in such a way that is consistent with applicable and relevant law, including Sections 647 and 647c of the California Penal Code; and WHEREAS, this Ordinance constitutes a valid time, place, and/or manner restriction on solicitation by restricting aggressive solicitation or solicitation in specific locations which is known to create fear or otherwise intimidate persons in the City of Grand Terrace, and is not intended to limit any persons from exercising their Constitutional right to solicit funds, picket, protest or engage in other constitutionally protected activity.
CC Reso No. xxx Page 2 of 6
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE DOES ORDAIN AS FOLLOWS:
SECTION 1. The facts set forth in the recitals in this Ordinance are true and correct and incorporated herein by this reference.
SECTION 2. A new Chapter 9.37 (Aggressive Solicitation) is hereby added to Title 9 (Public Peace, Morals and Welfare) of the Grand Terrace Municipal Code and shall read in its entirety as follows:
“Chapter 9.37 Aggressive Solicitation
9.37.010 – Purpose and intent.
9.37.020 – Definitions.
9.37.030 – Aggressive solicitation prohibited.
9.37.040 – Solicitation prohibited in specified areas.
9.37.050 – Penalty.
9.37.010 – Purpose and intent.
(a) It is the purpose and intent of this chapter to impose reasonable time, place, and manner limitations on solicitation, as defined herein, in order to protect the safety of the general public against aggressive solicitation while respecting the constitutional right to free speech.
(b) The provisions of this chapter shall not be construed to prohibit:
(1) The right to exercise protected free speech;
(2) The lawful vending of goods and services;
(3) Solicitations related to business authorized by or conducted by the property owner, business owner, or employees thereof on the premises; (4) Solicitations related to the lawful towing of a vehicle; (5) Solicitations related to emergency repairs requested by the operator or other occupant of a vehicle.
9.37.020 – Definitions.
For purposes of this chapter, the following words shall have the following meaning, unless the context clearly indicates otherwise:
“Aggressive manner” shall mean any of the following:
CC Reso No. xxx Page 3 of 6
A. Intentionally or recklessly making any physical contact with or touching another person in the course of the solicitation without the person's consent; B. Following the person being solicited, if that conduct is:
(1) Intended to or is likely to cause a reasonable person to fear imminent bodily harm or the commission of a criminal act upon property in the person's possession, or
(2) Is intended to or is reasonably likely to intimidate the person being solicited into responding affirmatively to the solicitation; C. Continuing to solicit within five (5) feet of the person being solicited after the person has made a negative response, if continuing the solicitation is:
(1) Intended to or is likely to cause a reasonable person to fear imminent bodily harm or the commission of a criminal act upon property in the person's possession, or
(2) Is intended to or is reasonably likely to intimidate the person being solicited into responding affirmatively to the solicitation; D. Intentionally or recklessly blocking the safe or free passage of the person being solicited or requiring the person, or the driver of the vehicle, to take evasive action to avoid physical contact with the person making the solicitation. Acts authorized as an exercise of one's constitutional right to picket or legally protest shall not constitute obstruction of pedestrian or vehicular traffic;
E. Intentionally or recklessly using:
(1) Obscene or abusive language or gestures intended to or likely to cause a reasonable person to fear imminent bodily harm or the commission of a criminal act upon property in the person's possession, or
(2) Words intended to or reasonably likely to intimidate the person into responding affirmatively to the solicitation; or
F. Approaching the person being solicited in a manner that:
(1) Is intended to or is likely to cause a reasonable person to fear imminent harm or the commission of a criminal act upon property in the person's possession, or
CC Reso No. xxx Page 4 of 6
(2) Is intended to or is reasonably likely to intimidate the person being solicited into responding affirmatively to the solicitation. "Automated teller machine (ATM)" means a device, linked to a financial institution's account records, which is able to carry out transactions, including, but not limited to, account transfers, deposits, cash withdrawals, balance inquiries and mortgage and loan payments.
"Automated teller machine facility" means the area comprised of one or more automatic teller machines and any adjacent space which is made available to banking customers after regular banking hours.
"Check-cashing business" means any person duly licensed by the State Banking Department to engage in the business of cashing checks, drafts or money orders for consideration pursuant to the provisions of the banking laws. "Public area" means an area to which the public or a substantial group of persons has access, and includes, but is not limited to, alleys, bridges, buildings, driveways, public parking garages, parking lots, parks, playgrounds, schools, plazas, sidewalks, and streets open to the general public, and the doorways and entrances to buildings and dwellings, and the grounds enclosing them. "Solicit" means to request an immediate donation of money or other thing of value from another person, regardless of the solicitor's purpose or intended use of the money or other thing of value. The solicitation may be, without limitation, by the spoken, written, or printed word, or by other means of communication.
