Grand Terrace City Council
July 28, 2026

Land Use Element
Grand Terrace General Plan
Land Use Element
Adopted April 27, 2010, via Resolution No. 2010-10
Amended June 23, 2026, via Resolution No. 2026-__

Land Use Element
Grand Terrace General Plan
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Land Use Element
Grand Terrace General Plan II-1

2.0 LAND USE ELEMENT

2.1 INTRODUCTION

2.1.1 Purpose and Function
The Land Use Element is often considered the
most critical element of a General Plan. It
provides overall guidance to all properties
within the City through the distribution of land
uses, by type, including residential,
commercial, industrial, institutional, and open
space. The Land Use Element identifies each
land use designation's location and intensity,
and its interrelationship with other land uses.

The Land Use Element translates the City's long-range vision for development in the City and provides a Land Use Plan, goals, policies, and implementation programs to achieve that vision.

In order to provide guidance for the physical development of the City, the Land Use Element must take into consideration the other elements of the General Plan that identify constraints or opportunities for the development of individual properties. Issues that must be considered include transportation systems, regional drainage, utilities, and geographic and geologic constraints, among others.

2.1.2 Relationship to Other Plans and Programs
City Zoning Code
The City of Grand Terrace Zoning Code sets forth the City's standards, guidelines, and procedures relating to the development and maintenance of all land uses within the City. These regulations are intended to implement the goals and policies of the General Plan while being consistent with the designations of the Land Use Plan. They are intended to protect the physical, social, and economic stability of City residents and businesses and their property; reduce or eliminate hazards to the public; and enhance the City's physical, social, and economic advantages through comprehensive land use and resource planning.

Barton Road Specific Plan and Other Specific Plans
The Barton Road Specific Plan serves as the zoning code for most properties fronting along or directly related to Barton Road. It is intended to provide guidance for the development of predominantly commercial property along the primary transportation corridor through the City.

Since incorporation, the City has approved approximately 16 project-oriented Specific Plans. The locations of the Barton Road Specific Plan, The Gateway at Grand Terrace Specific Plan and other Specific Plans are identified on Exhibit 2-1. The Specific Plan properties include multi-family residential projects, small lot single family projects, commercial projects, mixed-use projects and cellular communications projects.

Land Use Element
Grand Terrace General Plan II-2
Exhibit 2-1 – Specific Plan Locations
Amended July 23, 2024, Resolution No. 2024-28

Land Use Element
Grand Terrace General Plan II-3
City of Colton General Plan
The City of Colton borders Grand Terrace to the north, east, and west. The area west of Interstate 215 includes pockets of Grand Terrace property intermingled with pockets of Colton property. As such, the City of Grand Terrace must carefully monitor development and land uses in the City of Colton adjacent to Grand Terrace. Development in adjacent areas of Colton have the opportunity to create land use compatibility conflicts, generate traffic problems within Grand Terrace, and potentially generate environmental hazards that could impact Grand Terrace residents. Review of the Colton General Plan offers Grand Terrace the opportunity to plan accordingly and cooperate with Colton to ensure land use compatibility, improve efficiencies in public services, and mitigate potential environmental impacts generated by future development.

County of Riverside General Plan
The County of Riverside's unincorporated community of Highgrove lies immediately south of Grand Terrace. This area is projected to experience significant future growth that could potentially impact Grand Terrace in a similar manner as the City of Colton. Careful review and monitoring of development within this area will again allow Grand Terrace to plan accordingly and cooperate with Riverside County to ensure land use compatibility, improve efficiencies in public services, and mitigate potential environmental impacts generated by future development.

Sphere of Influence
The Sphere of Influence of the City of Grand Terrace encompasses its current City limit boundaries. It lies adjacent to the City of Colton to the north, east, and west. The County of Riverside lies immediately to the south. There are no opportunities to annex adjacent unincorporated San Bernardino County lands.

2.1.3 Relationship to Other Elements
The Land Use Element has the broadest scope of all the General Plan's elements. Since it governs how land is used throughout the City, virtually all issues and policies contained in other elements relate to the decisions to be made by the Land Use Element.

Examples of these relationships include the need to provide a circulation system to allow residents and workers to travel between land uses, and to ensure that the street system is adequate to serve intended lands uses. Residential uses must be protected from incompatible uses that could generate significant noise, air pollution or other hazards that might impact the residents. All land uses involving structures must be protected from man-made and natural hazards such as flooding, fires, and seismic events.

Land Use Element
Grand Terrace General Plan II-4

2.2 EXISTING CONDITIONS
Grand Terrace is predominantly a residential community. The City was formerly an unincorporated bedroom community surrounded by the City of Colton. Predominant commercial and industrial activities focused along regional transportation corridors in other areas of Colton leaving Grand Terrace to primarily develop as a single-family residential community. Since the majority of the community is located on the west side of Blue Mountain, the terrain offered scenic views that attracted residents while making large scale development of commercial and industrial uses more difficult.

The majority of the remaining undeveloped land is located on Blue Mountain, in the Santa Ana River floodplain, or adjacent to the I-215 Freeway.

Table 2.1 summarizes existing land use categories, by acreage, as noted in the existing City General Plan. As illustrated, 53 percent of all land within the City limits is designated for residential uses.

Table 2.1
Existing General Plan Land Uses
Land Use Type Acres % of Total
Hillside Low Density Residential 125.2 6%
Low Density Residential 826.6 36%
Medium Density Residential 144.1 6%
Medium/High Density Residential 6.8 0%
High Density Residential 97.1 4%
General Commercial 85.9 4%
Office Commercial 31.9 1%
Industrial 111.3 5%
Floodplain Industrial 42.3 2%
Public 161.3 7%
Hillside Open Space 188.5 8%
The Gateway at Grand Terrace Specific Plan 103.1 5%
Street & Railroad R/W 345.9 15%
Total 2,270.8 100.00%

Land Use Element
Grand Terrace General Plan II-5

2.3 GOALS AND POLICIES
The following goals and policies are established direct future land use planning decisions within the City of Grand Terrace:

Goal 2.1. Provide for balanced growth which seeks to provide a wide range of employment and housing opportunities and maintenance of a healthy, diversified community.

Policy 2.1.1: Implementation of general
plan goals shall be
reviewed every five years
with the first review
occurring one year after
adoption of the General
Plan. This will include an
assessment of the
relationship between
general plan land use
designations and existing
land uses at the time of the
review as well as growth
patterns in surrounding communities.

Policy 2.1.2: The City will establish a formal liaison with adjacent jurisdictions, i.e. Riverside and San Bernardino Counties and the Cities of San Bernardino and Colton, for the purpose of evaluating the effects of each jurisdiction’s land use planning activities on contiguous areas.

Policy 2.1.3: Grand Terrace’s potential role within the regional market area will be reviewed every 2 ½ years as an integral part of the General Plan.

Policy 2.1.4: The supply of vacant land and underutilized lands within the City shall be reviewed every 2 years to consider changes in zoning in support of General Plan goals.

Policy 2.1.5: Enhancement of the City’s image shall be undertaken by the establishment of City entrances and development of unified streetscapes.

Policy 2.1.6: Mixed use development which can demonstrate superior use of land, more efficient utilization of public facilities, and more effective conservation of natural resources shall be strongly encouraged by the City of Grand Terrace.

Land Use Element
Grand Terrace General Plan II-6
Policy 2.1.7: The City shall continually refine population growth forecasts to ensure adequate planning for anticipated increased levels of sewerage, water and other necessary community services.

Goal 2.2 Preserve and enhance the quality and character of the City’s residential neighborhoods.

Policy 2.2.1: Any development occurring within the Hillside residential designation shall be required to prepare a Specific Plan.

Policy 2.2.2: All residential developments shall comply with the goals and policies of the Housing Element of the General Plan.

Goal 2.3 Provide a wide range of retail and service commercial opportunities designed to meet the needs of the City’s residents, businesses, and visitors while also providing employment opportunities.

Policy 2.3.1: Commercially designated freeway frontage south of Barton Road, shall be developed under a Specific Plan to ensure a comprehensive commercial development pattern that will serve as a scenic entry into the City.

Policy 2.3.2: Maintenance and continued development of Grand Terrace’s established commercial areas, as an encouragement of new commercial development.

Policy 2.3.3: Additional freeway service-oriented commercial uses shall be encouraged.

Policy 2.3.4: Commercial areas along Barton Road shall be designated in a manner that discourages “strip commercial” type development.

Policy 2.3.5: Measures to reduce potential land use incompatibility between commercially designated areas and all other plan areas will be given special consideration. Specific features could include increased setbacks, walls, berms, and landscaping.

Goal 2.4: Provide for a mix of attractive industrial land uses designed to generate employment opportunities.

Policy 2.4.1: The City shall promote the development of employment generating, light, nonpolluting industry, within the present land use pattern.

Policy 2.4.2: The City shall promote the development of light, non-polluting industrial uses within the City.

Policy 2.4.3: Whenever feasible, industrially designated areas shall be master planned to provide an “industrial park” character.

Land Use Element
Grand Terrace General Plan II-7
Policy 2.4.4: Buffering to prevent potential land use incompatibilities between industrial areas and other areas shall be given special consideration. Specific features could include increased setbacks, walls, berms, and landscaping.

Policy 2.4.5: The City’s Redevelopment Agency shall assist in the consolidation and assemblage of properties to assure adequately sized quality development with areas designated as light industrial.

Goal 2.5 Provide for the preservation of natural resources and open space.

Policy 2.5.1 All areas of Blue Mountain above elevation 1,450 feet above sea level shall be maintained as open space. Consideration shall be given to the maintenance of existing communications towers.

Policy 2.5.2 Areas designated as Open Space shall be preserved to provide long term recreation opportunities as well as the preservation of scenic and environmental resources and the protection of public health and safety.