9.37.030 – Aggressive solicitation prohibited.
No person shall solicit in an aggressive manner in any public area.
9.37.040 – Solicitation prohibited in specified areas.
In order to promote the safe and orderly flow of traffic and to prevent the harassment and intimidation of citizens and visitors in the vicinity of certain locations within the City, no person may solicit or beg for any moneys, goods or services, including offering any services in exchange for moneys, goods or services, while located:
A. In any public transportation vehicle or bus or within twenty-five (25) feet of any bus or public transport station or stop;
B. In any public garage;
C. Within twenty-five (25) feet of any entrance or exit of any bank or check-cashing businesses or within twenty-five (25) feet of any automated teller machine; provided, however, that when an automated teller machine is located within an
CC Reso No. xxx Page 5 of 6
automated teller machine facility, such distance shall be measured from the entrance or exit of the automated teller machine facility; D. On private property if the owner, tenant, or lawful occupant has asked the person not to solicit on the property, or has posted a sign clearly indicating that solicitations are not welcome on the property; or
E. From any operator of a motor vehicle or a bicycle that is in traffic on a public street, whether in exchange for cleaning the bicycle or the vehicle windows or for blocking, occupying or reserving a public parking space, or directing the occupant to a public parking space; provided, however, that this subsection shall not apply to services rendered in connection with emergency repairs requested by the operator or passengers of such vehicle or bicycle.
9.37.050 – Penalty.
(a) Misdemeanor. Any person who violates any provision of this chapter shall be guilty of a misdemeanor or infraction pursuant to Chapter 1.16 of this Code and/or Penal Code section 647, as amended.
(b) Remedies cumulative. Nothing in this chapter shall limit or preclude the enforcement of any other applicable laws or remedies available for violations of this chapter.”
SECTION 3. Except as otherwise amended herein, the remainder of Title 9 (Public Peace, Morals and Welfare) of the Grand Terrace Municipal Code shall remain unchanged and in full effect.
SECTION 4. Severability. If any section, subsection, sentence, clause or phrase of this Ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance.
The City Council hereby declares that it would have passed this Ordinance, and each section, subsection, sentences, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared unconstitutional due to the writs of mandate issued by the Court.
SECTION 5. Effective Date. This Ordinance shall take effect thirty (30) days after its adoption. The City Council hereby authorizes and directs the Mayor and the City Clerk to execute this Ordinance on behalf of the City of Grand Terrace forthwith upon its adoption.
PASSED, APPROVED, AND ADOPTED by the City Council of Grand Terrace at a regular meeting held on the ______ day of _______ 2026.
___________________________
Bill Hussey
Mayor
ATTEST:
____________________________
Daysi Alcocer
City Clerk
APPROVED AS TO FORM:
____________________________
Adrian R. Guerra
City Attorney
AGENDA REPORT
MEETING DATE: March 10, 2026
TITLE: Consideration of Adoption of Resolutions and Conduct First Reading of an Ordinance Relating to the Establishment of a General Transactions and Use Tax at a Rate of Up to 1.00%
PRESENTED BY: Adrian Guerra, City Attorney
RECOMMENDATION: ADOPT A RESOLUTION SUBMITTING TO THE QUALIFIED ELECTORS
OF THE CITY OF A CERTAIN MEASURE RELATING TO A
TRANSACTIONS AND USE (SALES) TAX AT THE CONSOLIDATED
GENERAL MUNICIPAL ELECTION EXPECTED TO BE HELD ON
TUESDAY, NOVEMBER 3, 2026; AND
ADOPT A RESOLUTION SETTING PRIORITIES FOR FILING WRITTEN
ARGUMENT(S) AND DIRECTING THE CITY ATTORNEY TO PREPARE
AN IMPARTIAL ANALYSIS, REGARDING THE GRAND TERRACE
GENERAL SERVICES MEASURE; AND
ADOPT A RESOLUTION PROVIDING FOR THE FILING OF REBUTTAL
ARGUMENTS FOR THE GRAND TERRACE GENERAL SERVICES
MEASURE TO BE SUBMITTED AT A GENERAL MUNICIPAL ELECTION EXPECTED ON NOVEMBER 3, 2026; AND
IF THE RESOLUTIONS ABOVE ARE ADOPTED, THEN CONDUCT THE
FIRST READING, BY TITLE ONLY, OF AN ORDINANCE RELATING TO
THE PROPOSED GENERAL TRANSACTIONS AND USE TAX MEASURE
2030 VISION STATEMENT:
This staff report supports City Council Goal #1, “Ensure Our Fiscal Viability” by identifying additional revenue sources
BACKGROUND:
A transactions and use tax measure was placed on the ballot in 2024, but was not approved by the voters. This item is being presented to assess interest from the City Council in pursuing the transactions and use tax measure for a second time at the November 2026 general municipal election.