Policy 2.5.3 Energy efficiency shall be encouraged in all future development.

Land Use Element
Grand Terrace General Plan II-8

2.4 LAND USE PLAN

2.4.1 Land Use Map
As required by State law, the General Plan must identify land use designations and permitted development intensities. General plans must also provide a diagram indicating the locations of each land use type. These components are included in this section of the Land Use Element.

Exhibit 2-2 presents the Land Use Map that identifies the specific land use designation of individual parcels throughout the City. Table 2.2 provides a general breakdown of acreage by land use designation and its percentage of total area within the City.

Table 2.2
General Plan Acreage By Land Use Category
Land Use Category Acres % of Total
Hillside Low Density Residential 125.2 6%
Low Density Residential 826.6 36%
Medium Density Residential 144.1 6%
Medium High Density Residential 6.8 0%
High Density Residential 97.1 4%
General Commercial 85.9 4%
Office Commercial 31.9 1%
Industrial 111.3 5%
Floodplain Industrial 42.3 2%
Hillside Open Space 188.5 8.0%
Public 161.3 7%
The Gateway at Grand Terrace
Specific Plan 103.1 5%
Street & Railroad R/W 345.9 15%
Total 2,270.8 100%

Land Use Element
Grand Terrace General Plan II-9
Exhibit 2-2 – General Plan Land Use Map
City of Grand TerraceGeneral Plan 2010Adopted April 27, 2010, Resolution No. 2010-10Amended June 23, 2026, Resolution No. 2026-__

Land Use Element
Grand Terrace General Plan II-10

2.4.2 Land Use Designations
Land use designations are provided in order to define the amount, type, and nature of future development that will be allowed in a given location in the City. The following section defines each land use designation shown on the Land Use Plan and provides its density range and general development standards required in accordance with State law.

Each land use designation is typically implemented by a defined set of zoning designations included in the City's Zoning Code. The Zoning Code contains detailed regulations relating to permitted and conditional uses allowed within each zone, site development standards, and performance criteria that serve to implement the goals and policies of the General Plan.

Table 2.3 provides a description of each land use designation of the Land Use Plan.

Land Use Element
Grand Terrace General Plan II-11
Table 2.3
City of Grand Terrace
General Plan Land Use Designations
Land Use Designation Purpose of Land Use

RESIDENTIAL
Hillside Low Density Residential The hillside areas of Blue Mountain located at the far eastern edge of (HLDR) the City are considered a natural resource that requires special Maximum Density – 1 dwelling consideration to protect the scenic views and environmental unit per gross acre resources of the mountain. Any development proposed within the Hillside designation will require special evaluation of all environmental issues and must include provisions for the protection of all natural resources within the area. Properties within the designated areas must demonstrate that building pads and streets can be graded with minimal impact to the hillside and views, and that adequate utilities and public services, including drainage, domestic water, sanitary sewer, fire protection can be provided. Proposed developments within this area shall be required to prepare a Specific Plan. Clustered development that protects sensitive slopes and natural resources shall be strongly encouraged.

Low Density Residential (LDR) The Low Density Residential designation limits land uses to single Density Range - 0 to 5 dwelling family detached residential units and mobile homes subject to the units per gross acre applicable General Plan policies and Zoning Code provisions. This designation encompasses the majority of property within the City and is largely associated with existing housing developments throughout the City.

Medium Density Residential The Medium Density Residential designation include both single (MDR) family detached and multiple family attached developments.

Density Range – 6 to 12 dwelling Permitted uses within these areas may include small lot single family units per gross acre. developments or attached multi-family developments including townhomes, condominiums, and apartments. Mobile home
developments are also permitted.

A density bonus may be applied to a project pursuant to the density bonus provisions of Chapter 4.3 of the California Government Code, or pursuant to an approved Planned Residential Development application up to a 20% density bonus may be granted.

Medium High Density The Medium High Density Residential designation is reserved for Residential (MHDR) multiple family development, with an emphasis on affordable Maximum Density - 20 dwelling housing projects.
units per gross acre
A density bonus may be applied to a project pursuant to the density bonus provisions of Chapter 4.3 of the California Government Code, or pursuant to an approved Planned Residential Development application for up to a 20% density bonus.

Land Use Element
Grand Terrace General Plan II-12
Table 2.3
City of Grand Terrace
General Plan Land Use Designations
Land Use Designation Purpose of Land Use
High Density Residential (HDR)
Density Range – 20 to 40 dwelling
units per gross acre
The High Density Residential designation is reserved for multi-family development, with an emphasis on affordable housing projects.

Permitted uses within these areas may include garden-style apartments, courtyard buildings, townhomes, multiplexes, and other multiple family housing types. Single-family residential development or any residential development at a density less than twenty (20) dwelling units per acre is prohibited.

A density bonus may be applied to a project pursuant to the density bonus provisions of Chapter 4.3 of the California Government Code, or, pursuant to an approved Planned Residential Development application, up to a 20% density bonus may be granted.

COMMERCIAL
General Commercial (GC) This designation is primarily located along Barton Road and near the I-215 Freeway. It provides for general commercial uses to serve the retail and service needs of the community.

Office Commercial (OC) Office commercial uses are used as a buffer between residential areas and general commercial areas. The properties designated for Office Commercial uses are primarily located along Barton Road east of Mount Vernon Avenue and north of Barton Road west of Mount Vernon Avenue.

Permitted uses may include office/administrative uses and support retail and service commercial uses

INDUSTRIAL
Light Industrial (LI) Permitted uses for properties designated as Light Industrial include those uses that can be made compatible with other surrounding uses within the City regarding noise, dust, odors, vibration, glare, air quality, traffic, aesthetics, and hazardous materials. Typical uses may include light manufacturing and assembly, small scale warehousing and distribution, research and development, and administrative and service types of uses.

Floodplain Industrial (FI) Properties designated with the Floodplain Industrial designation experience the potential for severe flooding resulting from their proximity to the Santa Ana River. Properties within this designation are planned for ultimate development as light industrial, non-polluting uses similar to the Light Industrial designation. Proposed developments must demonstrate that adequate measures can be implemented to ensure that the proposed use is effectively protected from identified flood hazards.

Presently, parcels within this area are largely undeveloped or developed as rural residential land uses. It is anticipated that buildout of this area will occur over a long period of time. During this buildout period, existing residential uses shall be permitted and regulated under the requirements of the Low Density Residential land use designation.

Land Use Element
Grand Terrace General Plan II-13
Table 2.3
City of Grand Terrace
General Plan Land Use Designations
Land Use Designation Purpose of Land Use
Light agricultural uses shall be permitted including the keeping of animals with the approval of an Agricultural Overlay
zoning designation.

INSTITUTIONAL
Public (P) Public uses may include schools, parks, the City Hall, City maintenance facilities and facilities owned and operated by public utilities.

OPEN SPACE
Hillside Open Space (OS) Properties designated as Hillside Open Space are those that should not be developed as urban land uses due to environmental resources, environmental constraints or scenic resources. These are primarily located along the western and northern slopes of Blue Mountain.

Properties designated as Hillside Open Space shall be retained in their natural condition and used as either natural open space or parkland.

They may be either publicly or privately owned.

MIXED USE
Mixed Use (MU) Properties designated as mixed use are intended to be developed with multiple uses on a single site. This may include residential, commercial, business park, open space, and recreational uses.

Compatible uses may be placed horizontally or vertically on the site.

All Mixed Use projects shall be required to submit a Specific Plan or Planned Development that demonstrates compatibility between the proposed uses as well as buffering from adjacent properties, if warranted. Densities may not exceed those of the residential, commercial and industrial designations of the General Plan and zoning.

The Gateway at Grand Terrace
Specific Plan (GSP) Density Range 4
to 20 dwelling units per gross acre
Properties located within The Gateway at Grand Terrace Specific Plan are designated as The Gateway at Grand Terrace Specific Plan (GSP) land use designation. The proposed land uses within the GSP land use designation would include Residential 4 – 20 dwelling units per acre (R 4-20), General Commercial (GC), Park, Open Space, drainage facilities, utilities, and roads. IN addition, the GSP area would also include Utility/R 4-20, Utility/GC, and Open Space Overlays.

Land Use Element
Grand Terrace General Plan II-14

2.4.3 Buildout Analysis
Table 2.4 presents an analysis of residentially designated land and the total number of estimated dwelling units and population at ultimate buildout. As illustrated, at ultimate development of the residential component of the Plan, the City population is estimated to be approximately 15,747.

These estimates are based upon the total acreage by land use type, an average probable density in dwelling units per acre, and the City’s current average population per household. The analysis also assumes that certain properties with higher density designations that are currently underutilized would be redeveloped to the average designation’s density.

Non-residential land uses comprise approximately 27 percent of all land within the City and include employee generating commercial and industrial property as well as open space lands.

Table 2.5 summarizes the build out of non-residential uses and their potential employment generation. As illustrated, at buildout, a total of approximately 11,450 jobs may be available within the City.

Table 2.4
Residential Buildout Calculations
Land Use Designation
Probable
Avg.

Density Acres
Dwelling
Units
Persons /
Household
Estimated
Population
Low Density/Hillside 0.7 du/ac 125.2 88 2.83 249
Low Density 3.6 du/ac 826.6 2,976 2.83 8,422
Medium Density 11 du/ac 144.1 1,585 2.83 4,486
Medium High Density 20 du/ac 6.8 136 1.20/2.83+ 385+
High Density 28 du/ac 97.9 2,741 2.83 7,757
Total 1,200.7 7,526 21,299
+Includes existing senior housing in persons per household and estimated population calculations.

Table 2.5
Non-Residential
Buildout Estimates
Land Use
Designation
Probable
Density
(FAR) Acres Square Feet
Square Feet/
Employee
Estimated
Employment
General Commercial 0.35 85.9 1,309,631 500 2,619
Office Commercial 0.35 31.9 486,347 250 1,945
Industrial 0.30 111.3 1,454,468 1,000 1,454
Floodplain Industrial 0.30 42.3 552,776 1,000 552
Public 0.35 161.3 2,459,179 1,000 2,459
Open Space N/A 188.5 N/A N/A N/A
Total 621.2 6,262,401 9,029

Land Use Element
Grand Terrace General Plan II-15

2.5 IMPLEMENTATION PROGRAM
Table 2.6 presents the implementation plan designed to implement the policies of the Land Use Element. One or more implementation programs are provided for each policy. The implementation programs identify:
• The individual policy and proposed action,
• Its relationship to specific projects or overall City policy, • Primary and secondary responsibility for implementation, • Potential funding sources, and
• Implementation priority.

The General Plan Implementation Program is presented in a table format. Each policy of the General Plan is presented with the following information:
• Policy Number: Shows each policy number by General Plan Element.
• Action Type: Indicates whether the policy is project review specific or requires other administrative of judicial
actions.
• Policy Action: Describes the policy and proposed actions for its implementation.
• Primary Responsibility: Indicates what agency is primarily responsible for implementation of the proposed action.
• Support Responsibility: Indicates what agencies are responsible for supporting the primary agency.
• Funding Source: Indicates the general sources of funding for the implementation action.
• Priority: Indicates the level of priority given to the implementation action.

The following codes are used throughout the Implementation Program table:

Table 2.6
Implementation Table Codes
Code Definition
Responsible Agencies
SOC State of California
CA City Attorney
CC City Council
COC City of Colton
COSB County of San Bernardino
CD Community Development Department
CJUSD Colton Joint Unified School District
CM City Manager
CRA Community Redevelopment Agency
CS Community Services Department

Land Use Element
Grand Terrace General Plan II-16
ENG City Engineer
FCD County Flood Control District
FD Fire Department
FIN Finance Department
GTF Grand Terrace Foundation
PW Public Works/Building & Safety Department
RHWC Riverside Highland Water Company
SANBAG San Bernardino Association of Governments
SCAG Southern California Association of Governments
SD Sheriff’s Department
US United States Federal Government
Funding Sources
CFD Community Facilities District
FG Federal Grants
GF City General Fund
ISF Impact/Service Fee
LMD Landscape Maintenance District
PP Public/Private Partnership
RDA Redevelopment Agency
SG State Grants
UAF User/Application Fees
Priorities
1 Current. Action already implemented.
2 Urgent. Action should be undertaken within the next
fiscal year. It is either required by law or is critical to the City.
3 Important. Action should be taken in the
near future. It may be necessary for the
completion of other actions.
4 Ongoing. Action is continuous or is the continuation of an existing action or program. It requires no further
action to implement.
5 Desirable. Action would benefit the community, but
does not require short term implementation or may
require other actions to be taken first.
6 Optional. Action has a relatively low priority, but is desirable. It is not critical to other actions.

Land Use Element
Grand Terrace General Plan II-17 Policy Project Review Initiative Primary ResponsibilitySupport ResponsibilityFunding Source Priority
Policy/Action
Land Use Element
Goal 2.1: Provide for balanced growth which seeks to provide a wide range of employment and housing opportunities and maintenance of a healthy, diversified community.

2.1.1 X Implementation of General Plan goals shall be reviewed every five years with the first review occurring one year after adoption of the General Plan. This will include an assessment of the relationship between General Plan land use designations and existing land uses at the time of the review as well as growth patterns in surrounding communities. a. Conduct an evaluation of the current General Plan and revise the Plan as CD PW, CA GF 4 necessary.

2.1.2 X The City will establish a formal liaison with adjacent jurisdictions, i.e. Riverside and San Bernardino Counties and the Cities of San Bernardino and Colton, for the purpose of evaluating the effects of each jurisdiction’s land use planning activities on contiguous areas.
a. Contact all surrounding jurisdictions to acquire copies of their General Plans. CD PW GF 4 Review the Plans for consistency with the City’s. Request that the City be included in the review of any General Plan Amendments.
b. Contact surrounding jurisdictions to have the City placed on their transmittal lists CD PW GF 4 for project review. Review adjacent projects for compatibility with the City’s General Plan and identify potential impacts to the City.

2.1.3 X Grand Terrace’s potential role within the regional market area will be reviewed every 2 ½ years as an integral part of the General Plan.
a. Conduct an evaluation of the City’s role in the regional market area for submittal CD CM GF 5 and review by the City Council.

2.1.4 X The supply of vacant land and underutilized lands within the City shall be reviewed every 2 ½ years to consider changes in zoning in support of General Plan goals. a. Conduct a survey of vacant and underutilized lands. Where appropriate, CD --- GF 5 proposed changes to a specific property’s General Plan designation and/or zoning shall submitted to the Planning Commission and City Council for appropriate action.

Land Use Element
Grand Terrace General Plan II-18 Policy Project Review Initiative Primary ResponsibilitySupport ResponsibilityFunding Source Priority
Policy/Action

2.1.5 Enhancement of the City’s image shall be undertaken by the establishment of City entrances and development of unified streetscapes.
a. Identify entrances to the City that are under-landscaped. Submit proposed CD PW, CD GF, FG, SG, 4 landscape plans to the Planning Commission and City Council for review. Prepare LMD, ISF, plans for approved concepts and install new landscaping, as funding becomes PP available.

2.1.6 X Mixed use development which can demonstrate superior use of land, more efficient utilitization of public facilities, and more effective conservation of natural resources shall be strongly encouraged by the City of Grand Terrace.
a. Review new development on a project-by-project basis for implementation of CD PW GF 1 mixed use development concepts.

2.1.7 The City shall continually refine population growth forecasts to insure adequate planning for anticipated increased levels of sewerage, water and other necessary community services.
a. Acquire updated population information through the State, SCAG, and SANBAG. CD PW, SCAG, GF 4 SANBAG
Goal 2.2: Preserve and enhance the quality and character of the City’s residential neighborhoods.

2.2.1 X Any development occurring within the Hillside Residential designation shall be required to prepare a Specific Plan.
a. Enforce the current requirement for the preparation of a Specific Plan for any CD CA GF 1 development proposed in areas designated as Hillside Residential.

2.2.2 X All residential developments shall comply with the goals and policies of the Housing Element of the General Plan.
a. Review all proposed residential projects for consistency to the General Plan CD --- GF 4 Housing Element.

Land Use Element
Grand Terrace General Plan II-19 Policy Project Review Initiative Primary ResponsibilitySupport ResponsibilityFunding Source Priority
Policy/Action
Goal 2.3: Provide a wide range of retail and service commercial opportunities designed to meet the needs of the City’s residents, businesses, and visitors while also providing employment opportunities.

2.3.1 X Commercially designated freeway frontage shall be master planned to ensure a comprehensive commercial development pattern that will serve as a scenic entry into the City.
a. Require that all commercial projects along the I-215 freeway are developed under C
D --- GF, RDA, 1
a master plan concept. UAF

2.3.2 X Maintenance and continued development of Grand Terrace’s established commercial areas, as an encouragement of new commercial development. a. The City shall develop a program to support the renovation and improvement of C
D CS, PW, CM SG, GF, FG, 3
existing commercial areas. RDA, PP

2.3.3 X X Additional freeway service-oriented commercial uses shall be encouraged. a. Promote the development of freeway-oriented land uses south of Barton Road and C
D CS, CM GF, UAF, 1
east of I-215. PP, RDA
b. Develop an economic development program designed to attract freeway-oriented C
D CS, CM RDA, 1
commercial land uses to the City.

2.3.4 X X Commercial areas along Barton Road shall be designated in a manner that discourages “strip commercial” type development.
a. All new commercial projects along Barton Road shall be reviewed in compliance C
D PW GF 4
with the Barton Road Specific Plan to discourage “strip commercial” development concepts.

2.3.5 X X Measures to reduce potential land use incompatibility between commercially designated areas and all other plan areas will be given special consideration. Specific features could include increased setbacks, walls, berms, and landscaping. a. Review and modify the Zoning Ordinance to provide requirements for buffering C
D PW, CA GF 4
between commercial and residential land uses.

Land Use Element
Grand Terrace General Plan II-20 Policy Project Review Initiative Primary ResponsibilitySupport ResponsibilityFunding Source Priority
Policy/Action
Goal 2.4: Provide for a mix of attractive industrial land uses designed to generate employment opportunities

2.4.1 X The City shall promote the development of employment generating, light, non-polluting industry with the present land use pattern.
a. Identify potential industrial sites. Market the sites through City-sponsored CD CM, RDA GF, RDA 4 economic development programs using multi-media sources including the City Website, television, and written materials.

2.4.2 X The City shall promote the development of light non-polluting industrial uses within the City.
a. Develop a marketing program for the development of industrial areas along and CD CM, RDA GF, RDA 5 west of I-215.

2.4.3 X Whenever feasible, industrially designated areas shall be master planned to provide an “industrial park” character.
a. When industrial projects are proposed, they will be evaluated for their potential to CD PW GF 1 be included in an overall master plan with other adjacent industrial properties.

2.4.4 Buffering to prevent potential land use incompatibilities between industrial areas and other areas shall be given special consideration. Specific features could include increased setbacks, walls, berms, and landscaping. a. Review the Zoning Ordinance and establish buffer guidelines for industrial areas CD PW GF 3 adjacent to more sensitive land uses.

2.4.5 The City’s Redevelopment Agency shall assist in the consolidation and assemblage of properties to assure adequate sized quality development with areas designated as light industrial.
a. Identify potential industrial sites and determine whether they warrant RDA RDA CD, CM RDA 6 participation based upon available RDA funding.