The current city-wide tax rate is 7.75%, which is composed of State, County and City sales tax rates.
The City’s component is only 1.00% as shown below.
Taxing Jurisdiction Rate
California state sales tax 6.00%
San Bernardino County sales tax 0.25%
Grand Terrace sales tax 1.00%
Special tax (San Bernardino County) 0.50%
Combined Sales Tax: 7.75%
State law “caps” the total cumulative sales tax rate at a maximum rate of 10.25% for the jurisdiction of Grand Terrace. Because 7.25% has already been accounted for of this maximum, 2.50% remains available to be allocated.
To capture a portion of this remaining 2.50% an ordinance will need to be adopted, as described in this report, to establish a transactions and use tax with a specified tax rate for implementation. Per sections 7285.92 and 7251.1 of the Revenue and Tax Code, a maximum of 2.00% of the remaining
2.50% may be captured by the City. A 1.00% transactions and use tax has been recommended by an Ad Hoc Citizens Committee.
A 1.00% transactions and use tax was recommended by an Ad Hoc Citizens Committee in 2024. The City Council approved a measure for the November election.
By this staff report, City staff would like to receive City Council direction whether to take the actions necessary to submit a general transactions and use tax measure with a rate of 1.00% to the voters at the November 3, 2026, General Municipal Election. If approved, the revenues collected from this tax will be deposited in the City’s general fund to finance general City services and programs for its residents instead of other taxing jurisdictions like the County of San Bernardino. If adopted, the total annual revenue generated is estimated to be $1 million.
DISCUSSION:
Three Election Resolutions
If the City Council desires to proceed with a ballot measure at the November 2026 general municipal election, three election resolutions concerning the proposed general transactions and use tax ordinance are presented for consideration by the City Council.
The first resolution submits the proposed transactions and use tax to the voters for consideration at the General Municipal Election expected to be held on November 3, 2026, approves the transactions and use tax ordinance, and authorizes the measure to be placed on the ballot once the election is formally called.
The second resolution establishes priorities under State law for choosing among multiple written arguments (both in favor and against) the transactions and use tax measure. It also directs the City Attorney to prepare an impartial analysis of the proposed measure.
The third resolution provides for the filing of rebuttal arguments to the primary written arguments. The rebuttal arguments are prepared by the opposite authors of the primary arguments.
Per the City Clerk and relevant county requirements, the last day to submit the adopted resolutions to the San Bernardino County Elections office is August 7, 2026. As such, all three resolutions and the first reading, by title only, of the ordinance must be completed before this deadline.
Issues Concerning the Three Election Resolutions
A. The Ballot Label
The first resolution includes a “ballot label” (commonly known as the “ballot question”) which
describes the proposed transactions and use tax ordinance, and which is the question actually presented to the voters. Ballot labels are limited to 75 words or less. The Council may revise the language used for the ballot label within the following state law restrictions:
1. “If the proposed measure imposes a tax or raises the rate of a tax, the ballot shall include in the statement of the measure to be voted on the amount of money to be raised annually and the rate and duration of the tax to be levied.” (Elec. Code § 13119(b).)
2. “The statement of the measure shall be a true and impartial synopsis of the purpose of the proposed measure, and shall be in language that is neither argumentative nor likely to create prejudice for or against the measure.” (Elec. Code § 13119(c).)
3. “The ballot label must be in the form of “Shall the measure...be adopted?” (Elec. Code § 13119(a).) The label should also clarify the general transactions and use tax will be for general government use.
Although the proposed tax will be deposited in the General Fund for unrestricted general revenue purposes, the ballot label may make reference to possible uses while not committing the revenue to those uses.
B. Argument Authorization
The second resolution authorizes councilmembers to write an argument in favor of the ballot measure. If three (3) or more Councilmembers jointly write a ballot argument, then the Brown Act will require the collaboration to occur at a noticed public meeting.
C. Rebuttals
Rebuttal arguments are optional under state law and are allowed at the discretion of the City Council.
If the Council does not desire to authorize rebuttal arguments, then it should not approve this third election resolution.
Procedures
A two-thirds (i.e., four out of five) vote of all members of the City Council will be required to adopt the resolution to order the submission of the proposed transactions and use tax measure to the voters and to approve the ordinance. Additionally, the City Council must approve the transactions and use tax ordinance, which consists of the Council conducting a first reading, by title only, of the ordinance.
The City Council will subsequently conduct second reading and adoption of the ordinance if it approved by the voters.
Under Proposition 218, the levy of a new general transactions and use tax measure will require approval by a majority of the voters (50% + 1). (Cal. Const, art. 13C, § 2(b).) As discussed above, the proposed taxes will generate revenue, deposited in the general fund, available for any general governmental purpose.