Goal 2.5: Provide for the preservation of natural resources and open space.

2.5.1 All areas of Blue Mountain above elevation 1,450 feet above sea level shall be maintained as open space. Consideration shall be given to the maintenance of existing

Land Use Element
Grand Terrace General Plan II-21 Policy Project Review Initiative Primary ResponsibilitySupport ResponsibilityFunding Source Priority
Policy/Action
communications towers.
a. Review the Zoning Ordinance and establish requirements for the preservation of CD CA GF 3 Blue Mountain as open space above the elevation 1,450.

2.5.2 X X Areas designated as Open Space shall be preserved to provide long-term recreation opportunities as well as the preservation of scenic and environmental resources and the protection of public health and safety.
a. Work with the Grand Terrace Foundation and Friends of Blue Mountain to CD CS, CM FG, SG, ISF, 3 identify potential properties for acquisition as public open space. PP b. Review projects on or adjacent to Blue Mountain and condition them, where CD CM GF 4 appropriate, to dedicate property as public open space.

2.5.3 X X Energy efficiency shall be encouraged in all future development. a. The City shall develop energy conservation policies and guidelines to be used in the CD PW, CA GF, SG, FG, 3 review of all new development proposals. PP

° City of Grand Terrace General Plan Land Use Map
0 0.5 1
Miles
Legend
Low Density Residential
Medium Density Residential
Medium/High Density
Residential
High Density Residential
Hillside Low Density
Residential
Office Commercial
General Commercial
Industrial
Floodplain Industrial
Public
Hillside Open Space
The Gateway at Grand
Terrace Specific Plan (GSP)

June 23, 2026
Housing Element
VIII-202
Grand Terrace General Plan Draft | May 2024
APPENDIX A: RHNA SITES INVENTORY MAP

AGENDA REPORT
MEETING DATE: May 26, 2026
TITLE: Discussion and Possible Reconsideration of Zoning Code Amendment (ZCA) 26-02, General Plan Amendment (GPA) 26-01, Zone Change (ZC) 26-01, and Environmental Review (E) 26-03 – Establishment of the R3-40 High Density Multiple Family Residential District and Housing Element Rezoning PRESENTED BY: Adrian Guerra, City Attorney, Gabriel Arguelles, Associate Planner RECOMMENDATION: PASS A MOTION TO RECONSIDER APPROVAL OF ZONING CODE AMENDMENT (ZCA) 26-02, GENERAL PLAN AMENDMENT (GPA) 26-01, ZONE CHANGE (ZC) 26-01, AND ENVIRONMENTAL REVIEW (E) 26-03 – ESTABLISHMENT OF THE R3-40 HIGH DENSITY MULTIPLE FAMILY

RESIDENTIAL DISTRICT AND HOUSING ELEMENT REZONING
2030 VISION STATEMENT:

This staff report supports City Council Goal #3, “Promote Economic Development” by encouraging the City to prepare for future development by updating zoning and development codes; and City Council Goal #5, “Engage in Proactive Communication” by encouraging public participation regarding land use and development activities.

BACKGROUND:

City Council did not pass the motion to approve Zoning Code Amendment (ZCA) 26-02, General Plan Amendment (GPA) 26-01, Zone Change (ZC) 26-01, and Environmental Review (E) 26-03 to implement Program 1 of the City’s 2021–2029 Housing Element at its May 12, 2026 public hearing.

The hearing was adjourned for continuation on May 26, 2026. The proposed amendments were intended to establish the R3-40 High Density Multiple Family Residential District and rezone a total of approximately 97 acres throughout the City to allow residential development at a density of 20 to 40 dwelling units per acre.

As a result, the item was continued to the next City Council meeting on May 26, 2026, for discussion and possible reconsideration. This staff report discusses ramifications the City will likely face in failing to adopt a compliant Housing Element, including disqualification from eligibility for state grants; carryover/combined RHNA from the 6th Cycle to 7th Cycle, at least doubling the amount that must be zoned to R3-40; risk of litigation from the state, private parties, and nonprofit organizations; significant financial penalties; loss of permitting authority; court receivership; and inability to deny new projects inconsistent with the General Plan or Zoning, including Builder’s Remedy vulnerability.

By this staff report, City staff recommends that the City Council move to reconsider approval of Zoning Code Amendment (ZCA) 26-02, General Plan Amendment (GPA) 26-01, Zone Change (ZC) 26-01, and Environmental Review (E) 26-03 – Establishment of the R3-40 High Density Multiple Family Residential District and Housing Element Rezoning and, if a motion for reconsideration

passes, continue the matter to a future re-noticed hearing to ensure the public is properly informed prior to final action.

To assist the City Council and public in understanding the proposed rezoning program and the potential consequences associated with continued Housing Element noncompliance, additional background materials have been provided with this report. Attachment 1 contains the May 12, 2026 City Council staff report and associated rezoning materials previously considered by the City Council.

Attachment 2 provides supplemental background information regarding the Housing Element rezoning program, including General Plan and Housing Element framework, development assumptions, theoretical buildout capacity, and recent State housing legislation. Attachment 3 includes a recent article regarding enforcement actions and penalties imposed on the City of Huntington Beach related to Housing Element noncompliance.

DISCUSSION:

I. CONSEQUENCES OF NONCOMPLIANCE
If the City does not have a housing element in compliance with State Housing Element Law, the City may face serious consequences, including but not limited to:
• Disqualification from eligibility for state grants
• Carryover/Combined RHNA from 6th Cycle to 7th Cycle – at least doubling the amount that must be zoned to R3-40.
• Risk of litigation
• Financial penalties
• Loss of permitting authority
• Court receivership
• Inability to deny new projects inconsistent with General Plan or Zoning (Builder’s Remedy) State Grants. Noncompliance results in ineligibility or delay in receiving state funds that require a compliant housing element as a prerequisite, including, but not limited to, the following:
• Infill Infrastructure Grant Program
• SB 1 Caltrans Sustainable Communities Grants
• Permanent Local Housing Allocation Program
• Local Housing Trust Fund Program
• Affordable Housing and Sustainable Communities Program Eligibility for these funding sources is tied, in part, to Housing Element compliance and/or compliance with annual reporting obligations under Government Code section 65400. In addition, the City’s refusal to adopt the necessary zoning amendments required to complete the Housing Element process may jeopardize grant funding the City has already received. Under the Regional Early Action Planning Grants of 2021 (“REAP 2.0”) program, failure to complete required Housing Element implementation actions could subject the City to repayment obligations or other enforcement actions related to previously awarded grant funds.

RHNA Carryover. If a local government fails to provide enough sites or rezone to meet their previous RHNA allocation, that "unmet need" is carried over to the next cycle. This means that Grand Terrace

will not only have to rezone in two years to accommodate the higher 7th Cycle RHNA but will also need to additionally accommodate the 6th Cycle RHNA, at least doubling the potential number of units that the Grand Terrace must zone for.

By adopting the zoning and maintaining a compliant Housing Element, all of the potential 6th Cycle units that have not been developed during the 6th Cycle (through 2029) will be allowed to count toward the 7th Cycle RHNA requirement. There is a good chance that Grand Terrace would not have to rezone additional lands for the 7th Cycle Housing Element.

Lawsuits. Jurisdictions that do not meet their housing element requirements may face additional financial and legal ramifications. HCD may notify the California Office of the Attorney General, which may bring suit for violations of State Housing Element Law.

Local governments with noncompliant housing elements are vulnerable to litigation from housing rights’ organizations, developers, and HCD. If a jurisdiction faces a court action stemming from its lack of compliance and either loses or settles the case, it often must pay substantial attorney fees to the plaintiff’s attorneys in addition to the fees paid to its own attorneys. Potential consequences of lawsuits include:
• Mandatory compliance within 120 days,
• Suspension of local control on building matters, and
• Court approval of housing developments.

Financial Penalties. Further, state law provides for court-imposed penalties for persistent noncompliance, including financial penalties. Under Government Code section 65585, subdivision (l)(1), such penalties may be imposed following a judicial finding of noncompliance, issuance of a compliance order or judgment, and continued failure to comply with that order for a period of 12 months. The statute establishes a minimum fine of $10,000 per month, up to $100,000 per month. If a jurisdiction remains noncompliant for an additional six months, a court may multiply those penalties by a factor of six, up to $600,000 per month. Further financial implications are discussed in the Fiscal Impact section below.

Loss of Permitting Authority. Other potential ramifications could include the loss of local land use authority to a court-appointed agent. Courts have authority to take local government residential and nonresidential permit authority to bring the jurisdiction’s General Plan and housing element into substantial compliance with State law. The court may suspend the locality’s authority to issue building permits or grant zoning changes, variances, or subdivision map approvals – giving local governments a strong incentive to bring their housing element into compliance.

For example, a defective housing element may freeze the City’s ability to issue permits for nonresidential construction or development, as a finding of consistency with the general plan is not valid when a general plan is incomplete or inadequate. (See, e.g., Resource Defense Fund v. County of Santa Cruz (1982) 133 Cal.App.3d 800, 806; Camp v. Board of Supervisors (1981) 123 Cal.App.3d 334, 358.) Accordingly, a city without a valid housing element would not be able to approve most development projects. (See, e.g., Urban Habitat Program, Case No. RG 06 293831 [instituting a ban on city approval of development projects until a settlement agreement had been reached with the Attorney General and the housing advocacy organizations].) Court Receivership. Government Code sections 65585 and 65587 authorize courts to impose

additional remedies for persistent noncompliance with State Housing Element Law, including appointment of a receiver or other agent. Generally, such remedies may occur following: (1) a judicial finding that the housing element does not substantially comply with State law; (2) issuance of a court order or judgment directing the jurisdiction to come into compliance; and (3) continued failure to comply with that order. Pursuant to Government Code section 65585, subdivision (l), the court retains jurisdiction to ensure compliance and may impose escalating enforcement measures if noncompliance persists. Under Government Code section 65587, the court may appoint a receiver with authority to take actions necessary to remedy identified deficiencies and achieve substantial compliance, including actions related to housing element programs, rezoning, and other implementing land use regulations.

Builders Remedy
Failure to maintain a substantially compliant Housing Element may expose the City to applications submitted pursuant to the “Builder’s Remedy” provisions of Government Code Section 65589.5(d)(5), commonly referred to as the Housing Accountability Act. Under Builder’s Remedy, jurisdictions without a substantially compliant Housing Element are significantly limited in their ability to deny qualifying housing development projects based on inconsistency with local zoning standards or General Plan land use designations.

As a result, developers may propose qualifying residential or mixed-use projects at densities, heights, and intensities that would otherwise not be permitted under the City’s zoning regulations. The California Department of Housing and Community Development (HCD) and the California Attorney General have both indicated an intent to aggressively enforce Builder’s Remedy protections and challenge local actions that unlawfully impede qualifying housing projects.

The City of Grand Terrace’s Housing Element compliance deadline was October 15, 2021. Because the Housing Element was not found to be in substantial compliance by the statutory deadline, the City has remained subject to Builder’s Remedy provisions pending completion of the required rezoning program identified in Program 1 of the Housing Element.

Under Builder’s Remedy, qualifying affordable housing projects where at least 20 percent of the units are affordable to lower-income households, or where 100 percent of the units are affordable to moderate-income households, may not be denied based on inconsistency with the City’s zoning code or General Plan land use designations unless specific statutory findings can be made. Under State law, qualifying Builder’s Remedy projects may only be denied if the project has a specific adverse impact upon public health or safety that cannot be mitigated without rendering the project unaffordable, violates State or federal law and there is no feasible method to comply without rendering the project unaffordable, is located on qualifying agricultural or resource preservation land, or lacks adequate water or wastewater infrastructure to serve the development.

As the City remains non-compliant until completion of the required rezonings, Grand Terrace is currently subject to Builder’s Remedy applications. This means a developer may propose residential development at densities and heights exceeding current zoning limitations so long as the project satisfies applicable affordability thresholds.

Adoption of the proposed rezoning program would restore the City’s ability to regulate residential development through objective zoning standards, including limitations related to density, height, setbacks, design, and site development. Under the City’s current noncompliant status, a developer could propose a substantially higher-density residential project that exceeds the standards contemplated under the proposed R3-40 zoning district. Adoption of the proposed rezoning would instead establish enforceable development standards, including a maximum density of 40 dwelling

units per acre, a maximum height of 45 feet, and applicable setback and development requirements.

Adopting the new zoning gives the City the power to shape what these developments will look like, and will limit proposed projects to the standards that have been developed. As an example, at this time a developer could propose a 10-story building at 100 dwelling units per acre on any parcel in the City, and the City would not have the ability to deny such a project. By adopting the zoning to achieve housing element compliance, developers would be limited to the proposed standards, and projects could be denied should they exceed 40 du/ac or exceed 45 feet in height, or do not meet the required setbacks or other development standards.

The City has already received two Builder’s Remedy project proposals submitted following preliminary applications in December 2024:
• 12466 Michigan Street (APN: 1167-181-09): Proposed 30-unit mobile home park development on approximately 33,000 square feet within the General Commercial (GC) zone. • 21600 Walnut Avenue (APN: 0275-281-08): Proposed 119-unit mobile home park development on approximately 4.3 acres within the M2 Industrial zone.

These projects are proposed at approximately 40 dwelling units per acre and 28 dwelling units per acre, respectively, in areas where residential development is not currently permitted under the City’s zoning regulations. As long as the Housing Element remains noncompliant, qualifying Builder’s Remedy projects may not be subject to many local zoning standards, including restrictions related to permitted uses, density, and certain development regulations.

HCD Fines
HCD wrote specifically in a notice of violation letter to the City of Grand Terrace that “HCD may notify the California Office of the Attorney General, which may bring suit for violations of State Housing Element Law… [and the] government code establishes a minimum fine of $10,000 per month, up to $100,000 per month. If a jurisdiction remains noncompliant, a court can multiply those penalties by a factor of six. Other potential ramifications could include the loss of local land use authority to a courtappointed agent”.

If the City fails to pay such fines in a timely manner, the court can order the State Controller to “intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction's failure to pay.” (Gov. Code § 65585(l)(1).) If the City continues to be in noncompliance for three months after the imposition of fines, the court can multiply the fines above by 3 and can similarly order the intercept of funds. Continue failure to comply within 6 months of the initial imposition of fines, the fines can be increased by a factor of 6 times the original fine and, further, the court can order actions necessary to bring the Housing Element into compliance.

Nevertheless, the court can also consider mitigating circumstances, such as a good faith effort by the City. (Gov. Code § 65585(m).) However, a failure to adopt a compliant Housing Element would weigh against any finding of good faith compliance. As previously noted in correspondence sent directly to the City, the City has been advised of the potential fines associated with continued noncompliance. If imposed at an increased rate of up to six times the base amount, such penalties could reach as high as $600,000 per month.

This extreme cost to the City would affect all property owners, and not just those within the rezone area.

REAP Grant
This year, SCAG made available a REAP funding grant that must be used by December 2026. The City was proactive in coordinating with SBCTA to utilize this opportunity to fund the rezoning efforts.

Requirements to qualify for the REAP funding is that the project go beyond state law. Projects that only meet minimum state requirements do not meet the threshold requirement for “Transformational Planning and Implementation Activities.” The reason the rezoning qualified for this grant is because it included proposed rezoning beyond the 24 acres required to meet the RHNA. Reducing the rezoning below the 97 acres may result in the grant needing to be repaid by the City, in the amount of $154,000.

The REAP grant also requires any funded project to be implemented through adoption by a deliberative body. Therefore, if the rezone is not adopted by the Grand Terrace City Council, the grant is likely to need to be repaid as the minimum requirement will not be met. 6 th Cycle Rezoning
If the City fails to meet the 6th Cycle rezone requirements, a revised plan to meet the RHNA will need to be developed at the responsibility of the City. Housing Element Program 1 says the City will rezone approximately 97 acres to high density residential. If the City decides to rezone different sites than the selected RHNA sites, or a total area less than the 97 acres, the rezoning process would need to be restarted, and the City would need to coordinate with HCD to determine if a housing element amendment would be required. A new zone and potential housing element amendment would not be covered by the REAP grant and would be at cost to the City. 7 th Cycle Rezoning
One of the purposes of rezoning beyond the required 24 acres to meet the 6th Cycle RHNA is to preemptively put zoning in place that can accommodate the 7th Cycle RHNA. The 7th Cycle Housing element for the City of Grand Terrace is due on October 15, 2029. It is typically recommended that a jurisdiction begin work on their housing element 2 years in advance of the statutory deadline. As the 6 th Cycle rezoning is late, City would need to begin work on the next housing element very soon, it was a more cost effective approach to combine the rezoning efforts. There are also benefits of lesser requirements for zoning standards when the zoning is in place prior to adoption of the housing element.

There are already jurisdictions in northern California that have been assigned their 7th Cycle RHNA, with an over 200% increase since the 6th Cycle. If the City does not achieve rezoning beyond the 6th Cycle requirement now, while it is being covered by REAP funding, the City would likely need to accomplish 7th Cycle rezoning as well in the next couple years at cost to the City.

Environmental Review (CEQA)
The Housing Element rezoning program is exempt from the California Environmental Quality Act (CEQA) pursuant to Senate Bill 131 (SB 131), which applies to rezonings necessary to implement an adopted Housing Element. The rezoning does not approve any specific development project, but instead establishes the zoning framework necessary to maintain compliance with State Housing Element law.

Failure to complete the rezoning program identified in Program 1 of the adopted Housing Element may result in additional environmental review requirements and increased costs to the City. The

current rezoning effort relies on the statutory exemption associated with implementation of the adopted Housing Element program. If the rezoning process is delayed or restarted in the future, additional environmental analysis, technical studies, consultant work, and public review processes may be required depending on the timing, scope, and regulatory circumstances at that time.

Future development on rezoned properties would still be subject to separate project-level review and environmental analysis, including evaluation of traffic, utilities, drainage, public services, air quality, noise, and other environmental considerations, as applicable.

Legal Fees
Local governments with noncompliant housing elements are vulnerable to litigation from housing rights’ organization, developers, and HCD. Many jurisdictions have received lawsuits from housing advocates such as CalHDF, YIMBY Law, or the League of Women Voters. If a jurisdiction faces a court action stemming from its lack of compliance and either loses or settles the case, it often must pay substantial attorney fees to the plaintiff’s attorneys in addition to the fees paid to its own attorneys. Potential consequences of lawsuits include mandatory compliance within 120 days, suspension of local control on building matters, and court approval of housing developments.

Enforcement by the Attorney General
HCD may notify the City and the California Attorney General’s office (“AG”) regarding any violation of Housing Element Law by the City. (Gov. Code § 65585(j).) The AG will then be able to initiate a lawsuit against the City for violations of Housing Element Law. (Gov. Code §§ 65585(j), (k), (l).) If the AG declines to initiate litigation, then HCD may initiate litigation against the City for violations of Housing Element Law. (Gpov. Code § 65585(o).)
In 2010, the City of Pleasanton entered into a settlement agreement exceeding $2 million in litigation brought by the California Attorney General and housing advocacy organizations concerning the City’s Housing Element and growth management policies. (See Urban Habitat Program v. City of Pleasanton (2008) 164 Cal.App.4th 1561; Alameda County Superior Court Case No. RG06293831.) The settlement required the City to revise its Housing Element, modify growth management restrictions, and implement additional affordable housing measures. Similarly, housing advocacy organizations have successfully challenged Housing Elements and related housing policies in other California jurisdictions, resulting in settlement agreements, revised Housing Elements, and compliance measures adopted pursuant to State Housing Element Law. (See, e.g., Peninsula Interfaith Action v. City of Menlo Park (San Mateo County Superior Court Case No. CIV513882).) In addition to judicial compliance orders and statutory penalties, jurisdictions may also face substantial financial liability through attorney’s fees awards arising from Housing Element litigation.