The transactions and use tax is collected by the California Department of Tax and Fee Administration (CDTFA) and distributed to the City. Per Revenue and Tax Code section 7265, the CDTFA may begin collecting the tax on the first day of the calendar quarter at least 110 days after adoption of the ordinance. If the majority of the electorate votes in favor of the ordinance, it is anticipated to be adopted on Tuesday, December 8, 2026. As such, the first day for the collection of taxes, or operative date, shall be on April 1, 2027. If the ordinance is not adopted during the December 8th City Council meeting, the operative date shall be postponed to the first day of the following calendar quarter at least 110 days after the date of adoption.
The CDTFA will review the ordinance and resolutions related to the proposed sales tax measure to confirm their accuracy. If CDTFA identifies any discrepancies or required changes, the City will return to the City Council with revised documents for approval.
City staff recommends that, if the City Council desires to place this matter on the November 3, 2026 ballot, the City Council:
1. ADOPT Resolution No. 2026-XX, submitting to the qualified electors of the City of a certain measure relating to a transactions and use (sales) tax at the consolidated General Municipal Election expected to be held on Tuesday, November 3, 2026; and
ADOPT Resolution No. 2026-XX, setting priorities for filing written argument(s) and directing the City Attorney to prepare an impartial analysis, regarding the Grand Terrace General Services Measure; and
ADOPT Resolution No. 2026-XX, providing for the filing of rebuttal arguments for the Grand Terrace General Services Measure to be submitted at a General Municipal Election expected on November 3, 2026; and
If the Resolutions above are adopted, then CONDUCT the First Reading, by Title only, of an Ordinance relating to the proposed general transactions and use tax measure.
2. Provide other direction to staff.
ENVIRONMENTAL IMPACT:
None.
FISCAL IMPACT:
Costs anticipated include city attorneys’ fees to prepare the necessary impartial analysis and costs associated with reviewing and preparing written arguments and rebuttals.
CC Ord No. xxx Page 1 of 12
ORDINANCE NO. XXX
AN ORDINANCE OF THE CITY OF GRAND TERRACE, CALIFORNIA,
FUNDING CITY OF GRAND TERRACE GENERAL SERVICES BY
IMPOSING A 1.00% TRANSACTIONS AND USE TAX TO BE
ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND
FEE ADMINISTRATION
WHEREAS, Article XIIIC, Section 2 of the California Constitution authorizes a city to impose a general tax if approved by a majority vote of the qualified electors; and WHEREAS, Article XIIIC, Section 2, of the California Constitution requires that the election at which a general tax increase is submitted to the electorate shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body; and
WHEREAS, Part 1.6 (commencing with Section 7251) of Division 2 of the California Revenue and Taxation Code, and Section 7285.9 of the California Revenue and Taxation Code, authorizes a city to adopt a transactions and use (sales) tax ordinance, which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose; and WHEREAS, to preserve and fund vital general City services, including those items discussed herein, the City must identify a reliable source of locally-controlled funding source that can only be used for local services and address local priorities, which is legally protected from being taken by the State; and
WHEREAS, on March 10, 2026 the City Council of the City of Grand Terrace adopted Resolution No. 2026-XX, submitting the GRAND TERRACE GENERAL SERVICES MEASURE ("Transactions and Use Tax Measure") to the voters at the General Municipal Election to be held in the City of Grand Terrace on November 3, 2026 ("General Municipal Election"), which, if approved, would establish a transactions and use (sales) tax at the rate of 1.00%; and
WHEREAS, as part of Resolution No. 2026-XX, on March 10, 2026, the City Council also approved this Ordinance, pursuant to Revenue & Taxation Code Section 7285.9, subject to the City voters' approval; and
WHEREAS, the General Municipal Election is a regularly scheduled general election for members of the Grand Terrace City Council.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE DOES ORDAIN AS FOLLOWS:
SECTION 1. The Recitals set forth above are incorporated herein by this reference.
CC Ord No. xxx Page 2 of 12
SECTION 2. ADOPTION OF NEW CHAPTER. A new Chapter 3.32 is hereby added to the Grand Terrace Municipal Code to read as follows:
"Chapter 3.32
TRANSACTIONS AND USE TAX
3.32.010 Title.
This ordinance shall be known as the "City of Grand Terrace Transactions and Use Tax Ordinance. The City of Grand Terrace hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City.
3.32.020 Operative Date.
"Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below.
3.32.030 Purpose.
This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:
A. To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.
B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.
C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.
D. To adopt a retail transactions and use tax ordinance that can be
CC Ord No. xxx Page 3 of 12
administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance.
3.32.040 Contract with State.
Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract.
3.32.050 Transactions Tax Rate.
For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 1.00% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.