One of the most significant examples is Kennedy Commission v. City of Huntington Beach (2023) 91 Cal.App.5th 436, in which the California Court of Appeal upheld an attorney’s fees award of approximately $3.53 million against the City following years of litigation concerning affordable housing obligations and Housing Element compliance. The court found that the litigation was instrumental in compelling the City to adopt a revised Housing Element that complied with State law and provided additional affordable housing opportunities. Litigation began in 2015 and was finally decided in 2023.

The $3.5 million cost to the City is only one portion of the costs incurred. The City also would have incurred its own attorney’s fees and any litigation fees and costs (e.g., expert retention, consultant retention, deposition costs, filing pleadings, etc.), resulting in well over $3.5 million dollars actually spent.

More recently, in The People of California, et al. v. The City of Huntington Beach et al., HCD and the Attorney General’s Office initiated litigation against the City of Huntington Beach to enforce state

housing laws after the City refused to zone for its mandated 13,368 housing units and failed to adopt a compliant housing element plan. Although the City filed multiple countersuits challenging the constitutionality of the Housing Element Law, all were dismissed. As a result of the lawsuit against the City, Huntington Beach was ordered to pay financial penalties of initially $170,000, plus $50,000 per month to the state until it complies with state housing mandates. The $50,000 monthly fine is slated to go into a state’s Building Homes and Jobs Trust Fund that could spur housing production in other cities. Huntington Beach taxpayers will lose over $1,600 a day until city leaders get a state approved housing plan in place. (See Attachment 3.)
Such litigation demonstrates that prolonged resistance to Housing Element compliance may expose jurisdictions not only to court oversight and statutory penalties, but also to significant financial consequences, including substantial attorney’s fees awards.

Enforcement by Private Parties
Pursuant to Government Code Section 65587, a private party may bring a lawsuit to enforce Housing Element Law and any deadlines required under Government Code Section 65583. The court’s review in that instance will be to determine whether the Housing Element, or any subsequent action, substantially complies with the requirements of Housing Element Law.

If the court finds an action of the City to be inconsistent with its Housing Element, the City must bring its action into compliance within 60 days and the court will retain jurisdiction to enforce its decision. (Gov. Code § 65587(c).) If the court determines that the 60-day period would be an undue hardship upon the City, then it can extend the deadline by an additional 60 days.

If the court finds that the City has failed to complete its rezoning to be consistent with its Housing Element by the statutory deadlines, the court can order the rezoning to be complete within 60 days or the earliest time consistent with public hearing notice requirements. (Gov. Code § 65597(d)(1).) The court retains jurisdiction for enforcement purposes. If the court finds that the order has not been carried out, then court can issue further orders to ensure that Housing Element Law is complied with, “including ordering, after considering the equities of the circumstances presented by all parties, that any rezoning required be completed within 60 days or the earliest time consistent with public hearing notice requirements in existence at the time the action was filed and may impose sanctions …” on the City. (Gov. Code § 65587(d)(1).)
Enforcement by Nonprofit Entities
Californians for Homeownership, Inc. brought a string of Petitions against cities, generally alleging failure to adopt a compliant Housing Element by the statutory deadline or failure to identify adequate housing sites consistent with State Housing Element Law. The organization stated that the cities targeted for litigation were selected because they were significantly behind their peers in the Housing Element process, had demonstrated resistance to adequate housing planning, or both. In these actions, the nonprofit sought court orders requiring expedited compliance with Housing Element Law, judicial declarations establishing the cities’ noncompliance, and enforcement of statutory penalties applicable to noncompliant jurisdictions. Such penalties may include limitations on a city’s ability to deny qualifying housing projects, potential loss of local land use authority, court oversight of development approvals, suspension of certain nonresidential permitting activities, and judicial approval of housing projects that have been delayed or denied by the jurisdiction.

The litigation consistently resulted in outcomes favorable to the nonprofit organization rather than the subject cities. In Californians for Homeownership v. City of Beverly Hills (Case No. 23STCP00143), the court granted the petition after finding deficiencies in the City’s Housing Element, including inadequate identification of housing sites, and ordered the City to bring both its Housing Element and

zoning ordinance into compliance within specified timeframes. The City’s appeal was subsequently denied. In cases against the Cities of Bradbury, Claremont, Fullerton, La Mirada, Laguna Hills, South Pasadena, and Vernon, stipulated judgments were entered for Californians for Homeownership and against each public entity, requiring the jurisdictions to adopt and submit compliant Housing Elements to the California Department of Housing and Community Development (HCD) by court-ordered deadlines. (See Californians for Homeownership v. City of Bradbury, Los Angeles County Superior Court Case No. 22STCP01381; Californians for Homeownership v. City of Claremont, Los Angeles County Superior Court Case No. 22STCP03414; Californians for Homeownership v. City of Fullerton, Orange County Superior Court Case No. 30-2022-01281840-CU-WM-CJC; Californians for Homeownership v. City of La Mirada, Los Angeles County Superior Court Case No. 22STCP03418; Californians for Homeownership v. City of Laguna Hills, Orange County Superior Court Case No. 30- 2022-01255365-CU-WM-CJC; Californians for Homeownership v. City of South Pasadena, Los Angeles County Superior Court Case No. 22STCP01388.)
Additional litigation against Manhattan Beach challenged the adequacy of the City’s adopted Housing Element, including reliance on nonvacant sites without sufficient evidence of redevelopment feasibility; although that matter was later dismissed, the litigation nevertheless required the City to address identified deficiencies. (See Californians for Homeownership v. City of Manhattan Beach, Los Angeles County Superior Court Case No. 22STCP01417.) Similarly, litigation against La Habra Heights was dismissed after the City belatedly prepared and submitted a draft Housing Element for HCD review. (See Californians for Homeownership v. City of La Habra Heights, Los Angeles County Superior Court Case No. 22STCP01394.) Collectively, these cases demonstrate the increasing willingness of nonprofit housing organizations to pursue enforcement litigation against noncompliant jurisdictions and the substantial legal and regulatory consequences that may result from failure to timely adopt and maintain a compliant Housing Element.

II. RECONSIDERATION PROCESS AND PROCEDURE
Under the City’s adopted parliamentary procedure, consistent with Rosenberg’s Rules of Order and as set forth in the City’s Council Protocols and Procedures, a motion to reconsider an action may only be made by a member who voted on the prevailing side of the original action. The motion requires a second, which may be made by any City Council Member. Once properly made and seconded, the motion is debatable but not amendable.

A motion to reconsider is in order at the time of the original action or later in a continued public meeting, subject to recognition by the presiding officer. The purpose of reconsideration is to allow the City Council to re-open and re-examine a matter previously decided.

If the motion to reconsider is not made and seconded, or if it is made and fails, the original action of the City Council remains in full force and effect.

ENVIRONMENTAL IMPACT:

The City Council is discussing the possible reconsideration of Zoning Code Amendment (ZCA) 26-02, General Plan Amendment (GPA) 26-01, Zone Change (ZC) 26-01, and Environmental Review (E) 26- 03 related to the Housing Element rezoning program. Pursuant to CEQA Guidelines Section 15060(c)(2) and Section 15378, the discussion and possible reconsideration action does not constitute a “project” under CEQA because it does not commit the City to a definite course of action resulting in a potentially significant physical impact on the environment.

FISCAL IMPACT:

If the City elects not to reconsider approval of Zoning Code Amendment (ZCA) 26-02, General Plan Amendment (GPA) 26-01, Zone Change (ZC) 26-01, and Environmental Review (E) 26-03 – Establishment of the R3-40 High Density Multiple Family Residential District and Housing Element Rezoning, the City will likely be exposed to significant costs.

Costs anticipated include, but are not limited to:
• Up to a $600,000 monthly fine from HCD
• Repayment of the REAP grant to SCAG for the 6th Cycle rezoning program ($154,000) • Costs to revise 6th cycle rezoning
• Cost of possible amendments to the 6th Cycle Housing Element • Cost of possible amendments to the Land Use Element
• Costs of 7th Cycle rezoning program
• Litigation fees, including the City’s attorney’s fees, fees for litigation, and Plaintiff’s attorney’s fees (approx. $25,000 to over $1 million)
• Loss of taxpayer money
• Potential financial impacts associated with Builder’s Remedy applications and the loss of local control over qualifying housing developments.

In addition to the costs described above, the City has already incurred expenses, including attorneys’ fees and City staff time, in connection with preparing additional memoranda supporting approval of the Housing Element between the May 12, 2026 City Council meeting and the May 26, 2026 City Council meeting. If the motion to reconsider is approved, the City will incur additional costs associated with re-noticing the item for final action. The City’s grant funding is also nearing depletion, meaning the City will need to pay the Consultant directly once those funds are exhausted. This could result in significant costs if the City does not pass the motion to reconsider.

AGENDA REPORT
MEETING DATE: July 28, 2026
TITLE: Designation of Voting Delegate & Alternate to the Cal Cities 2026 Annual Conference & Expo
PRESENTED BY: Daysi Alcocer, City Clerk
RECOMMENDATION: ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

GRAND TERRACE, CALIFORNIA, DESIGNATING A DELEGATE AND
ALTERNATE TO THE 2026 CAL CITIES ANNUAL CONFERENCE & EXPO

AS OFFICIAL REPRESENTATIVES OF THE CITY OF GRAND TERRACE 2030 VISION STATEMENT:

This staff report supports City Council Goal #4 “Develop and Implement Successful Partnerships” by working collaboratively with Public Sector, Local, Regional and State Agencies to facilitate the delivery of services to our community and to secure funding for programs and projects.