3.32.060 Place of Sale.
For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.
3.32.070 Use Tax Rate.
An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 1.00% of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery
CC Ord No. xxx Page 4 of 12
is made.
3.32.080 Adoption of Provisions of State Law.
Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.
3.32.050 Transactions Tax Rate.
For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 1.00% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.
3.32.060 Place of Sale.
For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.
3.32.070 Use Tax Rate.
An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 1.00% of the sales price of the property. The safes price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.
3.32.080 Adoption of Provisions of State Law.
Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section
CC Ord No. xxx Page 5 of 12
6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.
3.32.090 Limitations on Adoption of State Law and Collection of Use Taxes.
In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:
A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when:
1. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Treasury, or the Constitution of the State of California;
2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this Ordinance.
3. In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
a. Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; b. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.
4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.
B. The word "City" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203.
1. "A retailer engaged in business in the District" shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this state or for delivery in the State by the retailer and all persons related to the retailer that
CC Ord No. xxx Page 6 of 12
exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder.
3.32.100 Permit Not Required.
If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance.
3.32.110 Exemptions and Exclusions.
A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.
B. There are exempted from the computation of the amount of transactions tax the gross receipts from:
1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.
2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:
a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and to the retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder.
CC Ord No. xxx Page 7 of 12
3.32.100 Permit Not Required.
If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance.
3.32.110 Exemptions and Exclusions.
A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.
B. There are exempted from the computation of the amount of transactions tax the gross receipts from:
1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.
2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:
a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and
b. With respect to commercial vehicles, by registration to a place of business out-of-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.
3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
4. A lease of tangible personal property which is a continuing sale
CC Ord No. xxx Page 8 of 12
of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance.
5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or !ease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
C. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property:
1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance.
2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.
3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance.
5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale
CC Ord No. xxx Page 9 of 12
of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.
7. "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.
D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.
3.32. 120 Amendments.
All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance.
3.32.130 Enjoining Collection Forbidden.
No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.
3.32.150 Severability.
If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.
CC Ord No. xxx Page 10 of 12
3.32.160 Council Authority to Amend.
Pursuant to Elections Code Section 9217, the City Council shall have and retain the right and authority to amend this ordinance to further its purposes and intent (including but not limited to amendment for more efficient administration as determined by the City Council) in any manner that does not increase a tax rate, or otherwise constitute a tax increase for which voter approval is required by Article XIII C of the California Constitution.
3.32.170 Effective Date.
This chapter relating to the levying and collecting of the City transactions and use tax shall be effective ten (10} days after the date on which the City Council has declared that the voters of the City of Grand Terrace have approved the ordinance by a vote of no less than a majority of the votes cast by the electors voting on the tax measure set forth in this chapter at that general municipal election to be held on November 3, 2026.
3.32.180 Termination Date.
The authority to levy the tax imposed by this ordinance shall continue until the ordinance codified in this chapter is repealed by the majority vote of qualified electors."
SECTION 3. COUNCIL AUTHORITY TO AMEND. This is a City Council sponsored initiative Ordinance which otherwise would only be subject to amendment by the voters of the City. However, pursuant to Elections Code Section 9217, the City Council shall have and retain the right and authority to amend the Ordinance to further its purposes and intent (including but not limited to amendment for more efficient administration as determined by the City Council) in any manner that does not increase a tax rate, or otherwise constitute a tax increase for which voter approval is required by Article XIII C of the California Constitution.
SECTION 4. CEQA. The adoption of this Ordinance is not a "project" subject to the requirements of the California Environmental Quality Act (CEQA) (Public Resources Code Section §§ 21000 et seq.). CEQA Guideline § 15378(b)(4) provides that the creation of government funding mechanisms or other government fiscal activities that do not involve any commitment to a specific project that may result in a potentially significant physical impact on the environment are not projects subject to the requirements of CEQA.
SECTION 5. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this ordinance or the application thereof to any person or place, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remainder of this ordinance. The City Council hereby declares that it would have adopted this ordinance, and each and every section, subsection, subdivision, sentence, clause, phrase, or portion
CC Ord No. xxx Page 11 of 12
thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.
SECTION 6. APPROPRIATIONS LIMIT. Pursuant to Article XIII B of the California Constitution, the appropriations limit for the City of Grand Terrace is increased to the maximum extent over the maximum period of time allowed under the law consistent with the revenues generated by this tax.
SECTION 7. EFFECTIVE DATE. If a majority of the voters of the City of Grand Terrace voting at the General Municipal Election of November 3, 2026, vote in favor of this Ordinance, then this Ordinance shall become a valid and binding ordinance of the City of Grand Terrace, and shall be considered as adopted upon the date that the vote is declared by the City Council, and this Ordinance shall go into effect ten (10) days after that date, pursuant to Election Code section 9217.
SECTION 8. CERTIFICATION. The City Clerk shall certify to the adoption of this Ordinance and cause the same to be published as required by law.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace, California, at a regular meeting held on the ___ day of _______ 2026.
________________________________
Bill Hussey
Mayor
ATTEST:
________________________________
Daysi Alcocer
City Clerk
APPROVED AS TO FORM:
________________________________
Adrian Guerra
City Attorney
CC Ord No. xxx Page 12 of 12
Exhibit A
Ordinance
CC Reso No. 2026-xx Page 1 of 2 March 10, 2026
RESOLUTION NO. 2026-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY GRAND
TERRACE, CALIFORNIA, SETTING PRIORITIES FOR FILING WRITTEN
ARGUMENT(S) AND DIRECTING THE CITY ATTORNEY TO PREPARE
AN IMPARTIAL ANALYSIS, REGARDING THE GRAND TERRACE
GENERAL SERVICES MEASURE
WHEREAS, a General Municipal Election is expected to be held on Tuesday, November 3, 2026, for the purpose of electing council members and submitting ballot measures and, pursuant to Resolution No. 2026-XX, the City Council submitted a measure relating to the establishment of a transactions and use (sales) tax entitled the GRAND TERRACE GENERAL SERVICES MEASURE; and
WHEREAS, for measures place on the ballot by a legislative body, pursuant to section 9282 of the California Elections Code, the legislative body or a member authorized by the legislative body may file a written argument for or against any city measure.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE,
CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. The Recitals set forth above are true and correct and are incorporated herein by this reference.
SECTION 2. That pursuant to Elections Code section 9282, the City Council hereby authorizes, but does not require, any or all members of the City Council to file a written argument for the foregoing measure.
SECTION 3. That in the event that more than one argument for or against the foregoing measure is timely submitted, the City Clerk shall give preference and priority first, to arguments submitted by member(s) of the City Council, as authorized by this Resolution, and second, to individual voters, bona fide associations, or a combination thereof, in the order set forth at California Elections Code section 9287.
SECTION 4. That in accordance with the requirements of Division 9, Chapter 3, Article 4 of the Elections Code, all written arguments for or against the foregoing measure:
(1) shall not exceed three hundred (300) words in length; (2) shall be filed with the City Clerk; (3) shall be accompanied by the printed name(s) and signature(s) of the person(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of the principal officers who is the author of the argument; and (4) shall be accompanied by the Form of Statement to be Filed by Author(s) of Argument as provided for in California Elections Code section 9600.
All written arguments may be changed or withdrawn until and including the date fixed by the City Clerk, being the close of business on July 17, 2026, after which time no arguments for or against the foregoing measure may be submitted to the City Clerk.
CC Reso No. 2026-xx Page 2 of 2 March 10, 2026
SECTION 5. That the City Council hereby directs the City Clerk to transmit a copy of the foregoing measure to the City Attorney. In accordance with Elections Code section 9280, the City Attorney is hereby directed to prepare an impartial analysis of the measure, not to exceed five hundred (500) words in length, showing the effect of the measure on the existing law and the operation of the measure. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the city. In the event the entire text of the measure is not printed on the ballot, nor in the voter information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10-point bold type, a legend substantially as follows: “The above statement is an impartial analysis of Ordinance or Measure. If you desire a copy of the ordinance or measure, please call the City Clerk's office at (909) 954-5207 and a copy will be mailed at no cost to you.” The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments.
SECTION 6. That the City Clerk shall cause the City Attorney’s Impartial Analysis, and duly selected arguments, to be printed and distributed to voters in accordance with State law regarding same.
SECTION 7. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. This Resolution shall be effective immediately upon passage and adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace, California, at a regular meeting held on the 10th day of March 2026. ___________________________
Bill Hussey
Mayor
ATTEST:
Daysi Alcocer
City Clerk
APPROVED AS TO FORM:
Adrian Guerra
City Attorney
CC Reso No. 2026-xx Page 1 of 2 March 10, 2026
RESOLUTION NO. 2026-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL
ARGUMENTS FOR THE GRAND TERRACE GENERAL SERVICES
MEASURE SUBMITTED AT A GENERAL MUNICIPAL ELECTION
EXPECTED TO BE HELD ON NOVEMBER 3, 2026
WHEREAS, a General Municipal Election is expected to be held on Tuesday, November 3, 2026, for the purpose of electing council members and submitting ballot measures and, pursuant to Resolution No. 2026-XX, the City Council submitted a measure relating to the establishment of a transactions and use (sales) tax entitled the GRAND TERRACE GENERAL SERVICES MEASURE; and
WHEREAS, Section 9285 of the California Elections Code authorizes the City Council, by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for city measures submitted at municipal elections.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE,
CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. The Recitals set forth above are true and correct and are incorporated herein by this reference.