BACKGROUND:

The City of Grand Terrace is a member of the League of California Cities. In accordance with League procedures, the City Council is requested to designate one Council Member as the City's voting delegate and one Council Member as the alternate voting delegate for the 2026 Annual Conference and Expo. The designated delegate and alternate will be authorized to represent the City and cast its vote on League policy matters during the conference.

For the 2025 Annual Conference and Expo, the City Council adopted a resolution appointing Council Member Matt Brown as the City's voting delegate and Mayor Pro Tem Michelle Sabino as the alternate voting delegate.

DISCUSSION:

An important component of the League of California Cities Annual Conference is participation in the Annual Business Meeting held during the General Assembly. The 2026 Annual Business Meeting is scheduled for 8:30 a.m. on Friday, September 25, 2026, at the Anaheim Convention Center. In order for the City of Grand Terrace to cast its vote on League policy matters, the City Council must designate a Voting Delegate. The Council may also appoint up to two alternate voting delegates; however, only one alternate may vote in the absence of the voting delegate.

In accordance with League bylaws, the City’s voting delegate and any alternate delegates must be formally designated by City Council resolution. All designated representatives must also be registered conference attendees. If the voting delegate is unable to attend the full conference, they may register for the Friday session only. To cast a vote at the Annual Business Meeting, the voting delegate or alternate must be present and possess both the voting delegate card and voting delegate sticker issued at conference check-in.

The League of California Cities has requested that all participating cities submit a resolution

designating their voting delegate and alternate(s) by September 1, 2026. Adoption of the attached resolution will satisfy this requirement and ensure the City of Grand Terrace is eligible to participate in the Annual Business Meeting on September 25, 2026.

Based on the foregoing, staff recommends that the City Council designate one (1) voting delegate and one (1) alternate voting delegate from among its members to represent the City of Grand Terrace at the League of California Cities 2026 Annual Business Meeting.

ENVIRONMENTAL IMPACT:

None.

FISCAL IMPACT:

None.

CC Reso No. 2026-xx Page 1 of 2 July 28, 2026
RESOLUTION NO. 2026-xx

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND

TERRACE, CALIFORNIA, APPOINTING DELEGATES AND
ALTERNATES TO THE 2026 LEAGUE OF CALIFORNIA CITIES

ANNUAL CONFERENCE AS OFFICIAL REPRESENTATIVES OF THE

CITY OF GRAND TERRACE
WHEREAS, the League of California Cities (“League”) will be having its 2026 Annual Conference from September 23, 2026, to September 25, 2026, in Anaheim, California; and
WHEREAS, the League’s 2026 Annual Conference will have an Annual Business Meeting on Friday, September 25, 2026, in which the League’s membership may consider and take action on resolutions that establish League policy; and WHEREAS, in order to participate in the Annual Business Meeting and to attend the League’s 2026 Annual Conference, the Bylaws of the League require the City Council to appoint, by a majority vote, a primary Voting Delegate and up to two (2) Alternate Voting Delegates, one (1) of whom may vote in the Annual Business Meeting in the event that the primary designated voting delegate is unable to serve in that capacity; and WHEREAS, the City Council now desires to appoint a Voting Delegate and Alternate Voting Delegate to the 2026 League of California Cities Annual Conference.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE,

CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. is hereby appointed to serve as the Voting
Delegate to the 2026 League of California Cities Annual Conference representing the City of Grand Terrace.

SECTION 2. is hereby appointed to serve as the Alternate Voting Delegate to the 2026 League of California Cities Annual Conference representing the City of Grand Terrace.

SECTION 3. The City Clerk of the City of Grand Terrace shall certify to the passage and adoption of this Resolution and its approval by the City Council and shall cause the same to be listed in the records of the City.

SECTION 4. The City Clerk of the City of Grand Terrace is directed to submit a certified copy of this Resolution before September 1, 2026, to the League of California Cities.

CC Reso No. 2026-xx Page 2 of 2 July 28, 2026
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace, California, at a regular meeting held on the 28th day of July 2026. ________________________________
Bill Hussey
Mayor
ATTEST:
_________________________
Daysi Alcocer
City Clerk
APPROVED AS TO FORM:
_________________________
Adrian R. Guerra
City Attorney

AGENDA REPORT
MEETING DATE: July 28, 2026
TITLE: Consideration of Adoption of a Resolution 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: IF THE CITY COUNCIL DESIRES TO PROCEED WITH A BALLOT

MEASURE FOR A TRANSACTIONS AND USE TAX AT THE NOVEMBER
2026 GENERAL MUNICIPAL ELECTION, ADOPT THE FOLLOWING:

ADOPT RESOLUTION NO. 2026-XX, CALLING FOR THE PLACEMENT

OF A GENERAL TAX MEASURE ON THE BALLOT FOR THE

CONSOLIDATED GENERAL MUNICIPAL ELECTION TO BE HELD ON
NOVEMBER 3, 2026, FOR SUBMISSION TO THE VOTERS THE “GRAND TERRACE GENERAL SERVICES MEASURE,” WHICH ENACTS THE
“CITY OF GRAND TERRACE TRANSACTIONS AND USE TAX
ORDINANCE” THAT ESTABLISHES A GENERAL-PURPOSE ONE
PERCENT (1.00%) RETAIL TRANSACTIONS AND USE TAX MEASURE, SUBJECT TO MAJORITY VOTER APPROVAL; AND

DIRECTING THE CITY ATTORNEY TO PREPARE THE IMPARTIAL
ANALYSIS OF THE BALLOT MEASURE; AND PROVIDING FOR OTHER ELECTION MATTERS AS REQUIRED BY LAW.

IF THE RESOLUTION IS ADOPTED, THEN CONDUCT THE FIRST
READING, BY TITLE ONLY, OF ORDINANCE NO. 2026-XXX 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 November 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 3, 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 7.75% 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 was recommended by an Ad Hoc Citizens Committee in 2024. The City Council approved a measure for the November 2024 election, but the measure did not pass.

By this staff report, a general transactions and use tax measure with a rate of 1.00% is proposed again to the City Council for consideration by 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 $1,200,000.

DISCUSSION:

Resolution
If the City Council desires to proceed with a ballot measure at the November 2026 general municipal election, the proposed resolution for adoption and the proposed general transactions and use tax ordinance are presented for consideration by the City Council.

The resolution accomplishes three things:

1. It calls for the placement of the proposed transactions and use tax on the November 3, 2026 ballot and submit it to the voters for consideration at the General Municipal Election on November 3, 2026, and approves the transactions and use tax ordinance.

2. The resolution establishes priorities under State law for choosing among multiple written primary arguments - both in favor and against - the transactions and use tax measure, and provides for the filing of rebuttal arguments to the primary written arguments. It also directs the City Attorney to prepare an impartial analysis of the proposed measure.

3. The resolution directs staff to accomplish other election matters as required by law.

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, the resolution and the first

reading, by title only, of the ordinance must be completed before this deadline.

II. Election Law Considerations Addressed by the Resolution A. The Ballot Label
The 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.

The proposed ballot label is included below:

B. Argument Authorization
The 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 direct a modification of the resolution accordingly.

II. 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 submit 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 Yes
“GRAND TERRACE GENERAL SERVICES MEASURE. To
maintain and enhance essential City services — including police protection, neighborhood patrols, 9-1-1 emergency response, and rapid response times — shall the City of Grand Terrace enact a one-cent (1%) sales tax, providing
approximately $1.2 million annually for general City use until ended by voters, with all funds staying local, public spending disclosure, and independent annual audits?”
No

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, which will be deposited into the general fund, and will be available to the City 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.

RECOMMENDATION:

City staff recommends that, if the City Council desires to proceed with a ballot measure for a Transactions and Use Tax at the November 2026 general municipal election, the City Council:

1. Adopt Resolution No. 2026-XX, calling for the placement of a General Tax Measure on the ballot for the consolidated General Municipal Election to be held on November 3, 2026, for submission to the voters the “GRAND TERRACE GENERAL SERVICES MEASURE,” which enacts the “City of Grand Terrace Transactions and Use Tax Ordinance” that establishes a general-purpose one percent (1.00%) retail transactions and use tax measure, subject to majority voter approval; and directing the City Attorney to prepare the impartial analysis of the ballot measure; and providing for other election matters as required by law; and
If the Resolution is adopted, then CONDUCT the First Reading, by Title only, of Ordinance No. 2026- XXX relating to the proposed general transactions and use tax measure.

2. Provide other direction to staff.

ENVIRONMENTAL IMPACT:

None.

FISCAL IMPACT:

Based on estimates provided by the City’s sales tax consultant, Hinderliter deLlamas, a 1.00% local sales tax would generate approximately $1,200,000 annually in additional general fund revenues.

Under Revenue and Taxation Code 7272, the California Department of Tax and Fee Administration (CDTFA) will assess the City charges to administer the new local sales tax, with a statutory maximum not to exceed $175,000.

Additional costs anticipated include city attorneys’ fees to prepare the necessary impartial analysis and costs associated with reviewing and preparing written arguments and rebuttals.