July
SECTION 2. That pursuant to Elections Code section 9285, when the City’s elections official has selected the arguments for and against the foregoing measure which will be printed and distributed to the voters, the City’s elections official shall send copies of the argument in favor of the measure to the authors of the argument against, and copies of the argument against to the authors of the argument in favor. The author or a majority of the authors of an argument relating to the foregoing city measure may prepare and submit a rebuttal argument not to exceed two hundred fifty (250) words in length. A rebuttal argument may not be signed by more than five (5) authors. The final date to file rebuttal arguments with the City Clerk is no later than the close of business on July 23, 2026. The rebuttal arguments shall be accompanied by the Form of Statement to be Filed by Author(s) of Argument as provided for in Elections Code section 9600. Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument which it seeks to rebut.
SECTION 3. That all previous resolutions providing for the filing of rebuttal arguments for city measures are repealed.
SECTION 4. That the provisions of Sections 1 of this Resolution shall apply only to the General Municipal Election to be held on November 3, 2026, and shall then be repealed.
CC Reso No. 2026-xx Page 2 of 2 March 10, 2026
SECTION 5. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. This Resolution shall be effective immediately upon passage and adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace, California, at a regular meeting held on the 10th day of March 2026. ___________________________
Bill Hussey
Mayor
ATTEST:
Daysi Alcocer
City Clerk
APPROVED AS TO FORM:
Adrian Guerra
City Attorney
CC Ord No. xxx Page 1 of 12
ORDINANCE NO. XXX
AN ORDINANCE OF THE CITY OF GRAND TERRACE, CALIFORNIA,
FUNDING CITY OF GRAND TERRACE GENERAL SERVICES BY
IMPOSING A 1.00% TRANSACTIONS AND USE TAX TO BE
ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND
FEE ADMINISTRATION
WHEREAS, Article XIIIC, Section 2 of the California Constitution authorizes a city to impose a general tax if approved by a majority vote of the qualified electors; and WHEREAS, Article XIIIC, Section 2, of the California Constitution requires that the election at which a general tax increase is submitted to the electorate shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body; and
WHEREAS, Part 1.6 (commencing with Section 7251) of Division 2 of the California Revenue and Taxation Code, and Section 7285.9 of the California Revenue and Taxation Code, authorizes a city to adopt a transactions and use (sales) tax ordinance, which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose; and WHEREAS, to preserve and fund vital general City services, including those items discussed herein, the City must identify a reliable source of locally-controlled funding source that can only be used for local services and address local priorities, which is legally protected from being taken by the State; and
WHEREAS, on March 10, 2026 the City Council of the City of Grand Terrace adopted Resolution No. 2026-XX, submitting the GRAND TERRACE GENERAL SERVICES MEASURE ("Transactions and Use Tax Measure") to the voters at the General Municipal Election to be held in the City of Grand Terrace on November 3, 2026 ("General Municipal Election"), which, if approved, would establish a transactions and use (sales) tax at the rate of 1.00%; and
WHEREAS, as part of Resolution No. 2026-XX, on March 10, 2026, the City Council also approved this Ordinance, pursuant to Revenue & Taxation Code Section 7285.9, subject to the City voters' approval; and
WHEREAS, the General Municipal Election is a regularly scheduled general election for members of the Grand Terrace City Council.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE DOES ORDAIN AS FOLLOWS:
SECTION 1. The Recitals set forth above are incorporated herein by this reference.
CC Ord No. xxx Page 2 of 12
SECTION 2. ADOPTION OF NEW CHAPTER. A new Chapter 3.32 is hereby added to the Grand Terrace Municipal Code to read as follows:
"Chapter 3.32
TRANSACTIONS AND USE TAX
3.32.010 Title.
This ordinance shall be known as the "City of Grand Terrace Transactions and Use Tax Ordinance. The City of Grand Terrace hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City.
3.32.020 Operative Date.
"Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below.
3.32.030 Purpose.
This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:
A. To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.
B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.
C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.
D. To adopt a retail transactions and use tax ordinance that can be
CC Ord No. xxx Page 3 of 12
administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance.
3.32.040 Contract with State.
Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract.
3.32.050 Transactions Tax Rate.
For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 1.00% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.
3.32.060 Place of Sale.
For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.
3.32.070 Use Tax Rate.
An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 1.00% of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery
CC Ord No. xxx Page 4 of 12
is made.
3.32.080 Adoption of Provisions of State Law.
Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.
3.32.050 Transactions Tax Rate.
For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 1.00% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.
3.32.060 Place of Sale.
For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.
3.32.070 Use Tax Rate.
An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 1.00% of the sales price of the property. The safes price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.
3.32.080 Adoption of Provisions of State Law.
Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section
CC Ord No. xxx Page 5 of 12
6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.
3.32.090 Limitations on Adoption of State Law and Collection of Use Taxes.
In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:
A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when:
1. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Treasury, or the Constitution of the State of California;
2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this Ordinance.
3. In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
a. Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; b. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.
4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.
B. The word "City" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203.
1. "A retailer engaged in business in the District" shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this state or for delivery in the State by the retailer and all persons related to the retailer that
CC Ord No. xxx Page 6 of 12
exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder.
3.32.100 Permit Not Required.
If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance.
3.32.110 Exemptions and Exclusions.
A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.
B. There are exempted from the computation of the amount of transactions tax the gross receipts from:
1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.
2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:
a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and to the retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder.
CC Ord No. xxx Page 7 of 12
3.32.100 Permit Not Required.
If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance.
3.32.110 Exemptions and Exclusions.
A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.
B. There are exempted from the computation of the amount of transactions tax the gross receipts from:
1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.
2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:
a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and
b. With respect to commercial vehicles, by registration to a place of business out-of-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.
3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
4. A lease of tangible personal property which is a continuing sale
CC Ord No. xxx Page 8 of 12
of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance.
5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or !ease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
C. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property:
1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance.
2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.
3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance.
5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale
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of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.
7. "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.
D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.
3.32. 120 Amendments.
All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance.
3.32.130 Enjoining Collection Forbidden.
No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.
3.32.150 Severability.
If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.
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3.32.160 Council Authority to Amend.
Pursuant to Elections Code Section 9217, the City Council shall have and retain the right and authority to amend this ordinance to further its purposes and intent (including but not limited to amendment for more efficient administration as determined by the City Council) in any manner that does not increase a tax rate, or otherwise constitute a tax increase for which voter approval is required by Article XIII C of the California Constitution.
3.32.170 Effective Date.
This chapter relating to the levying and collecting of the City transactions and use tax shall be effective ten (10} days after the date on which the City Council has declared that the voters of the City of Grand Terrace have approved the ordinance by a vote of no less than a majority of the votes cast by the electors voting on the tax measure set forth in this chapter at that general municipal election to be held on November 3, 2026.
3.32.180 Termination Date.
The authority to levy the tax imposed by this ordinance shall continue until the ordinance codified in this chapter is repealed by the majority vote of qualified electors."
SECTION 3. COUNCIL AUTHORITY TO AMEND. This is a City Council sponsored initiative Ordinance which otherwise would only be subject to amendment by the voters of the City. However, pursuant to Elections Code Section 9217, the City Council shall have and retain the right and authority to amend the Ordinance to further its purposes and intent (including but not limited to amendment for more efficient administration as determined by the City Council) in any manner that does not increase a tax rate, or otherwise constitute a tax increase for which voter approval is required by Article XIII C of the California Constitution.
SECTION 4. CEQA. The adoption of this Ordinance is not a "project" subject to the requirements of the California Environmental Quality Act (CEQA) (Public Resources Code Section §§ 21000 et seq.). CEQA Guideline § 15378(b)(4) provides that the creation of government funding mechanisms or other government fiscal activities that do not involve any commitment to a specific project that may result in a potentially significant physical impact on the environment are not projects subject to the requirements of CEQA.
SECTION 5. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this ordinance or the application thereof to any person or place, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remainder of this ordinance. The City Council hereby declares that it would have adopted this ordinance, and each and every section, subsection, subdivision, sentence, clause, phrase, or portion
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thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.
SECTION 6. APPROPRIATIONS LIMIT. Pursuant to Article XIII B of the California Constitution, the appropriations limit for the City of Grand Terrace is increased to the maximum extent over the maximum period of time allowed under the law consistent with the revenues generated by this tax.
SECTION 7. EFFECTIVE DATE. If a majority of the voters of the City of Grand Terrace voting at the General Municipal Election of November 3, 2026, vote in favor of this Ordinance, then this Ordinance shall become a valid and binding ordinance of the City of Grand Terrace, and shall be considered as adopted upon the date that the vote is declared by the City Council, and this Ordinance shall go into effect ten (10) days after that date, pursuant to Election Code section 9217.
SECTION 8. CERTIFICATION. The City Clerk shall certify to the adoption of this Ordinance and cause the same to be published as required by law.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace, California, at a regular meeting held on the ___ day of _______ 2026.
________________________________
Bill Hussey
Mayor
ATTEST:
________________________________
Daysi Alcocer
City Clerk
APPROVED AS TO FORM:
________________________________
Adrian Guerra
City Attorney
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Exhibit A
Ordinance