CC Reso No. 2026-xx Page 1 of 6 July 28, 2026
RESOLUTION NO. 2026-xx

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND

TERRACE, CALIFORNIA, CALLING FOR THE PLACEMENT OF A

GENERAL TAX MEASURE ON THE BALLOT FOR THE GENERAL
MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 3, 2026 FOR THE

SUBMISSION TO THE QUALIFIED VOTERS OF AN ORDINANCE TO

ENACT A GENERAL TRANSACTIONS AND USE TAX AT A RATE OF
ONE PERCENT (1.0%); REQUESTING THE COUNTY OF SAN

BERNARDINO TO CONSOLIDATE THE SUBMISSION OF THE

MEASURE WITH THE GENERAL ELECTION TO BE HELD ON
NOVEMBER 3, 2026; PROVIDING FOR THE FILING OF PRIMARY AND

REBUTTAL ARGUMENTS AND SETTING RULES FOR THE FILING OF

WRITTEN ARGUMENTS REGARDING A CITY MEASURE TO BE
SUBMITTED AT THE NOVEMBER 3, 2026 GENERAL MUNICIPAL
ELECTION; AND DIRECTING THE CITY ATTORNEY TO PREPARE AN

IMPARTIAL ANALYSIS OF THE MEASURE
WHEREAS, Article XHIC, 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, On June 9, 2026, the City of Grand Terrace adopted Resolution No. 2026-10 calling for a General Municipal Election on November 3, 2026, requesting that San Bernardino County consolidate the General Municipal Election with the statewide general election to be held on November 3, 2026, and requesting the County of San Bernardino County Clerk to administer the City’s General Municipal Election; and WHEREAS, the City Council now desires to submit to the voters at the General Municipal Election a measure relating to the establishment of a transactions and use (sales) tax as provided in this Resolution and the City Council further desires that this measure be submitted to the voters at the aforementioned consolidated General Municipal Election (a true and correct copy of the Ordinance is attached to this Resolution as EXHIBIT "A"); and

CC Reso No. 2026-xx Page 2 of 6 July 28, 2026
WHEREAS, the projected $1,200,000 annual revenue from the proposed tax measure contemplated by this Resolution serves as a reliable source of locally controlled funding that supports vital City services, such as law enforcement services, and helps implement the needs and plans of the City by establishing a general tax in which the proceeds will be deposited in the City's General Fund for general government use; and WHEREAS, the proposed tax measure contemplated by this Resolution, if approved, would create a 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, the proposed tax measure contemplated by this Resolution, if approved, will have strict accountability requirements such as public disclosure of all spending and annual independent financial audits that ensure funds are used effectively, and only to the benefit of the Grand Terrace community; and WHEREAS, pursuant to Government Code section 53724 and Revenue and Taxation Code section 7285.9, a two-thirds (2/3) vote of all members of the City Council is required to place the Measure on the November 3, 2026 ballot; and WHEREAS, a transactions and use tax does not apply to common essentials such as groceries, prescriptions, medical and dental services, real estate, rent, utilities, education, personal services, and labor; and
WHEREAS, The City Council also wishes to (i) establish deadlines and rules for the submission of written arguments and rebuttals for and against the Measure in accordance with applicable Elections Code procedures; (ii) direct the timely preparation of the City Attorney's impartial analysis; and (iii) provide such other direction to the City Manager and City Clerk as may be necessary to facilitate the placement of the Measure on the ballot at the General Municipal Election on November 3, 2026.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND TERRACE,

CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. Recitals. The City Council of the City of Grand Terrace hereby finds and determines that the above recitals are true and correct and incorporated herein by this reference.

SECTION 2. Submission of Measure; Nature of Tax; Required Approval. That the City Council, by a two-thirds (2/3) vote of all members, and pursuant to its right and authority, does order submitted to the voters at the consolidated General Municipal Election on Tuesday, November 3, 2026, the ordinance attached hereto as EXHIBIT A, which establishes a general transactions and use tax at a rate of 1.00%, with the abbreviated form of this measure to appear on the ballot is specified below. This measure shall be entitled the "GRAND TERRACE GENERAL SERVICES MEASURE.”

CC Reso No. 2026-xx Page 3 of 6 July 28, 2026
SECTION 3. Ballot Question.

A. The City Council, pursuant to California Elections Code section 9222, hereby orders that the ballot question for the measure shall be presented and printed upon the ballot submitted to the qualified voters in the manner and form set forth in this Section. The abbreviated form of the measure to be placed on the ballot and submitted to the voters at the General Election on November 3, 2026, is as follows, with the designation “Measure __” (with the measure designation letter to be assigned by the elections official):

Yes
“GRAND TERRACE GENERAL SERVICES MEASURE. To
maintain and enhance essential City services — including police protection, neighborhood patrols, 9-1-1 emergency response, and rapid response times — shall the City of Grand Terrace enact a one-cent (1%) sales tax, providing approximately $1.2 million annually for general City use until ended by voters, with all funds staying local, public spending disclosure, and independent annual audits?”
No
B. The City Clerk is authorized to make minor, non-substantive changes to the ballot question to conform to Elections Code requirements and ballot formatting.

SECTION 4. Ordinance Text. The City Council hereby approves and adopts the Ordinance in substantially the form attached hereto as EXHIBIT A and incorporated by reference, and approves submission thereof to the voters at the General Municipal Election on November 3, 2026. The City Clerk is directed to transmit and post/publish the full text as required by law and to cause the Ordinance to be printed as required.

SECTION 5. Conduct of Election. The City Clerk, and/or the County of San Bernardino County Clerk as delegated, is authorized, instructed, and directed to procure and furnish any and all official ballots, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections.

SECTION 6. Arguments; Rebuttals; Impartial Analysis; Voter Information Materials.

A. Primary Arguments.

1. 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.

2. 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,

CC Reso No. 2026-xx Page 4 of 6 July 28, 2026
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.

3. 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 August 14, 2026, after which time no arguments for or against the foregoing measure may be submitted to the City Clerk.

B. Rebuttal Arguments.

1. 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 rebuttal arguments shall be filed with the City Clerk not more than ten (10) days after the final date for filing direct arguments. The final date for filing direct arguments is August 14, 2026, and as such rebuttal arguments shall be filed with the City Clerk no later than the close of business on August 20, 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.

2. All previous resolutions providing for the filing of rebuttal arguments for city measures are repealed.

3. The provisions of Section 6.B.1. of this Resolution shall apply only to the General Municipal Election to be held on November 3, 2026, and shall then be repealed.

C. Impartial Analysis. 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

CC Reso No. 2026-xx Page 5 of 6 July 28, 2026
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.

D. Other Materials. The City Clerk, and/or County Clerk of the County of San Bernardino, is authorized to prepare and include such other information and notices as may be required by the Elections Code and as it is determined to be appropriate for the conduct of the election.

SECTION 7. That the City Clerk is hereby authorized and directed to make any changes to the text of the proposition or this Resolution, including its exhibits, as required to conform to any requirements of law.

SECTION 8. That the method of tax collection and all aspects of the application and operation of any tax levied pursuant to the adoption of the ordinance attached hereto in Exhibit A shall be as provided in such ordinance and/or as authorized in the ordinance to be conducted and determined by the City Council.

SECTION 9. That the vote requirement for the ballot measure to pass is a majority (50% + 1) of the votes cast at the November 3, 2026, General Municipal Election.

SECTION 10. That in all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding elections.

SECTION 11. That notice of the time and place of holding the election shall be given following the formal calling of the election, and the City Clerk is authorized, instructed, and directed to give any further or additional notice of the election in the time, form, and manner required by law.

SECTION 12. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions

CC Reso No. 2026-xx Page 6 of 6 July 28, 2026
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand Terrace, California, at a regular meeting held on the 28th day of July 2026. ___________________________
Bill Hussey
Mayor
ATTEST:

Daysi Alcocer
City Clerk
APPROVED AS TO FORM:

Adrian Guerra
City Attorney

CC Ord No. xxx Page 1 of 11
ORDINANCE NO. XXX

AN ORDINANCE OF THE CITY OF GRAND TERRACE, CALIFORNIA,

FUNDING CITY OF GRAND TERRACE GENERAL SERVICES BY
IMPOSING A ONE PERCENT (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, community surveys were conducted to hear and understand what the community’s priorities are for the City; and
WHEREAS, this Ordinance could maintain funding for vital City services and help implement the needs and plans of the City by establishing a general tax in which the proceeds will be deposited in the City’s General Fund for general government use; and WHEREAS, this Ordinance would create a 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, this Ordinance has strict accountability requirements such as public disclosure of all spending and annual independent financial audits that ensure funds are used effectively, and only to the benefit of the Grand Terrace community; and WHEREAS, on [date], 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 [date], the City Council also approved this Ordinance, pursuant to Revenue & Taxation Code Section 7285.9, subject to the City voters' approval; and

EXHIBIT A

CC Ord No. xxx Page 2 of 11
WHEREAS, on June 9, 2026, the City Council adopted Resolution No. 2026-10 calling for a General Municipal Election to elect members of the Grand Terrace City Council, and called for the consolidation of the General Municipal Election and Statewide General Election.

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.

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.

CC Ord No. xxx Page 3 of 11
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 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

CC Ord No. xxx Page 4 of 11
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 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.

3.32.090 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

CC Ord No. xxx Page 5 of 11
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.
c. 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 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

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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 or her 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 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 lease 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.

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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 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.

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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.

3.17.140 – Audit and Review
The proceeds of the tax imposed by this ordinance, as well as the expenditure thereof, shall be deposited into the City's General Fund and shall be audited annually by an independent accounting firm. The City Council shall discuss the results of such audit at a meeting of the City Council that is open to the public. The report of such audit shall be posted on the City’s website.

3.17.150 – 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.

3.32.160 City 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

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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. CITY 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 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

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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 (50% + 1) 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 and ADOPTED by the voters of the City of GRAND TERRACE at an election held on November 3, 2026, and ADOPTED by the City Council of the City of Grand Terrace, California, at a regular meeting held on the ___ day of December, 2026.
________________________________
Mayor
ATTEST:
________________________________
Daysi Alcocer
City Clerk
APPROVED AS TO FORM:
________________________________
Adrian Guerra
City Attorney

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